Federal
Circuit Clarifies Delaware Rulings on Personal Jurisdiction in Hatch-Waxman
Paragraph IV Orange Book Patent Litigations in Mylan
Cases
On March 18, 2016, the Court of
Appeals for the Federal Circuit (“CAFC”) held that the U.S. District Court
for the District of Delaware had personal jurisdiction to hear Acorda’s
patent infringement suit against Mylan asserting patents covering the MS drug
Ampyra.
Mylan had argued that the Delaware
District Court did not have personal jurisdiction over Mylan because: (i) Mylan is based in West Virginia; and
(ii) Mylan filed the ANDAs at issue with the FDA in Maryland. In a separate suit pending before the Delaware
District Court, Mylan also made the same argument in AstraZeneca’s lawsuit based
upon Mylan’s ANDAs seeking to market a generic version of the type II
diabetes drugs Onglyza and Kombiglyze.
In both cases, the Delaware District
Court held that it had personal jurisdiction, although the respective judges
relied on different rationales. Thereafter, the CAFC affirmed the Delaware District Court decisions in
an opinion authored by Judge Richard G. Taranto relying solely on the grounds
of specific personal jurisdiction.
“Specific personal jurisdiction” refers
to jurisdiction based on a company’s minimum contacts with the forum state
when the claim arises out of, or is related to, those specific contacts;
whereas “general personal jurisdiction” refers to a situation where a court
in a given state may assert personal jurisdiction over a defendant
irrespective of the nature of the claim by virtue of that defendant’s
continuous actions and relations with the state.
According to the CAFC’s decision,
Acorda markets Ampyra, under the authority of a new drug application or NDA
to help individuals with multiple sclerosis, and in seeking approval for
Ampyra, Acorda identified five patents for listing in the FDA’s Approved Drug
Products with Therapeutic Equivalence Evaluations publication—the “Orange
Book.”
In January 2014, Mylan submitted its
ANDA to the FDA seeking approval to market generic versions of Ampyra, and
certifying that Acorda’s Orange Book patents for Ampyra were invalid and/or
not infringed. Mylan also submitted
ANDAs seeking approval to market generic versions of Onglyza and Kombiglyze
making the same type of certification.
Acorda, Alkermes and AstraZeneca
each filed separate suits against Mylan in the District of Delaware for
patent infringement under the Hatch-Waxman artificial infringement provision
of 35 U.S.C. § 271 (e)(2) (A).
Faced with Mylan’s arguments, Chief
Judge Leonard P. Stark in the Acorda case and Judge Gregory M. Sleet in the
AstraZeneca case denied Mylan’s respective motions to dismiss. The judges, however, disagreed on the grounds. Judge Stark’s ruling relied upon a general
personal jurisdiction theory finding that Mylan had consented to such
jurisdiction by registering to do business in Delaware; and Judge Sleet
relied upon a specific jurisdiction theory.
On appeal, the CAFC found that the
minimum-contacts standard is satisfied by the particular actions Mylan had
already taken—its ANDA filings—for the purpose of engaging in that
injury-causing and allegedly wrongful marketing conduct in Delaware. "[Mylan’s] ANDA filings constitute
formal acts that reliably indicate plans to engage in marketing of the
proposed generic drugs. Delaware is undisputedly a State where Mylan will
engage in that marketing if the ANDAs are approved."
The CAFC also opined that the
magnitude and costs of the work required before the ANDA is filed soundly
link the ANDA filing to the filer’s entry into the market to compete with the
brand-name manufacturer if approval is obtained and that it had emphasized
the link in its decisions in Apotex,
Inc. v. Daiichi Sankyo, Inc., 781 F.3d 1386 (Fed. Cir. 2015) and Caraco Pharm. Labs., Ltd. v. Forest Labs.,
Inc., 527 F.3d 1278 (Fed. Cir. 2008).
The CAFC further wrote that although
Mylan did not meaningfully develop an argument that a rigid past/future
dividing line governs the minimum-contacts standard, "Mylan does not
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. Such a rule would run counter to the legal tradition of
injunctive actions to prevent a defendant’s planned, non-speculative harmful
conduct before it occurs."
In her concurrence, Judge O’Malley
agreed with Stark that the Delaware District Court could have exercised
general personal jurisdiction over Mylan in the case, citing for example the
Supreme Court’s decision in Pennsylvania
Fire Insurance Co. of Philadelphia v. Gold Issue Mining & Milling Co.,
243 U.S. 93 (1917).
According to prognosticators,
"It’s a good decision for brand manufacturing companies because it
allows personal jurisdiction over a generic manufacturer in a Hatch-Waxman
case anywhere in the country." That is, "Under the decision, specific jurisdiction is
established because an ANDA filed with the Food and Drug administration shows a plan that leads to
the deliberate making of sales and potentially real word of infringement that
harm brand name manufacturers."
Federal Circuit Rules that While the Patent
Trial and Appeal Board has the Authority to Eliminate "Redundant" Arguments
in a Patent Challenge, Estoppel Does Not Apply to Those “Eliminated” Arguments
The CAFC
recently ruled that Patent Trial and Appeal Board (“PTAB”) has the authority
to eliminate "redundant" arguments in a patent challenge, but that those
“eliminated” arguments are not subject to estoppel and may be made later in a
District Court proceeding. The CAFC
also reiterated that the AIA leaves it with little ability to review
"trial institution" decisions. At issue here, the PTAB eliminated a Shaw Industries Group argument
for why Automated Creel Systems’ (“ACS”) carpet manufacturing patent was
invalid.
The CAFC held
that the AIA defined an IPR challenge to begin when trial is instituted, not
when an IPR petition is filed, and while the PTAB ultimately ruled that the
patent was not invalid, the CAFC held that Shaw did not lose based upon the
eliminated argument since the PTAB never considered it. The CAFC also ruled that, on the merits,
the PTAB’s final decision of patent validity in this case was so ambiguous
that it required additional clarification and remanded.
By way of
background, ACS asserted infringement, in the U.S. District Court for the
Northern District of Georgia, of U.S. Patent No. 7,806,360 directed to
"creels" for supplying yarn and other stranded materials to a
manufacturing process. Shaw thereafter
filed an IPR petition challenging the ‘360 patent on both anticipation and
obviousness grounds. Two of those
grounds relied on a patent issued in 1985 to William Payne. While the PTAB instituted an IPR, the PTAB
denied the Payne-based invalidity as redundant; the CAFC noted that the
PTAB’s final written decision does not mention the Payne reference.
The CAFC then
rejected Shaw’s attempts, i.e.,
appeal and petition for writ of mandamus, seeking appellate review of the
PTAB’s "redundancy doctrine." Shaw characterized the doctrine as where "the Board arbitrarily
and capriciously denies some grounds but not others," but acknowledged
that its main concern was the fear that they would be barred from relying on
the Payne reference at a future PTAB or pending district court proceeding.
In addressing
the eliminated Payne reference, the CAFC said that Shaw would only be barred
from asserting invalidity grounds that were raised or could have been raised
during the IPR, and because Shaw was precluded from raising its Payne-based
invalidity arguments during IPR, the estoppel provisions did not apply to
those grounds.
Judge Jimmie V.
Reyna wrote a concurrence heavily criticizing the PTAB for its redundancy
doctrine and rejecting the USPTO’s argument that no such doctrine
exists. He also mocked the USPTO for
claiming it has "complete discretion" to institute trial. "The PTO’s claim to unchecked
discretionary authority is unprecedented," he said.
The U.S.
Supreme Court heard oral arguments April 25 on appellate authority to review
the PTAB’s trial institution decisions
in Cuozzo Speed Techs., LLC v. Lee,
No-15-446 (Jan. 15, 2016). |
