IP Law Daily Generic drug manufacturer subject to specific personal jurisdiction after filing ANDA
Friday, March 18, 2016

Generic drug manufacturer subject to specific personal jurisdiction after filing ANDA

By Jody Coultas, J.D.

Generic drug manufacturer Mylan Pharmaceuticals Inc. was subject to specific personal jurisdiction in the Delaware courts because its filing of an application to market a generic drug constituted suit-related contacts with Delaware, according to the U.S. Court of Appeals for the Federal Circuit (Acorda Therapeutics Inc. v. Mylan Pharmaceuticals Inc., March 18, 2016, Taranto, R.). Two separate patent infringement claims filed by Acorda Therapeutics Inc. and AstraZeneca AB could continue in those courts.

Acorda owns four patents and is the exclusive licensee of a fifth for Ampyra®, which helps individuals with multiple sclerosis walk. Alkermes Pharma Ireland Ltd. owns the licensed patent. Mylan filed an Abbreviated New Drug Application (ANDA) seeking approval to market generic versions of Ampyra®.

AstraZeneca markets Onglyza® and KombiglyzeTM to help individuals with type II diabetes, which are covered by three of AstraZeneca’s patents. Mylan filed two ANDAs seeking approval to market generic versions of the two drugs.

In two separate claims filed in a federal district court in Delaware, Acorda, Alkermes, and AstraZeneca alleged that Mylan’s generics infringed their patents. Although the judges reached different conclusions about whether Delaware could exercise general personal jurisdiction over Mylan based on consent given in registering to do business in the State, they both concluded that Delaware could exercise specific personal jurisdiction, based on Mylan’s suit-related contacts with Delaware.

The Delaware court could exercise specific personal jurisdiction over Mylan, according to the court. A court may exercise specific personal jurisdiction when the defendant has minimum contacts with the forum such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice. Mylan’s ANDA filings satisfied the minimum contacts standard for the purpose of engaging in allegedly wrongful conduct in Delaware. The economic realities of preparing an ANDA confirm that filing realistically establishes a plan to market. Those activities will unquestionably take place in Delaware. The ANDA filings were directly related to the sale of Mylan’s generic products in Delaware, and the claims were based on those in-state sales infringing the patents at issue. Mylan also admitted that it developed drugs for the entire U.S. market and does some business in every State, and that it registered to do business in Delaware and appointed an agent to accept service of process there. Such directing of sales into Delaware was sufficient for minimum contacts.

Mylan was unable to show that a State is forbidden to exercise its judicial power to prevent a defendant’s planned future conduct in the State, but must wait until the conduct occurs. Rulings as such would run counter to the legal tradition of injunctive actions to prevent a defendant’s planned, non-speculative harmful conduct before it occurs. As long as the connection to the planned acts is close enough, that conduct will be considered to be conduct purposefully directed at the State.

Due process factors did not weigh against litigating the present cases in Delaware, according to the court. The Supreme Court has identified a number of factors to consider that would render specific personal jurisdiction unreasonable, including “the burden on the defendant,” “the forum State’s interest in adjudicating the dispute,” “the plaintiff’s interest in obtaining convenient and effective relief,” and “the interstate judicial system’s interest in obtaining the most efficient resolution of controversies.” The burden on Mylan to litigate in Delaware would be modest, as Mylan has litigated many ANDA lawsuits in Delaware. Delaware has an interest in providing a forum to resolve the disputes because they involve the pricing and sale of products in Delaware and harms to firms doing business in Delaware. Upholding personal jurisdiction would serve the interests of the plaintiffs and the judicial system. There was no substantial argument that considerations of unfairness override the minimum-contacts basis for Delaware’s exercise of specific personal jurisdiction over Mylan.

Concurring opinion. Judge O’Malley wrote in a concurring opinion that Mylan was subject to general personal jurisdiction in Delaware by virtue of its registration to do business there. The district court judges came to different conclusions on whether compliance with a state’s registration statute that requires appointment of a registered agent for service of process continues to constitute a valid form of consent to general personal jurisdiction. Delaware requires foreign corporations to register to do business in Delaware and to appoint an agent for service of process. Judge O’Malley stated that the Supreme Court has not overruled the line of cases stating that compliance such a statute is a valid form of express consent to general personal jurisdiction. Mylan registered to do business in Delaware and appointed an agent to accept service of process there. Therefore, Mylan was subject to general personal jurisdiction in Delaware by virtue of its voluntary, express consent to such jurisdiction.

The concurring opinion also noted that Judge O’Malley concurred in the result reached by the majority that Mylan was subject to specific personal jurisdiction in Delaware.

The cases are Nos. 2015-1456 and 2015-1460.

Attorneys: Theodore B. Olson (Gibson, Dunn & Crutcher LLP) for Acorda Therapeutics Inc. and Alkermes Pharma Ireland Limited. Kannon K. Shanmugam (Williams & Connolly LLP) for AstraZeneca AB. Paul D. Clement (Bancroft PLLC) for Mylan Pharmaceuticals Inc. and Mylan Inc.

Companies: Acorda Therapeutics Inc.; Alkermes Pharma Ireland Limited; AstraZeneca AB; Mylan Pharmaceuticals Inc.; Mylan Inc.

MainStory: TopStory Patent FedCirNews

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