Chief Judge Stark Clarifies Requirements for Proper Venue in Hatch-Waxman Litigation and Permits Venue Discovery

October 12, 2017

Publication| Intellectual Property

In Bristol-Myers Squibb Co. and Pfizer v. Mylan Pharmaceuticals Inc., C.A. No. 17-379-LPS (D. Del. Sept. 11, 2017), Chief Judge Stark considered a motion to dismiss for improper venue. Mylan Pharmaceuticals Inc. (“MPI”) was sued by Bristol-Myers Squibb Co. and Pfizer Co. (collectively, “BMS”) for patent infringement after its ANDA filing for a generic version of the drug Eliquis. Ultimately, Judge Stark denied MPI’s motion to dismiss without prejudice because the Court could not reach a decision on whether venue was proper based on the facts currently available. The Court granted limited discovery for BMS to determine facts relevant to the venue analysis. Prior to issuing this decision, Judge Stark engaged in an extensive analysis of the patent statute and the TC Heartland ruling to determine what must be shown for venue to be proper in Hatch-Waxman litigation.

In conducting its analysis, the Court considered what was needed to satisfy Section 1400(b) of the patent statute when the district is not where the defendant resides. Under TC Heartland, MPI resided in West Virginia. Judge Stark found that for venue to be proper, it must be established that MPI committed acts of infringement and had a regular and established place of business in the judicial district. The Court found that MPI filing an ANDA application constituted infringement, and contacting distributors was a reliable basis that MPI intended to market their infringing product in Delaware, relying in large part on the Federal Circuit’s analysis from Acorda in the personal jurisdiction context.

After finding that an act of infringement occurred in the district, the Court considered whether MPI has a regular place of business in Delaware. Noting that the precedent on this issue was not settled, the Court concluded that while a defendant does not need to have offices or stores in the district, some physical presence and more than a few sales people in the district is required. For example, a defendant may have a regular place of business in Delaware if it has employees and products in the district that regularly interact with a distribution network or consumers.

The Court also considered MPI’s business. If the defendant was predominantly focused on litigation and regularly appeared before the Court, it could establish that MPI had a regular place of business in Delaware. Realizing that the factual record was insufficient, however, the Court granted limited discovery. The purpose was to develop facts on whether MPI had a regular place of business in Delaware. Accordingly, the motion to dismiss for improper venue was dismissed without prejudice.

Key Point: Chief Judge Stark’s decision highlights the change in venue analysis following TC Heartland and suggests each case will be determined on a factual record and that, in appropriate circumstances, venue discovery will be permitted.

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