Apicore US LLC v. Beloteca, Inc.

Although the court had personal jurisdiction over defendant, venue was improper in the Eastern District of Texas.

Case Name: Apicore US LLC v. Beloteca, Inc., C.A. No. 2:19-CV-00077-JRG, 2019 U.S. Dist. LEXIS 65858 (E.D. Tex. Apr. 17, 2019) (Gilstrap, J.) 

Drug Product and Patent(s)-in-Suit: isosulfan blue (ISB); U.S. Pats. Nos. 8,969,616 (“the ’616 patent”) and 9,353,050 (“the ’050 patent”)

Nature of Case and Issue(s) Presented: Plaintiffs Apicore and Mylan filed a patent infringement suit against Defendant Beloteca in the Eastern District of Texas. Mylan was the exclusive licensee of the asserted patents. Beloteca submitted an ANDA to the FDA on January 16, 2019. The following day, Beloteca filed a declaratory judgment action of non-infringement and invalidity of the asserted patents in the Northern District of Illinois. That court dismissed the action without prejudice because it lacked subject matter-jurisdiction at the time Beloteca filed its action.

Beloteca was not licensed to do business in Texas, nor was it licensed with the Texas Department of State Health Services. Beloteca entered into an agreement with TruPharma (a Delaware company with its principal place of business in Florida) to market, sell, and distribute ISB in the Unites States. TruPharma is licensed to sell pharmaceutical drugs in Texas. Beloteca filed a motion to dismiss for lack of personal jurisdiction and improper venue. As an alternative to dismissal, Beloteca requested that the court transfer the case to the Northern District of Illinois or the Southern District of California pursuant to 28 U.S.C. § 1406. Although the court found that it had personal jurisdiction over Beloteca, it further found that the Eastern District of Texas was an improper venue.

Why Beloteca Prevailed: The court found that Beloteca had sufficient minimum contacts with Texas for the court to exercise personal jurisdiction. Beloteca argued that: (i) Apicore did not have a cognizable claim under § 271(e) because the ANDA lacked a paragraph IV certification; and (ii) the act of filing an ANDA was not sufficient contact with Texas to support personal jurisdiction. The court rejected both arguments.

Paragraph IV certification was not required to sustain a § 271(e)(2) infringement claim. Beloteca’s ANDA filing and approval, in combination with its intent to market, distribute, and sell ISB, constituted sufficient minimum contacts with Texas. Beloteca’s conduct—filing an ANDA and challenging the validity and the infringement of the patents—had the same result of filing a paragraph IV certification. Both acts challenged the validity or the infringement of any patents covering the drug at issue.

Beloteca read Zeneca too narrowly and missed the distinction of Acorda. Zeneca stated that an ANDA filing could not be the sole basis for personal jurisdiction. Acorda stated that a defendant’s ANDA filings and something more—e.g., its distribution channels—triggered personal jurisdiction. The court rejected Beloteca’s argument that Acorda applied only to established defendants with already-existing distribution networks. The Acorda court made no such limitation; it focused on the alleged infringer’s “future real-world acts sufficiently connected to the ANDA that triggered the litigation.” Beloteca’s agreement with TruPharma demonstrated that Beloteca had established distribution channels to market and sell ISB. The court found no meaningful distinction between the distribution channels of the Acorda defendant and those contracted for by Beloteca.

Next, Beloteca argued that venue was improper because § 1400, not § 1391, governed the case. Apicore and Mylan argued that § 1391 governed venue because their complaint was a declaratory judgment action for future patent infringement. The court found that Apicore and Mylan had an express statutory remedy for patent infringement under § 271. They could not claim an additional one in the form of declaratory judgment. Where a plaintiff has an actionable claim under § 271, the plaintiff cannot avoid § 1400(b) by “wrapping its patent infringement claim inside the blanket of a declaratory judgment action.” Viewed under the correct statute, venue was improper in the Eastern District of Texas. Beloteca was a California company with its principal place of business in California. Beloteca did not have any regular and established places of business in the Eastern District of Texas. The court transferred the case to the Northern District of Illinois.