Venue in Hatch-Waxman Actions is Governed by 28 U.S.C. § 1400(b) Not § 1391(b)

Some commentators have suggested that since Hatch-Waxman actions share certain similarities with declaratory judgment ("DJ") actions to prevent future infringement, venue in such actions should be governed by the general venue statute, 28 U.S.C. § 1391(b),[1] and not 28 U.S.C. § 1400(b),[2] which controls venue in typical patent infringement actions. These commentators argue that applying the general venue statute rather than the strict requirements of section 1400(b) would allow patentees to sue multiple generic defendants in a single district, even though the generics are spread across different locales. The same would hold true for biosimilar actions under the Biologics Price Competition and Innovation Act (BPCIA).

While these policy arguments make some sense, the specter of multiple suits in different jurisdictions can be addressed under section 1400(b) because venue is proper in any district where the defendant intends to market its generic product after FDA approval. In a sense, nationwide venue exists. See Bristol-Myers Squibb Co. v. Mylan Pharm. Inc., No. CV 17-379-LPS, 2017 WL 3980155, at *13 & *13 n.18 (D. Del. Sept. 11, 2017).

The question of proper venue in Hatch-Waxman actions was further addressed by Judge Gilstrap of the District Court for the Eastern District of Texas in Apicore U.S. LLC v. Beloteca, Inc., No. 2:19-cv-00077 JRG, D.I. 100 (E.D. Tex. April 17, 2019). Although the case involved a complex fact pattern (a second ANDA holder challenging the patents of a first ANDA holder), we focus on the present issue—which arose after plaintiffs brought a "declaratory judgment action for future patent infringement." Id. at 13 (emphasis in original). In opposing defendant Beloteca's motion to transfer for improper venue, plaintiffs argued that (i) section 271(a) was inapplicable because Beloteca had not yet committed an act of infringement and (ii) section 271(e)(2) was inapplicable because Beloteca had not filed the requisite paragraph IV certification. Id. at 12-13.[3] Accordingly, plaintiffs argued that the only way to enforce the asserted patents was to institute a DJ action barring "future" infringement, which would be governed by section 1391. Id. at 13.

Judge Gilstrap first held that a paragraph IV certification was not required to support an action under the Hatch-Waxman statute, § 271(e)(2). Id. at 7-8.[4] He rejected Beloteca's argument that "[t]his is not a Hatch-Waxman case" simply because the act of filing an ANDA without any patent certifications did not constitute an act of infringement under section 271(e). Id. at 5. Rather, Judge Gilstrap found that plaintiffs had a claim under section 271(e)(2) because the facts—a second ANDA filer bringing a DJ action against a first ANDA filer—mirrored the practical results of an ANDA filer's paragraph IV certification:

Beloteca's conduct in the Illinois Action filing an ANDA and challenging the validity and infringement of the Asserted Patents through a declaratory judgment action—mirror the practical results of an ANDA filer's paragraph IV certification—i.e., challenging the validity and/or the infringement of any patents covering the drug in question. Plaintiffs' patent rights should be respected, even if they were not NDA filers. Accordingly, the Court finds that Plaintiffs have a cognizable claim against Beloteca under § 271(e)(2).

Id. at 9.

After deciding that the Hatch-Waxman statue applied, Judge Gilstrap held that plaintiffs had a statutory remedy for patent infringement under section 271(e)(2), and thus section 1391(b) did not apply for venue purposes:

[W]here, as here, a plaintiff has an actionable claim under § 271, the plaintiff cannot avoid the requirements of § 1400(b) by wrapping its patent infringement claim inside the blanket of declaratory judgment action.

Id.at 14.

The court, therefore, held that venue was improper and transferred the case. This decision may dampen creative attempts by patentees to avoid the strict venue requirements of section 1400(b) in Hatch-Waxman actions.

[1] Under section 1391(b), civil actions can be brought where the defendant resides, where the claim arose, or where defendant is subject to personal jurisdiction for the action. Clearly, venue in DJ actions by accused infringers against patentees are not governed by section 1400(b), even though the crux of the action involves the validity and/or infringement of a patent.

[2] Under section 1400(b), venue in actions for patent infringement is proper where the defendant resides, i.e., is incorporated, or has committed an act of infringement and has a regular and established place of business. See TC Heartland LLC v. Kraft Foods Grp. Brands, LLC, 137 S. Ct. 1514 (2017).

[3] Although Plaintiff Mylan's lsosulfan Blue Injection active pharmaceutical ingredient (API) is designated by the FDA as the reference standard product, the asserted patents were not listed in the FDA's Orange Book. Id. at 2.

[4] The court noted that other district courts are split as to whether a paragraph IV certification is required to sustain a section 271(e) claim. Id. at 7 n.9 (comparing Eisai Co. v. Mutual Pharm. Co., No. 06-3613-HAA, 2007 WL 4556958, at *11 (D.N.J. Dec. 20, 2007) with Cephalon, Inc. v. Sandoz, Inc., No. CIV. 11-821-SLR, 2012 WL 682045, at *5 (D. Del. Mar. 1, 2012), Teva Pharm. USA, Inc. v. Abbott Labs., 301 F. Supp. 2d 819, 829 (N.D. Ill. 2004), and Bayer Healthcare LLC v. Norbrook Labs., Ltd., No. 08-C-0953, 2009 WL 6337911, at *9 (E.D. Wis. Sept. 24, 2009)).