Somewhat remarkably, there is no settled Federal Circuit precedent regarding where a patentee can bring suit against a generic competitor in Hatch-Waxman litigation under 35 U.S.C. § 271(e)(2). While recognizing that this situation has arisen in large part to the disruption created by the Supreme Court in TC Heartland LLC v. Kraft Foods Grp. Brands LLC of prior Federal Circuit interpretations that venue was coincident with personal jurisdiction, last Thursday the Federal Circuit arrived at a decision regarding where proper venue does not lie in ANDA litigation, in Valeant Pharmaceuticals North America LLC v. Mylan Pharmaceuticals Inc.
The issue arose in ANDA litigation brought in the District of New Jersey by Valeant Pharmaceuticals against a trio of Mylan entities: Mylan Pharmaceuticals, Inc., (MPI) "a West Virginia corporation with a principal place of business in Morgantown, West Virginia"; Mylan Laboratories Ltd. (MLL), "Indian corporation with a principal place of business in Hyderabad, India"; and Mylan Inc., "a Pennsylvania corporation with a principal place of business in Canonsburg, Pennsylvania." The underlying dispute involves Dow Pharmaceutical Sciences' anti-fungal drug Jublia® (efinaconazole) protected by nine Orange Book-listed patents. Because geography is important to the venue issue, the opinion notes that MPI "executed" its ANDA in its West Virginia corporate headquarters and filed at the FDA in White Oak, Maryland. Valeant's suit was supported by several allegations that venue was proper in New Jersey, including:
• Each Mylan defendant "directly, or indirectly, develops, manufactures, markets, and sells generic drug products throughout the United States and in this judicial district, and this judicial district is a likely destination for Mylan's generic efinaconazole topical solution." . . .
• Each Mylan defendant does business in New Jersey and is registered to do so. . . .
• Each defendant has previously submitted to the jurisdiction of the court and has a place of business in New Jersey.
• MPI applied for FDA approval of its generic drug, which will be "purposefully directed at, upon information and belief, New Jersey and elsewhere. [MPI's] ANDA filings constitute formal acts that reliably indicate plans to engage in marketing of the proposed generic drugs." And MPI plans to market and sell its generic drug in into New Jersey upon FDA approval[.]
The Mylan defendants moved to dismiss under Fed. R. Civ. P. 12(b)(3) for improper venue (and under Rule 12(b)(6) as to the MLL and Mylan Inc. defendants for failure to state a claim). Mylan did not dispute Valeant's assertions as set forth above; rather, the basis for the motion was that venue was improper under 28 U.S.C. § 1400(b) because none of the defendants resided in New Jersey, was incorporated there, or has "regular and established places of business" in the state, and no act of infringement occurred there. Valeant argued in response that infringement under § 271(e)(2) was prospective, intended to address "planned future [infringing] conduct," an argument supported by Bristol-Myers Squibb Co. v. Mylan Pharmaceuticals Inc. from the District Court in Delaware. And with regard to the (12)(b)(6) motion, Valeant argued that infringement liability under the statute was not limited to the ultimate ANDA filer in these situations, citing In re Rosuvastatin Calcium Patent Litig., 703 F.3d 511, 527–28 (Fed. Cir. 2012).
The District Court granted the Mylan motions on improper venue grounds, based on Federal Circuit precedent in In re Cray and In re ZTE, for the principle that "requirements of the venue statute are specific, unambiguous, and not amenable to liberal...
