Post-Daimler Paradigm Shift: Personal Jurisdiction in the ANDA Context

Mylan recently filed two ANDAs seeking approval to sell generic versions of AstraZeneca’s ONGLYZA® and KOMBIGLYZE™ drug products.  In response, AstraZeneca LP (“AZP”) filed a complaint in the District of Delaware for patent infringement, and Mylan moved to dismiss for lack of personal jurisdiction.  Judge Gregory M. Sleet denied the motion, finding specific jurisdiction because Mylan sent its paragraph certification to AZP in Delaware.

AZP is a limited partnership operating under the laws of Delaware.  AZP’s principal place of business is also Delaware.  Mylan, meanwhile, is incorporated and has its principal place of business in West Virginia.  AZP argued that dismissal was improper because Mylan (1) was subject to general jurisdiction in Delaware, (2) consented to general jurisdiction in Delaware, and (3) was subject to specific jurisdiction in Delaware.

By way of context, the court explained that prior to Daimler AG v. Bauman, 134 S. Ct. 746 (2014), general jurisdiction traditionally provided the basis to assert jurisdiction over generic drug companies in Hatch-Waxman suits.  Judge Sleet explained, however, that post-Daimler the place of incorporation and principal place of business are the only jurisdictions where a generic manufacturer is subject to general jurisdiction, absent unusual circumstances.  In other words, “continuous and systematic” contacts are alone insufficient to confer general jurisdiction.  Specifically, the court held that Mylan’s registration to do business in Delaware and its broad business network within the state were not sufficient to establish general jurisdiction.  Indeed, AZP was unable to identify any Mylan business activities in Delaware that set it apart from other states.  In other words, upholding jurisdiction based alone on Mylan’s state registration and business contacts would mean that Mylan was subject to general jurisdiction in every state across the nation, a result specifically precluded by the decision in Daimler.

AZP next argued that Mylan consented to general jurisdiction by registering to do business in the state and by appointing a registered agent to accept service.  AZP posited that under International Shoe Co. v. Washington, 326 U.S. 310 (1945), personal jurisdiction is found merely by complying with state business registration statutes.  The court rejected this argument, explaining that Daimler established that “continuous and systematic contacts” are alone insufficient to establish general jurisdiction, and thus Mylan did not consent to general jurisdiction merely by seeking permission to do business in the state of Delaware.

The court did, however, determine that specific jurisdiction was present.  In framing its analysis, the court noted the unique challenge that arises in assessing personal jurisdiction in the ANDA context, especially post-Daimler.  The court explained that a Hatch-Waxman injury is abstract, making it difficult to ascertain the location of the injury for jurisdictional purposes.  But on balance, the court concluded that because Mylan sent its paragraph IV certification to AZP in Delaware—triggering the 45-day window for AZP to file suit—its contacts to the state were not illusory.  As such, Mylan reasonably could anticipate being haled to court in Delaware since patent litigation is an integral part of a generic company’s business.  Additionally, the court noted that a decision to the contrary would mean that personal jurisdiction in the ANDA context would be limited to the generic company’s state of incorporation or principal place of business, causing patent holders—who often face simultaneous challenges by multiple generic manufacturers—to litigate parallel actions in different jurisdictions across the nation.

Although the post-Daimler jurisdictional framework is far from settled, Judge Sleet’s decision establishes a framework whereby absent unusual circumstances, personal jurisdiction will be present only in two jurisdictions: the state of the ANDA filer will establish general jurisdiction and the state of the NDA holder will establish specific jurisdiction.