Delaware Found to be Improper Venue for ANDA Suit

October 31, 2018

The District of Delaware dismissed a Hatch-Waxman Act ANDA lawsuit that Bristol-Myers Squibb had filed against Mylan Pharmaceuticals, finding that under the new venue rules established by the Supreme Court’s TC Heartland decision, Delaware was an improper venue for BMS’s patent infringement claims. Mylan has vigorously insisted that the Northern District of West Virginia is the only proper venue for ANDA suits filed against it and frequently challenged suits filed anywhere else. Until now, however, Mylan has been largely unsuccessful in having suits filed in other districts rejected on venue grounds.

Because Mylan is incorporated in West Virginia, and thus under TC Heartland does not “reside” in Delaware for purposes of the special patent venue statute (35 U.S.C. § 1400(b)), BMS was forced to try to establish, among other things, that Mylan has a “regular and established” place of business in that District. In Bristol-Myers Squibb Co., et al. v. Mylan Pharmaceuticals Inc., Civ. A. No. 17-374-LPS (D. Del. Oct. 18, 2018), Judge Stark found that BMS could not do so. Although he agreed with BMS that the residency of a corporate affiliate may be attributed to a named corporate defendant in appropriate circumstances, Judge Stark imposed a very high bar for doing so—holding that the “presumption of corporate separateness may only be overcome by a showing of fraud, injustice, or unfairness” akin to the proofs required to “pierce the corporate veil.” He then found that BMS had failed to meet that “heavy burden.” Judge Stark also rejected BMS’s argument that the unique circumstances presented by ANDA cases dictate that they be treated differently for venue purposes than traditional patent infringement actions, finding that the Supreme Court’s TC Heartland decision dictates that “the patent venue statute alone should control venue in patent infringement proceedings.”

Historically, Mylan has been an outlier amongst generic manufacturers in its efforts to fight venue in Delaware, New Jersey and other common venues for ANDA cases. This case, however, will bolster any accused infringers—in ANDA cases or otherwise—who wish to challenge a patentee’s chosen forum, and may embolden other generic manufacturers to follow Mylan’s more combative approach to venue issues.

Subscribe to Dechert Updates