The Federal Circuit Analyzes Venue Requirements In Hatch-Waxman Cases

• Published date: 14 December 2021
• Subject Matter: Intellectual Property, Patent
• Law Firm: Haug Partners
• Author: Ms Laura Chubb and Patrick Lavery

I. Introduction

Since the Supreme Court's decision in TC Heartland (137 S. Ct. 1514 (2017)), the venue statute for patent cases, 28 U.S.C. ' 1400(b), has been interpreted to mean that venue is proper only where the defendant "resides" or where the defendant "has committed acts of infringement and has a regular and established place of business." Recently in Celgene Corp. v. Mylan Pharmaceuticals, Inc., No. 2021-1154, 2021 U.S. App. LEXIS 32996 (Fed. Cir. Nov. 5, 2021) the Federal Circuit analyzed the second prong of the patent venue statute in the context of Hatch-Waxman cases.

In Celgene, the Federal Circuit reiterated its holding in Valeant Pharmaceuticals North America LLC v. Mylan Pharmaceuticals, Inc. (978 F.3d 1374 (Fed. Cir. 2020)), that the sending and receipt of a paragraph IV notice letter to the target forum does not satisfy the "has committed acts of infringement" requirement for proper venue. Instead, it is "actions related to the submission" of an ANDA, and only the submission, that constitutes an act of infringement under the venue statute. As to establishing a "regular and established place of business" the Federal Circuit relied on its previous holding in In re Cray Inc. (871 F.3d 1355 (Fed. Cir. 2017)) and held that neither the residence of a handful of defendants' employees nor a physical office location of a defunct affiliate of defendants' would satisfy this requirement.

II. Facts

Celgene markets pomalidomide as a multiple-myeloma drug under the brand name Pomalyst. Id. at *1. Celgene has patents related to Pomalyst, which several other drug companies challenged the validity of and sought to bring their own generic pomalidomide products to market. Id. One such company was Mylan Pharmaceuticals Inc. ("MPI") who, in 2017, submitted an Abbreviated New Drug Application ("ANDA") seeking approval to market a generic version of Pomalyst before the expiration of Celgene's four Orange-Book-listed patents. Id. at *6. In its ANDA, MPI included a paragraph IV certification, which generally provide that the patent at issue is invalid, unenforceable, or not infringed by the generic drug seeking to come on market. Id. In response to MPI's ANDA filing, Celgene sued MPI, Mylan Inc., and Mylan N.V. under the Hatch-Waxman Act, asserting its four Orange-Book listed patents. Id. Celgene also sued the same defendants on later-acquired patents also listed in the Orange Book for Pomalyst. Id.

Both cases were brought by Celgene against the Mylan entities in the District of New Jersey. Id. Celgene is based in New Jersey, MPI in West Virginia, Mylan Inc. in Pennsylvania, and Mylan N.V. in Pennsylvania and the Netherlands. Id. at *2. In the first case, the defendants moved to dismiss for improper venue and failure to state a claim. Id. at *7. The parties stipulated that the resolution of the motion to dismiss in the first case would govern in the second case. Id. at *6-7. The district court denied the motion without prejudice in order to allow the parties to conduct venue-related discovery. Id. After this discovery ended, the defendants renewed their motion, which the district court reviewed under In re Cray Inc., 871 F.3d 1355 (Fed. Cir. 2017), and concluded that, although the defendants had...