Federal Circuit Decides Patent Venue Question

On Thursday, the Federal Circuit issued an opinion resolving the question of where venue is proper for patent infringement claims brought pursuant to the Hatch-Waxman Act. The court largely affirmed the findings of the trial court in favor of the defendant-appellees, sued by other pharmaceutical manufacturers for allegedly infringing on patents related to the toenail fungus infection treatment Jublia.

The case was brought by Valeant Pharmaceuticals North America LLC, Valeant Pharmaceuticals Ireland Ltd., Dow Pharmaceutical Sciences, Inc., and Kaken Pharmaceuticals Co., Ltd. (collectively Valeant), who, according to the instant order, “reside in a range of locations, including Japan, Ireland, and Delaware.” Valeant sued Mylan  Pharmaceuticals Inc. (MPI), Mylan Inc., and Mylan Laboratories Ltd. (MLL), (collectively Mylan), a company based in Hyderabad, India, none of which are incorporated or headquartered in New Jersey. The order explained that “[b]ecause this appeal is primarily a venue dispute, the locations of the parties’ places of incorporation are important.”

In June 2018, MPI, a generic drug company, filed an Abbreviated New Drug Application (ANDA) seeking approval to make a generic version of Jublia. In September 2018, Valeant sued the Mylan defendants in the District of New Jersey, alleging infringement of Dow’s Jublia patents pursuant to the Hatch-Waxman Act.

In January 2019, Mylan moved to dismiss the complaint arguing that venue was improper “because no Mylan defendant resides in New Jersey, the only alleged act of infringement—submission of the ANDA—did not occur in New Jersey, and the Mylan defendants do not have regular and established places of business in New Jersey.” Valeant countered that Mylan’s interpretation was too narrow. Instead, it argued that the court needed to consider the location of Mylan’s “planned, future acts.”

In August 2019, the district court granted Mylan’s motion to dismiss the complaint as to all of the defendants based on improper venue, finding that the ANDA was submitted from West Virginia, rendering venue proper there. It also ruled that while venue was proper as to foreign defendant MLL, it dismissed the claims against that entity.

On appeal, the Federal Circuit upheld the district court’s determination that venue was improper in New Jersey as to the domestic defendants, but reversed its dismissal of claims against MLL. The ruling considered precedent, in particular the Supreme Court’s 2017 holding in TC Heartland LLC v. Kraft Foods Grp. Brands LLC that “a corporation may be sued for patent infringement in only two categories of judicial districts: those in the state in which it is incorporated and those in which it has a regular and established place of business and an act of infringement has occurred,” and a survey of relevant case law.

The panel determined that “venue in Hatch-Waxman cases must be predicated on past acts of infringement— i.e., acts that occurred before the action alleging infringement was filed.” Those acts, it ruled, “occur only in districts where actions related to the ANDA submission occur.”  The court rejected several of Valeant’s statutory interpretation and policy arguments, the latter of which it found “intuitively persuasive.” Ultimately, the court held that the plain language and requirements of the statutes militated a different result.

The appellate panel reversed and remanded as to whether MLL was properly dismissed. The question was whether it could be “held answerable for all claims of infringement,” based on  “whether MLL’s involvement in the submission of the ANDA is sufficient for it to be considered ‘submitter,’ and thus, amenable to suit.”

Finally, the order noted that a day after it filed the New Jersey suit, Valeant also filed “an essentially identical protective suit against Mylan in the Northern District of West Virginia,” which is still ongoing.

The Valeant plaintiffs and Dow are represented by McDermott, Will & Emery LLP and Gibbons P.C.

Kaken Pharmaceutical Co., Ltd. is represented by Finnegan, Henderson, Farabow, Garrett & Dunner, LLP.

The Mylan defendants are represented by Wilson Sonsini Goodrich & Rosati.