Last Spring, the Supreme Court in TC Heartland LLC v. Kraft Foods Group Brands LLC held that the word "resides" in the patent venue statute, 28 U.S.C. § 1400(b), "refers only to the State of incorporation" of the alleged infringer. Correspondingly, the first prong of the statute is limited as to where a patent owner can bring an infringement suit. However, TC Heartland left open the question as to where an alleged infringer could be sued pursuant to the second prong of § 1400(b). The statute reads in its entirety:
Any civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.
However, in ANDA litigation, as well as lawsuits filed pursuant to the BPCIA, the act of infringement is artificial and the questions that a court must address are prospective in nature. Therefore, it is also an open question as to what it means for an FDA applicant to have committed an act of infringement as that term is used in 1400(b)? On September 11, 2017, in the Bristol-Myers Squibb Company v. Mylan case, Chief Judge Stark of the District of Delaware set out his framework for addressing venue challenges post-TC Heartland. Interestingly (but only coincidentally), it was ultimately Judge Stark that was reversed by the Supreme Court resulting from his adoption of the recommendation of Magistrate Judge Burke to deny TC Heartland's motion to dismiss on venue grounds.
This case arose when Mylan Pharmaceuticals Inc. ("Mylan") submitted an ANDA to market a generic version of BMS' Eliquis®, 2.5 mg and 5 mg strength apixaban tablets. BMS filed suit in the District of Delaware asserting U.S. Patent Nos. 6,967,208 and 9,326,945, generally directed to chemical compounds and formulations of apixaban. On July 25, 2017, after TC Heartland was decided, Mylan moved to dismiss the case for improper venue under Federal Rule of Civil Procedure 12(b)(3). The Court heard oral arguments in a hearing that concerned this case and other similar post-TC Heartland venue motions with both Chief Judge Stark and Magistrate Judge Burke presiding. In denying Mylan's motion without prejudice, Judge Stark analyzed what the second prong of § 1400(b) requires in the Hatch-Waxman context.
Who Bears the Burden of Proof?
The first issue addressed by the Court was who bears the burden in motions to dismiss for improper venue. The Court acknowledged that the majority of courts that have considered this issue have determined that it is the Plaintiff that must establish that the chosen district is a proper venue. However, the Third Circuit, in which Delaware is situated, has held that it is the defendant as the moving party that has the burden. The Federal Circuit, for its part, has not addressed this issue.
The Court first addressed whether Federal Circuit case law would control the case. To do this, the Court first determined whether this issue is one unique to patent law. According to Federal Circuit precedent, the procedural aspects of 12(b)(6) and judgments as a matter of law are controlled by the laws of the regional circuits. Because venue challenges also occur by operation of the Federal Rules of Civil Procedure, the Court concluded that improper venue motions are procedural, and controlled by Third Circuit law. Even so, the substantive questions relating to § 1400(b) are controlled by how the Federal Circuit would apply the second prong of this statute. Correspondingly, the Court determined that it was Mylan that had the burden of proof in establishing that venue was not proper.
Acts of Infringement in the ANDA Context
The next issue addressed by the Court was what would be considered an "act of infringement" such that venue would be proper. The Court first noted that the second prong of §1400(b) is written in the present perfect tense -- "where the defendant has committed acts of infringement." The problem is that the temporal focus of a Hatch-Waxman infringement analysis is in the future, not the past or present. In other words, the question is what will the defendant manufacture and sell in the future, not what has been sold or is being sold. In footnote 9, the Court analogized the forward-looking nature of these cases to those of declaratory judgment actions. The prospective nature of the analysis is necessitated in part because there is no infringement liability for activities related to the...
