#acipiv aci’s 9 th annual paragraph iv disputes dominick a. conde partner fitzpatrick, cella,...

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ACI’s 9th Annual Paragraph IV Disputes

Dominick A. CondePartnerFitzpatrick, Cella, Harper & Scinto

Personal Jurisdiction In Hatch Waxman Cases After Daimler

Steven M. CoylePartner and Pharmaceutical Litigation Group LeaderCantor Colburn LLP

Elizabeth J. HollandPartnerGoodwin Procter LLP

April 27-28, 2015

Thomas KrzeminskiPartnerKnobbe, Martens, Olson & Bear, LLP

Tedd W. Van BuskirkShareholderPolsinelli

Peter WaibelHead US Patent LitigationNovartis Pharmaceutical Corporation

Tweeting about this conference?

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Jurisdictional Issues

• Traditional Personal Jurisdiction Over Corporations:

• Due Process Clause of Fourteenth Amendment limits jurisdiction over defendants

• International Shoe: requires “minimum contacts” such that it would be fair for defendant to defend suit (later called “specific jurisdiction”)

• McGee: showed “minimum contacts” can be quite minimal; quality of contacts with jurisdiction matters, and even contacts based on a single contract may be enough

• Hanson: for specific jurisdiction, there must be some type of “purposeful availment” of the privileges of conducting business in that forum

• Helicópteros Nacionales de Colombia, S.A: on the other end of the personal jurisdiction spectrum, general jurisdiction is available if contacts are continuous and systematic

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• Personal Jurisdiction in Patent Cases

• Finding personal jurisdiction in patent cases has historically not been challenging

• “A patent is a federally created property right, valid throughout the United States. Its legal situs would seem to be anywhere it is called into play.” Beverly Hills Fan Co. v. Royal Sovereign Corp.

• The Federal Circuit has advised that even selling infringing products establishes personal jurisdiction in patent infringement suits. See e.g. North American Philips Corp. v. American Vending Sales, Inc.

• Under Hatch-Waxman, generics were often sued under theory of general jurisdiction based on sales. See e.g. In re Cyclobenzaprine Hydrochloride Extended-Release Capsule Patent Litig. (ANDA filing insufficient for specific jurisdiction but “substantial revenue” from Delaware drug sales establishes general jurisdiction); Eli Lilly & Co. v. Sicor Pharm., Inc. (sales of drugs through wholesaler sufficient to establish general jurisdiction)

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• Contemporary Personal Jurisdiction: Supreme Court in Goodyear v. Brown (2011)

• In Goodyear, the Court introduced concept of “home” forum for general jurisdiction• “continuous and systematic” means sufficiently continuous and

systematic to be considered the corporation’s home• but Court did not define the term “home”

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• Contemporary Personal Jurisdiction: Supreme Court in Daimler v. Bauman (2014)

• In Daimler, the Court delved into the concept of “home” forum and scaled back general jurisdiction• substantial amounts of business do not necessarily amount to general

jurisdiction• “corporation’s activities in their entirety, nationwide and worldwide”

must be considered, because “a corporation that operates in many places can scarcely be deemed at home in all of them.”

• To hold otherwise would render “‘at home’ synonymous with ‘doing business.’”

• Supreme Court also limited agency theory. Subsidiary’s activities not attributable to parent.

• State of incorporation and principal place of business are “paradigm all-purpose forums.”

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Jurisdictional Issues• So, after Goodyear and Daimler, do Brands need to sue ANDA filers in

their home forum?

• Generic will always be subject to jurisdiction in its state of incorporation and in its principal place of business• may be other places too, depending on activities considered in entirety

• Currently top districts for ANDA litigation are:• Delaware• New Jersey• Southern District of New York• Northern District of Illinois• Southern District of Florida• others include Nevada, E.D. Tex., California

• Delaware and New Jersey have H-W experienced judges, local patent and/or ANDA rules, and a degree of predictability• So even if generic is not subject to general jurisdiction there, they may still be a

good forum

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Personal Jurisdiction in Hatch-Waxman Cases After Daimler: Recent District Court Decisions

1. AstraZeneca AB v. Mylan Pharms., Inc., No. 14-696-GMS, 2014 WL 5778016 (D. Del. Nov. 05, 2014)

2. Acorda Therapeutics, Inc. v. Mylan Pharms. Inc., No. 14-935-LPS, 2015 WL 186833 (D. Del. Jan. 14, 2015)

3. Forest Labs., Inc. v. Amneal Pharms. LLC, No. 14-508-LPS, 2015 WL 880599 (D. Del. Feb. 26, 2015)

4. Novartis Pharm. Corp. v. Mylan Inc., Nos. 14-777-RGA, 14-820-RGA, 2015 WL 1246285 (D. Del. Mar. 16, 2015)

5. Allergan, Inc. v. Actavis, Inc., No. 2:14-CV-638, 2014 WL 7336692 (E.D. Tex. Dec. 23, 2014)

6. Eli Lilly and Co. v. Mylan Pharms., Inc., No. 1:14-cv-00389-SEB-TAB, 2015 WL 1125032 (S.D. Ind. Mar. 12, 2015)

7. Otsuka Pharm. Co., Ltd. v. Mylan Inc., No. 14-4508 (JBS/KMW), 2015 WL 1305764 (D.N.J. Mar. 23, 2015)

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AstraZeneca v. Mylan,(D. Del. Nov. 05, 2014) (Sleet, J.)

• Specific personal jurisdiction over Mylan Pharma:

1. Mylan met the minimum contacts test at least because it sent a PIV notification into Delaware, and

2. Jurisdiction was fair because Mylan “is no stranger to ANDA litigation in Delaware.” 2014 WL 5780213, at *7.

• But Judge Sleet rejected Plaintiff’s consent to jurisdiction by registration argument.

• Registration to do business in Delaware and a network of third party contacts within the state insufficient for general personal jurisdiction: • Compliance with a state’s “registration statutes—mandatory for doing business

within the state—cannot constitute consent to jurisdiction.” Id. at *4-5.• “upholding jurisdiction on these allegations alone would permit the ‘exercise of

general jurisdiction in every [s]tate,’ a result specifically precluded by the Supreme Court [in Daimler].” Id. at *3.

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Acorda v. Mylan,(D. Del. Jan. 14, 2015) (Stark, J.)

• No PIV notice letter sent into Delaware.

• Judge Stark disagreed with Judge Sleet’s analysis of general personal jurisdiction by consent:

“Daimler does not eliminate consent as a basis for a state to establish general jurisdiction over a corporation which has appointed an agent for service of process in that state, as is required as part of registering to do business in that state.” 2015 WL 186833, at *12 (emphasis added).

• Judge Stark explained how in Delaware registering to do business means a company consents to general jurisdiction:

“In 1988, the Delaware Supreme Court decided Sternberg v. O’Neil, in which it [interpreted Delaware’s business registration statute and] unambiguously held…that a corporation qualified to do business in Delaware, which requires appointment of an agent to accept service of process, has consented to the general jurisdiction of the courts in the State of Delaware.” Id. at *10.

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• The Court “exercise[d] general jurisdiction over Mylan Pharma based on Mylan Pharma’s consent, consent . . . [given] when it complied with the Delaware business registration statute by appointing a registered agent in Delaware to accept service of process.” Id. at *11.

• But Judge Stark noted “[AstraZeneca’s] rejection of consent as a basis for general jurisdiction . . . is well-reasoned and may well be the correct view.” Id. at *14.

• Indeed, Judge Stark described the split on this issue between the Circuit Courts:

“Two . . . circuits [9th and 5th] appear to agree with the principle that a state may condition doing business in that state on an agreement to submit to the general jurisdiction of the courts of that state - although the statutes these circuits were analyzing did not, the courts found, amount to such consent…[And] two circuits [7th and 4th] appear to have held that a state registration requirement cannot be the basis for finding consent to general jurisdiction.” Id. at *9-*10.

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• Alternatively, Court had specific jurisdiction.

• PIV notification sent to a Delaware corporation (but not sent into Delaware). Id. at *17-*18.

• Predictable that litigation would occur in Delaware: “nearly 41% of all ANDA cases filed over the last five years have been filed in the District of Delaware.” Id. at * 17 n.21.

• Jurisdictional discovery permitted on agency theory as to Mylan Inc., which unlike Mylan Pharma neither registered to do business in Delaware nor directly participated in the ANDA submission. Id. at *18-*19.

• Acorda’s theory of general jurisdiction by consent followed in Forest Labs., Inc. v. Amneal Pharms. LLC, No. 14-508-LPS, 2015 WL 880599 (D. Del. Feb. 26, 2015) (Burke, M.J.).

• Federal Circuit accepted interlocutory appeals in AstraZeneca and Acorda on March 17, 2015.

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Novartis v. Mylan, (D. Del. Mar. 16, 2015) (Andrews, J.) • General jurisdiction by consent over Mylan Pharma.

• Allowed discovery as to specific jurisdiction over Mylan Inc.:

“[W]hile I am not bound to follow Acorda, it is the only Delaware case on point on this [specific jurisdiction] issue, and I believe it would be appropriate to follow Acorda’s analysis.” 2015 WL 1246285, at *4.

Acorda found that Mylan Pharma was subject to specific jurisdiction, and its parent Mylan Inc. would be subject to specific jurisdiction if Mylan Pharma acted on its parent’s behalf or at its parent’s direction.

• Discussed “artificial” theory of specific jurisdiction in ANDA cases:

• “Mylan must concede that if it actually were being sued for infringement based on sales, it could be sued on a specific jurisdiction theory anywhere it makes sales. In Mylan’s case, that would generally be in any of the fifty states…I am not sure that it would make any particular sense that ‘artificial’ patent litigation against Mylan could only be brought in West Virginia, while regular patent litigation can be brought anywhere.” Id.

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Allergan v. Actavis, (E.D. Tex. Dec. 23, 2014) (Gilstrap, J.)• Court had specific personal jurisdiction with respect to declaratory judgment claims

(premature PIV notification).

• PIV notification not sent into Texas, but Plaintiff manufactures the drug at-issue in Texas and would therefore suffer harm in Texas.

• “Defendants sought and now hold a state-issued license to distribute prescription drugs in Texas; they have established contracts with Texas wholesalers, retailers and state agencies as the ways and means to further such sales; and, they have been enormously successful, selling more than $1 billion in drugs in Texas during 2013 alone.” 2014 WL 7336692, at *6.

• “Here, Defendants’ contacts with Texas and this litigation fundamentally differ from the situation at issue in Walden…[because] Defendants’ contacts with Texas are inextricably linked to the harm (or threatened harm) to [Plaintiff] in Texas.” Id.

• Did not reach the issue of specific personal jurisdiction with respect to patent infringement claims.

• Did not address general personal jurisdiction.

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Eli Lilly v. Mylan, (S.D. Ind. Mar. 12, 2015) (Barker, J.)

• Court had specific jurisdiction, following AstraZeneca and Acorda.

• Court did not distinguish between three Mylan Defendants because each was “heavily involved” in ANDA preparation.

• Mylan Defendants’ act of filing an ANDA and sending a PIV notification into Indiana provided sufficient minimum contacts.

• Indiana forum not “unjustly burdensome” because “Mylan frequently sends its employees to Indiana for business purposes.” 2015 WL 1125032 , at *5-*7.

• No general jurisdiction because Mylan Defendants not “at home” in Indiana; no discussion of consent.

• AstraZeneca stated that 7th Circuit rejected consent theory.

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Otsuka v. Mylan Inc.,(D.N.J. Mar. 23, 2015) (Simandle, C.J.)

• General personal jurisdiction over two Defendants:

“Mylan Inc. and Mylan Pharma consented to the Court’s jurisdiction by registering to do business in New Jersey, by appointing an in-state agent for service of process in New Jersey, and by actually engaging in a substantial amount of business in this State.” 2015 WL 1305764, at *11-*12.

• Mylan Labs had not complied with New Jersey’s registration statute and therefore was not subject to general personal jurisdiction in New Jersey.

• Mylan Labs was not subject to specific personal jurisdiction in New Jersey because Plaintiff did not identify any “specific activities [of Mylan Labs] directed at this forum”; Court distinguished AstraZeneca because here Mylan did not “mail[] its paragraph IV letter to the brand name plaintiff in New Jersey.” Id. at *12.

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• What can ANDA filer do to influence when and where they are sued?• Generic has much influence over the when

• Generic controls the P IV cert. and therefore the earliest likely time Brand can file suit

• If Brand doesn’t sue within 45 days, generic can attempt to establish DJ jurisdiction (but beware of preclusive effect on IPR)

• Generic previously had little influence over the where• Because filing an ANDA is an “artificial” act of infringement, Brands typically

rely on general personal jurisdiction to bring suit in their preferred forum• Filing ANDA with FDA in Rockville, MD does NOT lead to specific jurisdiction

in Maryland (Zeneca Ltd. v. Mylan Pharm., Inc., 173 F.3d 829 (Fed. Cir. 1999)).

• Courts and Federal Circuit allowed general jurisdiction based on permissive “continuous and systematic contacts” standard• ANDA filer licensed to distribute drugs in state• ANDA filer makes and sells drugs in state• ANDA filer derives substantial revenue from state

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Jurisdictional ScorecardAZ v. Mylan (Sleet)

D. Del.

Acorda v. Mylan (Stark)

D. Del.

Novartis v. Mylan (Andrews)

D. Del.

Forest v. Amneal (Burke)

D. Del.

Lilly v. Mylan (Barker)

S.D. Ind.

Allergan v. Actavis (Gilstrap)

E.D. Tex.

Otsuka v. Mylan (Simandle)

D.N.J.

Senju v. Metrics (Simandle)

D.N.J.

General (consent)

Specific +discovery

allowed as to Mylan,

Inc.

+discovery

allowed as to Mylan,

Inc.

Not discussed

discovery allowed as to Mayne

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Jurisdictional Issues• Pending Federal Circuit (and Supreme Court review) of current Hatch-Waxman

personal jurisdiction cases, what might a generic do now to influence where it may be sued?

• Incorporate or set up its principal place of business in its preferred forum

• Avoid incorporation or principal place of business in states it wants to avoid

• Be aware that if a foreign entity submits an ANDA, it is subject to jurisdiction in the United States. But under Fed. R. Civ. P. 4(k)(2), a foreign defendant that is subject to jurisdiction in the U.S., but to no state in particular, is subject to jurisdiction in every state.• It may benefit a foreign ANDA filer to establish a “home” forum to avoid

being subject to jurisdiction in every state• Or establish a subsidiary in a preferred jurisdiction just for the purpose

of filing its ANDAs

#acipiv aci’s 9 th annual paragraph iv disputes dominick a. conde partner fitzpatrick, cella,...

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