Defendants, Nang Kuang Pharmaceutical Co., Ltd. ("Nang Kuang") and CANDA NX-2, LLC ("CANDA") (collectively, "Defendants") filed a motion to dismiss, asserting that the patent infringement action filed by Plaintiffs, Eli Lilly and Company ("Lilly") and the Trustees of Princeton University (collectively, "Plaintiffs"), should be dismissed for lack of personal jurisdiction.
As explained by the district court, "Nang Kuang is a Taiwanese generic drug manufacturer seeking approval from the FDA to market generic versions of ALIMTA®. CANDA, a Texas limited liability company, entered into an agreement with Nang Kuang whereby Nang Kuang agreed to exclusively manufacture and supply the ANDA Product to CANDA, and CANDA agreed to assist Nang Kuang with the U.S. litigation arising from Nang Kuang's submission of the ANDA, and find marketing partners to market, sell and distributed the ANDA Product if the ANDA application is approved by the FDA. As of this date, the FDA has not approved the ANDA, and neither Nang Kuang nor CANDA has commercially manufactured, used, sold or offered for sale in, or imported into, the United States any ANDA Product. On August 25, 2014, Nang Kuang and CANDA jointly provided a notice of certification to the required parties pursuant to 21 C.F.R. § 314.95(a) ('Notice Letter'), including Lilly's Indianapolis-based General Counsel and its Indianapolis trial counsel. The submission of the Notice Letter triggered the forty-five day period in which Lilly had to file the instant Hatch-Waxman action to challenge the ANDA and seek an order that the effective date of any approval of Nang Kuang's ANDA be not earlier than the expiration date of Plaintiffs' patents."
In support of the motion to dismiss, the Plaintiffs argued that the court had specific jurisdiction over the Defendants, arguing that they satisfied the Federal Circuit's three-prong test to determine if specific jurisdiction exists over a defendant: (1) whether the defendant purposefully directed activities at residents of the forum; (2) whether the claim arises out of or relates to those activities; and (3) whether exercising personal jurisdiction is reasonable and fair.
Defendants argument focused on the act of completing the ANDA and the possibility of future distribution of the ANDA Product, asserting that neither of these acts occurred in or were directed toward the state of Indiana. The district court believed that this was the wrong focus and instead focused on the Notice Letter the Defendants sent to Plaintiffs in Indiana. The district court agreed with Plaintiffs and other courts that this was sufficient to establish specific jurisdiction over the Defendants. See Eli Lilly & Co. v. Mylan Pharm., Inc., No. 1:14-CV-00389-SEB-TA, 2015 WL 1125032, at *6 (S.D. Ind. Mar. 12, 2015) ("Defendants purposefully directed their activities at Indiana by sending a Paragraph IV certification notice letter to Lilly in Indiana, which act they knew would trigger the forty-five-day period within which Plaintiffs were empowered to file suit under the Hatch-Waxman framework.").
The district court then found that the situation was the same in this case. "Likewise, in this case, Defendants' actions in filing the ANDA and sending the Notice Letter was the act that gave rise to this action in this district. The Defendants' actions were purposefully directed toward a resident of this forum--Lilly--and the instant claim arises out of those activities, as it is Lilly that was required to file this action to protect its intellectual property rights, and it is Lilly that would be injured if Defendants' ANDA Products infringe on the Plaintiffs' patents. Because Lilly's state of incorporation is Indiana, the Court considers Indiana to be the place of the injury that Plaintiffs allege arose by the filing of the ANDA. See Acorda Therapeutics, Inc. v. Mylan Pharm. Inc., 78 F. Supp. 3d 572 (D. Del. 2015) ('[I]t seems logical to conclude that the state of incorporation is at least one place in which a corporation whose patents are artificially infringed by an ANDA filing is injured.')."
As a result, the district court concluded that the Defendants' act of filing an ANDA and directing a Paragraph IV certification to Indiana provided sufficient minimum contacts to exercise specific jurisdiction over Nang Kuang and CANDA.
Eli Lilly and Company v. Nang Kuang Pharmaceutical Co., Ltd., Case No. 1:14-cv-01647-TWP-DKL (S.D. Ind. Aug. 24, 2015)
The authors of www.PatentLawyerBlog.com are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. For more information about this case, contact Stan Gibson at 310.201.3548 or SGibson@jmbm.com.