Limited v. Daiichi Sankyo, Inc.
Limited v. Daiichi Sankyo, Inc.
Opinion of the Court
MEMORANDUM OPINION AND ORDER
Plaintiffs, three manufacturers of generic drugs, are seeking a declaratory judgment, which they believe would give them the green light to produce a generic form of Defendants’ popular blood pressure medicine, Benicar® (olmesartan medoxom-il), at the earliest possible date. As explained here, however, this court lacks jurisdiction over Defendants. Accordingly, the case is dismissed without prejudice.
INTRODUCTION
Defendant Daiichi Sankyo Co., Ltd. (“DS Japan”), a Japanese pharmaceutical company, owns certain patents, including United States Patent No. 6,878,703 (“the ’703 patent”), concerning the pharmaceutical drug product Benicar®. Defendant Daiichi Sankyo, Inc. (“DS USA”), DS Japan’s United States subsidiary, is incorporated in Delaware and has its principal place of business in New Jersey. DS USA markets and sells Benicar® throughout the United States and holds the United States New Drug Application (“NDA”) for the drug,
Plaintiffs have filed motions for summary judgment ([41], Alembic Pharm. Ltd. v. Daiichi Sankyo Co., 16 C 3956 [16], Aurobindo Pharm. Ltd. v. Daiichi Sankyo Inc., 16 C 4876 [17]), contending that Plaintiffs’ products, as a matter of law, could not infringe the ’703 patent because Defendants have already disclaimed the patent. Mylan has filed a motion for judgment on the pleadings [54], arguing that the court lacks subject matter jurisdiction. Mylan insists the declaratory judgment Plaintiffs seek would not redress their asserted injuries because it would not cause Mylan to forfeit its exclusivity period as Plaintiffs contend. In addition, Mylan argues that there is no case or controversy
BACKGROUND
Beniear® is drug approved by the FDA for the treatment of hypertension. See http://www.fda.gov/Drugs/DrugSafety/ PostmarketDrugSafetylnformationfor PatientsandProviders /ucm215245.htm (last visited July 20, 2016). To obtain FDA approval to market and sell Beniear®, Defendants listed two patents in the FDA’s published list of Approved Drug Products with Therapeutic Equivalence Evaluations (commonly referred to as the “Orange Book”). (PI. Torrent’s Compl. For Decl, J. (hereinafter “Torrent Compl.”) [1] at 28.); see 21 U.S.C. § 355(b)(1) (requiring applicants to list patents “with respect to which a claim of patent infringement could reasonably be asserted if a person not licensed by the owner engaged in the manufacture, use or sale of the drug”). United States Patent No. 5,616,599 (“the ’599 patent) covers the drug’s active ingredient, olmesartan medoxomil, while the ’703 patent covers methods of treatment. Apotex, Inc. v. Daiichi Sankyo, Inc., 781 F.3d 1356, 1358 (Fed.Cir. 2015). The ’703 patent remains listed in the Orange Book though Daiichi disclaimed every term of the patent on July 11, 2006. (Id. ¶¶ 24, 29.)
Drug manufacturers who seek FDA approval to market and sell generic versions of previously-approved drugs may do so by submitting abbreviated new drug applications (“ANDAs”). See 21 U.S.C. § 355(j). Plaintiffs have submitted ANDAs with respect to their own generic versions of Be-niear®. In doing so, they certified under 21 U.S.C. § 355(j)(2)(A)(vii)(IV)
In an earlier lawsuit in this district, another manufacturer of a generic version of Benicar® sought the same declaratory judgment of non-infringement of patent ’703 that Plaintiffs seek here. See Apotex, Inc. v. Daiichi Sankyo, Inc., No. 12 C 9295, 2014 WL 114127, at *1 (N.D.Ill. Jan. 9, 2014). In that case, the district court initially concluded that the case did not present a case or controversy and dismissed it for lack of subject-matter jurisdiction. Id. at *4. The Federal Circuit reversed that decision on appeal, finding that the parties’ dispute over the plaintiffs ability to sell the patented drug involved sufficiently concrete and substantial stakes. See Apotex, 781 F.3d at 1361-62. On remand, the district court granted the generic manufacturer’s motion for summary judgment of non-infringement. Apotex, Inc. v. Daiichi Sankyo, Inc., No. 12 C 9295, 2016 WL 98572, at *4 (N.D.Ill. Jan. 8, 2016). The court ruled that non-infringement follows as a matter of law from the fact that the ’703 patent had been formally disclaimed. Id. Defendants have appealed that ruling, and the case is now pending again before the Federal Circuit. Plaintiffs suggest that for the same reason the court entered summary judgment in Apotex, this court should grant summary judgment in their favor in this case. (See, e.g., PI. Torrent’s Br. in Supp. of its Mot. for Summ. J. of Noninfringement of U.S. Patent 6,878,-703 [41] at 1.) In the alternative, they argue that the district court’s decision in Apotex requires summary judgment in this case on collateral estoppel grounds. (Id.)
Defendants — respectively, a Japanese company and a company incorporated in Delaware with a primary place of business in New Jersey — object that the court lacks personal jurisdiction over them and argue for dismissal of Plaintiffs’ complaints in them entirety without consideration of the merits. Plaintiffs respond that Defendants consented to, or waived their right to ob
DISCUSSION
Because the issue of personal jurisdiction in this declaratory judgment action is intimately related to patent law, the court applies the law of the Federal Circuit to determine whether personal jurisdiction1 exists. See Silent Drive, Inc. v. Strong Indus., Inc., 326 F.3d 1194, 1201 (Fed.Cir. 2003). In the absence of an evi-dentiary hearing, which neither party has requested in this case, a plaintiff bears the burden of making a prima facie showing that the court has personal jurisdiction over the defendants. Synthes (U.S.A.) v. G.M. Dos Reis Jr. Ind. Com de Equip. Medico, 563 F.3d 1285, 1292 (Fed.Cir. 2009). When deciding whether Plaintiffs have met that burden,» the court accepts the uncontroverted allegations in their complaints as true and resolves any factual conflicts in their favor. Id. Before discussing the merits of Plaintiffs’ contention that Defendants’ contacts with the United States allow this court to exercise personal jurisdiction over them, the court turns to Plaintiffs’ argument that Defendants have waived a personal jurisdiction defense in this case.
I. Waiver
Plaintiffs assert that Defendants waived their right to challenge personal jurisdiction in this case by failing to raise the issue in the Apotex litigation. The Apo-tex suit, Plaintiffs note, was brought in this district and involved the same patent, the same undisputed material facts, and the same legal issues of infringement. (Pis.’ Jt. Br. at 8.) Plaintiffs argue that it would be inequitable to allow Defendants, who have “enjoyed the full benefits of access to this District,” to avoid litigating the same legal issues in the forum to which they previously consented. (Id.)
Plaintiffs’ waiver theory is not the law. By failing to object to jurisdiction in a case brought by one plaintiff in 2012, Defendants did not waive their right to contest personal jurisdiction in 2016 in a separate — though similar — case brought by different plaintiffs. “A party’s consent to jurisdiction in one case ... extends to that case alone.” Klinghoffer v. S.N.C. Achille Lauro Ed Altri-Gestione Motonave Achille Lauro in Amministrazione Straordinaria, 937 F.2d 44, 50 n. 5 (2d Cir. 1991). In the cases on which Plaintiffs rely, courts have recognized that a defendant may consent — or waive the right to object — to personal jurisdiction in a district when the defendant itself has brought suit involving the same transaction in that district as a plaintiff. See Gen. Contracting & Trading Co., LLC v. Interpole, Inc., 940 F.2d 20, 23 (1st Cir. 1991); Neuralstem, Inc. v. StemCells, Inc., 573 F.Supp.2d 888, 898 (D.Md. 2008). In such circumstances, where a defendant has previously brought suit in the forum, it is fair to conclude that
But where a party itself has not instituted an action in the district and has merely failed to contest jurisdiction in some prior case, equity does not require the party to adhere to that position in a later case. It is quite possible that a party may decide to waive a personal jurisdiction defense based on the circumstances of one case but make a different decision in a later case based on changed circumstances or other strategic considerations.
Permitting Defendants to assert a jurisdictional defense is particularly appropriate in this case because the Supreme Court’s personal jurisdiction jurisprudence has developed significantly between the filing of the Apotex suit and now. In 2014, the Supreme Court issued its decision in Daimler AG v. Bauman,—U.S.-, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014). Departing from the “expansive views” of general jurisdiction held by some lower courts, id. at 763, the Court in Daimler ruled that general jurisdiction must be limited to those situations in which a defendant’s contacts with the forum are so continuous and systematic that the defendant ⅛ “essentially at home” in the forum state. The paradigmatic bases for general jurisdiction over a corporation, the Court observed, are the place of incorporation or the principal place of business. Id. at 754. Following Daimler, lower courts have recognized that it is now “incredibly difficult to establish general jurisdiction in a forum other than” the place where a defendant is incorporated or has its principal place of business. Monkton Ins. Servs., Ltd. v. Ritter, 768 F.3d 429, 432 (5th Cir. 2014); Brown v. Lockheed Martin Corp., 814 F.3d 619, 627 (2d Cir. 2016). The Apotex case was filed in 2012, well before Daimler. Defendants therefore plausibly assert that their failure to contest personal jurisdiction in Apotex was based on a good-faith position that general jurisdiction may have been present in that case — a position now foreclosed in this case by Daimler. (See Defs.’ Reply in Supp. of Mots, to Dismiss PL’s Compls. [83] at 10.) In any event, whatever Defendants’ reasons for failing to contest personal jurisdiction in Apotex, Plaintiffs cite no case in which a court found that a party consented to jurisdiction in one case by failing to raise that defense in a separate case brought by a different plaintiff. Defendants’ waiver of personal jurisdiction in that case does not carry over to this one.
II. Specific Jurisdiction
In most cases, the law of the state in which a district court sits will determine the bounds of that court’s jurisdiction. See Fed. R. Civ. P. 4(k)(l)(A) (ser
In addition, in some cases, where a defendant is not subject to jurisdiction in any state’s courts and the plaintiffs claim arises under federal law, any federal district court may properly exercise jurisdiction under the so-called federal long-arm statute. See Fed. R. Civ. P. 4(k)(2). As is the case when jurisdiction is grounded in Rule 4(k)(l)(a), the court’s exercise of jurisdiction in a Rule 4(k)(2) case must still comport with the Constitution’s due process requirements. Id. In such a case, in determining whether the exercise of specific jurisdiction is constitutionally proper, the court considers the entire United States as the forum and asks whether the defendant had sufficient minimum contacts with the country as a whole. Synthes, 563 F.3d at 1295.
Plaintiffs assert that the court may properly exercise jurisdiction over DS USA under Rule 4(k)(l)(a) (and thus under the Illinois long-arm statute) and over DS Japan under Rule 4(k)(2). For that to be true, the court would have to find that DS USA had sufficient contacts with Illinois, that DS Japan had sufficient contacts with the United States, and that Plaintiffs’ claims arise from or relate to those contacts. In making such a determination, the Federal Circuit applies a three-factor test, asking whether “(1) the defendant purposefully directed its activities at residents of the forum; (2) the claim arises out of or relates to the defendant’s activities with the forum; and (3) assertion of personal jurisdiction is reasonable and fair.” Id. at 1291.
Before analyzing Defendant’s forum-based activities, however, the court must determine which of Defendants’ activities are relevant to the jurisdictional analysis in this case. As the Federal Circuit has explained, in “the ordinary patent infringement suit,” the patentee plaintiff asserts a claim against a defendant who has engaged in some act of “making, using, offering to sell, selling, or importing products or services” that allegedly, infringed the plaintiffs patent. Avocent Huntsville
Under a straightforward application of Avocent to this declaratory judgment action, it appears that the court lacks jurisdiction over Defendants. Plaintiffs have not alleged that DS USA engaged in any activities relating to enforcement of the ’703 patent in Illinois or that DS Japan has engaged in such activities within the United States. Indeed, Defendants assert that DS Japan has never sought to enforce the ’703 patent against any alleged infringer. (Decl. of Kevin Takeuchi in Supp. of Defs.’ Mot. to Dismiss (hereinafter “Tak-euchi Decl.”) [31-1] ¶ 11.) Plaintiffs contend that the mere fact that DS Japan filed for and obtained the ’703 patent is a sufficient contact with the United States to support jurisdiction. (Pis.’ Jt. Br. at 5.) But it would be inconsistent with Federal Circuit precedent to conclude that a foreign paten-tee could be sued in any United States District Court merely because it has obtained a United States patent. The Federal Circuit has previously ruled that a foreign patentee cannot be haled into a forum in a declaratory judgment action merely because it has sent a cease-and-desist letter to an alleged infringer within the forum. Silent Drive, Inc. v. Strong Indus., Inc., 326 F.3d 1194, 1202 (Fed.Cir. 2003). “[E]x-ercis[ing] jurisdiction in such a situation would not comport with fair play and substantial justice.” Id. (internal quotation marks omitted). If sending a cease-and-desist letter into a forum is insufficient to establish personal jurisdiction, then a for-tiori, a patentee’s having applied for and obtained the patent in the first place cannot be an adequate basis to confer jurisdiction.
Plaintiffs also rely on the fact that DS Japan allegedly “engaged in licensing activities for the ’703 patent” (including licensing it to DS USA) and allowed the patent to be listed in the Orange Book. (Pis.’ Jt. Br. at 6.) Indeed, the Federal Circuit has recognized that licensing activity can be the basis for specific jurisdiction in a declaratory judgment non-infringement case, but in order for licensing activity to support jurisdiction, the license at issue must be of the sort that “imposes enforcement obligations with a party residing or regularly doing business in the forum.” Avocent, 552 F.3d at 1334. Plaintiffs’ complaints contain no allegations concerning DS Japan’s licensing of the ’703 patent; Plaintiffs assert only in their joint brief opposing the motion to dismiss that DS Japan has “engaged in licensing activities.” (Pis.’ Jt. Br. at 6.) Without more specific details about the type of licensing in which DS Japan has engaged, Plaintiffs’ allegation is inadequate to confer jurisdiction in an action like this. Notably, DS Japan specifically denies Plaintiffs’ claim that it has licensed the ’703 patent to DS USA, and Plaintiffs have offered nothing to rebut that denial. (Takeuchi Decl. ¶ 13.) Finally, for the same reason that simply obtaining a patent is inadequate to confer
Plaintiffs insist that it would be misguided to rely on Avocent in this case. That precedent, they suggest, is not applicable in a case arising under the Hatch-Waxman Act. (See Pis.’ Jt. Br. at 10-11.) Because the Hatch-Waxman Act authorizes declaratory judgment suits under certain circumstances for ANDA filers seeking patent certainty, see 21 U.S.C. § 355(j)(5)(C)(i)(II), Plaintiffs argue that Acorda Therapeutics Inc. v. Mylan Pharmaceuticals, Inc., 817 F.3d 755 (Fed.Cir. 2016), the Federal Circuit’s most recent personal jurisdiction decision in the Hatch-Waxman context, provides the governing standard for this case. (Pis.’ Jt. Br. at 11.) In Acorda, the defendant was not the pat-entee, but rather an ANDA filer seeking FDA approval to market and sell its generic drug products. 817 F.3d at 757. In filing its. ANDA, the defendant certified under Paragraph IV that doing so would not infringe the patents at issue. 817 F.3d at 757. The holders of the patents brought suit in the District of Delaware for patent infringement, arguing that defendant’s Paragraph IV certification constituted an act of infringement under 35 U.S.C. § 271(e)(2)(A). Id. Affirming the denial of the defendant’s motion to dismiss for lack of personal jurisdiction, the Federal Circuit concluded that though the defendant had yet to begin marketing or selling the drugs at issue in Delaware (or anywhere else in the United States), its plans to market the drugs in Delaware and its conduct in applying for FDA approval to do so were sufficient suit-related contacts with Delaware to warrant the exercise of jurisdiction. Id. at 759-60.
Acorda, therefore, was the type of “ordinary patent infringement suit” the Federal Circuit discussed in, Avocent. In such a case, the court considers the defendants’ commercialization activity related to the accused product within the forum as part of the jurisdictional analysis. Avocent, 552 F.3d at 1332. The Federal Circuit in Acor-da simply added the wrinkle that in the Hatch-Waxman context, the court, may consider an ANDA filing as an act of alleged infringement in the forum state because of the commercialization activity within the forum state in which the defendant is likely to engage following FDA approval. Acorda, 817 F.3d at 759-60. Acorda, therefore, allows a court to look beyond actual commercialization activity within the forum state when a patentee plaintiff brings an infringement suit against an ANDA filer in the Hatch-Wax-man context. Nothing in the Federal Circuit’s opinion, however, suggests that a court should deviate from the Avocent standard in a declaratory judgment action brought against a patentee defendant.
Plaintiffs note that the effect of Acorda is that a generic company that files an ANDA may be sued anywhere in the United States, and the exercise of personal jurisdiction over that company will be proper. (Pis.’ Jt. Br. at 11.) Where it appears that the generic company would market or sell the product in every state following FDA approval of its ANDA, Plaintiffs’ statement about Acorda’s effect is probably accurate. But Plaintiffs also insist that this case presents the mirror image of Acorda, and that the Federal Circuit’s reasoning “applies in equal force in the mirror.” (Pis,’ Jt. Br. at 12.) In other words, Plaintiffs argue that because, under Acorda, a patentee may sue an ANDA filer for patent infringement in any state, an
As DS Japan asserts that it has not engaged in any enforcement activities relating to the ’703 patent (Takeuchi Decl. ¶ 11), the court’s reasoning above might suggest that the company is not subject to personal jurisdiction anywhere in the United States. It would be a troubling result if a foreign holder of a United States patent could dodge suits challenging the validity of its patent in the United States simply by refraining from enforcement activities. But fortunately, the court’s reasoning need not lead to such a result. Under 35 U.S.C. § 293, the so-called patent long-arm statute, the United States District Court for the Eastern District of Virginia may exercise personal jurisdiction over every foreign patentee (unless the patentee designates an agent to receive service of process in another jurisdiction). Thus, although neither Defendant has engaged in the type of enforcement activities within Illinois (in DS USA’s case) or within the United States (in DS Japan’s case) to warrant the exercise of personal jurisdiction in this case, Plaintiffs have other venues available to prosecute their claims.
CONCLUSION
For the reasons stated above, the court grants Defendants’ motions to dismiss ( [30], Alembic, No. 16 C 3956 [43], Aurobindo, No. 16 C 4876 [29]) for lack of personal jurisdiction. The court is aware that Mylan has also intervened as a defendant in this case. Plaintiffs, however, have only asserted claims against Daiichi, and the court has concluded that it lacks jurisdiction to hear such claims. Thus the parties are ordered to show cause within 14 days why their cases should not be dismissed in entirety without prejudice.
. The court refers to DS Japan and DS USA collectively as "Daiichi.”
. Torrent’s case, No. 16 C 2988, was assigned to this court, and the court granted Alembic’s [27] and Aurobindo's [46] motions to reassign their cases — No. 16 C 3956 and No. 16 C 4876, respectively — with Torrent’s related case. Except where otherwise noted in this opinion, docket references are to the docket in Torrent Pharm. Ltd. v. Daiichi Sankyo, Inc., 16 C 2988.
. Defendants disclaimed the '703 patent, pursuant to 35 U.S.C. § 253, after receiving notice of Mylan’s challenge to the patent's validity. (See Alembic Compl. ¶ 61.) Though Defendants requested that FDA delist the patent from the Orange Book, FDA must continue to list the patent because the first generic applicant's exclusivity period depends upon the patent’s continued listing in the Orange Book. (Id. ¶¶ 61-62); Teva Pharm. USA, Inc. v. Sebelius, 595 F.3d 1303, 1315-18 (D.C.Cir. 2010).
. Under 21 U.S.C. § 355(j)(2)(A)(vii), every ANDA must contain, among other information, a certification with respect to each patent which claims the drug at issue or claims a use for that drug
(I) that such patent information has not been filed,
(II) that such patent has expired,
(III) of the date on which such patent will expire, or
(IV) that such patent is invalid or will not be infringed by the manufacture, use, or sale of the new drug for which the application is submitted.
. The 180-day exclusivity period provides "an incentive for generic pharmaceutical companies to challenge suspect Orange Book listed patents....” Janssen Pharmaceutica, N.V. v. Apotex, Inc., 540 F.3d 1353, 1356 (Fed.Cir. 2008)
. A favorable judgment in the district court, from which Defendants fail to appeal, or which is affirmed by the Federal Circuit, would trigger the 7 5-day requirement. The possibility of a petition to the Supreme Court for a writ of certiorari does not render the decision "appealable” under the statute. See 21 U.S.C. § 355(j)(5)(D)(i)(Z )(bb)(AA).
. Plaintiffs also argue that Defendants waived personal jurisdiction in this case by agreeing to the form of the judgment entered in Apotex after Judge Coleman granted summary judgment. (Id.) In support of this claim, they cite to an unpublished Federal Circuit opinion. See Aeration Sols., Inc. v. Dickman, 85 Fed. Appx. 772, 774 (Fed.Cir. 2004) (‘‘[T]he defendants also waived personal jurisdiction concerns by consenting to an injunction in this jurisdiction.”). In that case, however, the court ruled simply that by signing a stipulated injunction order, without reserving the right to challenge jurisdiction, a defendant waives its right to raise a personal jurisdiction defense later in that same case. Id. at 775. Aeration suggests nothing about the potential waiver effect of a defendant’s agreement to the language of a judgment before another court in a different case.
Reference
- Full Case Name
- TORRENT PHARMACEUTICALS LIMITED and Torrent Pharma Inc. v. DAIICHI SANKYO, INC. and Daiichi Sankyo Co., Ltd., Mylan Pharmaceuticals Inc., Intervenor-Defendant. Alembic Pharmaceuticas Limited v. Daiichi Sankyo Co., Ltd., Mylan Pharmaceuticals Inc., Intervenor-Defendant. Aurobindo Pharmaceuticals, Limited and Aurobindo Pharma, Inc. v. Daiichi Sankyo, Inc. and Daiichi Sankyo Co., Ltd., Mylan Pharmaceuticals Inc., Intervenor-Defendant
- Cited By
- 3 cases
- Status
- Published