By: Rocco Screnci
In today’s blog, we are straying from our Orange Book roots to discuss the Federal Circuit's recent decision in Regeneron Pharmaceuticals v. Mylan Pharmaceuticals, a case arising under the BPCIA. Regeneron owns several patents covering its EYLEA® product. EYLEA® contains the protein aflibercept, a VEGF antagonist, and is used to treat various conditions that affect the eyes. Several companies filed abbreviated Biologics License Applications (aBLAs) seeking approval for EYLEA® biosimilars. Regeneron then sued four of these aBLA filers in West Virginia and secured a preliminary injunction against them.
On appeal, one of the defendants—Samsung Bioepis—argued that the preliminary injunction should be reversed on the merits and because the district court in West Virginia could not exercise personal jurisdiction over Samsung because Samsung was “at home” in Korea and lacked adequate suit-related conduct in West Virginia to establish the requisite “minimum contacts” there. The court, however, disagreed with Samsung and affirmed. And while the decision includes some interesting obviousness-type double-patenting analysis, perhaps the most interesting part of the Federal Circuit’s opinion is the part that addresses personal jurisdiction. To this end, the court held that, under its decision in Acorda Therapeutics v. Mylan Pharmaceuticals, 817 F.3d 755 (Fed. Cir. 2016), personal jurisdiction in West Virginia was appropriate because Samsung’s proposed bioequivalent product will be sold throughout the U.S., including West Virginia, albeit through a distributor. Regeneron, slip op. at 13.
By way of background, Acorda addressed whether an ANDA filer could be sued under the Hatch-Waxman Act in Delaware even though it was “at home” for personal jurisdiction purpose in another state, prepared the ANDA in that other state, and filed the ANDA at the FDA’s Maryland office. The court said, “Yes.” While the Due Process Clause requires a defendant to have adequate “minimum contacts” with a forum before it can be sued there, the Acorda court held that those contacts could be established through reliable, non-speculative evidence about conduct that will take place should the defendant’s ANDA be approved. Acorda, 817 F.3d at 762. Or as the court put it: “[I]t suffices for Delaware to meet the minimum-contacts requirement in the present cases that Mylan’s [ANDA] filings and its distribution channels establish that Mylan plans to market its proposed drugs in Delaware and the lawsuit is about patent constraints on such in-State marketing.” Id. at 762-63. Through that lens, Regeneron seems like a natural application of Acorda in the BPCIA context. But that lens glosses over some key factual differences between the two cases.
For starters, the Acorda defendant and Samsung have very different relationships with their respective forum states. In Acorda, the defendant was “registered to do business and appointed an agent to accept service in Delaware,” and registered with the Delaware Board of Pharmacy as a licensed “Pharmacy-Wholesale” and a “Distributor/Manufacturer CSR.” Acorda, 817 F.3d at 758, 763. Indeed, it even sent the Paragraph IV notice letter to the plaintiff’s U.S. subsidiary’s headquarters in Delaware. Samsung, by contrast, has no facilities in West Virginia, no employees there, has not registered to do business with the West Virginia Secretary of state, does not have a registered agent for accepting service in West Virginia, and has no current or planned business with companies in West Virginia.
Second, and perhaps more importantly, evidence showed that the Acorda defendant had, unlike Samsung with West Virginia, taken concrete, affirmative steps to exploit the Delaware market. More specifically, the Acorda defendant had established “a network of independent wholesalers and distributors with which it contracts to market the drugs in Delaware.” Acorda, 817 F.3d at 763. But Samsung has no such network. Indeed, the sole basis for finding personal jurisdiction in West Virginia over Samsung was that Samsung had contracted with Biogen for nationwide distribution rights for the biosimilar and that Samsung “has not sought to limit the States where SB15 will be marketed, distributed, or sold.” Regeneron, slip op. at 14 (emphasis added). And while it was unclear exactly how much control Samsung would have over Biogen’s distribution and sales of the prospective biosimilar product, see generally id. at 13-14, the court outright rejected the argument that it made a difference whether Samsung used a third-party distributor or did its own distribution based on the language in Acorda about the defendant’s Delaware distribution network. See slip op. at 15.
But the factual differences between Acorda and Regeneron are quite significant ones for personal jurisdiction. The typical rule is that the defendant must purposefully direct conduct to the forum state for that conduct to count in the “minimum contacts” analysis. Acorda, as I understood the decision until recently, adhered to that rule by focusing on concrete steps that the defendant had taken to exploit the Delaware market with its proposed ANDA product. Regeneron, on the other hand, focuses not on any purposeful conduct directed at West Virginia, but on the absence of any disclaimer of future conduct directed there. This seemingly turns decades of jurisprudence on its head. In effect, Regeneron holds that prospective biosimilar (or generic) manufacturers have purposefully availed themselves to states that they may never actually do business in for a drug that may never launch simply because they have chosen not to narrow their distribution plans a priori. The upshot is that, absent a carve out, a nationwide distribution agreement may subject the companies to personal jurisdiction in every judicial district in every state.
In sum, Regeneron seems to drastically expand the scope of personal jurisdiction, particularly for foreign-based prospective defendants who have few ties to the United States. This may have huge consequences for generic and biosimilar manufacturers who hope to avoid litigating in certain forums, so it will be interesting to see how Regeneron influences companies’ pre-approval, pre-commercialization conduct.