Article: March 2016 Life Sciences Litigation Update

Federal Circuit Affirms Broad Personal Jurisdiction Over ANDA Filers. On March 18, 2016, in the first decision of its kind since the U.S. Supreme Court decided Daimler AG  v. Bauman, 134  S. Ct.  746 (2014), the Federal Circuit issued a precedential decision confirming that patentees are essentially free to choose their forum in Hatch-Waxman patent litigation. See Acorda Therapeutics,  Inc. v. Mylan Pharms., Inc., No. 2015-1456 (Fed. Cir. March 18, 2016).  Daimler  effectively held that a defendant is only subject to general personal jurisdiction in its state of incorporation or its principal place of business, arguably overturning decades of precedent permitting general personal jurisdiction in any forum where the defendant is doing business.

Mylan Pharmaceuticals, Inc.,  a  generic drug company incorporated in West Virginia and a frequent filer of Abbreviated New Drug Applications (“ANDAs”), used Daimler as an  opportunity to challenge the long-established practice of filing Hatch- Waxman patent litigations in the patentee’s  home state, not the ANDA filer’s. Mylan filed at least ten motions to dismiss for lack of personal jurisdiction in various federal district courts, including at least two in Delaware:  AstraZeneca AB v. Mylan Pharmaceuticals, Inc., No. 14-696 (D. Del.) and Acorda Therapeutics, Inc. v. Mylan Pharmaceuticals, Inc., et al., No. 14-935 (D. Del.).  In both AstraZeneca and Acorda, the District of Delaware denied Mylan’s motions. Mylan appealed both rulings to the U.S. Court of Appeals for  the  Federal Circuit, where they were argued for the  Federal Circuit, where they  were argued together in January 2016 before Judges Newman, O’Malley, and Taranto. The Federal Circuit’s March 18, 2016 precedential decision affirms the district courts’ denials of Mylan’s  motions, and essentially holds that a patentee is free to choose its forum in Hatch-Waxman cases where it is clear that the generic pharmaceutical company will engage in nationwide sales of its proposed ANDA product. See Acorda, No. 2015-1456 (Fed. Cir. March 18, 2016).

AstraZeneca and Acorda began like typical Hatch- Waxman cases. Mylan filed ANDAs seeking approval from the U.S. Food and Drug Administration (“FDA”) to market generic drug products before the expiration of patents covering the branded versions of those products.  Mylan’s ANDAs included so-called Paragraph IV Certifications alleging that the patents were invalid, unenforceable, and/or  would not  be infringed.   Mylan mailed the statutorily-required “Notice Letter” of its Paragraph IV Certifications to AstraZeneca  and Acorda, and each sued Mylan for patent infringement in the District of Delaware. Mylan moved to dismiss both complaints, arguing that  it was not  subject to personal jurisdiction in Delaware in light of Daimler. In both cases, Mylan asked the district court to hold that Mylan is subject to jurisdiction in ANDA cases only in its home state of West Virginia.

While Judge Sleet in AstraZeneca and Judge Stark in Acorda disagreed over whether Mylan “consented” to general jurisdiction in Delaware by complying with the state’s  registration statute, both  found specific jurisdiction and denied Mylan’s motion on that basis. Judge Sleet reasoned that  Mylan had purposefully directed its  activities at Delaware by mailing its Notice Letter to AstraZeneca in Delaware, thereby establishing sufficient “minimum contacts” to confer jurisdiction. AstraZeneca, No. 14-696, 2014 WL 5778016, at *7 (D. Del. Nov. 5, 2014).  Judge Stark agreed with Judge Sleet’s reasoning, and expanded the reach of specific jurisdiction to cover Mylan’s mailing of its notice letter to a Delaware corporation, even though the letter was not actually sent into Delaware. Acorda, No. 14-935, 2015 WL 186833, at *18 (D. Del. Jan. 14, 2015) (discussing Notice Letter sent to New York). Both judges also concluded that the patentees would suffer injury in  Delaware—their “home” state—as a result of Mylan’s ANDA filing, and that exercising specific jurisdiction over Mylan was fair and just under the circumstances.

Mylan appealed both  decisions to the  Federal Circuit.  Just over two months after the January 4, 2016  oral argument, the  Federal Circuit affirmed the rulings below. Limiting its ruling to  specific jurisdiction, the Federal Circuit held that jurisdiction exists in any state where the ANDA filer intends to market its proposed generic product—a “common- sense conclusion,” according to the Court. See Acorda, No. 2015-1456, Slip Op. at 14 (concluding that “it suffices for Delaware to meet the minimum-contacts requirement in the present cases that Mylan’s ANDA filings and its distribution channels establish that Mylan plans to market its proposed drugs in Delaware and the lawsuit is about patent constraints on such in- State marketing”). The Court relied on the forward- looking nature of the Hatch-Waxman Act, explaining that “Congress added § 271(e)(2) as a special means of litigating patent scope and validity only when . . . a declaration has been made by an ANDA filer—which has, by its filing, confirmed its plan to commit real- world acts that would make it liable for infringement if it commits them without the patentees’ permission and it is wrong in its challenges.”  Id. at 10-11.

Finally, the Court concluded that it would be fair to subject Mylan to jurisdiction in Delaware, given that the generic company has “litigated many ANDA lawsuits in Delaware” and given the “interests of the plaintiffs and the judicial system in efficient resolution of litigation.” Id. at 16.

While the majority opinion did not address general personal jurisdiction, Judge O’Malley’s  concurring opinion tracked Supreme Court precedent on the issue. It  concluded that  Mylan is also subject to general jurisdiction in  Delaware “by virtue of its voluntary, express consent to such jurisdiction” based on its registration to do business in Delaware  Id. (concurring opinion) at 12.

The Federal Circuit’s landmark decision provides much-needed clarity regarding specific personal jurisdiction for Hatch-Waxman litigants going forward.