Recent Rulings Increase Likelihood that Jurisdiction Will Be Found in Patentee’s Home State

In Eli Lilly & Co. et al. v. Mylan et al., No. 14-cv-0389, 2015 U.S. Dist. LEXIS 30175 (S.D. Indiana March 12, 2015), the District Court denied a motion to dismiss for lack of personal jurisdiction.

The Issue. Eli Lilly and friends filed a lawsuit against Mylan based on Mylan’s ANDA for Effient®, an anti-thrombotic drug indicated to prevent or reduce the risk of blood clots and stent thrombosis in patients who receive stents. Mylan moved to dismiss for lack of personal jurisdiction based on the U.S. Supreme Court’s recent decision in Daimler AG v. Bauman, 134 S.Ct.746 (2014), which heightened the threshold for general jurisdiction. Specifically, in Daimler AG v. Bauman, 134 S.Ct.746 (2014), the Supreme Court limited general jurisdiction to those instances where 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 754. General allegations of continuous and systematic contacts are no longer sufficient; rather, “in all but ‘exceptional cases,’ a corporation is ‘at home’ only in its ‘place of incorporation and principal place of business ….” Id. at 760.

The Ruling. While the Court agreed with Mylan that the Plaintiffs had failed to establish general jurisdiction, and the Plaintiffs’ “sole basis” for filing suit in Indiana was general jurisdiction, the Court nonetheless evaluated specific jurisdiction. In analyzing specific jurisdiction, the Court considered whether (1) Mylan purposefully directed activities at residents of Indiana and (2) the litigation concerns injuries that arose out of those purposeful contacts. Id. *11. The Court struggled to decide the second prong, because an ANDA submission is a highly artificial act of infringement. See id. at **12-14. Ultimately, however, the Court held that Mylan’s “act of filing an ANDA and directing a Paragraph IV notice letter to Indiana provide sufficient minimum contacts with this district to satisfy the requirements of an exercise of specific jurisdiction.” Id. at 19.

The Court then evaluated whether exercising jurisdiction would comport with “traditional notions of fair play and substantial justice.” Id. at *19 (quoting Int’l Shoe Co. v. State of Wash., 326 U.S. 310, 316 (1945)). The Court held that Mylan failed to demonstrate that litigating in Indiana would be unjustly burdensome, relying in part on Mylan’s presence in the state through promotion and Mylan’s history of sending employees to Indiana for business purposes. Id. at *20. The Court also found that Indiana had a substantial interest in resolving the infringement dispute as Plaintiff Lilly’s place of domicile, and concluded that it would be a significant burden for Plaintiffs to have to file separate lawsuits in the home states of each ANDA filer (in this case, roughly 40). Thus, the Court held “that the Mylan Defendants are properly subject to specific jurisdiction in Indiana.” Id. at *22.

Although the rationale varied in each case, the District of Delaware also recently exercised specific jurisdiction over ANDA filers in two lawsuits having similar circumstances. Acorda Therapeutics, Inc. v. Mylan Pharamceuticals Inc., No. 14-935, 2015 U.S. Dist. LEXIS 4056 (D. Del. Jan. 14, 2015) and AstraZeneca AB v. Mylan Pharmaceuticals, Inc., No. 14-696, 2014 U.S. Dist. LEXIS 156660 (D. Del. Nov. 5, 2014).

The Takeaway. In the wake of these decisions, it is more likely that courts will find specific jurisdiction when an ANDA case is filed in a Plaintiff’s home state. Defendants in ANDA cases should consider whether they have a viable challenge to a plaintiff’s preferred forum based on lack of personal jurisdiction. For example, given that the District Court in Eli Lilly placed significant import on the fact that Mylan directed its Paragraph IV letter to Lilly in Indiana, defendants that are not signatories of a Paragraph IV letter may have a legitimate challenge to a claim of specific jurisdiction. The outcome may also be different if the defendant does not have a marketing presence in the forum state.