Celgene Corporation v. Mylan Pharmaceuticals Inc.

17 F.4th 1111
Court of Appeals for the Federal Circuit·Decided November 5, 2021·No. 21-1154·Published·Cited by 31 cases

Opinion

United States Court of Appeals for the Federal Circuit

CELGENE CORPORATION,

Plaintiff-Appellant

v.

MYLAN PHARMACEUTICALS INC., MYLAN INC., MYLAN N.V., Defendants-Appellees

2021-1154

Appeal from the United States District Court for the District of New Jersey in No. 2:19-cv-05802-ES-MAH, Judge Esther Salas.

Decided: November 5, 2021

ELLYDE R. THOMPSON, Quinn Emanuel Urquhart & Sullivan, LLP, New York, NY, argued for plaintiff-appellant . Also represented by FRANCIS DOMINIC CERRITO, FRANK CHARLES CALVOSA, ERIC C. STOPS; MATTHEW J. HERTKO, Jones Day, Chicago, IL; JENNIFER L. SWIZE, Washington, DC.

TUNG ON KONG, Wilson, Sonsini, Goodrich & Rosati, PC, San Francisco, CA, argued for defendants-appellees. Also represented by KRISTINA M. HANSON; STEFFEN 2 CELGENE CORPORATION v. MYLAN PHARMACEUTICALS INC.

NATHANAEL JOHNSON, GEORGE E. POWELL, III, Washington , DC; ELHAM FIROUZI San Diego, CA.

Before PROST, CHEN, and HUGHES, Circuit Judges.

PROST, Circuit Judge.

This is a case about venue and pleading under the Hatch-Waxman Act.

Celgene Corporation (“Celgene”) markets pomalidomide as a multiple-myeloma drug under the brand name Pomalyst. It has patents related to that drug, but many drug companies viewed the validity or applicability of those patents with skepticism and sought to bring generic pomalidomide to market. They applied to the FDA to do so; Celgene sued. This appeal concerns Celgene’s suit surrounding the abbreviated new drug application (“ANDA”) submitted by Mylan Pharmaceuticals Inc. (“MPI”).

Celgene filed that suit in New Jersey. Celgene is headquartered there, but none of the defendants are. Rather, MPI is based in West Virginia, Mylan Inc. in Pennsylvania, and Mylan N.V. in Pennsylvania and the Netherlands. The district court ultimately dismissed this case for improper venue (as to MPI and Mylan Inc.) and for failure to state a claim (as to Mylan N.V.). Celgene appeals.

For the reasons below, we agree with the district court that venue was improper in New Jersey for the domesticcorporation defendants, MPI and Mylan Inc. That is, Celgene did not show that those defendants committed acts of infringement in New Jersey and have a regular and established place of business there. We also agree that, as to the foreign-corporation defendant, Mylan N.V., Celgene’s pleadings failed to state a claim upon which relief could be granted. We therefore affirm.

CELGENE CORPORATION v. MYLAN PHARMACEUTICALS INC. 3

I

A

In 1984, Congress enacted the Hatch-Waxman Act, a complex statutory framework that tries to balance generic and brand interests within the pharmaceutical industry. See Drug Price Competition and Patent Term Restoration Act of 1984, Pub. L. No. 98-417, 98 Stat. 1585. One aim of Hatch-Waxman was to “speed the introduction of low-cost generic drugs to the market.” Caraco Pharm. Labs., Ltd. v. Novo Nordisk A/S, 566 U.S. 399, 405 (2012); see also Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 676 (1990).

To market a new drug, a sponsor submits to the FDA a new drug application (“NDA”). See Caraco, 566 U.S. at 404. An NDA must contain the drug’s proposed labeling and directions for use but also must contain extensive information on clinical trials showing that the drug is safe and effective for its labeled use. See id. Brand-drug sponsors are also required to inform the FDA of all its patents covering the drug or its labeled methods of use. See 21 U.S.C. § 355(b)(1), (c)(2). These patents are publicly listed in what is known as the Orange Book. Caraco, 566 U.S. at 405–06.

To speed the introduction of low-cost generics, Hatch-

Waxman includes the option for generic-drug sponsors to submit an abbreviated new drug application, or ANDA. With an ANDA, a generic-drug sponsor need not repeat a brand drug’s safety-and-efficacy trials at great (and scientifically redundant) expense. Instead, a generic-drug sponsor must show that its product is bioequivalent to the reference brand drug. See id. If so, the sponsor can market that generic drug with a label matching that of brand drug. See id. at 415, 425.

A generic-drug sponsor may not market a drug in a way that infringes a brand-drug sponsor’s patents. See id. at 405–06; FTC v. Actavis, Inc., 570 U.S. 136, 143 (2013).

4 CELGENE CORPORATION v. MYLAN PHARMACEUTICALS INC.

The generic must therefore “assure the FDA” that marketing the generic “will not infringe.” Actavis, 570 U.S. at 143. It does so through certifications to the FDA.

An ANDA applicant might choose to avoid infringement by waiting out a patent’s term. If so, the applicant includes with its ANDA a so-called paragraph III certification for that patent. See 21 U.S.C. § 355(j)(2)(A)(vii)(III). It might also omit a patented method of use from its drug label and therefore not seek approval in a way that implicates the patent. See 21 U.S.C. § 355(j)(2)(A)(viii); Caraco, 566 U.S. at 406–07, 425; United Food & Com. Workers Local 1776 & Participating Emps. Health & Welfare Fund v. Takeda Pharm. Co., 11 F.4th 118, 124–27 (2d Cir. 2021). But an applicant might also think that a patent is invalid, unenforceable, or not infringed, notwithstanding its ANDA encompassing the same methods of use as the brand drug’s NDA. If so, the applicant can ask for full approval (without omitting any methods of use from its drug label) during the patent’s term and include with its ANDA a paragraph IV certification. See 21 U.S.C. § 355(j)(2)(A)(vii)(IV).

Submitting an ANDA that seeks approval to market a drug while that drug is on-patent (e.g., an ANDA containing a paragraph IV certification) is patent infringement. 35 U.S.C. § 271(e)(2); see also Valeant Pharms. N. Am. LLC v. Mylan Pharms. Inc., 978 F.3d 1374, 1381–82 (Fed. Cir. 2020). 1 If a generic goes the paragraph IV route, the brand can sue under a set of rules particular to this kind of infringement . The way this works is that the generic must

1 That is not to say that a generic’s failure to comply with some procedural rule surrounding the paragraph IV certification renders an ANDA noninfringing. The statutory infringement question is whether the “purpose” of the submitted ANDA “is to obtain approval” to market the drug “before the expiration of [the relevant] patent.” 35 U.S.C. § 271(e)(2).

CELGENE CORPORATION v. MYLAN PHARMACEUTICALS INC. 5

provide a so-called paragraph IV notice to the patentee brand-drug sponsor after it submits its ANDA and the FDA confirms receipt of the submission. See 21 U.S.C. § 355(j)(2)(B); see also id. § 355(j)(2)(B)(ii)(I). That notice must include “a detailed statement of the factual and legal basis of the opinion of the applicant that the patent is invalid or will not be infringed.” 21 U.S.C. § 355(j)(2)(B)(iv)(II). The notice and accompanying detailed statement, however, are not part of the ANDA and need not be submitted to the FDA. See id.; 21 C.F.R. § 314.95(e). Indeed, the substance of the notice letter (i.e., the generic’s legal opinion) is immaterial to the FDA, which professes to lack “expertise” and “authority” on patent matters . See Caraco, 566 U.S. at 406–07; United Food, 2021 WL 3744899, at *3; Applications for FDA Approval to Market a New Drug, 68 Fed. Reg. 36,676, 36,683 (June 18, 2003) (“[W]e have long observed that we lack expertise in patent matters.”).

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Celgene Corporation v. Mylan Pharmaceuticals Inc., 17 F.4th 1111 (Fed. Cir. 2021).

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