Last week the Federal Circuit handed down one of its more anticipated decisions regarding jurisdiction in cases brought under 35 U.S.C. § 271(e)(2) (aka Hatch-Waxman or ANDA litigation). In its holding, the Federal Circuit stated that a “[defendant’s] ANDA filings and its distribution channels” are enough to “establish that [the defendant’s] plans to market its proposed [ANDA product in the forum state]” are enough to meet the minimum-contacts requirement to establish jurisdiction. It further held “there is no substantial argument that considerations of unfairness override the minimum-contacts basis for [the forum state’s] exercise of specific personal jurisdiction over” the defendants. This holding is much broader than the underlying district court rulings and limited the analysis to specific jurisdiction without addressing the underlying general jurisdictional questions.
Stemming from the Supreme Court’s 2014 decision in Daimler AG v. Bauman in which held that “minimum contacts” and thus, general jurisdiction, required not merely “continuous and systematic” in-forum contacts, but “continuous and systematic” in-forum contacts so as to “render [it] essentially at home in the forum state,” generic drug manufacturers began challenging jurisdiction in Hatch-Waxman cases. The two underlying cases involved the same defendant, Mylan Pharmaceuticals, Inc. (“Mylan”), a West Virginia incorporated worldwide producer of generic pharmaceuticals, in the same District Court, Delaware. Chief Judge Stark, in Acorda Therapeutics, Inc. v. Mylan Pharm. Inc., 78 F. Supp. 3d 572, 583-92 (D. Del. 2015) held that compliance with a state’s registration statute and appointment of a registered agent for service of process constitutes consent to general personal jurisdiction. Judge Sleet, in AstraZeneca AB v. Mylan Pharm., Inc., 72 F. Supp. 3d 549, 558-60 (D. Del. 2014) found jurisdiction on the bases that Mylan sent its paragraph IV certification to the plaintiff in the forum state, Delaware. The panel’s decision did not rely on either of these bases to establish jurisdiction, but instead, found specific jurisdiction on the basis that “Mylan’s ANDA filings constitute formal acts that reliably indicate plans to engage in marketing of the proposed generic drugs.”
However, Justice O’Malley, in her concurring opinion, argued that general jurisdiction was the simpler path to address the issue of jurisdiction. Citing centuries’ old precedence, Justice O’Malley held that, by registering to do business and appointing an in-state agent for service of process, “Mylan is subject to general personal jurisdiction in Delaware by virtue of its voluntary, express consent to such jurisdiction . . . .”
In regards to specific jurisdiction, Justice O’Malley concurred with the panel’s decision but with different reasoning. Instead of “reliabl[e] plans to engage in marketing,” Justice O’Malley, citing Calder v. Jones, 465 U.S. 783 (1984), focused on the harm associated with a generic filing an ANDA with a paragraph IV certification. She held that “the targeted nature of an ANDA filing – which is intended to challenge a particular patent owned by a known party with a known location . . . – the harm is targeted only to these Delaware companies, occurs only in Delaware, and is only triggered by the filing of the ANDA.” Further, Justice O’Malley agreed with the majority that the filing of an ANDA indicates a desire to market a product on a nation-wide process, but she construes it to reflect an immediate harm to the patent holder in its local, not as a basis to establish nation-wide jurisdiction.
Justice O’Malley’s concurrence is significant as the panel’s broad decision appears to create specific jurisdiction over any ANDA filer in any U.S. District Court. Her narrow concurrence regarding general jurisdiction based on state registration and the appointing of an in-state agent for service of process seems more likely to be upheld if challenged.
Gibbons P.C. will continue to monitor developments in jurisdictional issues over cases brought under the Hatch-Waxman statute.