In TC Heartland LLC v. Kraft Food Brands Group LLC, the U.S. Supreme Court will decide whether 28 U.S.C. § 1400(b) is the sole and exclusive provision governing venue in patent infringement actions. Pursuant to § 1400(b), venue is proper in patent infringement actions in the judicial district where the defendant resides, or where the defendant has committed "acts of infringement" and has a "regular and established place of business." In Acorda v. Mylan, the Federal Circuit held that an abbreviated new drug application filer is subject to specific personal jurisdiction wherever that ANDA filer plans to sell its generic drug product[1] and, thus, an ANDA filing essentially creates personal jurisdiction in any district nationwide. In ANDA patent cases, like other patent infringement actions, courts have typically applied the broader statute governing venue, 28 U.S.C. § 1391, and found venue proper if the district court has personal jurisdiction over the defendant. TC Heartland contends that § 1400(b) is the sole and exclusive provision governing venue in patent actions and under controlling Supreme Court precedent, the terms of § 1400(b) are not supplemented by § 1391.

If the Supreme Court agrees with TC Heartland, then an innovator drug company can file a patent infringement action against an ANDA filer (or 505(b)(2) applicant) only in districts: (1) where the ANDA filer resides (i.e., is incorporated), or (2) where the ANDA filer has both committed acts of infringement and has a regular and established place of business. In a Law360 Expert Analysis article last year, I discussed what is a "regular and established place of business" for an ANDA filer. This follow-up article discusses where an act of infringement occurs, for venue purposes, in ANDA cases.

Determining Where an Act of Infringement Occurs

Courts have adopted various approaches to determine where the "act of infringement" occurs in patent infringement cases. For example, courts have held that venue is established where the accused product was delivered within a district, even though the sale occurred outside the district.[2] An earlier view that an act of infringement could be established only in a district where a completed transaction occurred has been replaced by the view that an act of infringement occurs in any district where the defendant participates significantly in the marketing activities leading to the transaction's consummation.[3] In fact, some courts have taken the position that § 1400(b) does not require more than "de minimis" infringement in a given district to constitute an act of infringement.[4] Yet some courts have held that solicitation unaccompanied by any actual sales or demonstrations of the alleged infringing product will not establish venue.[5] Indeed, other courts have held that a connection between the acts of infringements and the regular and established place of business is not required.[6]

No uniform standard exists to determine where the "act of infringement" occurs; however, such determination does not require reaching a decision on the merits of infringement — only a review of the allegations in the complaint. The majority view is that the test is liberal in determining where defendants committed acts of infringement, for venue purposes, and the term "acts of infringement" in § 1400(b) should not be narrowed or limited in its construction.[7] This view arises from traditional patent infringement cases where the accused product was on the market; however, in ANDA cases, the accused generic drug product is not yet marketed, sold or otherwise available to the public.

For an Artificial Infringement, Where Does the Act of Infringement Occur

Under § 271(e)(2), it is an act of infringement to submit an ANDA to the U.S. Food and Drug Administration with the intent to market a generic version of an innovator drug before the expiration of patents listed in the Orange Book.[8] The Supreme Court has described § 271(e)(2) as creating "a highly artificial act of infringement" because it permits an innovator drug company to bring suit before the ANDA filer brings its generic product to market.[9] If the Supreme Court rules that § 1400(b) is the sole and exclusive provision governing venue in patent actions, then courts will have to determine where the "artificial act of infringement" occurs in ANDA cases.

Because filing an ANDA constitutes an "act of infringement," it is reasonable to take a retrospective approach for determining the location of the "act of infringement." Such analysis of the facts in an ANDA case suggests that venue under § 1400(b) may be proper in those districts where: (1) the ANDA was prepared; (2) the ANDA was filed with the FDA, which is located in Maryland; (3) the Paragraph-IV notice letter was received;[10] and/or (4) the proposed generic drug batch(s) submitted with the ANDA was manufactured. However, Congress provided a safe harbor provision in § 271(e)(1) for those engaged in certain activities in support of filing an ANDA.[11] Many of the "acts" discussed supra are arguably within the "safe harbor" provision, and thus may not be considered "infringing acts" even for venue purposes.

To ensure proper venue and a 30-month stay, a retrospective view of the term "act of infringement" may require drug companies to file separate suits in each ANDA filer's state of incorporation.[12] Moreover, such an approach for determining proper venue could place restraints on the expansive jurisdiction rule for ANDA litigation held in Acorda.

An act of infringement occurs when an unauthorized party makes, uses, or sells a patented invention or induces another to do so.[13] Confronted with a claim of patent infringement, courts evaluate whether, "if a particular drug were put on the market, it would infringe the patent."[14] Congress deemed the ANDA filing to have a nonspeculative causal connection to the ANDA filer's future infliction of real-world market injury.[15] Upon prevailing on invalidity or noninfringement, an ANDA filer would indubitably distribute and/or sell its proposed generic drug. Furthermore, the Federal Circuit has taken a prospective approach to personal jurisdiction in ANDA cases.[16] Therefore, it may be justifiable to take a prospective approach to determine the location of commission of the "acts of infringement," for venue purposes.

A "forward-looking" analysis of the facts involved in an ANDA case suggests that venue, under § 1400(b), may be proper anywhere the ANDA filer intends to distribute, market and/or sell its generic drug product, which could result in nationwide patent venue over ANDA filers. Therefore, a prospective approach for determining proper venue may not place restraints on the current expansive jurisdiction rule for ANDA litigation.[17]

The Supreme Court denied Mylan Pharmaceuticals Inc.'s petition for certiorari to reverse the Federal Circuit's ruling in Acorda v. Mylan that essentially permits nationwide specific personal jurisdiction over ANDA defendants. If the Supreme Court rules that § 1400(b) is the sole and exclusive provision governing venue in patent actions, then the broad personal jurisdiction rule over ANDA defendants held in Acorda may (or may not) be restricted by the patent venue limits set forth in TC Heartland.

[1] Acorda Therapeutics Inc. v. Mylan Pharm. Inc., 817 F.3d 755 (Fed. Cir. 2016), cert. denied sub nom. Mylan Pharm. v. Acorda Therapeutics (U.S. Jan. 9, 2017).

[2] See, e.g., Johnston v. IVAC Corp., 681 F. Supp. 959, 961 (D. Mass. 1987) ("Venue in this district is thus proper, even though the sales are subject to final approval in California and the orders are filled from various locations outside Massachusetts."); Union Asbestos & Rubber Co. v. Evans Prod. Co., 328 F.2d 949, 952 (7th Cir.1964); Digital Equip. Corp. v. Electronic Memories & Magnetics Corp., 452 F. Supp. 1262, 1265 (D. Mass.1978); Stanley Works v. Globemaster, Inc., 400 F. Supp. 1325, 1330–31 (D. Mass.1975).

[3] Johnston, 681 F. Supp. at 961-62 (discussing the progression of the law pertaining to venue).

[4] See, e.g., Rackman v. Texas Instruments, Inc., 712 F. Supp. 448, 450 (S.D.N.Y. 1989) (Venue in patent infringement case was proper in the where the defendant maintained sales office in that district and sold a small quantity of the accused product, regardless of whether amount sold was "de minimis.").

[5] See, e.g., Amperex Elec. Corp. v. Perry, No. 18530, 1970 WL 10028, at *2 (7th Cir.1970); Scovill Mfg. Co. v. Sunbeam Corp., No. 4533, 1973 WL 20387, at *2 (D. Del. Aug. 23, 1973).

[6] See, e.g., Bourns, Inc. v. Allen-Bradley Co., No. 70-C-1992, 1971 WL 17177 (N.D. Ill. 1971) ("Nothing in the language of Section 1400 (b) justifies the conclusion that a defendant's place of business in the district must have some connection with the accused device. The statute requires only that the defendant have committed acts of infringement in the district and have a regular and established place of business there; there is no requirement that the two factors be related."); Kerr v. Port Huron Sulphite & Paper Co., 157 F. Supp. 685, 687 (D.N.J. 1957) ("Congress has carefully refrained from saying that the business conducted at this regular and established place, is to be confined only to the consummation of contracts.").

[7] Union Asbestos, 328 F.2d at 952 (citing Shelton v. v. Schwartz, 131 F.2d 805, 808 (7th Cir. 1942)); Kaz Mfg. Co. v. Chesebrough-Ponds, Inc., 317 F.2d 679 (2d Cir. 1963); Ronson Art Metal Works, Inc., v. Brown & Bigelow, Inc., 104 F. Supp. 716, 725 (S.D.N.Y.1952).

[8] See 35 U.S.C. § 271(e)(1).

[9] AstraZeneca Pharm. LP v. Apotex Corp., 669 F.3d 1370, 1377 (Fed. Cir. 2012) (citing Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 678, 110 S.Ct. 2683, 110 L.Ed.2d 605 (1990)).

[10] Cf. Eli Lilly and Co. v. Mylan Pharmaceuticals Inc., No. 1:14-cv-389 (S.D. Ind. Mar. 12, 2015) (court found specific jurisdiction based on receipt of a paragraph IV notice letter); AstraZeneca AB v. Mylan Pharmaceuticals Inc., No. 14‐696‐GMS, (D. Del. Nov. 5, 2014) (same).

[11] See Shire LLC v. Amneal Pharm., LLC, 802 F.3d 1301, 1309 (Fed. Cir. 2015) (citing 35 U.S.C. § 271(e)(1)).

[12] If the patent owner files suit within 45 days of receiving the paragraph IV notice letter, the FDA is prohibited from approving the ANDA for 30 months, unless the ANDA filer prevails before the 30-month period expires. See U.S.C. § 355(j)(5)(B)(iii).

[13] 35 U.S.C. § 271.

[14] Bristol-Myers Squibb Co. v. Royce Laboratories, Inc., 69 F.3d 1130, 1135 (Fed. Cir. 1995).

[15] Acorda, 817 F.3d at 762 (Fed. Cir. 2016).

[16] See id. at 759.

[17] See Part I of TC Heartland's Restraints On ANDA Litigation Jurisdiction for discussion about what is a "regular and established place of business" for an ANDA filer.

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