Eli Lilly & Co. v. Mylan Pharmaceuticals, Inc.
Eli Lilly & Co. v. Mylan Pharmaceuticals, Inc.
Opinion of the Court
ORDER DENYING THE MYLAN DEFENDANTS’ MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION
This cause is before the Court on the Motion to Dismiss [Docket No. 150], filed on May 2, 2014, by Defendants Mylan Pharmaceuticals, Inc., Mylan, Inc., and Mylan Laboratories, Ltd. (collectively, “the Mylan Defendants”).
On May 30, 2014, Plaintiffs moved for time to conduct jurisdictional discovery regarding the Mylan Defendants’ contacts with Indiana, and the Magistrate Judge granted that request as well as an enlargement of time to respond to the Mylan Defendants’ motion to dismiss. That discovery period has now ended and the My-lan Defendants’ Motion to dismiss is fully briefed and ripe for ruling. For the reasons detailed below, we DENY the Mylan Defendants’ Motion.
Factual Background
Plaintiffs have brought this claim against the Mylan Defendants and others alleging that Defendants infringed three of Plaintiffs’ patents by filing an Abbreviated New Drug Application (“ANDA”) with the
The Mylan Defendants are three of the forty original defendants who challenged the validity of Plaintiffs’ patents that cover Effient®.
The Mylan Defendants do not have offices or facilities in Indiana nor do they have a telephone listing or mailing address in Indiana. Although the Mylan Defendants assert in their opening brief that they have no employees or officers in Indiana (Tighe Decl. ¶ 6), deposition testimony establishes that Mylan Pharmaceuticals has at least four employees who do live in Indiana, including two members of the company’s eight-to-ten member National Account Managers group, which manages Mylan’s national sales relationships. Exh. 3 at 70-71. Mylan Pharmaceuticals obtained a wholesaler drug license allowing it to sell its generic products in Indiana and its Indiana sales include dozens of Mylan products. Id. at 63, 201. Mylan Pharmaceuticals sells Mylan products directly to retailers in Indiana as well as to wholesalers, knowing that the wholesalers sell their products in Indiana. Id. at 65, 69. Mylan Pharmaceuticals also makes sales calls and directs promotional materials to residents of Indiana. Exh. 5.
On July 10, 2013, Mylan Pharmaceuticals submitted an ANDA to the Food and Drug Administration (“FDA”) seeking approval to market generic prasugrel hydrochloride tablets in the United States. The ANDA was prepared in West Virginia and filed in Maryland. The ANDA included a “Paragraph IV” certification that the '726, '703, and '325 patents exclusively licensed to Eli Lilly are invalid, unenforceable, and will not be infringed. Mylan Pharmaceuticals also directed a Notice Letter to Lilly in Indiana, informing Lilly of its Paragraph IV certification as required under the Hatch-Waxman Act. Plaintiffs then filed in this court their complaint for patent infringement, alleging, inter alia, that the Mylan Defendants “market[ ] and provide! ]” generic drugs to Indiana residents. Compl. ¶¶ 90-92. Plaintiffs filed their complaint in this court within 45 days of
Legal Analysis
I. Standard of Review
Federal Rule of Civil Procedure 12(b)(2) requires dismissal of a claim where personal jurisdiction is lacking. When “[a] defendant moves to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction, the plaintiff bears the burden of demonstrating the existence of jurisdiction.” Purdue Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003) (citations omitted). When a district court rules on a defendant’s motion to dismiss based on the submission of written materials, the plaintiff “need only make out a -prima facie case of personal jurisdiction” and “is entitled to the resolution in its favor of all disputes concerning relevant facts presented in the record.” Id. (internal quotation marks and citations omitted).
Federal Circuit law governs personal jurisdiction issues in patent infringement cases. See Hildebrand v. Steele Mfg. Co., 279 F.3d 1351, 1354 (Fed.Cir. 2002). A district court may properly exercise personal jurisdiction over a non-resident defendant if a two-step analysis is undertaken and satisfied. First, the party resisting the exercise of jurisdiction must be amenable to service of process under the state’s long-arm statute; second, the exercise of personal jurisdiction must comport with the due process clause of the Constitution. Id. Because Indiana’s long-arm statute, Indiana Rule of Trial Procedure 4.4(A), “expand[s] personal jurisdiction to the full extent permitted by the Due Process Clause,” LinkAmerica Corp. v. Cox, 857 N.E.2d 961, 966 (Ind. 2006), the sole question before us is whether due process would be offended were we to exercise personal jurisdiction over the Mylan Defendants.
For a court to acquire personal jurisdiction over a defendant, due process requires “that the defendant have such ‘minimum contacts’ with the forum state as will make the assertion of jurisdiction over him consistent with ‘traditional notions of fair play and substantial justice[.]’ ” Lakeside Bridge & Steel Co. v. Mountain State Constr. Co., 597 F.2d 596, 600 (7th Cir. 1979) (quoting Int’l Shoe Co. v. State of Wash., 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)). In other words, defendants must have “fair warning that a particular activity may subject them to the jurisdiction of a foreign sovereign.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (quotation marks and citation omitted).
Personal jurisdiction may be either specific or general. A court exercises specific jurisdiction over a defendant where the cause of action arises out of or relates to a defendant’s purposefully established contacts with the forum state. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984); Burger King Corp., 471 U.S. at 472, 105 S.Ct. 2174. General jurisdiction, on the other hand, does not require that the cause of action arise out of contacts with the forum state. Helicopteros, 466 U.S. at 416, 104 S.Ct. 1868. General jurisdiction exists where the defendant’s contacts with the forum “are so continuous and systematic as to render it essentially at Rome in the forum State.” Daimler AG v. Bauman, — U.S. -, 134 S.Ct. 746, 761, 187 L.Ed.2d 624 (2014) (quoting Goodyear Dunlop Tires Operations, S.A v. Brown, - U.S. -, 131 S.Ct. 2846, 2851, 180 L.Ed.2d 796 (2011)).
Plaintiffs’ Complaint asserts general jurisdiction as the sole basis for bringing this ANDA infringement action against the Mylan Defendants in Indiana. The Mylan Defendants contend that the Supreme Court’s recent decision in Daimler AG v. Bauman, — U.S. -, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014), altered the analysis with respect to general jurisdiction such that Plaintiffs cannot establish that the Southern District of Indiana has general jurisdiction over the Mylan Defendants in this ANDA lawsuit. The Mylan Defendants further argue that their relationship with Indiana and this litigation is insufficient to support the exercise of specific jurisdiction in this case.
Given the- Mylan Defendants’ jurisdictional challenge, Plaintiffs bear the burden of showing the basis for this court’s jurisdiction. Plaintiffs now apparently concede that this court cannot exercise general personal jurisdiction over any of the Mylan Defendants on the basis of their being “at home” in Indiana, as that concept is defined in Daimler,
A. General Jurisdiction
In ANDA litigation prior to Daimler, “general jurisdiction traditionally provided the basis to assert jurisdiction over generic drug company defendants.” AstraZeneca AB v. Mylan Pharm., Inc., 72 F.Supp.3d 549, 554, No. 14-696-GMS, 2014 WL 5778016, at *3 (D.Del. Nov. 5, 2014) (citation omitted); see, e.g., Eli Lilly and Co. v. Mayne Pharma (USA) Inc., 504 F.Supp.2d 387 (S.D.Ind. 2007) (focusing on the defendant’s regular business solicitation and distribution of substantial quantities of pharmaceuticals in the forum as well as 'substantial revenues from those sales); Eli Lilly and Co. v. Sicor Pharm., Inc., No. 1:06-cv-238-SEB-JMS, 2007 WL 1245882 (S.D.Ind. Apr. 27, 2007) (same); Abbott Labs. v. Mylan Pharm., Inc., No. 05 C 6561, 2006 WL 850916 (N.D.Ill. Mar. 28, 2006) (same). However, the Supreme Court’s decision in Daimler has altered the general jurisdiction analysis such that the factors on which courts have traditionally focused in ANDA cases, to wit, a history of business solicitation and substantial past sales and revenue generated in the forum, in most cases are no longer sufficient without more to support an exercise of general jurisdiction. See 134 S.Ct. at 761-62 (finding that a test under which general jurisdiction existed in every forum in which a defendant’s sales are sizable would be “unacceptably grasping” and “exorbitant”).
Although the Daimler Court noted that it was not “foreclosefing] the possibility that in an exceptional case ... a corporation’s operations in a forum other than its
B. Specific Jurisdiction
Whether Plaintiffs have demonstrated that there is a basis to assert specific jurisdiction over the Mylan Defendants
Specific jurisdiction exists where “the defendant has ‘purposefully directed’ his activities at residents of the forum, and the litigation results from alleged injuries that ‘arise out of or relate to’ those activities.” Burger King, 471 U.S. at 472-73, 105 S.Ct. 2174 (internal citations omitted). This standard can be difficult to apply in the context of ANDA litigation, however, given the nature of the process created by the Hatch-Waxman Act. The statute was enacted with the purpose of balancing “two competing interests in the
The difficulty in applying the specific jurisdiction analysis arises in part because thp Supreme Court has recognized that a Paragraph IV act of patent infringement is “a highly artificial act.” Eli Lilly & C. v. Medtronic, Inc., 496 U.S. 661, 678, 110 S.Ct. 2683, 110 L.Ed.2d 605 (1990). Because the act is “a statutory creation, distinct from making, using, or selling a patented technology” it therefore “has no readily apparent situs of injury for the purpose of finding specific jurisdiction.” AstraZeneca, 72 F.Supp.3d at 558, 2014 WL 5778016, at *6. At the same time, litigation is expected to follow a Paragraph IV filing as, under the Hatch-Waxman Act, patent holders are given forty-five days following receipt of notice of the filing of the certification to initiate an infringement lawsuit thereby triggering the automatic thirty-month stay for FDA-approval of the generic drug. Thus, as the court in AstraZeneca explained, under the Hatch-Waxman framework: “The injury is abstract, making it difficult to point to a location out of which the injury ‘arises’ for jurisdictional purposes. At the same time, defending against an infringement lawsuit is an inherent and expected part of the ANDA filer’s business. To put it simply: a lawsuit is often inevitable, but it is not clear where it should be held.”
The Federal Circuit has recognized that the fact that the Supreme Court has viewed the act of submitting an ANDA to be “ ‘highly artificial’ ... is not a proper reason ... to conclude that the ANDA filing is not a ‘real act’ with ‘actual consequences.’ ” Zeneca Ltd. v. Mylan Pharm., Inc., 173 F.3d 829, 833-34 (Fed.Cir. 1999) (quoting Medtronic, 496 U.S. at 663-664, 110 S.Ct. 2683). The question then becomes, where are those “actual consequences” felt? In Zeneca, the Federal Circuit held that Maryland — the location of the FDA and the place where ANDAs must be filed — could not exercise specific jurisdiction over ANDA filers; this conclusion clearly was to avoid the Maryland district court having jurisdiction in all ANDA cases. 173 F.3d at 832. The My-lan Defendants argue here that their filing of the Paragraph IV certification was not “intentionally targeted” at the state of Indiana where Lilly resides, nor was the State the “focal point” of the alleged infringement.
■ The Mylan Defendants argue that this approach improperly focuses on Plaintiffs’ contacts with Indiana, not theirs. Our analysis does not ignore the clear rule that for purposes of the jurisdictional analysis, “[t]he proper question is not where the plaintiff experienced a particular injury or effect but whether the defendant’s conduct connects him to the forum in a meaningful way.” Walden v. Fiore — U.S.-, 134 S.Ct. 1115, 1125, 188 L.Ed.2d 12 (2014). Although the My-lan Defendants characterize their contacts with Indiana as no more than accidental, we are not so persuaded. Indeed, the Mylan Defendants purposefully directed their activities at Indiana by sending a Paragraph IV certification notice letter to Lilly in Indiana,
There can be no dispute that the Mylan Defendants, as generic drug companies well-versed in ANDA litigation, understood the purpose and known consequences of filing the ANDA and Paragraph IV certification. As noted above, such a filing constitutes an act of patent
Having found that minimum contacts exist, we turn to address whether the exercise of jurisdiction in this case comports with “traditional notions of fair play and substantial justice.” Int'l Shoe, 326 U.S. at 316, 66 S.Ct. 154. We balance five factors in determining whether an exercise of jurisdiction in a particular case is reasonable and fair: (1) the burden on the defendant; (2) the forum state’s interest in adjudicating the dispute; (3) the plaintiffs interest in obtaining convenient and effective relief; (4) the interstate judicial system’s interest in obtaining the most efficient resolution of controversies; and (5) the shared interest in obtaining the most efficient resolution of controversies. Felland v. Clifton, 682 F.3d 665, 677 (7th Cir. 2012); Burger King, 471 U.S. at 477, 105 S.Ct. 2174.
Here, the Mylan Defendants have failed to show that an Indiana forum would be unjustly burdensome such that it would be unfair to subject them to suit in this jurisdiction. The evidence before us establishes that Mylan frequently sends it employees to Indiana for business purposes and for the promotion of its generic pharmaceuticals to potential purchasers. Two of its National Account Managers reside in Indiana as well. Mylan Pharmaceuticals has also affirmatively sought to litigate in this district instead of its domicile in West Virginia on at least one prior occasion. See Urich v. Mylan, Inc., No. 1:10-cv-01068-JMS-DKL (S.D.Ind. 2010) (transferred from West Virginia to this district on Mylan’s motion). Given these facts, we cannot conclude that it would be a burden on the Mylan Defendants to litigate this action in Indiana.
We have recognized that “a state generally has a ‘manifest interest’ in providing its residents with a convenient forum for redressing injuries inflicted by out-of-state actors, and domestic corporations have an interest in obtaining convenient relief in their own state.” Key Elec., Inc. v. Earth Walk Commc’ns, Inc., No. 4:13-cv-00098-SEB-DML, 2014 WL 2711838 (S.D.Ind. June 16, 2014) (citing Burger King, 471 U.S. at 473, 482-83, 105 S.Ct. 2174). Thus, Indiana and Plaintiff Lilly both have a substantial interest in resolving this infringement suit in an Indiana forum.
Because no evidence has been adduced to show that the Mylan Defendants would be meaningfully burdened or even disadvantaged by litigating in this forum, coupled with both Indiana’s as well as Plaintiff Lilly’s obvious interests in proceeding in. an Indiana forum, we find that personal jurisdiction in this case is proper and entirely consistent with traditional notions of fair play and substantial justice.
For these reasons, we find that the My-lan Defendants are properly subject to specific jurisdiction in Indiana. Accordingly, the Mylan Defendants’ Motion to Dismiss under Rule 12(b)(2) is DENIED.
IT IS SO ORDERED.
. On November 17, 2014, the Mylan Defendants filed a Motion for Oral Argument [Docket No. 284], Because we are able to rule based on the parties' written submissions, that motion is DENIED.
. The Mylan Defendants are the only defendants to challenge the '726 patent, however. They are also the only defendants who have challenged personal jurisdiction over them in Indiana.
. In Daimler, the Supreme Court made clear that in assessing whether general jurisdiction is available, courts must determine not just whether a defendant’s ''in-forum contacts can be said to be in some sense 'continuous and systematic,’ ” but rather whether the defendant’s " 'affiliations with the State are so "continuous and systematic” as to render [it] essentially at home in the forum state.’ ” 134 S.Ct. at 761 (quoting Goodyear, 131 S.Ct. at 2851 (2011).) The Daimler Court further clarified that in all but "exceptional cases,” a corporation is “at home” only in its "place of incorporation and principal place of business,” which are the "paradig[m] ... bases for general jurisdiction.” 134 S.Ct. at 760 (alterations in original) (internal quotation marks omitted).
.We are mindful that in cases involving multiple defendants such as this, "personal jurisdiction must be assessed separately as to each defendant....” Sicor Pharm., Inc., 2007 WL 1245882, at *5 (citing Rush v. Savchuk, 444 U.S. 320, 331-32, 100 S.Ct. 571, 62 L.Ed.2d 516 (1980)). Here, Plaintiffs assert that "Mylan, Inc.- and Mylan Labs are subject to specific jurisdiction to the same extent as Mylan Pharmaceuticals, given their joint roles in the purposefully directed conduct that precipitated the lawsuit.” Pis.’ Resp. at 13. The Mylan Defendants have not meaningfully differentiated among the three entities in their motion to dismiss and they concede that the "Mylan Defendants” collectively "prepared the ANDA.” Defs.' Opposition to Motion for Jurisdictional Discovery at 9. The Mylan Defendants have also not challenged Plaintiffs' contention that Mylan, Inc. "directed and participated in the strategy for approval of this ANDA” and that Mylan Labs was "heavily involved with Mylan Pharmaceuticals in preparing the ANDA filing.” Pis.’ Resp. at 14. For these reasons, we are persuaded that Mylan Pharmaceutical’s relevant contacts can and should be attributed to Mylan, Inc. and Mylan Labs.
. The District Court for the Eastern District of Texas also addressed this issue in Allergan, Inc. v. Actavis, Inc., No. 2:14-CV-188, 2014 WL 7336692 (E.D.Tex. Dec. 23, 2014). However, the court limited its holding on specific jurisdiction to the plaintiff's declaratory judgment claims. Because such claims are not at issue here, the Texas case has limited applicability to our analysis.
. We note that, on December 17, 2014, Judge Sleet certified an interlocutory appeal of his order in AstraZeneca to the Federal Circuit, reasoning that the existence of personal jurisdiction in ANDA cases following Daimler is "a controlling (and novel)' question of law for which there is substantial ground for difference of opinion.” AstraZeneca AB v. Aurobindo Pharma Ltd., No. 14-664-GMS, 2014 WL 7533913, at *1 n. 1 (D.Del. Dec. 17, 2014). We share that view that this question is an important matter of first impression in the ANDA context.
. The uniqueness of this type of patent infringement litigation is likely a reason why specific jurisdiction has not traditionally been favored in ANDA cases. However, the narrowing of the general jurisdiction doctrine in Daimler (which was not an ANDA case) may well shift the focus toward specific jurisdiction in these cases.
. The Mylan Defendants argue that the appropriate factor on which to focus for determining where specific jurisdiction exists is the location(s) "where the ANDA was studied, drafted, compiled, and signed,” (Defs.’ Reply at 12), which in this case would be West Virginia. It is true that a number of district courts have found that it is proper to exercise specific jurisdiction in the forum in which the ANDA is prepared or the state in which the generic drug was developed and tested. See, e.g., Pfizer Inc. v. Synthon Holding, B.V., 386 F.Supp.2d 666, 675-76 (M.D.N.C. 2005) (find
. The Mylan Defendants also directed notification letters in this case to five other Plaintiffs, including parties in New Jersey and Japan.
. We recognize that this idea, to wit, that the Paragraph IV statutory notice letter constitutes a purposeful act directed at the state to which it is mailed, was rejected by the district court in Glaxo Inc. v. Genpharm, Pharmaceuticals, Inc., 796 F.Supp. 872 (E.D.N.C. 1992). However, we are not bound by that decision, nor are we certain of its continuing viability, particularly considering that Glaxo was decided before Zeneca and the North Carolina court’s ultimate decision to transfer the case to the District of Maryland is the same result that was later rejected by the Federal Circuit in Zeneca.
. We note that there is authority supporting the contention that injury in a patent infringement case occurs where “the infringing activity directly impacts on the interests of the patentee,” such as the place of infringing sales. Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558, 1571 (Fed.Cir. 1994); see also Acorda Therapeutics, 78 F.Supp.3d at 596 n. 26, 2015 WL 186833, at *18 n. 26. While there have not yet been sales in this ANDA case, if such sales are made ’in the future, the record before us is clear that they will be made nationwide, including in Indiana. See Exh. 3 at 159-160, 186.
Reference
- Full Case Name
- ELI LILLY AND COMPANY v. MYLAN PHARMACEUTICALS, INC., Mylan, Inc., Mylan Laboratories, Ltd.
- Cited By
- 1 case
- Status
- Published