Month: August 2017

On May 22, 2017, the Supreme Court decided TC Heartland LLC v. Kraft Foods Group Brands LLC, a dispute over the proper venue for a patent infringement suit. Section 1400(b) of the patent venue statute states in relevant part that a civil action for patent infringement may be brought in the judicial district “where the defendant resides.” In the 1957 case Fourco Glass Co. v. Transmirra Prods. Corp, the Supreme Court held that for purposes of section 1400(b) a domestic corporation “resides” only in its State of incorporation--a narrower understanding of corporate “residence” than that applicable under section 1391 of the general venue statute. Under section 1391, a corporate defendant is typically deemed to reside in any judicial district where it is subject to the court’s “personal jurisdiction” with respect to the civil action in question. -- TC Heartland LLC (Heartland) is organized under Indiana law and headquartered there. Kraft Food Brands LLC (Kraft) sued Heartland in federal district court in Delaware (where Kraft is organized), alleging that products Heartland shipped to Delaware infringed on Kraft’s patents for similar products. Heartland moved to dismiss the claim or transfer venue to Indiana, arguing that it did not reside in Delaware for purposes of section 1400(b). The district court rejected these arguments and the U.S. Court of Appeals for the Federal Circuit denied mandamus relief, because its circuit precedent had concluded that more recent statutory amendments to section 1391 had effectively superseded the Fourco interpretation of “reside” in section 1400(b) and thus the broader understanding expressed in section 1391 now applied to section 1400(b) too. -- By a vote of 8-0, the Supreme Court reversed the judgment of the Federal Circuit and remanded the case. In an opinion by Justice Thomas, the Court held that the amendments to section 1391 did not modify the meaning of section 1400(b) as interpreted in Fourco; as applied to domestic corporations, “residence” for purposes of section 1400(b) still refers only to the state of incorporation. All other members of the Court joined in Justice Thomas’ opinion except Justice Gorsuch, who took no part in the consideration or decision of this case. -- And now, to discuss the case, we have J. Devlin Hartline, who is Director, Center for the Protection of Intellectual Property (CPIP) and Adjunct Professor, Antonin Scalia Law School, George Mason University.

The Biologics Price Competition and Innovation Act of 2009 (BPCIA) provides an abbreviated pathway for obtaining Food and Drug Administration (FDA) approval of a drug that is biosimilar to an already licensed biological product. Among other things, BPCIA provisions require applicants for approval of a new biosimilar to provide the manufacturer of the already licensed product with a notice of commercial marketing and certain information about the biosimilar. Failure to comply permits the manufacturer to pursue infringement litigation against the applicant on an accelerated basis. -- Amgen claims to hold patents on methods of manufacturing and using filgrastim--a biologic used to stimulate the production of white blood cells--and markets one such product, Neupogen. Sandoz sought FDA approval to market a biosimilar called Zarxio. When the FDA accepted Sandoz’s application for review, Sandoz notified Amgen that Sandoz intended to market Zarxio upon receipt of FDA approval. Sandoz also indicated that it would not share with Amgen the relevant application and manufacturing information as required by the BPCIA and invited Amgen immediately to sue for infringement. Amgen did so, and further asserted claims for “unlawful” conduct in violation of California’s unfair competition law. The basis for the latter claims was Sandoz’s alleged failure to comply with the BPCIA requirements that Sandoz (a) share the application and manufacturing information pertaining to Zarxio, and (b) provide a notice of commercial marketing prior to obtaining FDA licensure. Amgen sought injunctive relief in federal district court to enforce both requirements against Sandoz, which counterclaimed for declaratory judgments that Amgen’s patent was invalid and not infringed, and that Sandoz had not violated the BPCIA. -- While the litigation was pending, the FDA licensed Zarxio, and Sandoz provided Amgen with further notice of commercial marketing. The district court thereafter granted partial judgment in favor of Sandoz on its BPCIA counterclaims and dismissed Amgen’s unfair competition claims with prejudice. A divided U.S. Court of Appeals for the Federal Circuit affirmed in part, vacated in part, and remanded the case. The Federal Circuit held that Sandoz had not violated the BPCIA disclosure requirements and that Amgen could not pursue state law remedies to enforce the BPCIA. The court also held that an applicant may provide effective notice of commercial market only after FDA licensure and therefore enjoined Sandoz from marketing Zarxio until 180 days passed after Sandoz’s second notice. -- By a vote of 9-0, the Supreme Court unanimously vacated in part and reversed in part the judgment of the Federal Circuit and remanded the case. In an opinion by Justice Thomas, the Court held that the BPCIA’s requirement on sharing application and marketing information is not enforceable by an injunction under federal law, but that the Federal Circuit should determine on remand whether a state-law injunction is available. The Supreme Court further held that an applicant may provide the requisite notice of commercial marketing before obtaining FDA licensure; therefore Sandoz fully complied with this requirement through its initial notice, the Federal Circuit erred in enjoining Sandoz from marketing Zarxio on this basis, and Amgen’s state law unfair competition claim predicated on the view that the BPCIA forbids pre-licensure notice must fail. Justice Breyer issued a concurring opinion. -- And now, to discuss the case, we have Erika Lietzan, who is Associate Professor of Law at the University of Missouri School of Law.