VALEANT PHARMACEUTICALS NORTH AMERICA LLC, VALEANT PHARMACEUTICALS IRELAND LTD., DOW PHARMACEUTICAL SCIENCES, INC., KAKEN PHARMACEUTICAL CO., LTD., Plаintiffs-Appellants v. MYLAN PHARMACEUTICALS INC., MYLAN LABORATORIES LTD., MYLAN INC., Defendants-Appellees
Case: 19-2402
United States Court of Appeals for the Federal Circuit
November 5, 2020
THOMAS P. STEINDLER, McDermott, Will & Emery LLP, Washington, DC, argued for all plaintiffs-appellants. Plaintiffs-appellants Valeant Pharmaceuticals North America LLC, Valeant Pharmaceuticals Ireland Ltd., Dow Pharmaceutical Sciences, Inc. also represented by IAN BARNETT BROOKS, CHRISTOPHER MICHAEL BRUNO, PAUL MICHAEL SCHOENHARD; CHARLES H. CHEVALIER, Gibbons P.C., Newark, NJ.
VALEANT PHARMACEUTICALS v. MYLAN PHARMACEUTICALS
JOHN D. LIVINGSTONE, Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, Atlanta, GA, for plaintiff-appellant Kaken Pharmaceutical Co., Ltd. Also represented by CORA RENAE HOLT, Washington, DC; CHARLES H. CHEVALIER, Gibbons P.C., Newark, NJ.
STEFFEN NATHANAEL JOHNSON, Wilson Sonsini Goodrich & Rosati, Washington, DC, argued for defendants-appellees. Also represented by ADAM WILLIAM BURROWBRIDGE; WENDY L. DEVINE, KRISTINA M. HANSON, TUNG ON KONG, San Francisco, CA.
Before NEWMAN, O‘MALLEY, and TARANTO, Circuit Judges.
In 2017, the Supreme Court dramatically changed the venue landscape in patent cases. See TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514 (2017). It held that the general venue provision in
Today we answer the question of where “acts of infringement” under
Given this conclusion, we affirm the district court‘s order dismissing the claims
I. BACKGROUND
Because this appeal is primarily a venue dispute, the locations of the parties’ places of incorporation are important. Less significantly, Valeant Pharmaceuticals North America LLC, Valeаnt Pharmaceuticals Ireland Ltd., Dow Pharmaceutical Sciences, Inc. (“Dow“), and Kaken Pharmaceuticals Co., Ltd. (collectively “Valeant” or “plaintiffs“) reside in a range of locations, including Japan, Ireland, and Delaware. On the defendants’ side, 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“) is an Indian corporation with a principal place of business in Hyderabad, India.
The parties are all plаyers in the pharmaceutical industry. Dow holds New Drug Application No. 203567 for the brand name drug Jublia®, approved by the United States Food and Drug Administration (“FDA“) on June 6, 2014. Jublia® is a medication used to treat fungal infections (onychomycosis) of toenails. The active ingredient in Jublia® is efinaconazole. There are nine patents listed in the Orange Book for Jublia®.
In June 2018, MPI, a generic drug company, executed an ANDA seeking approval to market a generic version of Jublia®. MPI sent the ANDA from its West Virginia corporate office to the FDA, located in White Oak, Maryland. The ANDA included a Paragraph IV certification that the Orange-Book-listed patents for Jublia® are invalid, unenforceable, or would not be infringed by the ANDA product. MPI notified Valeant of the ANDA submission in August 2018.
On September 26, 2018, Valeant filed suit against Mylan2 in the District of New Jersey, alleging infringement of Dow‘s Orange Book patents pursuant to the Hatch-Waxman Act and requesting declaratory judgment of validity of the Orange Book patents.3 The complaint contained several allegations about Mylan‘s connection to New Jersey:
- Each Mylan defendant “directly, or indirectly, develops, manufactures, markets, and sells generic drug products throughout the United States and in this judicial district, and this judicial district is a likely destination for Mylan‘s generic efinaconazole topical solution.” J.A. 147, ¶ 10 (MPI), 148, ¶ 12 (MLL), 149, ¶ 13 (Mylan Inc.).
- Each Mylan defendant does business in New Jersey and is registered to do so. J.A. 147, ¶ 10 (MPI), 148, ¶ 12 (MLL), 149, ¶ 13 (Mylan
Inc.). - Each defendant has previously submitted to the jurisdiction of the court and has a place of business in New Jersey. J.A. 147-48, ¶ 10 (MPI), 148-49, ¶ 12 (MLL), 149, ¶ 13 (Mylan Inc.).
- MPI applied for FDA approval of its generic drug, which will be “purposefully directed at, upon information and belief, New Jersey and elsewhere. [MPI‘s] ANDA filings constitute formal acts that reliably indicate plans to engage in marketing of the proposed generic drugs.” And MPI plans to market and sell its generic drug into New Jersey upon FDA approval. J.A. 148, ¶ 11.
The next day, Valeant filed an essentially identical protective suit against Mylan in the Northern District of West Virginia. See Complaint, Valeant Pharms. N. Am. LLC v. Mylan Pharms. Inc., No. 18-cv-00184-IMK, D.I. 1 (N.D. W. Va. Sept. 27, 2018). That suit is ongoing.
In January 2019, Mylan moved to dismiss Valeant‘s New Jersey District Court complaint against MPI and Mylan Inc. for improper venue pursuant to Federal Rule of Civil Procedure 12(b)(3). Mylan further moved to dismiss MLL and Mylan Inc. for failure to state a claim pursuant to Rule 12(b)(6). As to venue, Mylan did not deny the majority of the venue allegations in Valeant‘s complaint. Instead, it argued that venue was improper under
In response, Valeant argued that it is unduly narrow to limit “an act of infringement” under
As to the Rule 12(b)(6) motion, Mylan argued that the complaint alleged that MPI alone submitted the ANDA and MPI was thus the only entity against which a case could be brought under the Hatch-Wаxman Act. Valeant answered that liability for submitting an ANDA is not limited to the entity that sends the final ANDA to the FDA. J.A. 404 (citing In re Rosuvastatin Calcium Patent Litig., 703 F.3d 511, 527-28 (Fed. Cir. 2012) (holding that a “submitter” can include those who participate in the preparation of the ANDA and intend to directly benefit from marketing of the product identified in it)).
In August 2019, the district court 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 venue proper there. The court then discussed the parties’ arguments about the relevance of planned future acts to the venue analysis under
The district court did not separately address Mylan‘s Rule 12(b)(6) motion to dismiss as to MLL and Mylan Inc. or explain its rationale for dismissing MLL. It did, however, insert a footnote acknowledging the argument that MLL, a foreign entity, was properly subject to venue in every judicial district. The court stated it would not consider MLL in the venue analysis, but noted that venue would be proper for MLL in West Virginia. Id. at *3 n.2.4
Valeant timely filed a notice of appeal on September 10, 2019. We have jurisdiction to review the final decision of the district court pursuant to
II. ANALYSIS
This appeal presents two issues. First, as noted, we have been asked to answer a question of first impression relating to proper venue in Hatch-Waxman cases after TC Heartland. Second, we apply well-established law to the question of proper venue for patent cases brought against foreign entities. We affirm the district court‘s determination that venue was not proper in New Jersey as to the domestic defendants. We reverse and remand, however, as to foreign defendant MLL.
A. Venue in Hatch-Waxman Cases
For purposes of determining whether venue is proper in a district other than one in a state in which a defendant is incorporated, a court must determine, among other things, “where the defendant has committed acts of infringement.”
prior to expiration of the infringed patent.
The question we must answer in this appeal, therefore, is whether the act of infringement identified in
1. Statutory and Legal Backdrop
Prior to 2017, defendants hoping to transfer Hatch-Waxman cases to a different district generally objected to a plaintiff‘s chosen venue on personal jurisdiction grounds. We definitively resolved those arguments in Acorda Therapeutics Inc. v. Mylan Pharmaceuticals Inc., 817 F.3d 755 (Fed. Cir. 2016), where we held that planned future acts were sufficient to justify the exercise of specific personal jurisdiction over a defendant in ANDA cases. In Acorda, we held that planned future interactions with the state in the form of marketing activities met the constitutional minimum requirements for personal jurisdiction. Id. at 760. While we did not address any statutory venue questions and specifically disclaimed having done so, this holding was important to the then-extant venue analysis because, at that point in time, our case law effectively had equated personal jurisdiction with venue by incorporating the definition of “reside” in the general venue statute,
The practical significance of Acorda was markedly contracted when the Supreme Court changed the venue landscape for patent cases in TC Heartland. That decision not only overturned VE Holding and its progeny, it reopened the effectively resolved question of where Hatch-Waxman cases could be venued.
When faced with other questions growing out of TC Heartland, we have narrowly construed the requirements of venue in patent cases. In Cray, for example, we narrowly construed
We have had no chance since TC Heartland to address the question of where infringement occurs in an ANDA case, however.7 District courts have struggled with the question and two competing views have emerged. The first significant case to address the question was Bristol-Myers Squibb, 2017 WL 3980155. There, the district court identified what it called “an almost impenetrable problem” of reconciling the venue statute‘s use of the present perfect tense (“where the defendant has committed acts of
infringement” (emphasis added)) with the Hatch-Waxman scheme, which focuses on potential future acts. Id. at *6-7. Ultimately, the court reasoned that, because the actual substance of ANDA litigation is not about the documents filed with the FDA but about whether potential future conduct would infringe a valid patent, it must be those future acts that are relevant to the venue analysis. Id. at *8. The court concluded that “[t]he submission of an ANDA is a stand-in that serves to move forward in time the infringement and invalidity challenges that otherwise would come later in time, such as after approval or marketing of the ANDA drug.” Id. And, though acknowledging that it was not controlling of the issue presented, the court noted that our Acorda decision supported the result reached. Id. at *8-10.
When faced with the same question a few months later, one district court in the District of New Jersey adopted the reasoning in Bristol-Myers Squibb. See Celgene Corp. v. Hetero Labs Ltd., No. 17-cv-3387-ES-MAH, 2018 WL 1135334, at *3 (D.N.J. Mar. 2, 2018). On that basis, it denied a motion to dismiss for improper venue filed by some of the generic defendants in that case.
A district court in the Northern District of Texas respectfully disagreed with the Delaware court‘s reasoning. Galderma Labs., L.P. v. Teva Pharms. USA, Inc., 290 F. Supp. 3d 599, 606-09 (N.D. Tex. 2017). The court concluded both that
The district court‘s opinion in this case took a position akin to that taken by the district court in the Northern District of Texas. We agree with the district court that venue is improper in New Jersey as to MPI and Mylan Inc. For the reasons discussed below, we hold that venue in Hatch-Waxman cases must be predicatеd on past acts of infringement—i.e., acts that occurred before the action alleging infringement was filed. And we hold those acts occur only in districts where actions related to the ANDA submission occur.
2. Venue Was Not Available in New Jersey for MPI and Mylan Inc.
We review whether venue is proper under
We begin our analysis with the plain language of the statutes. At least by the time briefing was complete in this appeal, both parties agreed that
As noted, the Hatch-Waxman Act makes it “an aсt of infringement to submit [an ANDA] for a drug claimed in a patent or the use of which is claimed in a patent . . . if the purpose of such submission is to obtain approval under such Act to engage in the commercial manufacture, use, or sale of a drug . . . claimed in a patent or the use of which is claimed in a patent before the expiration of such patent.”
Valeant first argues that the Hatch-Waxman act of infringement is “artificial” and, therefore, requires us to look to planned future conduct to define what is really infringing. Appellants’ Br. 21-25. The Supreme Court, our court, and district courts have referred to the ANDA submission as an “artificial act of infringement.” See, e.g., Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 678 (1990); Acorda, 817 F.3d at 760; Belcher Pharms., LLC v. Int‘l Medication Sys., Ltd., 379 F. Supp. 3d 326, 330 (D. Del. 2019). The Hatch-Waxman Act itself never says the act that constitutes infringement is artificial, however. It speaks in real terms—submission of the ANDA is the infringing act. It does so, moreover, after declaring other acts, which otherwise may have been infringing, to be
Valeant next focuses on the nature and substance of Hatch-Waxman litigation and argues that the act of infringement must encompass more than just submission of the ANDA. Appellants’ Br. 24-25. As noted, it is true that the judicial inquiry on the merits once an action has been commenced considers the ANDA defendant‘s potential future conduct—i.e., whether the conduct in which that defendant would like to engage would infringe a valid patent. The content of the litigation does not, however, turn potential future acts into past infringement. Under the plain language of the statute, the only past infringing act is the ANDA submission, which creates the right to bring suit in the first instance. The result of virtually all Hatch-Waxman litigation is, moreover, that no post-submission infringement happens. Sales and offers for sale of the ANDA product are either non-infringing as determined through the litigation, or such acts typically never occur. In that ordinary circumstance (where there is no at-risk market entry of the generic), the only concrete locations that will ever be touched by a non-hypothetical past act of infringement are those connected to the submission of the ANDA itself.
Valeant also argues that congressional intent supports its interpretatiоn. Appellants’ Br. 34-39. Valeant argues that Congress must have meant to allow venue in all the places that might have been available had a generic entered the market at-risk. The statute does not say that, however. Importantly, the Supreme Court told us several things in TC Heartland. First, that its own decision in Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222 (1957), made clear that Congress enacted
Valeant further contends that the second clause of the patent venue statute, allowing venue where an act of infringement occurs if the accused infringer has a regular and established place of business, is rendered superfluous by a plain-language reading of the statute. Appellants’ Br. 25-26. Surely, a statute should be interpreted to give all of its provisions meaning. Corley v. United States, 556 U.S. 303, 314 (2009). But Valeant‘s argument fails to recognize that the second clause retains meaning in every other type of patent infringement case and will be operative in every Hatch-Waxman case where the ANDA is submitted from a venue different than the submitter‘s place of incorporation.
Next, Valeant argues that we should hold that an ANDA submission is a nationwide act of infringement based on a “conceptual” aspect beyond the literal act defined in the statute. Appellants’ Br. 28; Appellants’ Reply Br. 16-21. It cites Transocean Offshore Deepwater Drilling, Inc. v. Maersk Contractors USA, Inc., 617 F.3d 1296, 1309-11 (Fed. Cir. 2010), where we considered which locations can logically be said to be the locations of sales and offers for sale in patent cases. We held that those acts can occur in more than one location. The analysis looks to both the location of the parties at the time оf contracting and to the location of anticipated performance. Valeant argues for a similar, but markedly more expansive, analysis in this case. Valeant would have us hold that the literal act of infringement—submission of the ANDA—encompasses a vast “conceptual” element of nationwide infringement in every judicial district. While we have held that sales and offers for sale have both physical and conceptual elements, see Litecubes, LLC v. N. Light Prods., Inc., 523 F.3d 1353, 1369-70 (Fed. Cir. 2008), the conceptual elements in those cases were connected to common law understandings of “sales” and “offers for sale.” There is no analogоus common law here that would compel a conclusion that submitting an ANDA has a purely conceptual effect of causing infringement everywhere in the United States. To reach such a broad interpretation of the infringing act, without any textual hook in the statute, would be a bridge too far.
Valeant does have strong policy reasons for adopting its reading of the statutes. For example, a generic company may “game” the system to avoid venue in certain jurisdictions. Appellants’ Reply Br. 20. And brand name drug companies may “be required to file and maintain largely identical suits in multiple districts” causing an increase in time and expense to resolve the cases and “result[ing] in inconsistent judgments.” Bristol-Myers Squibb, 2017 WL 3980155, at *12 n.17. While intuitively persuasive, these policy arguments cannot trump the plain language of
Finally, Valeant looks to Acorda. Appellants’ Br. 29-33. Acorda did not, however, address proper venue—a question of statutory interpretation. It was focused on the
Accordingly, we hold that, in Hatch-Waxman cases, venue is not proper in all judicial districts where a generic product specified in an ANDA is likely to be distributed. It is proper only in those districts that are sufficiently related to the ANDA submission—in those districts where acts occurred that would suffice to categorize those taking them as a “submitter” under
The district court found that no act involved in the submitting of the ANDA occurred in New Jersey. Valeant does not challenge that finding on appeal. We therefore affirm the district court‘s dismissal of MPI and Mylan Inc. for improper venue.8
B. Venue Is Proper for MLL in New Jersey
The district court decision clearly articulates, and it is undisputed, that MLL is properly subject to venue in any judicial district, including the District of New Jersey. See Valeant Pharms., 2019 WL 4179832, at *3 n.2; see also In re HTC Corp., 889 F.3d 1349, 1358 (Fed. Cir. 2018). The court‘s conclusion dismissing the complaint as to all defendants after only evaluating Mylan‘s venue argument is, therefore, incongruous. Mylan invites us to affirm on an alternative basis by holding, in the first instance, that Valeant failed to state a claim against MLL and that the district court likely understood that fact. Appеllees’ Br. 44-46. Whether MLL can be held answerable to claims of infringement in this case turns on whether MLL‘s involvement in the submission of the ANDA is sufficient for it to be considered a “submitter,” and thus, amenable to suit. See Rosuvastatin, 703 F.3d at 527-29. For purposes of a Rule 12(b)(6) motion, the court must decide whether Valeant plausibly alleged sufficient involvement on the part of MLL. See, e.g., Galderma, 290 F. Supp. 3d at 615-18; Cephalon, Inc. v. Watson Pharms., Inc., 629 F. Supp. 2d 338, 349 (D. Del. 2009). Mylan points to paragraph 29 of the complaint and says
III. CONCLUSION
While, as noted, we are sympathetic to the policy concerns associated with limited venue for Hatch-Waxman cases, especially those relating to lost judicial efficiencies in the handling of these mostly multi-defendant cases, we are compelled to our conclusion by the plain language of the two statutes at issue.10 We therefore affirm the district court‘s dismissal of Valeant‘s complaint as to MPI and Mylan Inc. for improper venue. As to MLL, because venue is proper in New Jersey for any foreign defendant, we reverse the district court‘s dismissal and remand.
AFFIRMED-IN-PART, REVERSED-IN-PART, AND REMANDED
COSTS
No costs.