VENUE-RELATED ISSUES IN PATENT INFRINGEMENT & HATCH-WAXMAN LITIGATIONS

VENUE-RELATED ISSUES IN PATENT INFRINGEMENT & HATCH-WAXMAN LITIGATIONS IIPRD SEMINAR- NOV. 2018 MARK BOLAND SUGHRUE MION, PLLC 1

TC HEARTLAND SHIFTS PATENT VENUE LANDSCAPE BY LIMITING WHERE CORPORATIONS "RESIDE" Venue for patent infringement cases is governed by 28 U.S.C. 1400(b): patent infringement suits can be brought in the judicial district (1) where the defendant resides or (2) where the defendant has committed acts of infringement. 2

TC HEARTLAND SHIFTS PATENT VENUE LANDSCAPE BY LIMITING WHERE CORPORATIONS "RESIDE" In TC Heartland LLC v. Kraft Foods, 137 S.Ct. 1514 (2017), the Supreme Court changed well-established precedent. Previously: defendants in patent cases could be sued essentially in any district they were subject to the court s personal jurisdiction. The Federal Circuit's Acorda decision, discussed later, had cemented this result for ANDA defendants. This was a broad reading of 1400(b), and it subjected most companies of any significant size to being sued virtually anywhere in the country. 3

TC HEARTLAND SHIFTS PATENT VENUE LANDSCAPE BY LIMITING WHERE CORPORATIONS "RESIDE" In view of prior precedent with liberal venue options, plaintiffs in patent cases historically filed suit in plaintifffriendly jurisdictions, such as the Eastern District of Texas. ED Tex. is known for its knowledgeable and experienced judges with well-established rules and procedures, and this helped make it a preferred patent venue. This was more so for non-anda cases where money damages and juries willing to grant large awards were at stake, but it illustrates the point. 4

TC HEARTLAND SHIFTS PATENT VENUE LANDSCAPE BY LIMITING WHERE CORPORATIONS "RESIDE" In deciding whether resides in the general corporate venue statute -- 28 U.S.C. 1391(c) -- applies to 1400(b) for patent infringement cases, TC Heartland concluded it did not. The Supreme Court held that for patent infringement actions, which are in a class by themselves, a U.S. corporation resides for purposes of 1400(b) only in the state of its incorporation. This significantly reduced a plaintiff s venue options in many cases. 5

TC HEARTLAND SHIFTS PATENT VENUE LANDSCAPE BY LIMITING WHERE CORPORATIONS "RESIDE" Following TC Heartland, Delaware, where more than half of all publicly traded companies are incorporated, experienced a 40% surge in patent litigation. Delaware is priming to surpass the Eastern District of Texas which has seen a 60% decrease as the venue where the most patent cases are filed. New Jersey is also a significant player in Hatch-Waxman cases, given the number of generic pharmaceutical companies physically located there. 6

LITIGATION TRENDS: OB LISTED DRUGS 7

TOP 4 DISTRICTS FOR ANDA LITIGATION 2009-2017 Lex Machina Litigation Report 2018 8

NEW VENUE RULE IMPACTS PHARMA CASES TC Heartland -- venue is proper where defendant is incorporated or where an act of infringement is committed and defendant has a place of business. Delaware: 43% vs. 59% (post-tc Heartland) New Jersey: 32% vs. 27% (post-tc Heartland) 9

DOES FORUM MATTER? Infringement Found: D. Del & D.NJ, vs. All Other Districts 10

In re BigCommerce FURTHER LIMITS THE SCOPE OF PROPER VENUE Further, the Federal Circuit recently held in In re BigCommerce, Inc., 890 F.3d 978 (Fed. Cir. May 15, 2018) that in states with multiple districts, a defendant can only reside for purposes of section 1400(b) in one particular judicial district in that state: that is, where it maintains a principal place of business, or if none, the judicial district in which its registered office is located. This case further limits the scope of proper venue. 11

In re Cray CLARIFIES THE MEANING OF HAVING A "REGULAR AND ESTABLISHED PLACE OF BUSINESS" Despite the "resides" limitations imposed by TC Heartland, 1400(b) offers an alternative path to a desired district, where the defendant has committed acts of infringement and has a regular and established place of business. Shortly after TC Heartland, which did not address this alternative, the Federal Circuit in In re Cray, 871 F.3d 1355 (Fed. Cir. 2017) rejected the Eastern District of Texas broad-ranging four-factor test for venue. 12

In re Cray CLARIFIES THE MEANING OF HAVING A "REGULAR AND ESTABLISHED PLACE OF BUSINESS" In re Cray: three separate requirements for determining whether a defendant has a regular and established place of business in the district: (1) there must be a physical place in the district; (2) it must be regular and established; and (3) it must be the place of the defendant. 13

In re Cray CLARIFIES THE MEANING OF HAVING A "REGULAR AND ESTABLISHED PLACE OF BUSINESS" First, the Federal Circuit found that, while a formal office or store is not required, a physical, geographical location in the district from which the business of the defendant is carried out is required and cannot refer merely to a virtual space or electronic communications from one person to another. Next, the Federal Circuit explained that a business is regular if it is steady and methodical sporadic activity and single acts are not enough to create venue. The Federal Circuit further clarified that an established business must be settled and permanent an employee working out of his or her home for the defendant is insufficient as a place of business if the employee can move out of the district without approval of his employer. 14

In re Cray CLARIFIES THE MEANING OF HAVING A "REGULAR AND ESTABLISHED PLACE OF BUSINESS" -- Moreover, the Federal Circuit ruled that the place of the defendant cannot solely be that of defendant s employee. Relevant considerations include (a) whether the defendant owns or leases the place or exercises other methods of control over the place; (b) whether the employee s employment is conditioned on his or her residence in the district or in the storing of materials at a place in the district so that they can be distributed or sold from that place; (c) whether the defendant lists its place of business on a website or telephone directory; (d) whether the defendant places ads in the district; and (e) the nature and activity of the alleged place of business of the defendant in the district in comparison with that of other places of the defendant in other venues. 15

DECISIONS FOLLOWING TC Heartland AND In re Cray Over the last year or so, a number of courts have addressed venue issues raised by defendants in light of TC Heartland and In re Cray. Many of these venue disputes involve whether or not the defendant has a regular and established place of business in the district. A number of courts are allowing venue-related discovery to help resolve these venue disputes. Some general examples from patent cases follow, which principles can apply in ANDA cases too, followed by the application of Heartland and Cray rulings in ANDA cases. 16

DISTRIBUTOR'S PLACE OF BUSINESS CANNOT ESTABLISH VENUE FOR ITS SUPPLIER In EMED Technologies Corp. v. Repro-Med Systems, Inc., 2018 WL 2544564 (E.D. Tex. June 4, 2018), Judge Bryson (sitting by designation) transferred the case to SDNY. Judge Bryson found that a place of business of a corporation s distributor that buys and resells the corporation s products, even if a necessary distributor, is not a sufficient basis to establish venue: [A] distributor or subsidiary of a parent corporation selling the infringer s product does not demonstrate that a defendant has a regular and established place of business in th[e] district. 17

GOOGLE'S SERVERS HOUSED BY A THIRD-PARTY IN THE DISTRICT IS SUFFICIENT FOR VENUE In Seven Networks LLC v. Google LLC, 2018 WL 3634589 (E.D. Tex. Jul. 19, 2018), Judge Gilstrap denied Google s motion to transfer the case to the Northern District of California, holding that Google s servers, located in facilities owned by third-party internet service providers in the district, were sufficient for venue. Judge Gilstrap found that Google did not have a regular and established place of business in Texas, relying on the In re Cray factors: (1) Google s exclusive control over the servers themselves and the physical space in which the servers were located meets the statutory requirement of a physical place in the district ; 18

GOOGLE'S SERVERS HOUSED BY A THIRD-PARTY IN THE DISTRICT IS SUFFICIENT FOR VENUE (CONT'D) (2) Google s servers are a regular and established place of business, regardless of the server s minimal business contribution or the fact that they are manufactured by third parties, because they store information in local districts to provide Google s users with quick access to cached data and avoid delays associated with distant data retrieval; and (3) in addition to Google s own ratification, Google s servers are of Google because Google has exclusive control over the servers and the physical location in which they reside. -- This seems to be a fairly tortured reading of regular and established place of business by Judge Gilstrap, who seems intent on keeping cases in Texas 19

ACTIONS OF UNAFFILIATED INDEPENDENT RETAIL DISTRIBUTORS INSUFFICIENT FOR VENUE PURPOSES & VENUE-RELATED DISCOVERY DENIED In Green Fitness Equipment Co., LLC. v. Precor Inc., 2018 WL 3207967 (N.D. Cal. June 29, 2018), Plaintiff asserted that that Defendant Precor had retail stores and several employees that lived within the district. The court agreed with Precor, which argued that independent retail distributors, not Precor, operated the retail locations, and that merely having employees in the district was insufficient to establish a place of business for venue purposes. 20

ACTIONS OF UNAFFILIATED INDEPENDENT RETAIL DISTRIBUTORS INSUFFICIENT FOR VENUE PRUPOSES & VENUE-RELATED DISCOVERY DENIED Even the independent retailers use of Precor s logo, while a relevant consideration, was insufficient by itself to show that Precor was engaging in business out of these retail locations; the retailers were neither its subsidiaries nor affiliates, and did not have employees of Precor. The court further found that defendant did not prove that Precor s employee s homes are the regular and established places of business of Precor. The court also denied defendant's request for venue-related discovery, finding that the results of any discovery would not change the result. 21

REVENUE AND POSSIBLE SALES IN DISTRICT INSUFFICIENT FOR VENUE & VENUE-RELATED DISCOVERY DENIED In Patent Holder LLC v. Lone Wolf Distributors, Inc., 2017 WL 5032989 (S.D. Fl. Nov. 1, 2017), the Florida court transferred the case to the district of Idaho, rejecting the plaintiff s argument that Lone Wolf has a regular and established place of business in the district. The court also denied discovery of Lone Wolf on venue issues. In view of In re Cray, the Florida court found that merely deriving revenue from sales in the district was insufficient for venue. The court also noted that while this type of analysis is relevant to determining personal jurisdiction, it has no bearing on whether 1400(b) s "physical place" requirements are met. 22

REVENUE AND POSSIBLE SALES IN DISTRICT INSUFFICIENT FOR VENUE & VENUE-RELATED DISCOVERY DENIED The Florida court also rejected the argument that local dealers may be selling Lone Wolf products in the District through evidence of a Dealer Sign Up link on Lone Wolf s website. Even if true, such a fact does not establish that Lone Wolf maintains a physical place in the district or that it is of Lone Wolf. This case again emphasizes the fundamental distinctions between venue and personal jurisdiction, post-tc Heartland. 23

DISTRICT COURT SPLIT ON BURDEN OF PROOF Courts differ as to which party has the burden of proof to prove that venue is proper over the defendant: Burden on Plaintiff (Texas cases): Personal Audio, LLC v. Google, Inc., 280 F.Supp.3d 922 (E.D. Tex. 2017) (burden of proving venue is is on the plaintiff). Galderma Labs., L.P. v. Teva Pharms. USA, Inc., 2017 WL 6505793 (N.D. Tex. Nov. 17, 2017) (burden of proving that venue is proper is on the plaintiff once the defendant has objected to the forum). Burden on Defendant (Delaware): Bristol-Myers Squibb Co. v. Mylan Pharmaceuticals Inc., 2017 WL 3980155 (D. Del. Sept. 11, 2017) (burden of proof for a motion for improper venue is governed by regional law, and that the burden is on the defendant to prove improper venue). 24

VENUE ISSUES IN ANDA CASES In Bristol-Myers Squibb Co. v. Mylan Pharmaceuticals, 2017 WL 3980155 (D. Del. Sept. 11, 2017), the Delaware court discussed the mismatch between the past tense in 1400(b) ( has committed acts of infringement ) and the potential future act of selling a drug after FDA approval. The court did not buy Mylan s argument that there is no actual infringement in an ANDA case and thus venue should be limited to where the defendant "resides" (i.e., is incorporated per TC Heartland): In the Court s view, the best, most reasonable conclusion after Acorda is that an ANDA filer s future, intended acts must be included as part of the acts of infringement analysis for purposes of determining if venue is proper under the patent venue statute. In Acorda, the Federal Circuit plainly held that intended, planned, future acts that will occur in a district in the future (after FDA approval) are acts that must be considered now in determining whether an ANDA filer has sufficient contacts with that district right now to make Hatch-Waxman litigation in such a district appropriate from a jurisdictional perspective. 25

VENUE ISSUES IN ANDA CASES In BMS v. Mylan, the Delaware court discussed the alternative venue option, "regular and established place of business": The court allowed Plaintiff BMS to take fairly broad "venue discovery," including investigation into the relationships between movant Mylan Pharmaceuticals and 40 other Mylan entities in Delaware, the presence and activities of sales representatives in the district, including how the sales, marketing, and promotions are conducted, Mylan Pharmaceutical s business activities with wholesalers, and relationships with end consumers. The court also found that there did not need to be a nexus between the act of infringement and the regular and established place of business. 26

VENUE ISSUES IN ANDA CASES In Javelin Pharmaceuticals, Inc. v. Mylan Laboratories Limited, 2017 WL 5953296 (D. Del. Dec. 1, 2017), the court found that Mylan has committed acts of infringement by submitting an ANDA for a generic copy of Javelin s product Dyloject and intending to market its generic product within the district. Relying on BMS v. Mylan, As to the place of business prong, the court granted Plaintiff s venue discovery on Mylan s corporate entities relationships: While Defendants contend that there is no evidence to establish the Mylan Defendants have a regular and established place of business here (D.I. 73 at 2), the Court finds Plaintiffs theory that the places of any Mylan entity, including Mylan affiliates, subsidiaries, parents, or alter egos, may be attributable to the named Mylan Defendants for purposes of venue is not frivolous and justifies some limited venue-related discovery. 27

VENUE-RELATED DISCOVERY OFTEN ALLOWED IN HATCH-WAXMAN CASES In Celgene Corp. v. Hetero Labs Ltd., 2018 WL 1135334 (D.N.J. March 2, 2018), the New Jersey court also granted venue discovery against Mylan. Agreeing with BMS v. Mylan, the court found that Mylan s intent to market its generic product in the district satisfied 1400(b) s requirement that Mylan has committed acts of infringement in the district. But the court granted venue-related discovery as to whether Mylan has a regular and established place of business in New Jersey. 28

OTHER COURTS TAKE A MORE NARROW CONSTRUCTION OF "ACTS OF INFRINGEMENT" IN ANDA CASES In contrast to the Delaware and New Jersey cases, in Galderma Labs., L.P. v. Teva Pharmaceuticals United States, Inc., 2017 WL 6505793 (N.D. Tex. Nov. 17, 2017), the court focused on the past tense used in the second prong of 1400(b), the determined that the language has committed acts of infringement only applies to the filing of the ANDA in the Hatch-Waxman context: The Bristol Myers Squibb decision borrowed heavily from Acorda, but Acorda is a personal jurisdiction decision, not a venue decision. In re Cray, the most recent pronouncement from the Federal Circuit on the application of the patent venue statute, warns courts to be careful not to conflate showings that may be sufficient for other purposes, e.g., personal jurisdiction or the general venue statute, with the necessary showing to establish proper venue in patent cases. In re Cray, Inc., 871 F.3d at 1361. This language provides a clear admonition to courts to avoid importing personal jurisdiction standards into a venue analysis. This Court declines to find that an act of infringement occurs wherever an ANDA filer intends to market the accused product. 29

OTHER COURTS TAKE A MORE NARROW CONSTRUCTION OF "ACTS OF INFRINGEMENT" IN ANDA CASES The Galderma court noted that for purposes of venue in Hatch-Waxman cases, it was proper to look to the forum where the ANDA submission was prepared and submitted. However, venue factors do not include preclinical research studies performed in connection with the preparation of the ANDA. Such activities would be covered under the safe harbor of 35 U.S.C. 271(e)(1). The court only relied on the actual preparation and submission of the ANDA to determine the has committed acts of infringement prong of the venue test. 30

VENUE-RELATED DISCOVERY BETWEEN RELATED ENTITIES ALLOWED TO ESTABLISH VENUE In Mallinckrodt IP v. B. Braun Medical Inc., 2017 WL 6383610 (D. Del. Dec. 14, 2017), Mallinckrodt successfully argued, and the court agreed, that discovery into the relationships between various B. Braun entities, including B. Braun affiliates, subsidiaries, or alter egos, was justified. The facts could show that actions of other entities may be attributable to B. Braun for venue purposes of establishing a regular and established place of business. The court found that In re Cray left intact prior precedent that venue in a patent infringement case may be proper with regard to one s corporation by virtue of the acts of another, intimately connected, corporation. Thus, among the facts to consider is whether the formalities of corporate separateness are properly preserved. 31

VENUE-RELATED DISCOVERY BETWEEN RELATED ENTITIES ALLOWED TO ESTABLISH VENUE B. Braun asserted that its affiliates are separate companies and maintain all corporate formalities. Mallinckrodt insisted that the various entities share executive officers, regularly work together on various projects, etc. The court permitted Mallinckrodt to have the opportunity to conduct venue-related discovery. 32

THERE REMAINS NO BOUNDARIES ON WHERE FOREIGN COMPANIES CAN BE SUED The Supreme Court addressed venue restrictions for foreign companies in a 1972 decision, Brunette Machine Works Ltd. v. Kockum Industries Inc., 92 S.Ct. 1936 (1972). In Brunette, the court held that a foreign corporation can be sued for patent infringement in any judicial district. This was based on a long-standing rule that venue restrictions do not apply to foreign companies. 33

THERE REMAINS NO BOUNDARIES ON WHERE FOREIGN COMPANIES CAN BE SUED In a footnote in the TC Heartland ruling, the Supreme Court noted that it did not express any opinion on this court s holding in Brunette or on the implications of the decision on foreign corporations. 137 S.Ct. at 1520, n. 2. The court s language left open the possibility that future decisions following the narrow construction in TC Heartland could affect venue rules for foreign companies in patents cases. In In re HTC Corp., No. 2018-130 (Fed. Cir. May 9, 2018), the Federal Circuit specifically addressed this question and refused to limit where foreign companies can be sued. 34

THERE REMAINS NO BOUNDARIES ON WHERE FOREIGN COMPANIES CAN BE SUED In reaching this conclusion, the HTC court explained that applying venue restrictions to foreign companies "could create a venue gap, where at least some alien defendants would be entirely exempt from patent infringement actions." Thus, for venue, foreign corporations can be sued in any district court. However, the requirements for personal jurisdiction must still be satisfied, and Rule 4(k)(2) Fed.R.Civ.P. is available to plaintiffs (foreign defendant not subject to jurisdiction in any state can essentially be sued anywhere that fairness and due process permits). 35

DISTRICT COURT SPLIT ON VENUE IN ANDA SUITS Bottom line: District courts do not agree on how to interpret the patent venue s statutory language regarding has committed acts of infringement in the context of Hatch-Waxman actions. Delaware: in BMS v. Mylan, the court took a broad approach in analyzing infringing acts, finding that an applicant s submission of an ANDA, in conjunction with other acts the ANDA applicant non-speculatively intends to take if its ANDA receives final FDA approval, plus steps already taken by the applicant indicating its intent to market the ANDA product in this District, must all be considered for venue purposes, and can be sufficient to demonstrate that the ANDA-filing Defendant has committed acts of infringement in this District. Thus, generic defendant can be sued in Delaware if it intends to sell its proposed generic product in the state, as long as it has a regular place of business there. 36

MOST RECENT HATCH-WAXMAN CASE On October 18, 2018, Judge Stark dismissed a Hatch-Waxman case involving apixaban (Eliquis ) filed against Mylan Pharmaceuticals, Inc. in the District of Delaware for improper venue. Bristol-Myers Squibb Co. et al. v. Aurobindo Pharma USA Inc. et al., No. 17-cv-374 (D. Del.). Since the Supreme Court s landmark venue decision TC Heartland (2017), Mylan has filed a number of motions to dismiss or transfer from various courts to West Virginia, most of which have not been granted. However, the apixaban case establishes that venue motions can be successful in Delaware even in Hatch-Waxman cases involving numerous consolidated suits pending against other defendants in the same district. 38

MOST RECENT HATCH-WAXMAN CASE Judge Stark's recent decision focused on two of the potential arguments for venue over Mylan post-tc Heartland. First, the court evaluated whether the Delaware residency of one of Mylan s subsidiaries could be imputed on Mylan under the first prong of 1400(b). As a preliminary matter, Judge Stark held that the residency of one entity may be imputed to another for purposes of satisfying 1400(b) where the entities have an alter ego relationship or it is appropriate to pierce the corporate veil. However, the evidence showed that the Mylan entities maintained corporate separateness, that Mylan s subsidiary was a registered LLC with its own books and records, and that all of those documents are publicly available. 39

MOST RECENT HATCH-WAXMAN CASE Second, Judge Stark found that the general corporate venue statute, 28 U.S.C. 1391 [not 1400(b)] did not provide an independent basis for venue over Mylan post-tc Heartland. The court found that there is nothing special about Hatch-Waxman cases with respect to venue; they are still civil actions for patent infringement where venue is governed solely and exclusively by 1400(b). 40

MOST RECENT HATCH-WAXMAN CASE Judge Stark s dismissal is a significant victory for Mylan in not only the apixaban litigation, but also in future cases. Mylan still must defend against Plaintiffs protective suit on apixaban in the Northern District of West Virginia, thus emphasizing the value of such "backup" suits to Plaintiffs generally. Further, Mylan s successful venue motion in Delaware may be persuasive in seeking similar relief in future Delaware actions, even where there may be a large number of related suits in the same venue as there was with apixaban. Judge Stark s decision also confirms that future plaintiffs can try to defend venue in Delaware based on "imputed residency" due to corporate relationships, although discovery may be granted as we have seen. 41

PROTECTIVE SUITS Given venue uncertainty, branded companies often take precautions to safeguard against the possibility of dismissal. Under the Hatch-Waxman framework, upon receipt of a Paragraph IV certification, branded companies may file an infringement action against the generic manufacturer. Of course, if the action is filed within 45 days of receipt of the Paragraph IV Certification, the U.S. Food and Drug Administration may not grant final approval of the ANDA for 30 months from the receipt date. Because the dismissal of an ANDA action filed within 45 days from receipt of the Paragraph IV certification could jeopardize the 30-month stay of FDA approval, branded companies should and often do consider filing two suits: one suit in the forum where they wish to litigate the case and a second, so-called protective suit, in the forum where jurisdiction over the generic manufacturer is certain. 42

INTERPLAY BETWEEN PERSONAL JURISDICTION AND VENUE IN ANDA CASES In 2014, the Supreme Court clarified in Daimler that general personal jurisdiction can be exercised over a defendant where it is at home, which typically would be its state of incorporation or principal place of business. Daimler AG v. Bauman, et al., 134 S. Ct. 746 (2014). Possibly cognizant of the difficulty this standard created for plaintiffs in ANDA litigations, the Federal Circuit thereafter ruled in Acorda Therapeutics Inc. v. Mylan Pharms. Inc., 817 F.3d 755 (Fed. Cir. 2016), that specific personal jurisdiction in ANDA cases can be based on the filing of an ANDA coupled with the ANDA filer s intent to market its proposed drugs in the forum. 43

INTERPLAY BETWEEN PERSONAL JURISDICTION AND VENUE IN ANDA CASES The Federal Circuit had previously determined in VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (Fed. Cir. 1990) (later overturned by TC Heartland) that venue was coextensive with personal jurisdiction. Thus, the Acorda decision subjected ANDA filers to suit under the Hatch-Waxman Act in virtually any state in the country. 44

INTERPLAY BETWEEN PERSONAL JURISDICTION AND VENUE IN ANDA CASES For example, considering the committed acts of infringement portion of the venue test, under the reasoning of the Acorda decision, the situs of infringement would be all states in which the ANDA filer intends to market its proposed generic drug product. However, to satisfy 1400(b), the plaintiff now has to confine its choice of forum to the state of incorporation and those venues in which the ANDA filer has a regular and established place of business. 45

INTERPLAY BETWEEN PERSONAL JURISDICTION AND VENUE IN ANDA CASES How courts interpret this language of 1400(b) continues to evolve, but so far the results have favored the more narrow constructions advanced by defendants. Because of their more restrictive reading of the special patent venue provision, the TC Heartland decision and its progeny have tempered the effect of the Acorda decision. TC Heartland has effectively eliminated the national jurisdiction for cases brought under the Hatch-Waxman Act that was ostensibly created by Acorda. This is favorable for ANDA defendants, by limiting the chances of being unfairly dragged into a patentee s home or desired forum, instead of more traditional venues like DE and NJ. 46

TAKEAWAYS FOR ANDA DEFENDANTS Because the patentee s venue choices today are more limited than before Heartland and Cray, there is a greater chance of improper venue. A successful motion to dismiss can possibly result in the 45-day window having been effectively missed. Although the case could be refiled in a proper district (or transferred by the improper forum), if dismissed the possibility of no 30-month FDA stay arises absent a "protective suit" having been filed. The U.S. Food and Drug Administration has said the 30-month stay can be terminated if a court dismisses a lawsuit without prejudice, which is what one might expect to happen if a brand-name drug company were to file its case in the wrong venue. For the most part, the generic companies are quite happy being in Delaware and New Jersey because of the expertise on the bench and they know their defenses will be taken seriously. 47

TAKEAWAYS FOR ANDA DEFENDANTS Narrow Construction: Under the first prong of the patent venue statute ( resides ), patent suits may now only be filed in the district within the accused infringer s state of incorporation with the closest connection to the accused infringer. Narrow Construction: Under the second prong of the patent venue statute ( regular and established place of business ), patent suits may now only be filed in a district where the defendant has a physical location or presence. 48

TAKEAWAYS FOR ANDA DEFENDANTS The cases emphasize the basic and significant differences between personal jurisdiction and venue either of which can lead to dismissal if improper. The traditional principles of a defendant s minimum contacts with a jurisdiction such as sales, revenue, dealers, employees, etc. do not apply in the strict new world of post-tc Heartland venue analyses under section 1400(b). 49