by Dennis Crouch
Prior to TC Heartland, Federal Circuit precedent equated proper venue with personal jurisdiction — finding venue proper in any court that had personal jurisdiction over the defendant. See 28 U.S.C. § 1391. In 2017, however, the Supreme Court gave renewed force to the text of 28 U.S.C. § 1400(b).
Any civil action for patent infringement may be brought  in the judicial district where the defendant resides, or  where the defendant has committed acts of infringement and has a regular and established place of business.
28 U.S.C. § 1400(b). You’ll see that I underlined “where the defendant has committed acts of infringement” in the quote above because Valeant focuses on the location-of-infringement.
Valeant is an innovator-generic ANDA case. ANDA lawsuits are peculiar because the statutory act-of-infringement is submitting an Abbreviated New Drug Application (ANDA) to the FDA for a patented drug/use (along with a paragraph IV certification). 35 U.S.C. § 271(e)(2)(A) (“submit an application”). Here, the court held that that the location-of-infringement for venue purposes is “where actions related to the submission … occur.” The court further clarified that Section 271(e) infringement (for venue purposes) does not consider “locations where future distribution of the generic products specified in the ANDA is contemplated.”
On the facts here:
- Mylan Pharmaceuticals Inc. (“MPI”) is a West Virginia corporation and a subsidiary of the UK/Dutch company Mylan N.V. Mylan is set to merge with Pfizer later this calendar year.
- MPI submitted the ANDA documents from its Morgantown office to the FDA, which is located in Maryland just north of DC.
- Valeant then sued for infringement in New Jersey — noting that MPI plans to market the generic drugs within the state.
We do not have information about the course taken by the ANDA filing, but the most efficient route from WV to MD does not pass through NJ. (Note assumption regarding mail efficiency.) In any event, the district court concluded: “defendant MPI submitted its ANDA application in West Virginia, to the FDA in Maryland. None of these actions occurred in New Jersey.” On appeal, the Federal Circuit affirmed:
A plain language reading of this provision directs us to the conclusion that it is the submission of the ANDA, and only the submission, that constitutes an act of infringement in this context. Valeant makes several arguments as to why we should understand § 271(e)(2) as encompassing more. None persuade us to reach a different conclusion.
There has been some debate about the how to think about § 271(e). It seems odd that “to petition the Government” constitutes an act of infringement. (Quoting the First Amendment, U.S. Const.). Some courts have seen the provision as creating an “artificial act of infringement” to trigger resolution before the real-infringement occurs. You might see this as nunc-pro-tunc constructive infringement “by virtue of submitting an ANDA for the purpose of engaging in that future infringing conduct.” (quoting appellant’s brief); See also Eli Lilly and Co. v. Medtronic, Inc., 496 U.S. 661 (1990) (§ 271(e)(2) creates a “highly artificial act of infringement”).
On appeal, the Federal Circuit rejected the future-infringement theory and instead walked through a straight statutory read —
The Hatch-Waxman Act … speaks in real terms—submission of the ANDA is the infringing act. . . an ANDA submission is a real, albeit statutorily created, act of infringement.
Although I have not developed this argument, the court’s straight-read of the statute here places the provision on rocky First Amendment grounds regarding both speech and gov’t petitions. The court considered some of these issues in the personal-jurisdiction context in Zeneca Ltd. v. Mylan Pharm., Inc., 173 F.3d 829 (Fed. Cir. 1999)
In any event, MPI wins this round — with a holding that venue is improper against MPI in New Jersey.
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Foreign Defendant: Mylan Laboratories Ltd. (“MLL”) is also a defendant in the lawsuit, MLL is an “Indian corporation with a principal place of business in Hyderabad, India.” If you remember, TC Heartland applied directly only to domestic corporations, and the district court held here that 28 U.S.C. § 1391(c)(3) allows the lawsuit in N.J. against the foreign corporation:
(3) a defendant not resident in the United States may be sued in any judicial district.
Id. However, the court went-ahead and dismissed the case against MLL on venue grounds. On appeal, the Federal Circuit reversed this holding. MLL also argued that its case should be dismissed on R. 12(b)(6) for failure-to-state-a-claim. In particular, the complaint alleges that it was MPI who submitted the ANDA, not MLL. On appeal, the Federal Circuit punted on that issue and remanded to the district court to determine the issue.
Although venue is “proper” for MLL it probably isn’t the most-convenient forum if the rest of the case is heading to W.V. In addition, MPI might be considered a necessary party who cannot be joined under FRCP R. 19 (Required Joinder of Parties). As such, I expect that the NJ case against MLL will be dismissed.