Bristol-Myers Squibb Co. v. Aurobindo Pharma USA Inc.

After limited discovery on plaintiffs’ alter-ego theory, the court granted defendant’s motion to dismiss for lack of personal jurisdiction.

October 18, 2018

GENERICally Speaking

Case Name: Bristol-Myers Squibb Co. v. Aurobindo Pharma USA Inc., C.A. No. 17-374-LPS (Consolidated), 2018 U.S. Dist. LEXIS 179154 (D. Del. Oct. 18, 2018) (Stark, J.) 

Drug Product and Patent(s)-in-Suit: Eliquis® (apixaban tablets); U.S. Patents Nos. 6,967,208 (“the ’208 patent”) and 9,326,945 (“the ’945 patent”)

Nature of Case and Issue(s) Presented: Bristol-Myers Squibb Company and Pfizer Inc. sued Mylan. Mylan moved to dismiss for lack of personal jurisdiction. The court originally denied the motion, but afforded the parties an opportunity to take limited discovery on the issue. In particular, the parties were sent back to determine whether Mylan had a “regular and established place of business” under the second prong of § 1400(b), in line with the Supreme Court’s recent decision in TC Heartland. After eight months of limited discovery and multiple discovery disputes, Mylan renewed its motion to dismiss, maintaining that venue was improper in the District of Delaware. The court granted Mylan’s motion.

Why Mylan Prevailed: It was undisputed that Mylan was incorporated in West Virginia and did not “reside” in Delaware. Additionally, Mylan contended that it did not perform the alleged act of infringement in Delaware or that it maintained a regular and established place of business in Delaware. Mylan further argued that the residences and activities of non-party affiliates of Mylan were irrelevant because statutes and common law-doctrines regarding “alter egos” and “piercing the corporate veil” cannot supplement § 1400(b). BMS responded that the Delaware residency of a Mylan subsidiary, Mylan Securitization LLC (“Mylan Securitization”), may be imputed to Mylan due to an alleged alter ego relationship between these two entities and, thus, Mylan’s motion should be denied. In the alternative, BMS contended that, because this was a Hatch-Waxman action, venue should be governed by § 1391 and, under that statute, there could be no dispute that venue would be proper in Delaware.

The court’s § 1400(b) analysis. The court agreed with BMS that residency may be imputed under the first prong of the venue statute, and that TC Heartland did not overrule that proposition. While related corporate entities were generally legally distinct, piercing the corporate veil, and imputing one entity’s residence to another, may be appropriate in circumstances where one corporation acted as the alter ego of the other. But the court also found that BMS failed to show any alter-ego affiliation between the Mylan and Mylan Securitization. In its limited discovery period, BMS showed that Mylan Securitization: (i) was wholly-owned by Mylan; (ii) did not have its own employees, revenue, profits, Delaware tax filings, or facilities; (iii) was represented by the same counsel as Mylan in transactions with Mylan; (iv) had “tiny” costs of operations; and (v) shared one overlapping director with Mylan. The court found that “[w]hile these factors may show a close relationship between Mylan and Mylan Securitization, they are insufficient to pierce the corporate veil or render one entity the alter ego of the other.”

The court’s § 1391 analysis. The court dismissed BMS’s argument on grounds of timeliness. Until briefing on Mylan’s renewed motion, BMS had never proposed § 1391 as an appropriate, post-TC Heartland basis for venue in this case. Not once during the prior motion briefing, oral argument, or in any discovery dispute letter or teleconference did BMS raise § 1391. The court also dismissed BMS’s argument on the merits. TC Heartland clearly articulated that “the patent venue statute alone should control venue in patent infringement proceedings.” By filing a Hatch-Waxman patent infringement action, BMS obtained the benefit of the automatic 30-month stay of FDA approval of Mylan’s ANDA, a benefit to which BMS would not have been entitled if its cause of action were anything other than a claim for patent infringement. “As this case is incontestably a ‘civil action for patent infringement,’ venue is governed solely and exclusively by § 1400(b).

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