Petitioning the Government as an Act of Infringement

by Dennis Crouch

Valeant Pharmaceuticals v. Mylan Pharmaceuticals (Fed. Cir. 2020)

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 [1] in the judicial district where the defendant resides, or [2] 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.

Slip Op.

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.

Slip Op.

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.

= = = =

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.

19 thoughts on “Petitioning the Government as an Act of Infringement

  1. 7

    Oh, please. How is any right to petition the government curtailed by 271(e)? THE FDCA creates something called an ANDA, and 271(e) doesn’t curtail the ability to do that. All that 271(e) says is, “The FDCA allows companies to try to piggyback on the work done by others, by filing something called an ANDA; but understand that such a filing, under certain circumstances, may constitute patent infringement.” No speech is being prohibited or curtailed. Nor is a criminal penalty being attached to such filing – the remedies are civil. The ANDA filer can choose not to go to market until after the patents expire, in which case the ANDA filing doesn’t constitute infringement. If the ANDA filer makes a paragraph IV certification, the patentee may choose not to sue for infringement, in which case the FDA will process the ANDA, without the 30-month stay…and in the worst case scenario, there’s litigation and the ANDA submission is found to constitute infringement, in which case there are no damages (since there’s no FDA approval and nothing has been sold), and the ANDA filer merely needs to wait until the patents have expired. I don’t see where there are any first amendment issues here.

    And don’t forget that the ANDA filer has benefited from the safe harbor of Hatch-Waxman, which says that doing the acts necessary to compile the data for the ANDA submission *doesn’t* constitute infringement.

    Also, consider the alternatives. One of those is the pre-Hatch-Waxman arrangement, under which the acts necessary to prepare an FDA submission constitute infringement, and thus competitors need to wait until the patents expire before even beginning to prepare generics – or they need to send such work offshore, to a country where such acts don’t constitute infringement. Another is to provide the safe harbor of H-W, but without stipulating that submitting an ANDA to the FDA constitutes infringement. Then the ANDA filer may get FDA approval, but then will have to decide whether or not to launch “at risk”. And if, as is likely an, infringement suit follows, the patentee’s ability to obtain an injunction is uncertain, and the ANDA filer may be subject to a damage award if it does launch at risk. Is either of those alternatives better than the system under H-W, and is it worth it to the public to jettison those on the basis of a specious 1st amendment argument? (See Judge Gajarsa’s discussion in Zeneca v Mylan that Dennis mentioned on this point.)

    Finally, the generic drug company always has the option of foregoing the ANDA route and instead developing its own data and submitting that as a regular NDA rather than an ANDA, in which 271(e) wouldn’t come into play.

    There’s some creative lawyering going on here, but it doesn’t add up.

    1. 7.1

      Dan, a big plus one.

  2. 6

    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”).

    This is interesting and not anything I’ve seen before. It’s literally true that filing an ANDA is petitioning the government, but my immediate reaction is not to be troubled by it mostly for the reasons suggested in this paragraph, and a few others.

    With or without the patent laws, the ANDA holder can’t sell its product without FDA approval. An “infringing” ANDA submission is just a request for approval, containing statements that the ANDA applicant believes the NDA holder’s patents are invalid or not infringed by the ANDA product. It’s true that it’s an “act of infringement,” but I don’t anyone would say that the Hatch-Waxman Act signals official disapproval of ANDA applications. In other words, no one would say that filing an ANDA (with a P-III or P-IV certification) is “illegal” in the same way they might say patent infringement is “illegal.” Once the ANDA is submitted, the NDA holder still has to prove infringement in the normal way (comparing an actual product to patent claims) if it wants relief beyond the 30-month stay.

    Similarly, just like an ANDA isn’t “illegal,” the Hatch-Waxman Act doesn’t prohibit any other way people might “petition” the government to take action on generics.

    But it’s an interesting question that I don’t think I’ve seen raised before.

  3. 5

    On the thread to which comments have now been curtailed, AAA JJ posted in rebuttal to one of my comments:

    AAA JJ

    November 6, 2020 at 9:35 am

    [quoting my comment of] : “Of course (and I fully recognize that my view on this mat he a bit biased), training in the ‘hard’ areas related to STEM as opposed to the ‘soft’ areas of Humanities does provide better critical thinking skills.”

    Yes, your view is a bit biased. And wrong. It is merely your opinion. And is not based in any fact whatsoever.

    And “critical thinking” is a rather silly amorphous concept that nobody would ever actually agree on.

    I could not disagree more.

    It is NOT only “merely my opinion,” and it is certainly NOT “not based in any fact whatsoever” but is instead steeped in the facts (and ‘opinions’ of those throughout the centuries that have developed and honed the Scientific Method.

    There is an abundance of history of science and technology (my minor way back in the day to satisfy my own humanities requirement in my first degree).

    That YOU merely feel that this is “rather silly amorphous concept” is ONLY your own feelings.

    And verily, is a sign that YOU are not employing critical thinking.

    I get the distinct feeling that you feel that my post(s) have fired a shot across the bow of your more Liberal Left views, and that it is the emotion of such shots that drive your comment.

    1. 5.1

      AA, you really need to listen to “anon.” He knows what he’s talking about. He gets 20 bucks a pop.

      1. 5.1.1

        Not just 20, and please share the reasons WHY your choices provide my enterprising, my pal with the Shifty historical pseudonyms…

        Here, this should help: link to patentlyo.com

  4. 4

    Rantanen made it clear on whose initiative the comments were disabled, and for that we should be thanking him rather than excoriating him.

    Your further dig against him also serves to reinforce professor Chien’s likely shield if anyone criticized her choice: this place can be a discussion cesspit. Let’s not give her that excuse.

    1. 4.1

      This should’ve been in response to post #1.

  5. 3

    You 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.)” Just FYI: the FDA no longer accepts paper ANDA submissions; all ANDA submissions must be inelectronic format.

  6. 2

    Interesting Civ Pro angles.

    1. 2.1

      “Interesting Civ Pro angles.”

      What does Max call that nonsense? Zero what? And you still get the 20 bucks? Is that fair?

      1. 2.1.1

        Your obsess10n with me is noted, Shifty.

        But how exactly is any comment from “Max” about calling something (ambiguous here, just a bit?) nonsense have to do with the interesting Civ Pro angles provided in this case?

        As to “20,” if you paid attention to the reasons why YOUR choices benefit me, then you would not have to ask that question (helpful link provided above).

        As to whether or not this is fair, well, it is as fair as can be. Why would you think this to be not fair? Should I set the rate higher for your choices of various types of inanity?

  7. 1

    Nice censorship there Rantanen. We see you with your censorship. Can’t handle the heat when it comes to your leftism can ya?

    Rantanen the “white savior”. Has a nice ring to it doesn’t it?

    1. 1.1

      Meh, 6, I noted early on that comments were not expected to last, given the statement of “Comments have been disabled at the authors’ request.

      By the by, if you actually click on the article itself (through its title), you can still “show comments,” and your prior comments are still there.

      For now.

      1. 1.1.1

        It is actually pretty bad. The authors basically are shielded from any criticism both by this website and by their deans.

        I just hope people realize that there are no standards for writings that are placed in law journals. There is essentially no peer review, no consequences, no avenue for redress, and so forth.

        1. 1.1.1.1

          I “get” your lament on many things, but the inclusion of “peer review” means nothing, given that academia – in and of itself – simply is NOT a meritocracy, and being judged “by one’s peer’s” merely ensure MORE of the same problem of groupthink and genuflection to the views of those higher in the pecking order.

          It is NOT a path to critical thinking (one of the items that had long been perhaps the most important attribute).

        2. 1.1.1.2

          I’m all for deleting or disabling cesspit comments. Is SSRN engaged in censorship by not having a comments section? If people have thoughtful criticisms, they can write them up and publish them somewhere. I don’t see why it has to be here.

          1. 1.1.1.2.1

            dcl,

            I now have two comments hung up in the filter.

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