Hatch-Waxman Venue Is Further Narrowed

Yesterday, the Federal Circuit issued an order finding that in cases brought under 35 U.S.C. § 271(e)(2)(A), infringement occurs for venue purposes only in districts where actions related to the submission of an Abbreviated New Drug Application ("ANDA") occur, not in all locations where future distribution of the generic products specified in the ANDA is contemplated. This opinion is specific to venue in Hatch-Waxman cases at the “pre-launch” stage, i.e. where the act of infringement, by statute, is the submission of an ANDA or a 505(b)(2) application. This opinion does not implicate venue in cases at the “post-launch” stage or non-Hatch-Waxman cases.

Plaintiffs/brands Valeant Pharmaceuticals North America LLC, Valeant Pharmaceuticals Ireland Ltd., Dow Pharmaceutical Sciences, Inc. (“Dow”), and Kaken Pharmaceuticals Co., Ltd. (collectively “Valeant”) hold New Drug Application No. 203567 for the brand name drug Jublia® (active ingredient efinaconazole), a medication used to treat fungal infections (onychomycosis) of toenails.

Defendants/generics, Mylan Pharmaceuticals Inc. (“MPI”), is a West Virginia corporation with a principal place of business in Morgantown, West Virginia; Mylan Inc. is a Pennsylvania corporation with a principal place of business in Canonsburg, Pennsylvania; and Mylan Laboratories Ltd. (“MLL”) (collectively, “Defendants”) is an Indian corporation with a principal place of business in Hyderabad, India.

In June 2018, MPI sent an ANDA seeking approval to market a generic version of Jublia® from its West Virginia office to the FDA, located in Maryland. On September 26, 2018, Valeant filed suit against Defendants in the District of New Jersey alleging infringement of its patents throughout the United States and specifically in New Jersey. The following day, Valeant filed an identical suit in the Northern District of West Virginia. Defendants moved to dismiss the New Jersey District Court case for improper venue, as under § 1400(b) no Defendant resided in New Jersey, the only alleged act of infringement—submission of the ANDA—did not occur in New Jersey, and the Defendants did not have regular and established places of business in New Jersey. The District Court agreed with Defendants, finding that the ANDA was submitted from West Virginia, rendering venue proper there. Valeant appealed and the Federal Circuit affirmed.

In its opinion, the Federal Circuit held that venue is still, always, proper in the state of incorporation. Moreover, the Court also made clear that acts that are protected by the safe harbor provisions in § 271(e), i.e. formulation development, manufacturing, etc., are non-infringing for all purposes, including venue.

However, the Court left open what counts as an act of “submitting” the ANDA, which could be interpreted as entailing writing it, reviewing it, or mailing it. Further, the Court also left open whether Maryland, where it is submitted to FDA, is an appropriate venue based on “submitting” in Maryland.

In addressing Accorda, the Court found that analysis of personal jurisdiction is different from the analysis for venue, as while one can still base personal jurisdiction on where a generic drug will be sold after approval of an ANDA, that fact is not sufficient in establishing proper venue.

The Court acknowledged that its ruling would result in different ANDA filers being sued in different jurisdictions. This may significantly affect multi-district litigation practice and joint defense groups. Additionally, this may also lead to an uptick in cases being brought in Maryland. As such, this opinion will likely undergo an en banc review and Valeant may further petition for certiorari to the Supreme Court.

To recap, in the submission/pre-launch stage of Hatch-Waxman cases, for purposes of venue the site of infringement is the place(s) related to ANDA submission, not wherever the generic drug might be sold.