Generic and branded pharma companies alike are waiting with baited breath to see if the U.S. Supreme Court will take up the issue of personal jurisdiction in Hatch-Waxman patent cases this term. After a broad ruling from the Federal Circuit in Acorda Therapeutics v. Mylan Pharma (Fed. Cir. 2016) allowing generic companies to be sued for patent infringement in any state in the U.S., regardless of the company’s suit-related contacts with that state, the Supreme Court could put an end to branded companies’ dominion over where Hatch-Waxman cases are fought.
Last year, I co-authored an article for Bloomberg BNA Pharmaceutical Law & Industry Report entitled “New Strategies for Venue in Hatch-Waxman Litigation” covering the District of Delaware’s application of the Supreme Court’s decision in Daimler AG v. Bauman (a non-patent case) to Hatch-Waxman cases. As a brief recap, Daimler significantly changed the requirements for establishing personal jurisdiction in federal cases by limiting the reach of general personal jurisdiction. Before Daimler, it was largely accepted that a court had general jurisdiction if a corporation did business in the forum. But under the post-Daimler regime, except in “exceptional cases,” general jurisdiction generally only exists in a corporation’s principal place of business, that is its headquarters or formal place of incorporation.
After Daimler, there was a brief period where generics thought they might be free from the perceived brand-favoritism in certain forums (e.g. Delaware, New Jersey, and New York), especially where those forums did not constitute their principal places of business. With general jurisdiction generally no longer an option for bringing suit in their favored forums, brands were now faced with having to establish specific personal jurisdiction in those forums instead. This is where the complexity lies—Hatch-Waxman litigation is premised on an artificial act of infringement: filing an Abbreviated New Drug Application (ANDA) with the Food and Drug Administration (FDA). Thus, Hatch-Waxman litigation generally arises before a generic company has received FDA approval to market its product, so specific jurisdiction cannot be based on actual sales—a typical jurisdictional tie in patent cases. This is also where the intra-district split occurred, with the Delaware bench issuing several contradicting decisions on Hatch-Waxman personal jurisdiction, and subsequently certifying their decisions for interlocutory appeal to the Federal Circuit.
Since we last wrote on this topic, the Federal Circuit considered the interlocutory appeals from Delaware and issued an opinion in Acorda. The Circuit Court’s decision in Acorda effectively obviated Daimler’s limit on general jurisdiction by broadly holding that when a generic company files an ANDA, specific jurisdiction exists in any state where the generic company intends to market its drug upon FDA approval. Read: anywhere. In other words: Delaware, New Jersey, or New York.
Mylan has filed a petition for cert from the Acorda decision, presenting the Supreme Court with the following question: “Whether the mere filing of an abbreviated new drug application by a generic pharmaceutical manufacturer is sufficient to subject the manufacturer to specific personal jurisdiction in any state where it might someday market the drug.” The petition underscores the importance of this issue to the pharma industry—where a case is fought may very well be outcome-determinative. Generic filers can still hope that the Court will find a balance for Hatch-Waxman cases, rather than essentially reverting to the pre-Daimler jurisdictional standard it found “unacceptably grasping.” After requesting an extension, Acorda has until November 21 to respond to Mylan’s petition. Stay tuned, this could be an interesting SCOTUS term for the pharma industry.
