Valeant Pharms. N. Am. LLC v. Zydus Pharms. (USA) Inc.

Case Name: Valeant Pharms. N. Am. LLC v. Zydus Pharms. (USA) Inc., Civ. No. 18-13635, -14305 (PGS)(LHG), 2019 U.S. Dist. LEXIS 151891 (D.N.J. Aug. 13, 2019) (Sheridan, J.) 

Drug Product and Patent(s)-in-Suit: Jublia® (Efinaconazole topical solution 10%); U.S. Patents Nos. 7,214,506 (“the ’506 patent”), 8,039,494 (“the ’494 patent”), 8,486,978 (“the ’978 patent”), 9,302,009 (“the ’009 patent”), 9,566,272 (“the ’272 patent”), 9,662,394 (“the ’394 patent”), 9,861,698 (“the ’698 patent”) and 9,877,955 (“the ’955 patent”)

Nature of the Case and Issue(s) Presented: Plaintiffs sued multiple defendants who have filed ANDAs seeking to market a generic form of Jublia (efinaconazole topical solution, 10%).

Defendant Mylan Pharmaceuticals Inc. (“MPI”) is a corporation organized and existing under the laws of West Virginia, with its principal place of business located in West Virginia. Defendant Mylan Laboratories Ltd. (“MLL”) is a corporation organized and existing under the laws of India, with a place of business in Hyderabad, India. Mylan Inc. is a corporation organized and existing under the laws of Pennsylvania, having a place of business in Pennsylvania. Mylan Inc. is a parent corporation to several subsidiaries, including Agila Specialties Inc., which is located in New Jersey.

Plaintiffs allege infringement and seek declaratory judgments of infringement for each asserted patent. There is an identical, protective suit filed in the Northern District of West Virginia. That matter is stayed pending the D.N.J.’s decision on the propriety of venue. The court granted the Mylan defendants’ motion to dismiss for improper venue.

Why Mylan Prevailed: Plaintiffs had to show “both that Defendants committed acts of infringement in New Jersey, and that Defendants have a regular and established place of business in New Jersey.” Plaintiffs argued that MPI has taken steps to engage in future activities that will be purposefully directed at New Jersey. Specifically: (i) Mylan has committed acts of infringement in New Jersey through its submission of its ANDA; and (ii) Mylan has a regular and established place of business in New Jersey at minimum because its enterprise of related companies, commonly referred to as “One Mylan,” has a physical presence in this Judicial District, including the offices of its subsidiaries, clinical trial sites, and the homes of at least fourteen employees, whom Mylan admits work in New Jersey on behalf of Mylan.

The court found that the Hatch-Waxman Act treats the filing of an ANDA as an act of infringement, and therefore, because MPI electronically submitted the at-issue ANDA in West Virginia, MPI committed an act of infringement in West Virginia. Defendants and Plaintiffs disagree on whether “planned, future acts” of infringement shall be considered in determining whether a party has committed acts of infringement under § 1400(b). The temporal focus of the Hatch-Waxman infringement analysis is the future, not—as is true in essentially all other patent infringement suits—the past, or even the present. In a Hatch-Waxman suit, the subject of the dispute is the generic drug product that the defendant will manufacture and sell and offer for sale in the future. Plaintiffs argue that, should the FDA approve defendant MPI’s ANDA, each defendant will stand to benefit from such approval, and that MPI will direct product sales into New Jersey. But plaintiffs fail to show specifically how MLL and Mylan, Inc., as separate corporate entities, committed any act of infringement in New Jersey. Regarding defendant MPI, the court was not persuaded that the ANDA filer’s future, intended acts were included in the acts of infringement analysis. It was undisputed that defendant MPI submitted its ANDA application in West Virginia, to the FDA in Maryland. None of these actions occurred in New Jersey. Therefore, the court dismissed plaintiffs’ claims of infringement under the Hatch-Waxman Act.

Next, plaintiffs argued that venue was proper in New Jersey over the declaratory judgement claims because "[i]t has long been held that a declaratory judgment action alleging that a patent is invalid and not infringed … is governed by the general venue statutes, not by § 1400(b).” But, the court noted, no party was seeking invalidation of the patents. Instead, plaintiffs seek declaratory judgment that defendants infringed on its patents. Thus, because venue was improper for the infringement claims, the court found that venue was improper for the declaratory judgment claims as well. And even if venue was proper for those claims, it is within the court’s discretion to decline declaratory judgment jurisdiction.