Kaye Scholer represents Acorda Therapeutics Inc. in Acorda Therapeutics Inc. v. Mylan Pharmaceuticals Inc., in which the Federal Circuit has issued an important decision regarding personal jurisdiction in Abbreviated New Drug Application, or ANDA, cases. The United States Court of Appeals for the Federal Circuit unanimously affirmed a decision by Judge Stark of the United States District Court for the District of Delaware that Mylan was subject to personal jurisdiction in Delaware.
Mylan had argued that it was not subject to personal jurisdiction in Delaware because it is incorporated and headquartered in West Virginia, citing SCOTUS decision Daimler AG v. Bauman. Jurisdiction in ANDA cases, which precede actual infringing sales, had traditionally been predicated on general jurisdiction in light of the continuous and systematic contacts that generic pharmaceutical companies have with most, if not all, states. The Federal Circuit held unanimously that Mylan was subject to jurisdiction in Delaware on specific jurisdiction grounds not implicated by Daimler. The Court did not reach the issue of general jurisdiction which Judge Stark had also decided in Acorda’s favor.
The Federal Circuit’s decision by Judge Taranto, issued both in the Acorda case and in another ANDA case brought by AstraZeneca, focused on the fact that Mylan’s ANDA filing and paragraph IV certification challenging the branded companies’ patents was directed at selling its allegedly infringing product in Delaware. The Court observed that “[t]he Hatch-Waxman Act recognizes the close connection between an ANDA filing and the real-world acts that approval of the ANDA will allow and that will harm patent-owning brand name manufacturers.”
The Court explained: “Here, Mylan has taken the significant step of applying to the FDA for approval to engage in future activities—including the marketing of its generic drugs—that will be purposefully directed at Delaware (and, it is undisputed, elsewhere). If Mylan had already begun its deliberate marketing of these drugs in Delaware, there is no doubt that it could be sued for infringement in Delaware. Its Delaware sales would be acts committed in the state that are wrongful—if the plaintiffs here are right about infringement and validity—and would concretely injure Acorda and AstraZeneca in the State by displacing some of their Delaware sales... In our view, the minimum contacts standard is satisfied by the particular actions Mylan has already taken—its ANDA filings—for the purpose of engaging in that injury-causing and allegedly wrongful marketing conduct in Delaware.”
The Federal Circuit further stated: “Mylan’s ANDA conduct is ‘suit-related’ and has a ‘substantial connection’ with Delaware... because the ANDA filings are tightly tied, in purpose and planned effect, to the deliberate making of sales in Delaware (at least) and the suit is about whether that in-state activity will infringe valid patents.”
The Court concluded that in light of the fact that Mylan had frequently litigated ANDA cases in Delaware, “there is no substantial argument that considerations of unfairness override the minimum contacts basis for Delaware’s exercise of specific personal jurisdiction.”
The Court’s decision makes clear that courts will have personal jurisdiction over most, if not all, generics in the popular venues such as Delaware, New Jersey and New York—and possibly nationwide, based on the location of the future sales contemplated by the ANDA. Had the Court decided on general jurisdiction grounds, the decision would only have allowed for personal jurisdiction in states where the generic is incorporated, in states where the generic is headquartered, and in states where the generic has registered to do business and where, under that state’s law, such registration constitutes consent.
The Kaye Scholer client team is led by Intellectual Property partner and co-chair Aaron Stiefel with assistance from partner Daniel DiNapoli, special counsel Sylvia Becker, counsel Sam Deka and associates Jeffrey Martin, James Lyons, Philip Smithback and Stephanie Piper. Kaye Scholer was co-counsel with Gibson Dunn on the appeal.
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