Fed Circuit limits venue options for generic patent suits
The US Court of Appeals for the Federal Circuit has narrowed the landscape in which patent infringement suits over generic drugs suits can be filed, in a ruling handed down yesterday, November 5.
The court held that suits can only be allowed in venues where a generic drug maker has filed an Abbreviated New Drug Application (ANDA), rejecting arguments they should proceed wherever the generic product may one day be sold.
In June 2018, Mylan’s US business arm, MPI, filed an ANDA seeking approval to market a generic version of Jublia (Efinaconazole), a treatment for fungal infections of the nail.
In September 2018, pharmaceutical companies Valeant, Dow and Kaken filed a patent infringement suit against Mylan and MPI in the District of New Jersey and the Northern District of West Virginia. The companies alleged that MPI’s ANDA application was an act of infringement under the 1984 Hatch-Waxman Act.
In January 2019, Mylan moved to dismiss Valeant’s New Jersey complaint for “improper venue pursuant to Federal Rule of Civil Procedure 12(b)(3)”.
The company argued that the venue was improper because no Mylan defendant resided in New Jersey, and that the only alleged act of infringement, the submission of the ANDA, did not actually occur in New Jersey. It further said that Mylan did not have a regular and established place of business in that state.
In response, Valeant argued that it would be unduly narrow to limit “an act of infringement” to the act of submitting the ANDA and contended that “the court must consider Mylan’s planned, future acts”.
However, in August 2019, the US District Court for the District of New Jersey granted Mylan’s motion to dismiss the complaint against all defendants based on improper venue. The court found that the ANDA was submitted from West Virginia, rendering the venue proper there.
Valeant appealed against the decision, and was rejected this week by the Federal Circuit. The court pointed out that in 2017, “the Supreme Court’s unanimous decision in TC Heartland v Kraft Foods, dramatically changed venue parameters for patent infringement cases”.
Following this ruling, a company could be sued for patent infringement in only two categories of judicial districts: “those in the state in which it is incorporated and those in which it has a regular and established place of business and an act of infringement has occurred”.
The Federal Circuit held that the ruling “raised more questions than it answered” and that it was now bound to address the question of “where acts of infringement ...occur with respect to infringement claims brought pursuant to the Hatch-Waxman Act”.
In its conclusion, it ruled that, “infringement occurs for venue purposes only in districts where actions related to the submission of an ANDA occurs, not in all locations where future distribution of the generic products specified in the ANDA is contemplated”.
It further added that the court was bound by the plain language of the Hatch-Waxman Act and a directive from the Supreme Court that venue “is not one of those vague principles which, in the interest of some overriding policy, is to be given a liberal construction”.
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