Case Name: Bristol-Myers Squibb Co. v. Mylan Pharms., Inc., Civ. No. 17-379-LPS, 2017 U.S. Dist. LEXIS 146372 (D. Del. Sept. 11, 2017) (Stark, J.)
Drug Product and U.S. Patent: Eliquis® (apixaban); U.S. Patents Nos. 6,967,208 (“the ’208 patent”) and 9,326,945 (“the ’945 patent”)
Nature of the Case and Issue(s) Presented: BMS sued Mylan alleging infringement of the patents-in-suit in response to Mylan’s filing of an ANDA. Mylan is a corporation organized under the laws of West Virginia, having its principal place of business in Morgantown, West Virginia. Mylan “is in the business of making and selling generic pharmaceutical products, which it distributes in the State of Delaware and throughout the United States.” Mylan is registered with the Delaware Board of Pharmacy as a licensed “Pharmacy – Wholesale” and “Distributor/Manufacturer CSR.” But Mylan does not have any manufacturing plants, corporate offices, facilities, other real property, telephone listings, mailing addresses, or employees in Delaware.
On May 22, 2017, the Supreme Court issued its decision in TC Heartland LLC v. Kraft Food Group Brands LLC, 137 S. Ct. 1514 (2017), holding that a domestic corporation “resides” only in its State of incorporation for purposes of the patent venue statute. The Supreme Court did not construe the second prong of § 1400(b), which makes venue in a patent case proper where a defendant “has committed acts of infringement and has a regular and established place of business.”
On July 25, 2017, Mylan moved to dismiss for improper venue under Federal Rule of Civil Procedure 12(b)(3), contending that venue is not proper under either the residency or place of business prongs of § 1400(b). The court denied Mylan’s motion, without prejudice, and afforded Mylan an opportunity to renew its motion should it believe, after expedited venue-related discovery is complete, it can meet its burden to show that it does not have a “regular and established place of business” in Delaware.
Why BMS Prevailed: The court found that the “acts of infringement” requirement of § 1400(b) was satisfied. BMS alleged in its complaint that venue is proper because Mylan had “committed an act of patent infringement under 35 U.S.C. § 271(e)(2) and intends a future course of conduct that includes acts of patent infringement in Delaware. ... Mylan will make, use, import, sell, and/or offer for sale the Mylan ANDA product in the United States, including in Delaware, prior to the expiration of the patents-in-suit.” Those allegations were not rebutted by Mylan. Therefore, it is undisputed that if Mylan’s ANDA is approved, Mylan will direct sales of its apixaban product into Delaware. Because Mylan’s ANDA filings and its distribution channels establish that Mylan plans to market its proposed drugs in Delaware and the lawsuit is about patent constraints on such in-State marketing, the court found that Mylan’s ANDA submission was an “act of infringement” in accordance with § 1400(b).
The court next addressed the remaining prong of § 1400(b)’s non-resident venue test, turning first to whether Mylan has a “regular and established place of business” in Delaware. Ultimately, the Court was unable to determine this issue and provided BMS an opportunity to take venue-related discovery. Although Mylan was incorporated in West Virginia and has its principal place of business in Morgantown, West Virginia, it is part of a larger array of companies that has a nationwide and global footprint. Within that family of companies, the Mylan defendant here served the role of securing regulatory approval for many of Mylan’s generic products. As such, Mylan is a frequent litigant in federal court in Delaware. In the past ten years, Mylan has appeared in more than 100 cases in the D. Del., and in fact has recently persuaded the N.D.W.V, its home District, to transfer a Hatch-Waxman case into the D. Del. Moreover, Mylan’s business model is in large part predicated upon participating in a large amount of litigation, since almost all of the generic drugs Mylan seeks to market in the U.S. are bioequivalent to drugs that are covered by Orange Book-listed patents. Hence, it appears that a key to Mylan’s success in the generic drug business is its constant involvement in Hatch-Waxman litigation. Those facts weighed into the assessment of whether Mylan has a continuous and permanent presence, and therefore a regular and established place of business, in Delaware. The court also took into consideration the fact that Mylan had obtained the right to do business in Delaware, including for pharmaceutical manufacturing, distribution and sales; it’s licensed as a “Pharmacy – Wholesale” and “Distributor/Manufacturer CSR” in Delaware, allowing it to distribute and manufacture controlled substances in the State; it reported several promotional “in-kind” payments to physicians during 2016, indicating that Mylan has targeted some Delaware physicians. While BMS has been unable to this point to identify a “fixed physical presence in the sense of a formal office or store” that Mylan maintains in Delaware, the court reasoned that that was not required.
The court also found that no relationship between a defendant’s acts of infringement and its regular and established place of business is necessary to satisfy § 1400(b). Mylan’s contention that no Delaware-incorporated subsidiaries of Mylan had any involvement with its ANDA or its generic apixaban tablets (2.5 mg and 5 mg) that are the subject of its ANDA “is of no legal significance.” The question is whether Mylan has committed acts of infringement in Delaware and has a regular and established place of business in Delaware, not whether Mylan’s business committed, or had a role in committing, the infringing acts.
