So you want to bring your Hatch-Waxman suit and find a, perhaps, more favorable jurisdiction – like your own. Yesterday, the Federal Circuit undercut that possibility for many actions brought against ANDA filers. The Federal Circuit held that Hatch-Waxman non-resident venue for domestic entities is dependent on where “acts related to the ANDA submission occur.” Valeant Pharms. North Amer. LLC v. Mylan Pharms Inc., 2019-2402, slip op. at 13 (Nov. 5, 2020, Fed. Cir.). Resolving a split among the district courts, the Court held that the patent venue provision, § 1400(b), as interpreted by the Supreme Court in TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514 (2017), requires either that the alleged infringing defendant reside in the district in which it is sued or performed acts relating to the filing of the ANDA, i.e., the statutory act of infringement.
Valeant sued three Mylan defendant corporations – two domestic (WV and PA) and one foreign (India). All were alleged to have performed acts related to the filing of the ANDA, and also that each entity planned to make future sales of the ANDA product in New Jersey, the home of the presiding district. Mylan moved to dismiss for improper venue. The district court dismissed the action as to all three defendants, and the appeal ensued.
Beginning with the plain language of § 1400(b), the Court and the parties agreed that the venue provision requires a past act of infringement (“has committed acts of infringement”). Turning to 35 U.S.C. § 271(e)(2), the Court further noted that the only possible act of infringement giving rise to an actionable patent infringement claim was the submission of the ANDA. (Slip op. 14).
The panel rejected the notion that other court descriptors of § 271(e)(2) as an “artificial” act of infringement overcame the plain language of the statute and allowed the extension of venue to include the site of future possible sales. The Court further rejected Valeant’s argument that the nature of Hatch-Waxman litigation, i.e., bringing generic drugs to market, expanded venue to include the ANDA defendant’s future conduct. Rather, the Court found that most ANDA filers will either sell only after being found non-infringing or the patents being found invalid, both cases giving rise to non-infringement. Turning again to the plain language of the statute, the Court further held that Congress had not demonstrated the intent to change venue provisions in the face of the Hatch-Waxman Act. In the end, while agreeing that the policy considerations raised by Valeant were legitimate (e.g., ANDA filers gaming the system through incorporation in particular states), the Court held that the statutory language controlled.
Turning to the foreign defendant, the Court reversed, finding that the Indian corporation was subject to jurisdiction in any judicial district.
The Federal Circuit’s Valeant decision helps to clarify where Hatch-Waxman action may be brought. The likelihood is that plaintiffs will continue, as in the past, to file multiple complaints in multiple jurisdictions to meet the demands of the patent venue provisions. The Court specifically left open the question whether the District of Maryland, the home of the FDA (the place where ANDAs are submitted) and a possible venue as suggested in at least one case, Celgene Corp. v. Hetero Labs, Ltd., 2018 WL 1135334, at *3 (D.N.J. Mar. 2, 2018), is an appropriate venue for a Hatch Waxman suit. As the Court suggests, barring agreements of the parties (many of which will be likely), plaintiffs may be forced to bring defendants together under the multidistrict litigation provisions of 28 U.S.C. § 1407.
You can read the opinion here: http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/19-2402.OPINION.11-5-2020_1681030.pdf