The US Court of Appeals for the Federal Circuit found that in cases brought under the Hatch-Waxman Act, for purposes of determining venue, infringement occurs only in districts where actions related to the submission of an abbreviated new drug application (ANDA) occur, and not in all locations where future distribution of the generic products specified in the ANDA is contemplated. Valeant Pharmaceuticals North American LLC v. Mylan Pharmaceuticals Inc., Case No. 19-2402 (Fed. Cir. Nov. 5, 2020) (O’Malley, J.).

Valeant holds a new drug application for the brand name drug Jublia®, which is used to treat toenail fungal infections. In 2018, Mylan Pharmaceuticals Inc. (MPI) executed an ANDA seeking approval to market a generic version of Jublia®. MPI sent the ANDA from its West Virginia corporate office to the US Food and Drug Administration, located in White Oak, Maryland. The ANDA included a Paragraph IV certification that the Orange-Book-listed patents for Jublia® were invalid, unenforceable or would not be infringed by the ANDA product. After the ANDA was filed, Valeant filed suit in the District of New Jersey against MPI, Mylan Inc. and Mylan Laboratories Ltd. (MLL) pursuant to the Hatch-Waxman Act, alleging infringement of the Orange-Book-listed patents. Valeant also filed an essentially identical lawsuit in the Northern District of West Virginia against the same three defendants. 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. MLL is an Indian corporation with a principal place of business in Hyderabad, India.

The Mylan entities moved to dismiss the New Jersey litigation, arguing that venue was improper under 28 USC § 1400(b) because none of the Mylan defendants reside or have a regular and established place of business in New Jersey, and the only alleged act of infringement (submission of the ANDA) did not occur in New Jersey. In response, Valeant argued that it was unduly narrow to limit “act of infringement” to the act of submitting the ANDA, and that the court should consider the Mylan entities’ planned future acts, which included acts of infringement in New Jersey. The district court granted the Mylan entities’ motion based on improper venue, finding that the ANDA was submitted from West Virginia and thus venue was proper there. Valeant appealed.

The two issues presented on appeal were the proper venue in Hatch-Waxman cases after TC Heartland v. Kraft Foods, and the proper venue for patent cases brought against foreign entities. Starting with the first issue, the Federal Circuit explained that determining whether venue is proper under § 1400(b) in a district other than the state in which a defendant is incorporated requires determining where the defendant committed acts of infringement. Under the Hatch-Waxman Act, it is an act of infringement to submit an ANDA for a drug claimed in a patent if the purpose of the submission is to obtain approval to engage in commercial activities related to the drug before expiration of the patent. Once that act occurs, the patent owner may commence an infringement suit. Focusing on the plain language of statute, the Court found 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. Instead, venue is proper only in districts that are sufficiently related to the ANDA submission—i.e., districts where acts occurred that would suffice to categorize the actor as a submitter of the ANDA. The Federal Circuit therefore affirmed the district court’s finding that New Jersey was not the proper venue for MPI and Mylan Inc.

Turning to the second issue, the Court found that venue was proper in New Jersey for MLL since it was a foreign corporation. MLL nevertheless requested that the Federal Circuit affirm MLL’s dismissal based on Valeant’s failure to state a claim. The Court explained that whether MLL can be held answerable to claims of infringement turns on whether MLL’s involvement in the submission of the ANDA was sufficient for it to be considered a “submitter” and thus amenable to suit. The Court found that Valeant’s complaint may have sufficient language to state a claim against MLL and remanded for the district court to consider whether the language is sufficient, or whether leave to clarify any apparent confusion would be appropriate.