Back in September, I discussed the uncertainty surrounding personal jurisdiction in Hatch-Waxman litigation created by the U.S. Supreme Court’s decision in Daimler AG.1 Specifically, district courts were not consistent in answering the question of what constitutes sufficient contacts with a state for a generic drug company to be subject to personal jurisdiction in that forum. In a recent opinion, the Federal Circuit (the “Fed Cir”) resolved that uncertainty.
The Fed Cir held in Acorda Therapeutics Inc. v. Mylan Pharmaceuticals, Inc., 2015-1456, (Fed. Cir. 2016) that (i) the filing of an Abbreviated New Drug Application (ANDA) and (ii) the existence of distribution channels, indicating the intent to market generic drugs, are sufficient “personal contacts” to open the door to specific personal jurisdiction. This holding means that broad, nationwide jurisdiction may exist in Hatch-Waxman cases, potentially forcing generic drug companies to litigate in any state chosen by brand drug companies.
Mylan argued that it was not subject to jurisdiction in the U.S. District Court for the District of Delaware because Mylan (1) is based in West Virginia, (2) filed the ANDA with the Food and Drug Administration in Maryland, and (3) has no offices, manufacturing plants or other property, or direct sales in Delaware.
The Fed Cir’s opinion, which only addresses specific jurisdiction, begins with a summary of the principles of specific personal jurisdiction before turning to Mylan’s conduct in Delaware:
Mylan has taken the costly, significant step of applying to the FDA for approval to engage in future activities—including the marketing of its generic drugs— that will be purposefully directed at Delaware. If Mylan had already begun its deliberate marketing of these drugs in Delaware, there is no doubt that it could be sued for infringement in Delaware. Its Delaware sales would be acts committed in the State that are wrongful—if the plaintiffs here are right about infringement and validity—and would concretely injure [the plaintiffs] in the State by displacing some of their Delaware sales and likely lowering the price they could charge there.
The court did not actually provide evidence of Mylan’s plans to engage in marketing its product in Delaware. Instead, the court decided that the ANDA filings are so significantly tied to the making of sales in Delaware that the filings “constitute formal acts that reliably indicate plans to engage in marketing of the proposed generic drugs.”
As mentioned, the Acorda decision provides brand name drug companies with wide flexibility in their choice of forum in Hatch-Waxman actions. That being said, this flexibility may lead to even more cases being litigated in the District of Delaware and the District of New Jersey than before because these two courts are particularly experienced with ANDA litigation.
Following the Supreme Court’s decision in Daimler, many of the previous jurisdiction-related issues in Hatch-Waxman cases failed. Although it may appear that the Acorda decision put an end to that trend towards restricting patent litigation, stay tuned. More litigation, such as a request for rehearing en banc or a petition for certiorari, seems likely. Additionally, on March 17, 2016, the U.S. Senate introduced a bill that would place additional restrictions on where patent suits can be filed. The "Venue Equity and Non-Uniformity Elimination Act of 2016" would require patent infringement suits to be brought where the defendant is incorporated or has physical facilities tied to either the development of the technology at issue or alleged infringement. In combination with this proposed bill, the Acorda decision is a reminder of the competing policies in different types of patent litigation.
1 Daimler AG v. Bauman, 134 S. Ct. 746, 187 L. Ed. 2d 624 (2014)
Photo by Ben Webber.