Richards Layton & Finger
 

Chief Judge Stark Denies Motion to Dismiss for Improper Venue with Leave to Renew Following Venue Discovery

December 19, 2017

In Javelin Pharmaceuticals, Inc. v. Mylan Laboratories Ltd., No. 16-224-LPS (D. Del. Dec. 1, 2017), Chief Judge Stark denied a motion to dismiss or transfer for improper venue filed by the defendants, Mylan Laboratories Limited, Mylan, Inc., and Mylan Pharmaceuticals Inc. (collectively, “Mylan”), but with leave to renew after the plaintiffs, Javelin Pharmaceuticals, Inc., Hospira, Inc., and Janssen Pharmaceutica N.V. (collectively, “Janssen”), have the opportunity to take venue discovery.

After concluding that Mylan’s venue challenge was not untimely (since the Supreme Court’s decision in TC Heartland represented a change in controlling law), the Court found that Mylan did not forfeit the defense by participating in the litigation for over a year: Mylan originally asserted in its answer that venue was improper and moved to dismiss no more than three months after the TC Heartland decision was issued. Additionally, trial was scheduled for April 2018, around the same time that a parallel action in the Northern District of West Virginia (the proposed transferee forum) was scheduled to go to trial.

As the defendants were not Delaware corporations and thus did not “reside” in Delaware under the first part of the patent venue statute, the Court turned to the second part of the statute: whether Mylan had committed acts of infringement in the District of Delaware and has a regular and established place of business there. Although the Court found that Mylan failed to show that there were no acts of infringement, the Court was unable, on the present record, to determine whether Mylan had a regular and established place of business in the district. Reasoning that the ability of a company to “establish or ratify” an employee’s home as a regular and established place of business (as stated in In re Cray Inc., 871 F.3d 1355 (Fed. Cir. 2017)) could analogously apply all the more to corporate affiliates, the Court allowed Janssen to inquire into other affiliates or subsidiaries of Mylan Inc. that may have regular and established places of business in the district, places that could be attributed to Mylan to satisfy the patent venue statute.

Key Point: Although the Court allowed venue discovery, Chief Judge Stark noted that the defendants’ compliance with venue-related discovery would not result in the forfeiture of their improper-venue defense by participating in the lawsuit.