“Despite Valeant’s arguments to the contrary, the CAFC explained that ‘plain language reading’ of this section of the Hatch-Waxman Act leads to the conclusion that ‘it is the submission of the ANDA, and only the submission, that constitutes an act of infringement in this context.’”
Last week, the U.S. Court of Appeals for the Federal Circuit addressed a question of first impression regarding whether an act of patent infringement occurs in a Hatch-Waxman case “only when and where an ANDA-filer submits its ANDA to the FDA [Food and Drug Administration] or occurs wherever future distribution of the generic is contemplated.” Valeant Pharmaceuticals v. Mylan Pharmaceuticals. The court ultimately determined the answer to be the former; however, in the case of a foreign defendant, venue is proper in any judicial district. It was the first time the court has had a chance to address the question of where infringement occurs in an ANDA case since TC Heartland v. Kraft Food Group Brands.
The dispute stems from generic drug company Mylan Pharmaceuticals Inc.’s – a West Virginia corporation – June 2018 abbreviated new drug application (ANDA) seeking to market a generic version of Dow Pharmaceutical Sciences, Inc.’s (Valeant’s) Jublia®, a medication used to treat fungal infections of toenails. Valeant subsequently filed suit against Mylan in the District of New Jersey, alleging infringement of Dow’s Orange Book patents pursuant to the Hatch-Waxman Act and requesting declaratory judgment of validity of the Orange Book patents. In particular, the Mylan defendants included 1.) Mylan Pharmaceuticals Inc. (MPI), a West Virginia corporation with a principal place of business in Morgantown, West Virginia, 2.) Mylan Inc., a Pennsylvania corporation with a principal place of business in Canonsburg, Pennsylvania, and 3.) Mylan Laboratories Ltd. (MLL), an Indian corporation with a principal place of business in Hyderabad, India. Valeant claimed that Mylan directly or indirectly developed, manufactured, marketed, or sold products in New Jersey, had previously submitted to jurisdiction in the court, and planned to market and sell its generic products in New Jersey upon approval, among other arguments. Valeant also filed an essentially identical complaint in the Northern District of West Virginia.
Mylan moved to dismiss the New Jersey suit in January 2019, claiming improper venue pursuant to Federal Rule of Civil Procedure 12(b)(3). Mylan argued that venue was improper because none of the Mylan defendants resided in New Jersey and the only alleged act of infringement was the submission of the ANDA, which did not occur in New Jersey. Mylan further argued that the Mylan defendants did not have regular and established places of business in New Jersey. The district court granted Mylan’s motion to dismiss the complaint against all defendants based on improper venue, reasoning that venue was proper in West Virginia since the ANDA was submitted from there.
Federal Circuit Review of Venue in Hatch-Waxman Cases
The CAFC noted that a question of first impression on appeal was whether an act of infringement under the Hatch-Waxman act “occurs only when and where an ANDA-filer submits its ANDA to the FDA or occurs wherever future distribution of the generic is contemplated.” The CAFC explained that the Hatch-Waxman Act clearly states that it is “an act of infringement to submit [an ANDA] for a drug claimed in a patent or the use of which is claimed in a patent … if the purpose of such submission is to obtain approval under such Act to engage in the commercial manufacture, use, or sale of a drug… claimed in a patent or the use of which is claimed in a patent before the expiration of such patent.” Despite Valeant’s arguments to the contrary, the CAFC further explained that “plain language reading” of this section of the Hatch-Waxman Act leads to the conclusion that “it is the submission of the ANDA, and only the submission, that constitutes an act of infringement in this context.”
The CAFC reviewed Valeant’s arguments with respect to several cases, including Acorda Therapeutics Inc. v. Mylan Pharmaceuticals Inc., wherein the CAFC held that “planned future acts were sufficient to justify the exercise of specific personal jurisdiction over a defendant in ANDA cases.” However, the CAFC noted that Acorda did not address proper venue. Rather, it was focused on the narrow question of whether minimum contacts were present for purposes of personal jurisdiction based on an ANDA submission and Acorda cannot be stretched to address venue. Thus, the CAFC concluded that “in Hatch-Waxman cases, venue is not proper in all judicial districts where a generic product specified in an ANDA is likely to be distributed,” but rather is “proper only in those districts that are sufficiently related to the ANDA submission—in those districts where acts occurred that would suffice to categorize those taking them as a ‘submitter’ under § 271(e).” The CAFC reasoned that it was bound by the by the plain language of the statutes and “a directive from the Supreme Court that venue ‘is not one of those vague principles which, in the interest of some overriding policy, is to be given a liberal construction.’” Thus, the CAFC affirmed the district court’s dismissal of MPI and Mylan Inc. for improper venue.
Venue for Foreign Defendant
The CAFC noted that the district court’s statement that the foreign defendant, MLL, was properly subject to venue in any judicial district, including the District of New Jersey, was undisputed; therefore, the CAFC found the district court’s dismissal of the complaint with respect to MLL to be erroneous. The CAFC further explained that “whether MLL can be held answerable to claims of infringement in this case turns of whether MLL’s involvement in the submission of the ANDA is sufficient for it to be considered a ‘submitter’, and thus, amenable to suit.” Noting that the district court may find other paragraphs of the complaint sufficient to state a claim against MLL or that leave to amend and clarify may be appropriate, the CAFC reversed the district court’s venue-based dismissal of MLL and remanded for further consideration.