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Acorda Therapeutics, Inc. v. Mylan Pharms. Inc.

Case Name:  Acorda Therapeutics, Inc. v. Mylan Pharms. Inc., Nos. 14-935-LPS, 2015 U.S. Dist. LEXIS 4056 (D. Del. Jan. 14, 2015) (Stark, C.J.)

Drug Product and Patent(s)-in-Suit: Ampyra® (dalfampridine); U.S. Pats. Nos. 5,540,938 (“the ’938 patent”), 8,007,826 (“the ’826 patent”), 8,354,437 (“the ’437 patent”), 8,440,703 (“the ’703 patent”), and 8,663,685 (“the ’685 patent”)

Nature of the Case and Issue(s) Presented:  The issue here arises from Defendants’ motion to dismiss asserting a lack of personal jurisdiction. Mylan contends that the Supreme Court’s recent decision in Daimler AG v. Bauman, 134 S. Ct. 746 (2014) has resulted in the District of Delaware lacking general jurisdiction over Mylan in this and likely all future ANDA cases.

Acorda is a Delaware corporation having a principal place of business in Ardsley, New York. Mylan Pharma is a wholly-owned subsidiary of Mylan Inc, and it is undisputed that each is a separate corporate entity. Mylan Pharma is incorporated and has a principal place of business in West Virginia. But pursuant to sections 371 and 376 of title 8 of the Delaware Code, Mylan Pharma qualified to do business in Delaware and has contracted Corporation Services Company, in Wilmington, Delaware, as its registered agent to accept service of process in the State of Delaware. Mylan Pharma is also registered with the Delaware Board of Pharmacy as a licensed “Pharmacy-Wholesale” and a “Distributor/Manufacturer CSR.” Additionally, Mylan Pharma had “litigat[ed], as a defendant, over 50 other civil actions initiated in this jurisdiction in the last 19 years and affirmatively invoked this Court's jurisdiction by asserting counterclaims in at least 46 of those cases.” Mylan Inc., on the other hand, is a corporation organized under the laws of the Commonwealth of Pennsylvania, having a principal place of business in Canonsburg, Pennsylvania. Although Mylan Inc.’s subsidiaries have incorporated in Delaware, Mylan Inc. is not registered to do business in Delaware. Mylan Pharma prepared Mylan’s ANDA Filing in West Virginia and filed it with the FDA in Maryland. If Mylan’s generic product is approved by the FDA, it will be marketed and distributed, prescribed by physicians, and dispensed by pharmacies, throughout the US, including in Delaware.

Acorda asserted three bases for the exercise of personal jurisdiction: (i) general jurisdiction, notwithstanding Daimler; (ii) general jurisdiction based on consent; and (iii) specific jurisdiction. The court held that Mylan Pharma consented to the exercise of personal jurisdiction when it registered to do business and appointed an agent for service of process in the State of Delaware. The court further found that Acorda met its burden to establish that the court has personal jurisdiction over Mylan Pharma based on specific jurisdiction, which provides an independent reason for denying the motion as it relates to Mylan Pharma. With respect to Mylan Inc., the court lacked general jurisdiction, as Mylan Inc. was neither “at home” nor registered to do business in Delaware. But given the agency relationship between the parent and subsidiary, the court permitted Acorda to take jurisdictional discovery of Mylan Inc.’s relationship with Mylan Pharma and with the ANDA filing at issue in this case.

Why Acorda Prevailed:  The court first addressed the Daimler decision. It found that the Supreme Court in Daimler emphasized exercising general jurisdiction requires much more than the “continuous and systematic” contacts associated with specific jurisdiction. To assess whether general jurisdiction was available, the Supreme Court undertook an “essentially at home” analysis. The Supreme Court explained that in all but the most exceptional circumstances, a corporation is “at home” where it is incorporated and where its principal place of business is located. These affiliations are not only easily ascertainable, but allow corporations “to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit.” But, at the same time, the court pointed out that the factual and legal contexts in which Daimler arose could hardly be more different than those in which the instant case arises. “Most fundamentally, in the 1970s and 1980s, when Daimler’s subsidiary was allegedly engaged in the activities ultimately giving rise to the 2004 lawsuit against Daimler, Daimler could not have foreseen that, more than two decades later, it would be sued for human rights violations that had occurred in Argentina, and that the suit would be brought in California. … Here, by contrast, when Mylan Pharma sent the Mylan Notice Letter to Plaintiffs on July 9, 2014, it knew to a near certainty that, within 45 days, it would be sued for patent infringement, and that the suit would be brought in the District of Delaware.”

Next, the Court applied its interpretation of Daimler as against the Mylan entities. Because neither Mylan Pharma nor Mylan Inc. is a Delaware corporation or has its principal place of business in Delaware, under Daimler, neither Mylan defendant was “at home” in Delaware and the court could not exercise general personal jurisdiction on that basis. While both Mylan entities have litigated frequently in the District of Delaware, Mylan Pharma is registered to do business in Delaware, and numerous Mylan Inc. subsidiaries are incorporated in Delaware, these contacts are inadequate for purposes of general jurisdiction.

The court held that Mylan Pharma has consented to the jurisdiction of Delaware courts. Mylan Pharma’s decision to register to do business in Delaware and, as Delaware requires, appoint an agent here to accept service of process, has the consequence that Mylan Pharma has consented to the jurisdiction of the courts in Delaware. Relying on a 1917 Supreme Court case and its progeny, the court found that one manner in which a corporation may be deemed to have consented to the jurisdiction of the courts in a particular state is by complying with the requirements imposed by that state for registering or qualifying to do business there. The court then acknowledged the prevalent legal divide concerning this issue. The Third, Eighth, and First Circuits have followed this rationale. The Ninth and Fifth Circuits agree with the principle that a state may condition doing business in that state on an agreement to submit to the general jurisdiction of the courts of that state—although the statutes those circuits were analyzing did not, the courts found, amount to such consent. The Seventh and Fourth Circuits have found that a state registration requirement cannot be the basis for finding consent to general jurisdiction.  The Federal Circuit has yet to address the issue. And finally, there is even differing opinions within the Delaware District Court itself when, just recently, Judge Sleet reached a contrary conclusion on the same issue. Ultimately, however, the court found that Daimler does not eliminate consent as a basis for a state to establish general jurisdiction over a corporation which has appointed an agent for service of process, as is required as part of registering to do business in that state. In light of the above, the court further found that Mylan Inc.—which is not registered to do business in Delaware and does not maintain an agent for service of process—has not consented to the general jurisdiction of the court.

Moreover, the court found that it had specific personal jurisdiction over Mylan Pharma given its contacts directed at the State of Delaware. This suit arises from Mylan’s ANDA filing, which is a prerequisite to obtaining FDA approval, which is necessary in order to sell Mylan’s generic product in the US, including in Delaware. More directly, this lawsuit arises from Mylan Pharma’s sending the Mylan Notice Letter to Plaintiffs, including to Acorda, a Delaware corporation. At the time Mylan Pharma sent the Mylan Notice Letter to Acorda, Acorda had already initiated litigation in Delaware to enforce the Ampyra patents against efforts to introduce generic Ampyra to the US market. Therefore, when it sent the Mylan Notice Letter to Acorda, Mylan Pharma knew or should have known that: (i) Acorda is a Delaware corporation; (ii) Acorda had already begun litigating the Ampyra patents in the District of Delaware by filing suit against another ANDA filer (Actavis) here; (iii) Acorda would file suit against Mylan Pharma within 45 days of receiving the Mylan Notice Letter; and (iv) to obtain the efficiencies of coordinated litigation in a single district, Plaintiffs would almost certainly sue Mylan Pharma in Delaware. Mylan Pharma has directed other activities at Delaware, including registering to do the business there, appointing a registered agent to accept service of process there, and registering with the Delaware Board of Pharmacy as a “Pharmacy/Wholesale” and “Distributor/Manufacturer CSR.” Mylan Pharma has also been a frequent litigant in the District of Delaware, in precisely the type of case now before the Court and its business model is expressly dependent on the certainty of its participation in such litigation. And although it appears that specific jurisdiction has traditionally been disfavored as a basis for finding personal jurisdiction in an ANDA case—a point highlighted in Judge Sleet’s contrary opinion—in a “post-Daimler world, it may very well be that specific jurisdiction becomes a more prominent basis for exercising jurisdiction in ANDA cases.”

Finally, with regard to Acorda’s agency theory as the basis for personal jurisdiction, the Court found that such a claim was not frivolous and granted Acorda’s motion for jurisdictional discovery.

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