No Personal Jurisdiction over Foreign Patentee in Benicar® Saga

Last week the Northern District of Illinois found it lacked personal jurisdiction over foreign patentee Daiichi Sankyo Co., Ltd. and its U.S. subsidiary, Daiichi Sankyo, Inc..  Torrent Pharma. Ltd. v. Daiichi Sankyo Co., Ltd., No. 16-C-2988 (N.D. Ill. July 25, 2016).

The First Benicar® Case.  Daiichi holds the NDA for Benicar® and markets the blood pressure medication throughout the United States.  The Orange Book lists two Daiichi patents directed to Benicar®, namely the ‘599 and ‘703 patents.  Mylan was the first-to-file party for this product, whose ANDA included a PIV certification with respect to the ‘703 patent.  After receiving Mylan’s PIV certification, Daiichi Japan disclaimed the later-expiring ‘703 patent and went on to prevail on its infringement claims based on the earlier-expiring ‘599 patent.  The result is that Mylan is free to begin selling product upon expiration of the ‘599 patent.

The Second Benicar® Case.  After that, Apotex filed a declaratory judgment action seeking a judgment of non-infringement of the disclaimed ‘703 patent.  As we wrote about here, Apotex filed this action to trigger a potential exclusivity forfeiture for Mylan.  The district court held that there was no case or controversy and dismissed the case, but the Federal Circuit reversed, finding that Apotex’s concerns were sufficient to support jurisdiction.  On remand, the district court granted summary judgment of non-infringement to Apotex.  Daichi appealed the Apotex non-infringement ruling, and that appeal remains pending.

The Third Benicar® Case.  In view of the uncertainty created by this appeal, each of Torrent Pharmaceuticals Ltd., Alembic Pharmaceuticals Ltd., and Aurobindo Pharmaceuticals Ltd. (collectively, “Plaintiffs”) filed their own declaratory judgment actions against Daichi based on the same considerations that motivated Apotex.  This time around, however, Daiichi challenged personal jurisdiction rather than subject matter jurisdiction.

Analyzing specific jurisdiction, the court found that Defendants lacked sufficient contacts not only with Illinois, but also with the United States as a whole.  The Court ruled that for declaratory judgment actions of non-infringement, a defendant’s forum-based activities giving rise to the suit are only those activities concerning the enforcement of a patent.  Plaintiffs never alleged that Daiichi engaged in enforcement-related activities in the relevant forums, so Court ruled it had no specific jurisdiction.

Applying the Federal Circuit’s recent Acorda decision, which we wrote about here, the Court distinguished between the commercial activities of an ANDA-filer and the enforcement activities of a patentee.  The Court acknowledged it would be “troubling” if a foreign patentee could avoid infringement and validity challenges by refraining from enforcement activities in the United States, “[b]ut fortunately . . . [u]nder 35 U.S.C. § 293 . . . the United States District Court for the Eastern District of Virginia may exercise personal jurisdiction over every foreign patentee.”

Takeaway: As a result of this case, ANDA-filers hoping to pursue declaratory judgment actions against foreign patentees may be forced to litigate in the Eastern District of Virginia unless they can demonstrate that the patentee is subject to general jurisdiction in another forum.  Meanwhile, as we wrote about here, generic drug companies remain liable to suit almost anywhere in the United States based on their prospective marketing plans.