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Venue and Pleading Infringement in Hatch-Waxman Litigation Turn on Location and Identity of ANDA Filer

| Eric MalmgrenAndrew Morrell, Ph.D.

CELGENE CORP. v. MYLAN PHARM. et al.

Before Prost, Chen, and Hughes.  Appeal from the District of New Jersey.

Summary: In Hatch-Waxman litigation: (1) infringement occurs where the ANDA is submitted and not where the patentee received notice of the ANDA submission; (2) the presence of an affiliated entity or employees in the district is insufficient to show a regular and established place of business; and (3) pleadings must explain how a defendant was involved in the ANDA submission to support a claim for infringement.

Mylan Pharmaceuticals Inc. (“MPI”) filed an Abbreviated New Drug Application (“ANDA”) for a generic version of Celgene’s pomalidomide drug.  Celgene (residing in New Jersey) filed patent infringement actions in the District of New Jersey against MPI (residing in West Virginia), Mylan Inc. (residing in Pennsylvania), and Mylan N.V. (residing in Pennsylvania and the Netherlands) (collectively “Mylan”).  Mylan moved to dismiss for improper venue as to MPI and Mylan Inc., and failure to state a claim as to Mylan N.V.  The district court agreed with Mylan regarding venue and dismissed the claims against Mylan N.V. because it did not submit the ANDA.  Celgene appealed.

The Federal Circuit affirmed the dismissal of MPI and Mylan Inc. for improper venue.  It was undisputed that neither entity resides in New Jersey.  Thus, Celgene needed to prove that infringement occurred in New Jersey and that MPI and Mylan Inc. had their regular and established place of business there.  With respect to infringement, the Federal Circuit rejected Celgene’s argument that MPI’s ANDA submission (which did not occur in New Jersey) extends nationwide to future acts of marketing and sales.  The Federal Circuit also rejected Celgene’s argument that receipt of notice of MPI’s ANDA filing at its headquarters in New Jersey constituted part of the infringing ANDA submission.  Thus, no act of infringement occurred in New Jersey. 

The Federal Circuit also affirmed the finding that MPI and Mylan Inc. did not have a regular and established place of business in New Jersey.  Celgene argued that several Mylan employees lived in New Jersey and rented storage lockers, but the court found this insufficient and noted that a physical location must be “of the defendant, not solely . . . of the defendant’s employee.”  Alternatively, Celgene argued that Mylan Labs. Inc., a now-defunct, indirect subsidiary of MPI, once had an office in New Jersey that should be imputed to MPI and Mylan Inc. for venue purposes.  The Federal Circuit disagreed because Celgene failed to establish any disregard of corporate formalities or separateness to impute venue from the subsidiary.

Lastly, the Federal Circuit affirmed the dismissal as to Mylan N.V. for failure to state a claim.  It was undisputed that MPI was the entity that signed and submitted the ANDA to the FDA.  The Federal Circuit rejected Celgene’s argument that chain of ownership from Mylan N.V. to MPI was sufficient to state a claim against Mylan N.V. based on MPI’s ANDA submission.  Celgene also alleged that the entities acted in concert and that Mylan N.V. directed and controlled MPI.  However, the Federal Circuit found these statements to be mere legal conclusions, lacking allegations or evidence, for example, as to how Mylan N.V. was involved in the ANDA process or how Mylan N.V. controls or directs MPI. 

Editor: Paul Stewart