Bausch Health Ir. Ltd. v. Mylan Labs., Civil Action 21-10403 (SRC) (JSA)

CourtUnited States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey
Writing for the CourtHON. STANLEY R. CHESLER United States District Judge.
Docket NumberCivil Action 21-10403 (SRC) (JSA)
PartiesBAUSCH HEALTH IRELAND LIMITED, and SALIX PHARMACEUTICALS, INC. Plaintiffs, v. MYLAN LABORATORIES LTD., AGILA SPECIALTIES INC., MYLAN API U.S. LLC, MYLAN INC., VIATRIS INC., and MYLAN PHARMACEUTICALS INC., Defendants.
Decision Date08 March 2022

BAUSCH HEALTH IRELAND LIMITED, and SALIX PHARMACEUTICALS, INC. Plaintiffs,
v.
MYLAN LABORATORIES LTD., AGILA SPECIALTIES INC., MYLAN API U.S. LLC, MYLAN INC., VIATRIS INC., and MYLAN PHARMACEUTICALS INC., Defendants.

Civil Action No. 21-10403 (SRC) (JSA)

United States District Court, D. New Jersey

March 8, 2022


NOT FOR PUBLICATION

OPINION

HON. STANLEY R. CHESLER United States District Judge.

This matter comes before the Court on the motion to dismiss filed by Defendants Viatris Inc. (“Viatris”), Mylan Inc., Mylan API U.S. LLC (“Mylan API”), Mylan Pharmaceuticals Inc. (“MPI”), Mylan Laboratories Ltd. (“MLL”), and Agila Specialties Inc. (“Agila, ” and collectively, “Defendants”) as to the 16-count complaint filed against them by Plaintiffs Bausch Health Ireland Limited (“Bausch”) and Salix Pharmaceuticals Inc. (“Salix, ” and collectively “Plaintiffs”). Plaintiffs oppose the motion and cross-move for jurisdictional and venue discovery. The Court has reviewed the papers submitted and proceeds to rule without oral argument, pursuant to Federal Rule of Civil Procedure 78. For the reasons that follow, Defendants' motion will be granted in part and Plaintiffs' cross-motion will be denied. The action further will be transferred to the Northern District of West Virginia.

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I. Background

Under the Hatch-Waxman Act, to market a new drug, a sponsor submits to the Food and Drug Administration (“FDA”) a new drug application (“NDA”). See Caraco Pharm. Labs., Ltd. v. Novo Nordisk A/S, 566 U.S. 399, 404 (2012). An NDA must contain the drug's proposed labeling and directions for use and extensive information on clinical trials showing that the drug is safe and effective for its labeled use. See Id. Brand-drug sponsors are also required to inform the FDA of all its patents covering the drug or its labeled methods of use. See 21 U.S.C. § 355(b)(1), (c)(2). These patents are publicly listed in what is known as the Orange Book. Caraco, 566 U.S. at 405-06. The Hatch-Waxman Act also includes an option for generic-drug sponsors to submit an abbreviated new drug application (“ANDA”). Using an ANDA, a generic-drug sponsor need not repeat a brand drug's safety-and-efficacy trials at substantial expense. Instead, a generic-drug sponsor must show that its product is bioequivalent to the reference brand drug. See Id. If so, the sponsor can market that generic drug with a label matching that of the brand drug. See Id. at 415, 425.

An ANDA applicant that believes a brand-sponsor's patent is invalid, unenforceable, or not infringed can ask for full approval during the patent's term and include with its ANDA a paragraph IV certification. See 21 U.S.C. § 355(j)(2)(A)(vii)(IV).[1] Submitting an ANDA that seeks approval to market a drug while that drug is on-patent is patent infringement. 35 U.S.C. § 271(e)(2); see also Valeant Pharms. N. Am. LLC v. Mylan Pharms. Inc., 978 F.3d 1374, 1381- 82 (Fed. Cir. 2020).1 The generic sponsor must provide a so-called paragraph IV notice to the

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patentee brand-drug sponsor after it submits its ANDA and the FDA confirms receipt of the submission. See 21 U.S.C. § 355(j)(2)(B); see also Id. § 355(j)(2)(B)(ii)(I). A brand-drug sponsor that sues within 45 days of receiving notice of a generic's paragraph IV certification is entitled to an automatic thirty-month stay of FDA approval so the infringement and validity questions can be worked out in court. 21 U.S.C. § 355(j)(5)(B)(iii); Actavis, 570 U.S. at 143, 133 S.Ct. 2223.

The instant litigation concerns Defendants' alleged filing of ANDA No. 215686 to market generic versions of Plaintiff Salix's plecanatide oral tablets product, Trulance. (Compl. ¶¶ 47- 48.) Salix holds an approved NDA for Trulance, and the patents-in-suit are listed in the FDA's “Approved Drug Products with Therapeutic Equivalence Evaluations” publication (the “Orange Book”). (Id. ¶¶ 9, 45 (including United States Patents Nos. 7, 041, 786 (“the ‘786 patent”), 7, 799, 897 (“the ‘897 patent”), 8, 637, 451 (“the ‘451 patent”), 9, 610, 321 (“the ‘321 patent”), 9, 616, 097 (“the ‘097 patent”), 9, 919, 024 (“the ‘024 patent”), 9, 925, 231 (“the ‘231 patent”) and 10, 011, 637 (“the ‘637 patent”).)

As part of the ANDA process, Defendants allegedly submitted a paragraph IV certification as to six of the eight patents-in-suit and a paragraph III certification as to the remaining two. (Id. ¶¶ 47; see also Meckstroth Decl., Ex. C.)[2] Following the submission of these certifications and the FDA's acknowledgment of the same, MPI sent Salix, Bausch, and non-party Synergy Pharmaceuticals Inc. a notice-of-certification letter, dated March 18, 2021, which, among other things, notified Plaintiffs of Defendants' intentions to seek the FDA's approval to market certain of their proposed products prior to the expiration of the patents-in-suit. (See Compl. ¶¶ 49, 51- 54; Meckstroth Decl., Ex. D.)

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On April 28, 2021, Plaintiffs filed the 16-count Complaint against Defendants. For each of the eight patents upon which Defendants allegedly infringe, Plaintiffs pursue both a claim of infringement under the United States patent laws, 35 U.S.C. § 271(e)(2), and a claim under the Declaratory Judgment Act, 28 USC §§ 2201 and 2202. (Id. ¶¶ 55-142.)[3]

II. Discussion

Defendants move to dismiss the complaint on numerous grounds. First, Defendants assert that the District of New Jersey is an improper venue under 28 U.S.C. § 1400(b) as to Mylan Inc., Mylan API, MPI, or Viatris. Second, Defendants contend that Plaintiffs have failed to state a claim against MLL, Agila, Mylan API, Mylan Inc., and Viatris with respect to the Infringement Counts. Third, Defendants argue that Plaintiffs fail to state a claim and that this Court lacks subject matter jurisdiction with respect to the Declaratory Judgment Counts. Fourth, Defendants claim that the Court lacks personal jurisdiction over MLL. In turn, Plaintiffs cross-move for jurisdictional and venue discovery.

A. Defendants' Motion to Dismiss for Improper Venue as to Mylan Inc., Mylan API, MPI, and Viatris and Plaintiffs' Cross-Motion for Venue and Jurisdictional Discovery.[4]

28 U.S.C. § 1400(b) provides that a patent infringement case may be brought in the judicial

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district where (1) “the defendant resides, ” or (2) the defendant “has committed acts of infringement and has a regular and established place of business.”[5] Section 1400(b) is the “sole and exclusive provision controlling venue in patent infringement actions, ” TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S.Ct. 1514, 1519 (2017), and “is intended to be restrictive of venue in patent cases compared with the broad general venue provision, ” In re ZTE (USA) Inc., 890 F.3d 1008, 1014 (Fed. Cir. 2018).[6] Venue may be imputed to a corporate defendant under an alter ego or veil piercing theory in a patent infringement action, but where related companies have maintained corporate separateness, the place of business of one corporation is not imputed to the other for venue purposes. Celgene Corp. v. Mylan Pharms. Inc., 17 F.4th 1111 (Fed. Cir. 2021).

1. Standard of Review

Plaintiffs bear the burden of establishing that venue in this district is proper. In re ZTE (USA) Inc., 890 at 1013. As a general rule, “[t]he Court will accept any venue-related allegations in the complaint as true, unless they are contradicted by the defendant's evidence.” Novartis Pharm. Corp. v. Accord Healthcare Inc., 2019 WL 2502535, at *2 (D. Del. June 17, 2019) (citing Bockman v. First Am. Mktg. Corp., 459 Fed.Appx. 157, 158 n.1 (3d Cir. 2012)). In addition to the venue-related allegations found in the Complaint, the Parties have submitted declarations and documentary evidence in support of their respective positions. Since this Court has the benefit of a factual record, the Court will consider the evidence to determine whether venue is proper. See In re Cray Inc., 871 F.3d 1355, 1364 (Fed. Cir. 2017) (evaluating the various venue facts submitted

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without discussing whether they had been plead in the operative complaint); Bristol-Myers Squibb Co. v. Aurobindo Pharma USA Inc., 2018 WL 5109836, at *2 (D. Del. Oct. 18, 2018) (considering evidence outside of the complaint on a renewed motion to dismiss pursuant to Rule 12(b)(3)). When deciding a motion to dismiss for improper venue, a court draws all reasonable inferences and resolves factual conflicts in a plaintiff's favor. High 5 Games, LLC v. Marks, 2019 WL 3761114, at *13 (D.N.J. Aug. 9, 2019) (citing Bockman, 459 Fed.Appx. at 158 n.1). Because the record before the Court is limited to affidavits and other written materials, Plaintiffs are obliged only to make a prima facie showing that venue is appropriate. Cf. Celgard, LLC v. SK Innovation Co., 792 F.3d 1373, 1378 (Fed. Cir. 2015) (requiring prima facie showing when determining personal jurisdiction after jurisdictional discovery but without the benefit of a jurisdictional hearing); see also Gulf Ins. Co. v. Glasbrenner, 417 F.3d 353, 355 (2d Cir. 2005) (quoting CutCo Industries, Inc. v. Naughton, 806 F.2d 361, 364-365 (2d Cir. 1986) (“If the court chooses to rely on pleadings and affidavits, the plaintiff need only make a prima facie showing of [venue]”) (alterations in original)).

2. Only MPI has committed an alleged act of infringement and did not do so in New Jersey.

Under the Hatch-Waxman Act:

It shall be an act of infringement to submit (A) an application under section 505(j) of the Federal Food, Drug, and Cosmetic Act or described in section 505(b)(2) of such Act . . . if the purpose of such submission is to obtain approval under such Act to engage in the commercial manufacture, use, or sale of a drug . . . claimed in a patent or the use of which is claimed in a patent before the expiration of such patent.

35 U.S.C. § 271(e)(2). “[I]t is the submission of the ANDA, and only the submission, that constitutes an act of infringement in this...

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