Celgene Corp. v. Mylan Pharm., 2021-1154

CourtUnited States Courts of Appeals. United States Court of Appeals for the Federal Circuit
Writing for the CourtProst, Circuit Judge.
PartiesCELGENE CORPORATION, Plaintiff-Appellant v. MYLAN PHARMACEUTICALS INC., MYLAN INC., MYLAN N. V., Defendants-Appellees
Docket Number2021-1154
Decision Date05 November 2021

CELGENE CORPORATION, Plaintiff-Appellant


No. 2021-1154

United States Court of Appeals, Federal Circuit

November 5, 2021

Appeal from the United States District Court for the District of New Jersey in No. 2:19-cv-05802-ES-MAH, Judge Esther Salas.

Ellyde R. Thompson, Quinn Emanuel Urquhart & Sullivan, LLP, New York, NY, argued for plaintiff-appellant. Also represented by Francis Dominic Cerrito, Frank Charles Calvosa, Eric C. Stops; Matthew J. Hertko, Jones Day, Chicago, IL; Jennifer L. Swize, Washington, DC.

Tung On Kong, Wilson, Sonsini, Goodrich & Rosati, PC, San Francisco, CA, argued for defendants-appellees. Also represented by Kristina M. Hanson; Steffen


Nathanael Johnson, George E. Powell, III, Washington, DC; Elham Firouzi San Diego, CA.

Before Prost, Chen, and Hughes, Circuit Judges.

Prost, Circuit Judge.

This is a case about venue and pleading under the Hatch-Waxman Act.

Celgene Corporation ("Celgene") markets pomalido-mide as a multiple-myeloma drug under the brand name Pomalyst. It has patents related to that drug, but many drug companies viewed the validity or applicability of those patents with skepticism and sought to bring generic poma-lidomide to market. They applied to the FDA to do so; Celgene sued. This appeal concerns Celgene's suit surrounding the abbreviated new drug application ("ANDA") submitted by Mylan Pharmaceuticals Inc. ("MPI").

Celgene filed that suit in New Jersey. Celgene is headquartered there, but none of the defendants are. Rather, MPI is based in West Virginia, Mylan Inc. in Pennsylvania, and Mylan N.V. in Pennsylvania and the Netherlands. The district court ultimately dismissed this case for improper venue (as to MPI and Mylan Inc.) and for failure to state a claim (as to Mylan N.V.). Celgene appeals.

For the reasons below, we agree with the district court that venue was improper in New Jersey for the domestic-corporation defendants, MPI and Mylan Inc. That is, Celgene did not show that those defendants committed acts of infringement in New Jersey and have a regular and established place of business there. We also agree that, as to the foreign-corporation defendant, Mylan N.V., Celgene's pleadings failed to state a claim upon which relief could be granted. We therefore affirm.




In 1984, Congress enacted the Hatch-Waxman Act, a complex statutory framework that tries to balance generic and brand interests within the pharmaceutical industry. See Drug Price Competition and Patent Term Restoration Act of 1984, Pub. L. No. 98-417, 98 Stat. 1585. One aim of Hatch-Waxman was to "speed the introduction of low-cost generic drugs to the market." Caraco Pharm. Labs., Ltd. v. Novo Nordisk A/S, 566 U.S. 399, 405 (2012); see also Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 676 (1990).

To market a new drug, a sponsor submits to the FDA a new drug application ("NDA"). See Caraco, 566 U.S. at 404. An NDA must contain the drug's proposed labeling and directions for use but also must contain 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.

To speed the introduction of low-cost generics, Hatch-Waxman includes the option for generic-drug sponsors to submit an abbreviated new drug application, or ANDA. With an ANDA, a generic-drug sponsor need not repeat a brand drug's safety-and-efficacy trials at great (and scientifically redundant) 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 brand drug. See id. at 415, 425.

A generic-drug sponsor may not market a drug in a way that infringes a brand-drug sponsor's patents. See id. at 405-06; FTC v. Actavis, Inc., 570 U.S. 136, 143 (2013).


The generic must therefore "assure the FDA" that marketing the generic "will not infringe." Actavis, 570 U.S. at 143. It does so through certifications to the FDA.

An ANDA applicant might choose to avoid infringement by waiting out a patent's term. If so, the applicant includes with its ANDA a so-called paragraph III certification for that patent. See 21 U.S.C. § 355(j)(2)(A)(vii)(III). It might also omit a patented method of use from its drug label and therefore not seek approval in a way that implicates the patent. See 21 U.S.C. § 355(j)(2)(A)(viii); Caraco, 566 U.S. at 406-07, 425; United Food & Com. Workers Local 1776 & Participating Emps. Health & Welfare Fund v. Takeda Pharm. Co., 11 F.4th 118, 124-27 (2d Cir. 2021). But an applicant might also think that a patent is invalid, unenforceable, or not infringed, notwithstanding its ANDA encompassing the same methods of use as the brand drug's NDA. If so, the applicant can ask for full approval (without omitting any methods of use from its drug label) 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).

Submitting an ANDA that seeks approval to market a drug while that drug is on-patent (e.g., an ANDA containing a paragraph IV certification) 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] If a generic goes the paragraph IV route, the brand can sue under a set of rules particular to this kind of infringement. The way this works is that the generic must


provide a so-called paragraph IV notice to the 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). That notice must include "a detailed statement of the factual and legal basis of the opinion of the applicant that the patent is invalid or will not be infringed." 21 U.S.C. § 355(j)(2)(B)(iv)(II). The notice and accompanying detailed statement, however, are not part of the ANDA and need not be submitted to the FDA. See id.; 21 C.F.R. § 314.95(e). Indeed, the substance of the notice letter (i.e., the generic's legal opinion) is immaterial to the FDA, which professes to lack "expertise" and "authority" on patent matters. See Caraco, 566 U.S. at 406-07; United Food, 2021 WL 3744899, at *3; Applications for FDA Approval to Market a New Drug, 68 Fed. Reg. 36, 676, 36, 683 (June 18, 2003) ("[W]e have long observed that we lack expertise in patent matters.").

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. If a brand-drug sponsor waits more than 45 days after it receives notice, it isn't entitled to that stay but also isn't precluded from suing later for infringement. See, e.g., GlaxoSmithKline LLC v. Teva Pharms. USA, Inc., 7 F.4th 1320, 1325 (Fed. Cir. 2021); Dey Pharma, LP v. Sunovion Pharms. Inc., 677 F.3d 1158, 1160 (Fed. Cir. 2012); Teva Pharms. USA, Inc. v. Novartis Pharms. Corp., 482 F.3d 1330, 1341 (Fed. Cir. 2007); Valley Drug Co. v. Geneva Pharms., Inc., 344 F.3d 1294, 1297 n.5 (11th Cir. 2003). If the brand-drug sponsor doesn't sue within the 45 days, the generic can instead bring a declaratory-judgment action "to obtain patent certainty." 21 U.S.C. § 355(j)(5)(C)(i); 35 U.S.C. § 271(e)(5); see Dey Pharma, 677 F.3d at 1160- 61; Teva, 482 F.3d at 1335. The upshot is that the timing


of receipt of the notice letter governs the timing of the availability of particular forms of relief.


In early 2017, MPI submitted an ANDA seeking approval to market a generic version of Pomalyst before the expiration of four Orange-Book-listed patents. MPI included a paragraph IV certification as to those patents. In turn, Celgene sued the defendants under the Hatch-Wax-man Act, asserting the four listed patents.

Celgene later obtained (and asserted) five more related patents. It sued the same defendants again twice-once in 2018, asserting one of the later-issued patents, and once in 2020, asserting another. Those cases were consolidated with the 2017 one. For the sake of simplicity, we call that consolidated six-patent action "the first case."[2] In 2019, Celgene asserted the remaining three of the later-issued patents (again against these defendants, again in New Jersey) through a largely identical complaint. That's this case.[3] This procedural bookkeeping matters because this case, though not consolidated with the first, shared Rule 12 briefing with it. That is, the parties stipulated that the resolution of motions to dismiss in the first case would govern this one too. See J.A. 220-23.

Celgene filed its first case in May 2017. The defendants-appellees moved to dismiss for improper venue and failure to state a claim in August 2017. That motion was denied in March 2018 without prejudice so that the parties could engage in venue-related discovery.


After two years of that discovery, the defendants renewed their motion to dismiss. The district court reviewed the motion under In re Cray Inc., 871 F.3d 1355 (Fed. Cir. 2017), and concluded that venue was improper. Namely, the thin set of facts that Celgene had gathered after those two years-the presence of affiliated entities and employees in New Jersey-failed to show a "regular and established place of business" of the defendants in the district under 28 U.S.C. § 1400(b).

The district court also concluded that, for Mylan N.V., Celgene had failed to state a claim upon which relief could be granted. That...

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