ANDA Litigation Remained Clustered in Historic Hotspots Last Year Despite Narrowed Venue Options

In 2021, the vast majority of patent litigation targeting generic drugmakers—i.e., cases alleging infringement through the filing of Abbreviated New Drug Applications (ANDAs)—was filed in Delaware and New Jersey, historically the hotspots for such activity.

This concentration was perhaps unexpected in the wake of the Federal Circuit’s November 2020 ruling in Valeant v. Mylan, which narrowed where venue is proper for ANDA suits; i.e., those brought under the Hatch-Waxman Act. The Valeant decision relates to the prong of the patent venue statute (28 USC Section 1400(b)) under which venue is proper in part where acts of infringement have occurred—and in particular, the manner in which that prong is applied for ANDA cases, since under Hatch-Waxman, the act in question is the filing of the ANDA itself with the Food and Drug Administration (FDA).

In Valeant, the Federal Circuit held that for venue purposes, acts of infringement occur “only in districts where actions related to the submission” of an ANDA take place, and not where the distribution of generic drugs described in the ANDA is contemplated. One year later, on November 4, 2021, the court clarified that holding in Celgene v. Mylan, rejecting the argument that the filing of an ANDA has a nationwide effect “felt” in any district. The Federal Circuit further explained that the defendant’s sending of a notice letter asserting noninfringement or patent invalidity (a “paragraph IV letter”) into a particular district is not an act of infringement, as the filing of an ANDA is a prerequisite to send the paragraph IV letter in the first place.

Some had anticipated that Valeant would lead to a dispersion among other venues akin to the exodus from the Eastern District of Texas that occurred in the wake of TC Heartland. That 2017 Supreme Court decision reinstated a narrower view of the patent venue statute’s first prong, wherein a defendant “resides” for venue purposes in a company’s state of incorporation. However, such a dispersion has not occurred. It is not entirely clear why ANDA litigation has remained concentrated in Delaware and New Jersey, though some have posited that this could be due to a slowdown in ANDA filings or fears over COVID-related delays. It is also possible that plaintiffs will seek to consolidate cases filed in generic drugmakers’ home districts with others properly brought in Delaware or New Jersey through multi-district litigation.

See RPX’s fourth-quarter report for more on patent venue, plus a deep dive on other trends impacting patent litigation and the patent marketplace.