TC HEARTLAND’s limitations on patent infringement venue applies to Hatch-Waxman Act. VALEANT v. MYLAN

TC HEARTLAND’s limitations on patent infringement venue applies to Hatch-Waxman Act. VALEANT v. MYLAN

A patent is a set of exclusive rights granted to an inventor of an invention.  If someone other than that patent owner exercises one of the rights granted to the patent owner, without permission, that is considered patent infringement.  A patent owner can file a lawsuit to stop future patent infringement with an injunction and to get monetary damages for patent infringement which happened in the past.

In the United States the federal rules of civil procedure govern the filing of law suits in federal courts, including lawsuits related to patent infringement.  Prior to 2017 the proper venue patent infringement for a patent infringement lawsuit was very broad.  The United States Supreme Court narrowed the scope of venue for patent infringemet lawsuits in TC HEARTLAND LLC v. KRAFT FOODS GROUP BRANDS LLC, No. 16–341 (2017).  Now if a patent owner wants to file a patent infringement lawsuit the patent owner must file the lawsuit in a federal district court in which the defendant resides.  If a defendant resides in the federal court’s district then venue is proper.  If the defendant does not reside in the federal court’s district then venue is improper and the lawsuit can be dismissed.

Because TC Heartland was a big change in how patent lawsuits could be filed, there have been several cases since which have fleshed out the details of the change.

VALEANT PHARMACEUTICALS NORTH AMERICA LLC,  v. MYLAN PHARMACEUTICALS INC., 2019-2402 (C.A.F.C. 2020) is an example of a case which builds upon the precedent set in TC HARTLAND.

The principle question in this case is what is the proper venue in Hatch-Waxman cases after TC Heartland.

The Hatch-Waxman Act was intended to facilitate the marketing of generic pharmaceuticals while providing brand-name pharmaceutical firms with incentives to innovate. The Hatch-Waxman Act established an expedited pathway for generic drug companies to obtain Food and Drug Administration (FDA) approval for their products. It also created a statutory “safe harbor” that shields generic applicants from charges of patent infringement until such time as they request approval to market their products from the FDA.  Stated another way the  Hatch-Waxman Act allows generic pharmaceutical manufacturers to avoid liability for patent infringement provided they comply with certain rules.

Plaintiffs in this case 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®.

Defendant, a generic drug company, executed an Abreviated New Drug Application seeking approval to market a generic version of Jublia®. Defendant 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. Defendant notified Plaintiff of the ANDA submission in August 2018.

Plaintiff then filed suit against Defendant in the District of New Jersey, alleging infringement of Plaintiff’s patents pursuant to the Hatch-Waxman Act and requesting declaratory judgment of validity of the patents.  The next day, Plaintiff filed an essentially identical protective suit against Defendant in the Northern District of West Virginia.  The New Jersey District Court dismissed the case on the theory that the two places where an act of infringement might have occurred before the filing of the action were West Virginia and Maryland, not New Jersey.  Plaintiff then appealed the the Court of Appeals for the Federal Circuit.

The Federal Circuit noted that when 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.” 28 U.S.C. § 1400(b).  The Federal Circuit held 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. Venue is proper only in districts that are sufficiently related to the ANDA submission.  The district court found that no act involved in the submitting of the ANDA occurred in New Jersey. Therefore the Federal Circuit affirmed
the district court’s dismissal for improper venue.

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