IP Alerts

March 22, 2016

On March 18, 2016, in Acorda Therapeutics Inc. v. Mylan Pharmaceuticals Inc., the Court of Appeals for the Federal Circuit held that the filing of an Abbreviated New Drug Application (ANDA) with a paragraph IV certification demonstrated intent to direct future sales of its drugs into all states. Remarkably, the court also held this action was sufficient to confer specific personal jurisdiction over the defendant in Delaware, a jurisdiction unconnected to defendant Mylan’s ANDA filing. The court sustained jurisdiction in Delaware solely because Mylan intended to sell generic drugs covered by the ANDA within Delaware.

The plaintiffs, brand-name drug manufacturers Acorda and AstraZeneca, hold patents directed to Ampyra^®, which is a drug product designed to help individuals with multiple sclerosis walk, and Kombiglyze^TM, which is a drug product that helps individuals with type 2 diabetes. The plaintiffs identified eight patents protecting Ampyra and Kombiglyze in the FDA’s Orange Book.

Generic drug manufacturer Mylan filed an ANDA for each drug, seeking approval to market generic versions of Ampyra and Kombiglyze. Mylan filed the typical paragraph IV certification that the patents identified in the Orange Book are invalid or would not be infringed by Mylan’s marketing of its proposed generic drugs.

Plaintiffs then filed separate ANDA lawsuits against Mylan in Delaware. Mylan moved to dismiss each suit on the basis that the court in Delaware lacked personal jurisdiction over it. The Delaware court denied Mylan’s motions to dismiss, but granted permission to seek an interlocutory appeal to the Federal Circuit. The Federal Circuit then agreed to hear the interlocutory appeals.

On consolidated appeal, the Federal Circuit affirmed, holding that Mylan is subject to specific personal jurisdiction in Delaware. Following longstanding Supreme Court requirements for specific personal jurisdiction, the Federal Circuit held that Mylan had sufficient minimum contacts with Delaware and had purposefully directed its activities in Delaware. Specifically, the Federal Circuit held that “Mylan has taken the costly, significant step of applying to the FDA for approval to engage in future activities—including the marketing of its generic drugs— that will be purposefully directed at Delaware (and, it is undisputed, elsewhere).” The Federal Circuit further explained that “the minimum-contacts standard is satisfied by the particular actions Mylan has already taken—its ANDA filings—for the purpose of engaging in that injury-causing and allegedly wrongful marketing conduct in Delaware” because Mylan’s “Delaware sales would be acts committed in the State that are wrongful—if the plaintiffs here are right about infringement and validity—and would concretely injure Acorda and AstraZeneca in the State by displacing some of their Delaware sales and likely lowering the price they could charge there.”

The court further held that Mylan’s ANDA conduct is “suit-related” and has a “substantial connection” with Delaware. The Federal Circuit explained that “the ANDA filings are tightly tied, in purpose and planned effect, to the deliberate making of sales in Delaware (at least) and the suit is about whether that in-State activity will infringe valid patents.” The Federal Circuit explained that “Mylan’s ANDA filings constitute formal acts that reliably indicate plans to engage in marketing of the proposed generic drugs.” This holding is consistent with the longstanding rule that sales of an allegedly infringing product within a specific court’s jurisdiction is sufficient to confer personal jurisdiction.

The decision was 2–1, with Judge O’Malley concurring in the result. Judge O’Malley agreed that jurisdiction was proper, but would have found jurisdiction based solely on Mylan’s registration to do business in Delaware. Acknowledging the Constitutional questions raised by this jurisdictional rationale, Judge O’Malley concluded that no party had raised such concerns and in any event that “consent by registration” would comport with Supreme Court precedent.

It was undisputed that Mylan intended to sell the generic versions of its drugs in Delaware. Notably, because in most cases a generic manufacturer would not be likely to restrict its sales to specific states, the Acorda decision seems to allow for nationwide jurisdiction over generic manufacturer defendants in most cases in ANDA patent litigation.

For more information on this opinion, please contact Fitch Even partner Alison Aubry Richards, author of this alert.

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