Key Takeaways

• When there are multiple ANDA filers for the same drug, it may not be possible for a branded pharmaceutical company to bring Hatch-Waxman Act patent infringement suits against all of them in the same court consistent with the applicable venue statute. However, in such instances, brand companies can utilize consolidation via multidistrict (“MDL”) litigation to bring the case into a common venue for pretrial matters.
• Consolidation via MDL litigation can provide advantages to brand companies over litigating in multiple venues, including discovery efficiencies via consistent discovery obligations, avoiding multiple depositions of the same witness, and limiting the number of expert reports on issues common to the litigations. It also can avoid inconsistent rulings on important pretrial issues such as claim construction.
• The requirement that cases in MDLs be remanded to the original venue for trial (absent agreement or other waiver) leads to practical complications that the patentees will want to take into account and develop strategies to address, such as the fact that the trial court will be applying claim constructions that it did not issue and may not agree with.

A recent decision from the Multidistrict Litigation Panel in In re: Ozempic (Semaglutide) Patent Litigation¹ presents an interesting use of the multidistrict litigation (“MDL”) procedure in Hatch-Waxman cases to compel a generic drug manufacturer to defend itself in a venue that would otherwise be unavailable under the restrictive, patent-specific venue rules. In this instance, the venue rules forced Novo Nordisk to sue Mylan in the Northern District of West Virginia, but Novo Nordisk succeeded in having that case transferred to the District of Delaware via the MDL provisions of 28 U.S.C. § 1407. The case highlights a potential tool for branded pharmaceutical companies to gain more control over their choice in venue when—as is often the case—there are multiple generic filers for the same reference listed drug.

Background

The Recent Tightening of Venue in Hatch-Waxman Cases

The Supreme Court’s 2017 decision in TC Heartland LLC v. Kraft Food Group Brands LLC,² sparked a narrowing of potential venue choices for patentees in patent infringement cases. Before then, courts had held that consistent with the general venue statute (28 U.S.C. § 1391), venue under the patent-specific venue statute (28 U.S.C. § 1400(b)) was proper in any district that had personal jurisdiction over the accused infringer. In TC Heartland, however, the Supreme Court held that amendments broadening the general venue statute did not modify the patent-specific venue provisions of 28 U.S.C § 1400(b), under which venue arises only where either (1) the defendant resides, or (2) the defendant has committed acts of infringement and has a regular and established place of business. TC Heartland clarified that “resides” for those provisions means the defendant’s state of corporation,³ and since then, the Federal Circuit has narrowly construed the second alternative in the context of Hatch-Waxman Act cases, such that the “acts of infringement” for venue purposes are only those relating to the submission of the ANDA and do not include the expected future sales of the generic drug product.⁴ Post-TC Heartland, venue is far more restrictive for patent cases than for other types of civil litigation, and that is particularly so for Hatch-Waxman patent cases.

As a result, patentees in Hatch-Waxman cases have far fewer venue options than they had five years ago. This can create challenges for branded pharmaceutical companies seeking to sue multiple generic companies submitting ANDAs on the same reference listed drug in a common venue. While some generic pharmaceutical companies willingly consent to having their cases consolidated with other ANDA filers, typically in Hatch-Waxman heavy districts like Delaware and New Jersey, other defendants, like Mylan, vigorously defend their right to litigate only in a forum where the case can be commenced consistent with the strictures of § 1400(b).

The MDL Procedure

The MDL statute (28 U.S.C. § 1407) facilitates the efficient pretrial management of related cases filed in different jurisdictions. It established an MDL panel consisting of seven federal judges designated by the Chief Justice of the United States.⁵ Civil actions pending in different district courts that involve one or more common questions of fact may be transferred, upon the MDL panel’s own initiative or upon a motion by any party to an action in which transfer is requested, to any district for coordinated or consolidated pretrial proceedings. The panel grants transfers upon determining doing so “will be for the convenience of parties and witnesses and will promote the just and efficient conduct of such actions.”⁶ The MDL statute requires the panel to remand the transferred cases back to their original districts for trial upon completion of the consolidated pretrial proceedings, although a party may waive its right to return to the transferor court.⁷

Novo Nordisk’s Use of the MDL Procedure for Its Ozempic® ANDA Litigations

In Valeant v. Mylan Pharmaceuticals, tthe Federal Circuit planted the seeds of using the MDL process to address difficulties arising from the restrictive patent venue statute, noting in a footnote that “[w]hile cumbersome for these types of cases, 28 U.S.C. § 1407 is at least a viable path for consolidation of these cases for pretrial purposes.”⁸ Novo Nordisk successfully utilized that strategy to gain venue over Mylan, at least for pretrial purposes, in a jurisdiction in which it could not have sued Mylan in the first instance.

Ozempic® (semaglutide) is Novo Nordisk’s type 2 diabetes medicine, and generic manufacturers became eligible to submit ANDAs directed to Ozempic® in December 2021. Shortly thereafter, Novo Nordisk received notice of six ANDAs with paragraph IV certifications seeking FDA approval to manufacture generic semaglutide products. In March 2022, Novo Nordisk commenced lawsuits against each generic company.⁹ Novo Nordisk filed five cases in the District of Delaware, and they were each assigned to Chief Judge Connolly. Novo Nordisk filed the sixth case, against Mylan, in the Northern District of West Virginia. In all six cases, Novo Nordisk asserted infringement of its Orange Book-listed patents, with significant, but not complete, overlap in the specific patents asserted against the various defendants.¹⁰ Novo Nordisk sought Mylan’s consent to venue in the District of Delaware, which Mylan refused. Accordingly, in view of TC Heartland and its progeny, Novo Nordisk had no choice but to sue Mylan in a district other than Delaware, where it was able to sue the other ANDA filers, even though its case against Mylan presented many of the same patents and issues that would be litigated in the five Delaware cases.

To redress the potential problems that suing across multiple districts would present, Novo Nordisk asked the MDL panel to transfer the Mylan case to Delaware. Novo Nordisk argued that the cases would involve common questions of fact, including issues concerning the technology of the underlying patents, claim construction, prior art, and the infringement and validity of the patents. Novo Nordisk also argued that transfer and consolidation would streamline discovery by, among other things, avoiding document productions involving different parameters, avoiding witnesses being deposed multiple times across multiple cases, and avoiding multiple expert reports on the same issue. Finally, Novo Nordisk argued that transfer would promote the just and efficient conduct of the actions by eliminating duplicative discovery (and discovery disputes), preventing inconsistent pretrial rulings, and conserving resources of the judiciary and parties.

The MDL panel agreed and granted Novo Nordisk’s motion over Mylan’s opposition. The panel rejected Mylan’s focus on the patents unique to the action against Mylan, noting that transfer under § 1407 does not require complete identity, or even a majority, of common factual issues.¹¹

The MDL panel similarly rejected Mylan’s argument that centralization would interfere with its right to litigate the action in a proper forum, because § 1407 specifically authorizes the panel to select an appropriate venue for coordinated or consolidated pretrial proceedings and that doing so here would result in substantial efficiencies.

Conclusion and Practical Considerations

Novo Nordisk successfully utilized the MDL procedure to obtain venue over Mylan in a forum in which it could not have sued Mylan consistent with the narrow patent venue statute. Although this was not the first time the MDL procedure was used in a Hatch-Waxman case,¹² we can expect more patentees to take advantage of this tactic when, in view of the recent shift in venue law for Hatch-Waxman cases, they cannot sue all ANDA filers in the same forum in the first instance.

MDL litigation can provide advantages to brand companies over litigating in multiple venues. For example, discovery efficiencies can be obtained via the patentee being subject to consistent discovery obligations, avoiding multiple depositions of the named inventors and other fact witnesses, and limiting the number of expert reports on issues common to the litigations. It also can avoid inconsistent rulings on important pretrial issues such as claim construction.

However, patentees contemplating MDLs should recognize and plan for the complications that may arise given the prospect that any cases transferred to the common MDL forum will be remanded to their original forum for trial. On remand, the transferor court will not have the familiarity of the case that the transferee court acquired during the pretrial phase and will be applying important rulings from the transferee court, such as claim construction decisions, that it may not fully understand or agree with. Additionally, the use of common experts by the generic defendants will likely lead to logistical issues and require continued coordination with the parties from the MDL in preparing those experts to testify at trial. Moreover, patentees should recognize that the use of MDLs will not eliminate the risk of inconsistent trial rulings from the two venues on common issues, such as validity of the patent over the same prior art, and should strategize ways to minimize the likelihood and impact of such inconsistent rulings.

Footnotes

1. MDL No. 3038.
2. 137 S. Ct. 1514, 1516 (2017).
3. Id.
4. See, e.g., Valeant Pharmaceuticals North America LLC v. Mylan Pharmaceuticals Inc., 978 F.3d 1374 (Fed. Cir. 2020); Celgene Corp. v. Mylan Pharmaceuticals Inc., 17 F.4th 1111 (Fed. Cir. 2021).
5. 28 U.S.C. § 1407(d).
6. 28 U.S.C. § 1407(a).
7. See Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26, 37, n.2 (1998); In re Carbon Dioxide Indus. Antitrust Litig., 229 F.3d 1321, 1326–27 (11th Cir. 2000).
8. 978 F.3d at 1385 n. 10.
9. See MDL No. 3038, D.I. 29.
10. Id. at 4.
11. See MDL No. 3038, D.I. 29 at 2.
12. Novo Nordisk’s Memo in Support of Transfer, 1:22-cv-00023, D.I. 22-1, at 5 (N.D.W.Va. May 6, 2022)