The State Of Pharma Litigation After The Supreme Court's TC Heartland Case
By Andrew Williams
Last year, the Supreme Court’s TC Heartland LLC v. Kraft Foods Group Brands LLC case limited the districts in which patent owners could bring infringement actions against defendants. Specifically, the Court held that the word “resides” in the patent-specific venue statute “refers only to the State of incorporation” of the alleged infringer. 28 U.S.C. § 1400(b) reads in its entirety: “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.” Correspondingly, if a patent owner does not want to bring an infringement action in the alleged infringer’s state of incorporation, it must occur in a district where an act of infringement has occurred and where there is a regular and established place of business. For ANDA litigations, however, as well as for lawsuits filed pursuant to the BPCIA, the act of infringement is artificial and the questions that a court must address are prospective in nature. Therefore, for pharmaceutical litigation, it is necessary to understand where the “act of infringement” has occurred to determine if venue is proper.
Unfortunately, this issue has not been resolved uniformly. On the one hand, there are district courts that have focused on the future events of where a patent will be infringed by the manufacture, use or sale of the generic drug once the application is approved. For example, in Bristol-Myers Squibb Company v. Mylan, Chief Judge Stark of the District of Delaware concluded that “the ‘acts of infringement’ an ANDA filer ‘has committed’ includes all of the acts that would constitute ordinary patent infringement if, upon FDA approval, the generic drug product is launched into the market.” Id., 2017 WL 3980155 at *8 (D. Del. Sept. 11, 2017). In so doing, he relied heavily on the Federal Circuit’s personal-jurisdiction jurisprudence as articulated in Acorda Therapeutics Inc. v. Mylan Pharm. Inc., 817 F.3d 755 (Fed. Cir. 2016). Chief Judge Stark reasoned that in view of Acorda, “an ANDA filer’s future, intended acts must be included as part of the ‘acts of infringement’ analysis for purposes of determining if venue is proper under the patent venue statute.” Bristol-Myers at *9. Also important to the reasoning was that in the Hatch-Waxman context, the applicant has “reliably confirmed a plan to engage in real-world marketing” by the filing of the application. Id. at *10.
On the other hand, Chief Judge Lynn of the Northern District of Texas in Galderma Laboratories, L.P. v. Teva Pharmaceuticals USA, Inc. focused on the act of infringement being the submission of the ANDA. Id. at 290 F.Supp.3d 599 (N.D. Tex. 2017). She was aware of Chief Judge Stark’s analysis, but she could not get away from the past-tense language of the statute (“has committed”), and the fact that the generic drug had not yet been marketed. Instead, in the Hatch-Waxman context, the “act of infringement” is the filing of the ANDA. Correspondingly, this opinion reasoned that the “act of infringement arises out of the preparation and submission of the ANDA,” which can include “the compilation of information from multiple sources and completion of various FDA-required forms.” Id. at 608-09. Moreover, it also noted that the “[s]ubmission of the actual ANDA is accomplished electronically.” Id. at 609. As a result, because there was no evidence or even an allegation that the defendant Teva USA prepared or submitted its ANDA “in or from the Northern District of Texas,” the Judge concluded that venue was not proper because there was no act of infringement. Id.
The Federal Circuit has already been addressing some of the consequences of the TC Heartland case, such as what constitutes a “regular and established place of business,” whether defendants have waived their venue defense, and which party has the burden of proof regarding the question of venue. Nevertheless, the Court has not yet tackled the issue of what constitutes an “act of infringement” under the second prong of the patent-specific venue statute. Unless and until it does, NDA and BLA holders will need to be aware of the different interpretations of the statute in the different district courts before filing a Hatch-Waxman or BPCIA litigation. Otherwise, they will risk transfer or even worse dismissal of the case.
Andrew Williams is a partner with McDonnell Boehnen Hulbert & Berghoff LLP and serves as Chair of the firm's PTAB Trials Practice Group. He has over 16 years of experience in all areas of IP law, with particular emphasis on patent litigation, client counseling, and patent procurement in the areas of biochemistry, pharmaceuticals, and molecular diagnostics.