SENJU PHARMACEUTICAL CO., LTD. et al v. METRICS, INC. et al
Filing
86
OPINION. Signed by Chief Judge Jerome B. Simandle on 3/31/2015. (tf, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
SENJU PHARMACEUTICAL CO.,
LTD.,
BAUSCH & LOMB, INC. and BAUSCH
& LOMB PHARMA HOLDINGS CORP.,
HONORABLE JEROME B. SIMANDLE
Civil Action
No. 14-3962 (JBS/KMW)
Plaintiffs,
OPINION
v.
METRICS, INC., COASTAL
PHARMACEUTICALS, INC., MAYNE
PHARMA GROUP LIMITED, and
MAYNE PHARMA (USA), INC.,
Defendants.
APPEARANCES:
John F. Brenner, Esq.
Melissa Anne Chuderewicz, Esq.
PEPPER HAMILTON, LLP
301 CARNEGIE CENTER
SUITE 400
PRINCETON, NJ 08543-5276
Bryan C. Diner, Esq.
FINNEGAN, HENDERSON, FARABOW, GARRETT & DUNNER
901 New York Avenue, NW
Washington, DC 20001-4413
Attorneys for Plaintiffs
Sandra A. Jeskie, Esq.
DUANE MORRIS, LLP
30 South 17th Street
Philadelphia, PA 19103
Attorney for Defendants
SIMANDLE, Chief Judge:
I.
INTRODUCTION
This is a patent infringement action brought by Plaintiffs
Senju Pharmaceutical Company, Bausch & Lomb, Inc., and its
subsidiary, Bauch & Lomb Pharma Holdings Corp. Plaintiffs hold
the rights to three patents for novel formulations of bromfenac,
an active ingredient in Prolensa®, a drug that is used to treat
patients who have undergone cataract surgery. Plaintiffs filed
this case on June 20, 2014, alleging that Defendants infringed
upon their patents by submitting Abbreviated New Drug
Applications (“ANDAs”) seeking FDA approval for the manufacture
and sale of a bromfenac ophthalmic solution intended to be a
generic of Prolensa®, in violation of 35 U.S.C. § 271(e)(2). The
case was initially brought against four defendants: Metrics,
Inc. (“Metrics”), Coastal Pharmaceuticals, Inc. (“Coastal”),
Mayne Pharma Group Limited, and Mayne Pharma (USA), Inc. Only
Metrics and Mayne Pharma Group Limited remain in this action.
Six days after plaintiffs filed their Complaint, Defendants
filed for inter partes review of two of Plaintiff’s patents
before the Patent Trial and Appeal Board (“PTAB”).
Presently before the Court is Defendants’ motion to dismiss
the Complaint for lack of personal jurisdiction, and Plaintiffs’
motion to enjoin Defendants from proceeding in the parallel
2
inter partes review process before the PTAB. The Court heard
oral argument on both claims and accepted supplemental briefing.
For the reasons that follow, the Court finds that it lacks
general jurisdiction over Mayne Pharma Group Limited but will
permit limited discovery as to specific jurisdiction. The Court
finds that it has jurisdiction over Metrics and will deny
Defendants’ motion to dismiss with respect to Metrics. The Court
will also deny Plaintiffs’ motion to enjoin inter partes review
before the PTAB.
II.
BACKGROUND
A. Plaintiffs’ patents and Defendants’ ANDA application
Plaintiffs hold all substantial rights to three patents for
novel formulations of bromfenac, an active ingredient in the
ophthalmic drug Prolensa®, which is approved by the FDA for
treatment of post-operative inflammation and reduction of pain
in patients who have undergone cataract surgery. The patents are
issued by the United States Patent and Trademark Office
(“USTPO”) under United States Patent Nos. 8,129,431 (“the ‘431
patent”), 8,669,290 (“the ‘290 patent”), and 8,754,131 (“the
‘131 patent”).
On March 13, 2014, Defendant Metrics sent a letter to
Plaintiffs stating that it had submitted an Abbreviated New Drug
Application (“ANDA”) with the Food and Drug Administration
3
(“FDA”) pursuant to the Federal Food, Drug, and Cosmetic Act, 21
U.S.C.A. § 355(j), for the manufacture and sale of a bromfenac
ophthalmic solution intended to be a generic of Prolensa®.
(Compl. [Docket Item 1] ¶ 20; Pls.’ Mot. to Enjoin, Ex. 9.) The
ANDA included a certification under § 355(j)(2)(A)(vii)(IV),
known as a Paragraph IV Certification, claiming that Plaintiffs’
‘431 and ‘290 patents were “invalid or will not be infringed by
the manufacture, use, or sale” of the new drug being submitted
for FDA approval.
Plaintiffs then commenced this action for infringement on
June 20, 2014, seeking an injunction to prevent the manufacture,
use, import, and sale of defendants’ generic, a judgment of
infringement on the three patents, and declaratory relief.
(Compl. at 10-11.)
B. Defendants’ motion to dismiss for lack of personal
jurisdiction
Defendant Mayne Pharma Group Limited is a corporation based
in Australia; while Metrics, Coastal, and Mayne Pharma (USA),
Inc. are subsidiaries of Mayne Pharma Group Limited (Compl. ¶¶
4-7.)
Defendants moved to dismiss this case for lack of personal
jurisdiction, arguing that the Court lacked jurisdiction over
all Defendants. [Docket Item 30.] Following oral argument and
upon agreement by both parties, the Court entered an Order
4
dismissing Coastal from this action. Mayne Pharma (USA), Inc.
was later also dismissed as a defendant in this case.1
The remaining Defendants are Metrics, Inc. and Mayne Pharma
Group Limited, the parent company.
Metrics, a wholly-owned subsidiary of Mayne Pharma Group
Limited, is a corporation organized under the laws of North
Carolina. (Compl. ¶ 4.) Metrics directly manufactures, markets,
and sells generic drug products throughout the United States,
including New Jersey. (Compl. ¶ 10.) According to Defendants,
direct sales of products to New Jersey represented 4% of
Metrics’ overall U.S. product and service sales for the latest
fiscal year. (First Cross Decl. [Docket Item 30-1] ¶ 15.)
Although Metrics has no offices, facilities, or other real
property in New Jersey, the company is registered to do business
in New Jersey and employs one individual in the state who is
1
The parties agreed during oral argument that Coastal was an
assumed name of Metrics and was not a separate entity nor
incorporated in any state. The Court dismissed Coastal from the
case with the understanding that any judgment against Metrics
would be equally binding as to Coastal. (Oct. 6, 2014 Order
[Docket Item 62].) Also during oral argument, Defendants
asserted that they did not represent Mayne Pharma (USA), Inc.
and had accepted service on their behalf in error. (Oct. 3, 2014
Oral Arg. Tr. [Docket Item 63] 41-43.) The Court allowed
Plaintiffs to re-serve the Complaint on the correct party and
enlarged the time for service to 30 days beyond the period
otherwise required by Federal Rule of Civil Procedure 4(m). No
service was made within that time frame, and the Court
subsequently dismissed Mayne Pharma (USA), Inc. from this
action. (March 17, 2015 Order [Docket Item 81].)
5
solely associated with the business division of the company.
(First Cross Decl. ¶ 8-14.)
Plaintiffs served Metrics with the Complaint pursuant to
New Jersey Court Rule 4:4-4(a)(6), which provides for in
personam jurisdiction over a corporate defendant by personal
service within the state upon an authorized agent of the
corporation. N.J. Ct. R. 4:4-4(a)(6). Defendant’s registered
agent in New Jersey, Corporation Trust Company, accepted service
in West Trenton, New Jersey. (See Executed Summons [Docket Item
8].)
Plaintiffs argue that service upon a registered agent in
the state established this Court’s personal jurisdiction over
Metrics. Defendants argue that service upon a registered agent
did not automatically establish jurisdiction, and that Metrics’
contacts as a whole are insufficient for either general or
specific jurisdiction.
Defendant Mayne Pharma Group Limited, the parent company of
Metrics, is an Australian corporation that manufactures,
markets, and sells generic drug products around the world.
(Compl. ¶ 6.) Defendant has no physical presence in New Jersey,
nor does it have any employees in the state. Plaintiffs allege
that Defendant’s two corporate predecessors, Mayne Pharma
Limited and Mayne Pharma Pty Ltd, have previously used a New
Jersey address for professional licensure as a pharmaceutical
6
manufacturer in 2006 and 2007. Plaintiffs attached business
certificates to their opposition brief which showed that Mayne
Pharma Limited and Mayne Pharma Pty Ltd previously had licenses
associated with a Paramus, New Jersey address from approximately
2002 to 2007. (Pls.’ Opp. Exs. 23, 24.)
In addition, Plaintiffs allege that three other corporate
predecessors and subsidiaries of Defendant, namely Mayne Pharma
Limited, F.H. Faulding & Co., and Mayne Pharma International Pty
Ltd, filed 11 patent infringement actions in New Jersey over the
course of 14 years. (Pls.’ Opp. [Docket Item 50] 4, 7, 9; Pls.’
Opp. Exs. 11-21.) Specifically, Plaintiffs allege that corporate
predecessor F.H. Faulding & Co. previously filed two lawsuits in
the District of New Jersey in 2000 and 2001 (Pls.’ Opp. 7; id.
Ex. 11, 12); subsidiary Mayne Pharma International Pty Ltd
previously filed seven lawsuits in this district in the years
2008-2010 (Pls.’ Opp. Exs. 13-19); and Mayne Pharma Limited,
whose connection to Defendant is disputed, filed two
counterclaims in this district in 2007. (Pls.’ Opp. Exs. 20,
21.)2 None of the suits involve the patents at issue in this
case.
2
Defendants do not appear to dispute that Mayne Pharma
International Pty Ltd is a subsidiary, but they do dispute that
Mayne Pharma Limited and F.H. Faulding & Co. are corporate
predecessors. (See Defs.’ Reply 13-16.)
7
Finally, Plaintiffs note that Defendants’ active
pharmaceutical ingredient supplier, Johnson-Matthey, is based
out of West Deptford, New Jersey. Defendants acknowledge that
Johnson-Matthey supplies the active ingredient in the product
that is the subject of this suit, but argue that the ingredients
in this case were actually manufactured and shipped from
Massachusetts. (Def. Supp. Letter of Oct. 17, 2014 [Docket Item
68]; Pls.’ Supp. Letter of Oct. 15, 2014 [Docket Item 66], at
*3; Pls.’ Opp. 11; Def. Reply 12.)
C. Plaintiffs’ motion to enjoin Defendants from
participating in inter partes review
On March 13, 2014, Defendant Metrics sent a letter to
Plaintiff Bausch & Lomb Inc. advising Plaintiff that Metrics had
recently submitted an ANDA with the FDA with a Paragraph IV
certification to Plaintiffs’ ‘431 patent. Metrics stated that it
expected ANDA filing acceptance shortly. (Pl. Mot. to Enjoin,
Ex. 9 [Docket Item 10].)
Plaintiffs filed this patent infringement action on June
20, 2014. [Docket Item 1.] On June 26th, Defendants filed two
petitions for inter partes review (“IPR”) before the Patent
Trial and Appeal Board (“PTAB”) seeking a ruling on the validity
of Plaintiff’s ‘290 and ‘431 patents.3 One day later, on June
3
Inter partes review allows a party other than the patentee to
challenge the validity of a patent by bringing an action before
8
27th, Defendant Metrics provided a Notice Letter to Plaintiffs
advising Plaintiffs that it had filed an ANDA for Prolensa®. The
letter informed Plaintiffs that the ANDA included Paragraph IV
Certifications to two of Plaintiffs’ patents: the ‘431 patent
and the ‘290 patent.
While Defendants’ IPR petitions were pending, Plaintiffs
moved for an injunction in this Court to prevent Defendants from
participating in the inter partes review process. Plaintiffs
argued that the “first-filed” rule requires this Court to decide
the issue of infringement. Plaintiffs also argue that when
defendants filed their ANDA, they “filed a civil action,” under
§ 35 U.S.C. § 315(a)(1), which therefore prohibits them from
filing a subsequent petition for inter partes review.
Defendants opposed Plaintiffs’ motion, arguing that
Plaintiffs’ reading of § 315(a)(1) was not supported by the
language of the statute; and that the Court lacks authority to
entertain plaintiffs’ motion because it lacks personal
jurisdiction.
On February 19, 2015, PTAB granted Defendants’ petition for
inter parties review of the ‘290 and ‘431 patents. (Feb. 20,
2015 Letter [Docket Item 74].)
the PTAB, an administrative body of the U.S. Patent and
Trademark Office which decides issues of patentability.
9
III. DEFENDANTS’ MOTION TO DISMISS
A. Legal Standard
On a motion to dismiss for lack of personal jurisdiction
under Federal Rule of Civil Procedure 12(b)(2), the plaintiff
bears the burden of establishing “with reasonable particularity
sufficient contacts between the defendant and the forum state.”
Provident Nat’l Bank v. Cal. Fed. Sav. & Loan Ass’n, 819 F.2d
434, 437 (3d Cir. 1987); see also AFTG-LG, LLC v Nuvoton Tech.
Corp., 689 F.3d 1358, 1360-61 (Fed. Cir. 2012) (discussing the
plaintiff’s prima facie burden). Because a Rule 12(b)(6) motion
“is inherently a matter which requires resolution of factual
issues outside the pleadings,” the jurisdictional allegations
may be supported with sworn affidavits or other documents.
Metcalfe v. Renaissance Marine, Inc., 566 F.3d 324, 330 (3d Cir.
2009). The Court must “accept the uncontroverted allegations in
the plaintiff’s complaint as true and resolve any factual
conflicts in the affidavits [and other written materials] in the
plaintiff’s favor.” Elecs. for Imaging, Inc. v. Coyle, 340 F.3d
1344, 1349 (Fed. Cir. 2003) (citations omitted).
Jurisdictional discovery may be permitted when the existing
record is ‘inadequate’ to support personal jurisdiction and a
party demonstrates that it can supplement its jurisdictional
allegations through discovery. Jurisdictional discovery should
10
be sustained when factual allegations suggest the possible
existence of requisite contacts between the defendant and the
forum state with “reasonable particularity.” Mellon Bank, 960
F.2d at 1223.
B. Personal jurisdiction generally4
In order to determine whether personal jurisdiction exists
over a non-resident defendant, in this case, Metrics and Mayne
Pharma Group Limited, the Court must determine whether
jurisdiction lies under both the state long arm statute and the
Due Process Clause of the Constitution. Commissariat A L’Energie
Atomique v. Chi Mei Optoelectronics Corp., 395 F.3d 1315, 1319
(Fed. Cir. 2005). New Jersey’s long-arm jurisdiction statute
permits the exercise of jurisdiction to the full extent allowed
under the Due Process Clause. Imo Indus., Inc. v. Kiekert AG,
155 F.3d 254, 259 (3d Cir. 1998); DeJames v. Magnificence
Carriers, Inc., 654 F.2d 280, 284 (3d Cir. 1981). Thus, the two
4
Because the jurisdictional issue arises in the context of a
patent infringement action under the Hatch-Waxman Act, Federal
Circuit law governs the dispute, rather than the law of the
regional circuit. See Nuance Commc’ns, Inc. v. Abbyy Software
House, 626 F.3d 1222, 1230 (Fed. Cir. 2010); Breckenridge
Pharmaceutical v. Metabolite Laboratories, Inc., 444 F.3d 1356,
1362 (Fed. Cir. 2006); Elecs. For Imaging, Inc. v. Coyle, 340
F.3d 1344, 1348 (Fed. Cir. 2003); Pro Sports Inc. v. West, 639
F. Supp. 2d 475, 480 (D.N.J. 2009) (applying Federal Circuit law
to decide question of personal jurisdiction in patent case). The
Court will, however, refer to decisions in other circuits where
there is an absence of Federal Circuit authority.
11
jurisdictional inquiries in this case collapse into one: whether
the exercise of jurisdiction comports with due process.
Autogenomics, Inc. v. Oxford Gene Tech. Ltd., 566 F.3d 1012,
1017 (Fed. Cir. 2009); Red Wing Shoe Co., Inc. v. HockersonHalberstadt, Inc., 148 F. 3d 1355, 1358 (Fed. Cir. 1998).
In order for the exercise of jurisdiction to satisfy due
process, there must be “minimum contacts” between a non-resident
defendant and the forum state such that “maintenance of the suit
does not offend traditional notions of fair play and substantial
justice.” J. McIntyre Machinery, Ltd. V. Nicastro, 131 S. Ct.
2780, 2787 (2011) (quoting Int’l Shoe Co. v. Washington, 326
U.S. 310, 316 (1945)). Consistent with these principles, a court
may exercise personal jurisdiction over a defendant under two
theories: general jurisdiction and specific jurisdiction.
General jurisdiction may be asserted over a foreign corporation
even when the cause of action has no relation to those contacts
if the defendant’s contacts with the forum are so “continuous
and systematic” as to render them essentially “at home” in the
forum state. Daimler AG v. Bauman, 134 S. Ct. 746, 754 (2014);
Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct.
2846, 2851 (2011); Helicopteros Nacionales de Colombia, S.A. v.
Hall, 466 U.S. 408, 414 (1984). If an out-of-state defendant’s
contacts with the forum are insufficiently substantial to
establish general jurisdiction, a court may still assert
12
personal jurisdiction under the theory of specific jurisdiction
if the suit “aris[es] out of or relate[s] to the defendant’s
contacts with the forum.” Helicopteros, 466 U.S. at 414, n.8.
Here, the inquiry is whether the defendant has “purposefully
directed” his activities at residents in the forum state, Burger
King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985), or whether
there was “some act by which the defendant purposefully
avail[ed] itself of the privilege of conducting activities
within the forum State, thus invoking the benefits and
protections of its laws.” Hanson v. Denckla, 357 U.S. 235, 253
(1958).
C. Metrics is subject to this Court’s jurisdiction because it
accepted service of process in this state
New Jersey Court Rule 4:4-4(a)(6) allows for in personam
jurisdiction over a corporate defendant by personal service
within the state upon an authorized agent of the corporation.5
5
Rule 4:4-4(a) states that the “primary method of obtaining in
personam jurisdiction over a defendant in this State is by
causing the summons and complaint to be personally served within
this State” in one of several ways. Under 4(a)(6), jurisdiction
may be obtained over a corporation
. . . by serving a copy of the summons and complaint in
the manner prescribed by paragraph (a)(1) of this rule
on any officer, director, trustee or managing or general
agent, or any person authorized by appointment or by law
to receive service of process on behalf of the
corporation, or on a person at the registered office of
the corporation in charge thereof, or, if service cannot
be made on any of those persons, then on a person at the
principal place of business of the corporation in this
State in charge thereof, or if there is no place of
13
Plaintiffs served Metrics, which is registered do business in
New Jersey, in the state under Rule 4:4-4(a)(6) via its
registered agent in West Trenton, New Jersey. Defendants contend
that in-state service upon a registered agent is insufficient
without also showing that Metrics has “continuous and
systematic” contacts with New Jersey. (Defs.’ Reply 10-12; Supp.
Letter of Oct. 9, 2014 [Docket Item 65].) Plaintiffs argue that
acceptance of service by a registered agent in a state where
Metrics is registered to do business conclusively establishes
personal jurisdiction over Metrics. (Pls.’ Opp. 5-7; Sur-reply
2-4; Supp. Letter of Oct. 15, 2014.) The Court agrees with
Plaintiffs that by accepting service in the state through a
registered agent in the state, that company has consented to be
sued in that forum.
The Supreme Court has long recognized that jurisdiction may
be established over a defendant who has consented to suit in the
state. A party may consent to personal jurisdiction where such
jurisdiction might otherwise not exist in a number of ways. In
Insurance Corp. of Ireland v. Campagnie des Bauxies de Guinee,
456 U.S. 694 (1982), for example, the Court noted that a party
business in this State, then on any employee of the
corporation within this State acting in the discharge of
his or her duties, provided, however, that a foreign
corporation may be served only as herein prescribed
subject to due process of law
N.J. Ct. R. 4:4(a)(6).
14
may waive the requirements of personal jurisdiction through a
variety of “legal arrangements [that] have been taken to
represent express or implied consent to personal jurisdiction of
the court.” 456 U.S. at 704. The Court went on to note that one
such arrangement may include “state procedures which find
constructive consent to the personal jurisdiction of the state
court in the voluntary use of certain state procedures.” Id.
The Court has also previously suggested that a defendant
consents to suit when it agrees to accept service of process in
the forum. In Pa. Fire Ins. Co. v. Gold Issue Mining and Milling
Co., 243 U.S. 93, 94 (1917), the Court, through Justice Holmes,
found that a corporation had consented to personal jurisdiction
by complying with a state statute that required it to consent to
service in the state as a condition of doing business in that
state. Since the defendant had complied with the statute and
appointed an agent for service, the Court reasoned that it could
rationally be held to consent to service of process in lawsuits
filed against the defendant doing business in the state. 243
U.S. at 95.
Similarly, in Perkins v. Benguet Consol. Min. Co., 342 U.S.
437 (1952), the Supreme Court noted:
Today if an authorized representative of a foreign
corporation be physically present in the state of the
forum and be there engaged in activities appropriate to
accepting service or receiving notice on its behalf, we
recognize that there is no unfairness in subjecting that
15
corporation to the jurisdiction of the courts of that
state through such service of process upon that
representative.
Id. at 444-445. The principle of establishing jurisdiction by
in-state service was emphasized more recently in the plurality
opinion in Burnham v. Super. Court of California, 495 U.S. 604
(1990). In Burnham, the Court held that personal service upon a
defendant who was within a forum state was enough to establish
personal jurisdiction, regardless of whether the defendant had
sufficient minimum contacts to satisfy due process. The Court
explained that the long-standing in-state service rule does not
require an independent inquiry into whether “traditional notions
of fair play and substantial justice” were observed, because “a
doctrine that dates back to the adoption of the Fourteenth
Amendment and is still generally observed unquestionably meets
that standard.” 495 U.S. at 622. Citing a string of cases,
including, importantly, some applying the in-state service rule
to foreign corporate defendants accepting service by agent, the
Court explicitly stated that the in-state service rule “remains
the practice of, not only a substantial number of the States,
but as far as we are aware all the States and the Federal
Government.” 495 U.S. at 615-16; id. at 616. Four justices in
Burnham who did not join the plurality opinion wrote separately
to emphasize that they agreed that personal jurisdiction is
obtained over one who is served within the state, thus upholding
16
the doctrine of “transient jurisdiction,” and they thus joined
in the unanimous affirmation of the lower court’s holding that
personal service in California upon a New Jersey resident who
was transient in California comported with due process for
California to exercise personal jurisdiction even absent minimum
contacts with the forum. 495 U.S. at 628-29 (Brennan, J.)
Similarly, Justice White and Justice Stevens also wrote
separately to affirm the judgment and to agree that in-state
service of even a transient defendant suffices to confer
personal jurisdiction. 450 U.S. at 628, 640.
Contrary to Defendants’ contention, Daimler AG v. Bauman,
134 S. Ct. 746 (2014), did not disturb the consent-by-in-state
service rule described in Burnham. Daimler did not discuss instate service and there was no indication in Daimler that the
defendant had registered to do business in the state or been
served with process there. In fact, the Court’s citation to
Perkins v. Benguet Consol. Mining Co., for the “‘textbook case
of general jurisdiction appropriately exercised over a foreign
corporation that has not consented to suit in the forum,’”
suggests that the Daimler Court was deciding a case where no instate service had occurred. Daimler, 134 S. Ct. at 755-56
(quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S.
Ct. 2846, 2856 (2011))(emphasis added). The two other general
jurisdictional cases examined by Daimler similarly concerned
17
defendants who were not authorized to do business in the forum
state and had not consented to suit. See Goodyear, 131 S. Ct. at
2852 (stating that defendants were not registered to do business
in North Carolina); Helicopteros Nacionales de Colombia, S.A. v.
Hall, 466 U.S. 408, 411 (1984) (noting that defendant had never
been authorized to do business in Texas and never had an agent
for service of process in Texas). The Court therefore does not
find Daimler instructive in the present situation, which
principally concerns establishing jurisdiction through consent
to service. See, e.g., Acorda Therapeutics, Inc. v. Mylan
Pharmaceuticals Inc., 2015 WL 186833, at *12 (D. Del. Jan. 14,
2015) (holding that Daimler did not eliminate consent as a basis
for establishing general jurisdiction over a corporation which
has appointed an agent for service of process in the state).6
6
Moreover, Daimler’s decision to limit general jurisdiction over
a foreign corporation to the few places where a corporation’s
contacts were so continuous as to make it “at home” in that
state was animated by the concern that to subject a corporation
to jurisdiction in every state in which it does substantial
business would give it little assurance of being able to predict
where its conduct will render it liable to suit. Daimler AG v.
Bauman, 134 S. Ct. 746, 761-62 (2014). The same due process
concerns are absent in this case where the defendant has
voluntarily complied with a state registration statute and
accepted service of process in the forum state. Such conduct has
long been interpreted as constituting consent to general
jurisdiction in the state, and, particularly where, as here, the
state statute explicitly establishes in personam jurisdiction in
this manner, the corporation can have little uncertainty as to
the judicial consequences of his actions.
18
Neither party has pointed to relevant case law in the
Federal Circuit on the specific question of whether in-state
service by a registered agent establishes personal jurisdiction,
and the Federal Circuit has yet to address this question. See
Acorda Therapeutics, 2015 WL 186833, at *9. There is, however,
ample support in the Third Circuit and New Jersey law for the
principle that acceptance of service by a defendant registered
to do business in the state establishes personal jurisdiction.
See, e.g., Bane v. Netlink, Inc., 925 F.2d 637, 640 (3d Cir.
1991) (Pennsylvania statute establishing jurisdiction over any
foreign corporation that registers to do business in the state
“carries with it consent to be sued in Pennsylvania courts” and
and observing that “[c]onsent is a traditional basis for
assertion of jurisdiction long upheld as constitutional.”);
Sadler v. Hallsmith SYSCO Food Serv., 2009 WL 1096309 (D.N.J.
Apr. 21, 2009) (finding that defendant consented to being sued
in New Jersey by conceding that it was registered to do business
in New Jersey and had a registered agent in the state for
service of process); Allied-Signal Inc. v. Purex Ind., Inc., 576
A.2d 942 (N.J. Super. Ct. App. Div. 1990) (holding that foreign
defendant corporation was subject to suit in New Jersey because
an agent was served in-state even though agent was registered
for process in unrelated litigation, and noting that “[w]hile
due process merely requires that a nonresident defendant
19
‘reasonably anticipate’ being sued in the forum state, . . .
presence of an individual defendant in the forum state
accompanied by service, confers in personam jurisdiction.”
(citation omitted)); Litton Indus. Sys., Inc. v. Kennedy Van
Saun Corp., 283 A.2d 551, 556 (N.J. Super. Ct. Law Div. 1971)
(concluding that designation of an agent for service of process
under N.J.S.A. 14A:4-1 amounted to consent by defendant to be
sued in New Jersey); Randolph Labs v. Specialties Dev. Corp.,
623 F. Supp. 897, 898-99 (D.N.J. 1945) (finding that
corporation’s designation of an agent in New Jersey for service
of process constituted consent to be sued in the state).
The Court also notes that the Restatement (Second) Conflict
of Laws, which views are occasionally adopted by New Jersey
courts on issues the courts have not yet considered, provides
the same rule for establishing personal jurisdiction over a
foreign corporation:
By authorizing an agent or public official to accept
service of process in actions brought against it, the
corporation consents to the exercise by the state of
judicial jurisdiction over it as to all causes of action
to which the authority of the agent or official extends.
This consent is effective even though no other basis
exists for the exercise of jurisdiction over the
corporation.
Id., §§ 44 cmt. a; see H. John Homan Co., Inc. v. Wilkes-Barre
Iron and Wire Works, Inc., 558 A.2d 42, 45 (N.J. Super. Ct. App.
Div. 1989) (“New Jersey typically gives substantial weight to
20
the Restatement view, particularly in respect of issues it has
not yet addressed.”).
The Court is not persuaded by the New Jersey cases cited by
Defendants because none include the key facts which establish
jurisdiction in this case: personal service upon an agent
appointed to accept service on behalf of a corporation
registered to do business in New Jersey. See, e.g., Citibank,
N.A. v. Estate of Simpson, 676 A.2d 172, 176 (N.J. Super. Ct.
App. Div. 1996) (no indication that partner was authorized to
accept service on behalf of partnership in New Jersey); JWQ
Cabinetry, Inc. v. Granada Wood & Cabinets, Inc., 2014 WL
2050267, at *3 (D.N.J. May 19, 2014) (no indication that
defendant registered to do business in New Jersey or accepted
service of process in New Jersey through registered agent);
Atkinson & Mullen Travel Inc. v. New York Apple Tours Inc., 1998
WL 750355, at *2 (D.N.J. Sept. 16, 1998) (no indication that
defendant accepted service of process in New Jersey).
Notably, one case cited by Defendants, Nehemiah v.
Athletics Congress of U.S.A., 765 F.2d 42, 46-47 (3d Cir. 1985),
was cited by the Supreme Court in Burnham as one of the few
opinions that have “erroneously” found the practice of in-state
service of process unconstitutional. Id. at 615.
In holding that Metrics is subject to personal jurisdiction
in New Jersey, the Court makes a distinction between registering
21
to do business in the state and accepting service in the state
by an authorized agent, as was the case here. Although it may
also be correct that registering to do business alone
(particularly where registration also requires the entity to
appoint an agent in the state for service of process) may be
sufficient as a basis for personal jurisdiction,7 the decision to
7
At least four federal circuit courts have held that compliance
with registration statutes may be a basis for establishing
personal jurisdiction. See, e.g., King v. Am. Family Mut. Ins.
Co., 632 F.3d 570, 576, 578 (9th Cir. 2011); Bane v. Netlink,
Inc., 925 F.2d 637, 640 (3d Cir. 1991); Knowlton v. Allied Van
Lines Inc., 900 F.2d 1196, 1199–1200 (8th Cir. 1990); Holloway
v. Wright & Morrissey, Inc., 739 F.2d 695, 697 (1st Cir. 1984);
Novartis Pharmaceuticals v. Mylan, 2015 WL 1246285, at *3 (D.
Del. Mar. 16, 2015); Forest Laboratories, Inc. v. Amneal
Pharmaceuticals LLC, 2015 WL 880599, at *10 (D. Del. Feb. 26,
2015); Acorda Therapeutics, Inc. v. Mylan Pharmaceuticals Inc.,
2015 WL 186833, at *12 (D. Del. Jan. 14, 2015) (“[W]hen courts
have clearly held that compliance with a state's registration
statute confers general jurisdiction, corporations have the
requisite notice to enable them to structure their conduct so as
to be assured where they will, and will not, be subject to
suit.”). Two circuits have held that a state registration
requirement cannot be the basis for finding consent to general
jurisdiction. See Wilson v. Humphreys (Cayman) Ltd., 916 F.2d
1239, 1245 (7th Cir. 1990); Ratliff v. Cooper Labs, Inc., 444
F.2d 745, 748 (4th Cir. 1971) (“The principles of due process
require a firmer foundation than mere compliance with state
domestication statutes”); see also AstraZeneca AB v. Mylan
Pharmaceuticals, Inc., 2014 WL 5778016, at *4 (D.N.J. Nov. 5,
2014).
This Court recently held that, in an ANDA case,
registration to do business in New Jersey, even absent service
upon a corporate agent in New Jersey, suffices to confer
personal jurisdiction where the corporate defendant was also
availing itself of the privilege of doing business in New
Jersey, including bringing current lawsuits on pharmaceutical
patent disputes in this Court. Otsuka Pharmaceuticals Co., Ltd.
v. Mylan, Inc., Civ. No. 14-4508, 2015 WL 13-5764, at *12
(D.N.J. Mar. 23, 2015).
22
exercise jurisdiction over Metrics is based upon the fact that
Metrics not only registered to do business in New Jersey but,
under New Jersey Court Rule 4:4-4(a)(6), accepted service of
process through its registered agent in the state.
Accordingly, Defendants’ motion to dismiss will be denied
with respect to Metrics.
D. Mayne Pharma Group Limited – general and specific
jurisdiction
Defendants argue that Mayne Pharma Group Limited’s contacts
in New Jersey are insufficient to establish either general or
specific jurisdiction, as it is an Australian company which has
no property in New Jersey and does not directly sell its
products to New Jersey. (Def. Reply at 11.) Plaintiffs argue
that the litigation that Defendant’s corporate predecessors and
subsidiaries have engaged in in this state, and the fact that
its corporate predecessors previously had a New Jersey mailing
address, confers jurisdiction. Plaintiffs also argue that
Defendants have contracted with a New-Jersey based company,
Johnson-Matthey, to manufacture the pharmaceutical ingredient at
issue in this litigation. The parties’ briefs do not make clear
whether Johnson-Matthey has a contract with Metrics or Mayne
Pharma Group Limited.
The Court begins with the question of whether it may assert
general jurisdiction over Mayne Pharma Group Limited, and holds
23
that Defendant’s contacts with New Jersey fall below the
threshold of business activity that is required to render
Defendant “at home” in this state. In reaching this conclusion,
the Court follows the guidance of Daimler AG v. Bauman, 134 S.
Ct. 746 (2014), which finds that general jurisdiction is proper
over a foreign corporation “only when the corporation’s
affiliations with the State in which suit is brought are so
constant and pervasive ‘as to render [it] essentially at home in
the forum State.’” 134 S. Ct.
746, 751 (2014) (quoting Goodyear
Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846, 2851
(2011)).
Daimler involved a dispute over whether a California court
could exercise general jurisdiction over a German car
manufacturer, DaimlerChrysler Aktiengesellscaft, for the actions
of its subsidiary, Mercedes-Benz Argentina, in Argentina during
Argentina’s “Dirty War” twenty years ago. The plaintiffs in that
case argued that an agency relationship existed between Daimler
and another one of its subsidiaries, Mercedez-Benz USA
(“MBUSA”), and attempted to attribute the activities of MBUSA in
California to Daimler. Id. at 751-52. MBUSA was incorporated in
Delaware and had its principal place of business in New Jersey
but had several corporate facilities in California and
distributed cars to California. MBUSA was the largest supplier
of luxury vehicles to the California market, and annual sales of
24
Daimler vehicles in California amounted to 2.4% of Daimler’s
global sales, or about $4.6 billion. Id. at 752.
The Supreme Court held that even assuming MBUSA’s contacts
could be attributed to Daimler, the contacts would be
insufficient to subject Daimler to general jurisdiction in
California. Id. at 760. The Court followed the general
jurisdiction inquiry in Goodyear Dunlop Tires Operations, S.A.
v. Brown, 131 S. Ct. 2846, noted above, and explained it was not
enough that a corporation engage in “substantial, continuous,
and systematic” business in a state. Merely engaging in
“continuous and systematic” in-state activities would invite
corporations to be subject to suit in every state in which they
did substantial business. Id. at 761. In all but the most
“exceptional case,” a corporation is “at home” in only two
places: its place of incorporation and its principal place of
business. Id. at 760-61 & n.19. Thus, the Court found that
MBUSA’s sales in California, although sizable, would not render
Daimler subject to suit there on claims “by foreign plaintiffs
having nothing to do with anything that occurred or had its
principal impact in California.” Id. at 762.
Mayne Pharma Group Limited’s activities in New Jersey are
minimal and fall below the threshold for establishing general
jurisdiction. Defendant’s primary place of business is
Melbourne, Australia. Defendant has no offices, facilities, or
25
real property in New Jersey, so far as the record discloses at
present. Even though Plaintiffs asserts that Mayne Pharma
Australia is “engaged in the business of research, development,
manufacture, and sale of pharmaceutical products throughout the
world,” Defendants state, and Plaintiffs does not here deny,
that Mayne Pharma Group Limited does not sell products or
services directly in the state. (Pls.’ Opp. 9; First Cross Decl.
¶ 5, 15.) Unlike Metrics, Mayne Pharma Group Limited is not
registered to do business in the state and does not have an
agent appointed to accept service in the state. There is no
allegation that Defendant has any employees, agents, or bank
accounts in New Jersey, or that it solicits business or
advertises in the state.
Plaintiffs allege that Mayne Pharma Group Limited’s
corporate predecessors or subsidiaries previously had an office
in New Jersey and previously litigated 11 patent cases in 14
years in this state. Given the high threshold of business
activity that is required under Daimler, the Court is not
convinced that general jurisdiction may be established solely on
Defendant’s corporate predecessors’ past activity when Defendant
has no current business activity New Jersey, particularly when
Defendant’s only past connections are limited to the activity of
corporate predecessors and subsidiaries involving products that
have nothing whatsoever to do with the ANDA product in this
26
case. See AstraZeneca AB v. Mylan Pharmaceuticals, Inc., 2014 WL
5778016, at *4 (Nov. 5, 2014) (declining to find that defendant
was subject to general jurisdiction in the state despite its
extensive litigation history in the district and observing that
“familiarity with the court system of Delaware is insufficient
to render a defendant at home here, as envisioned by Daimler.”)8
Nor does the fact that Defendants potentially have an instate supplier change the Court’s analysis. The fact that
Defendants have a contract with one New-Jersey based company to
manufacture a part of its product does not make Defendant’s
activity in the state “constant” and “pervasive” to so as to
render it at home in New Jersey for purposes of general
jurisdiction. See Daimler, 134 S. Ct. at 760-62 (finding court
lacked general jurisdiction in the state even though defendant
had multiple in-state facilities, distributed products for sale
8
Contrary to Plaintiffs’ contention, the fact that Defendant’s
related entities litigated in this forum does not by itself
establish general jurisdiction. See, e.g., In re Rosuvastatin
Calcium Patent Litig., 2009 WL 4800702, at *6 (D. Del. Dec. 11,
2009) (“Filing a counterclaim and defending a lawsuit, and
consensually participating in other cases, is not enough to
serve as a basis for a finding of a general presence in Delaware
for all cases ....”); Merlino v. Harrah's Entm't, Inc., 2006 WL
401847, at *3 (E.D. Penn. Feb. 17, 2006) (unpublished) (“Filing
even nineteen lawsuits, without more, cannot constitute
continuous and systematic activity so as to establish general
jurisdiction.”); Jones v. Blige, 2006 WL 1329247, at *5 (E.D.
Mich. May 16, 2006) (unpublished) (general jurisdiction was not
established by the defendant's status as a plaintiff in three
unrelated lawsuits); Travelers Cas. & Sur. Co. v. Interclaim
(Bermuda) Ltd., 304 F. Supp. 2d 1018, 1025 (N.D. Ill. 2004).
27
in the state, and sold over 10% of its U.S. products in the
state); Goodyear, 131 S. Ct. at 2852 (finding court lacked
general jurisdiction where defendant’s products were distributed
to forum state by an affiliate but defendant had no office,
employees, or bank accounts in the state, was not registered to
do business in the state, did not solicit business or advertise
in the state, and did not themselves sell products in the
state); Fisher v. Teva PFC SRL, 212 Fed. App’x 72, 75-77 (3d
Cir. 2006) (finding defendant did not have continuous presence
in the forum where defendant had distribution contract with New
Jersey distributor, shipped products to New Jersey customers,
its employees visited New Jersey several times a year, it
briefly retained an individual as a New Jersey employee, and it
was owned for a time by parent company based in New Jersey).9
Having decided that Mayne Pharma Group Limited is not
subject to general jurisdiction in New Jersey, the Court turns
briefly to the question of specific jurisdiction. Plaintiffs did
9
The fact that Metrics is a subsidiary of Mayne Pharma Group
Limited change this determination, since Plaintiffs do not
allege – and the record does not suggest – that Mayne Pharma
Group Limited exercises “unusual hegemony” over Metrics such
that Metrics’ contacts with New Jersey should be imputed to
Mayne Pharma Group Limited. See Pfundstein v. Omnicom Group
Inc., 666 A.2d 1013, 1016-17 (N.J. Super. Ct. App. Div. 1995)
(declining to impute contacts of subsidiaries to defendant
parent company for purposes of establishing jurisdiction over
parent and noting that forum contacts of a subsidiary will not
be imputed to the parent without a showing of something more
than mere ownership).
28
not assert in their initial briefs that the Court has specific
jurisdiction over Mayne Pharma Group Limited. Rather, they
argued that Defendant’s forum-connected activity as a whole
creates “continuous and systematic” contacts with New Jersey.
(Pl. Opp. 8-12; Pl. Sur-Reply 4-7.)
As explained above, specific jurisdiction may be
established over a defendant where the defendant has
“purposefully directed” its activities at residents of the
state, and the litigation arises out of those forum related
activities. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472
(1985); World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286,
297 (1980). In the context of patent litigation, a plaintiff
must establish that (1) the defendant purposefully directed its
activities at residents of the forum, (2) the claim arises out
of or relates to those activities, and (3) assertion of personal
jurisdiction is reasonable and fair. Avocent Huntsville Corp. v.
Aten Intern. Co., 552 F.3d 1324, 1332 (Fed. Cir. 2008).
Here, the infringement suits filed by Defendant’s corporate
predecessors and subsidiaries have nothing to do with the
product that is the subject of the ANDA litigation in this case,
nor do they concern any of the same Plaintiffs. Defendants
moreover assert that the ANDA product was developed,
manufactured, and tested out-of-state. Similarly, the ANDA
application for Defendant’s generic bromfenac ophthalmic
29
solution was prepared and filed out-of-state. (First Cross Decl.
¶ 13.)
Plaintiffs argued that Defendants have a contract with the
West Depford-based company, Johnson-Matthey, to supply the
active pharmaceutical ingredient in Defendant’s bromfenac
ophthalmic solution. Plaintiffs do not make clear whether
Johnson-Matthey’s contract is with Metrics or Mayne Pharma Group
Limited,10 and neither party has sufficiently addressed the
question of whether the existence of a contract with an in-state
supplier to manufacture part of the ANDA product that is the
subject of this suit would be sufficient establish specific
jurisdiction in this case. Since injunctive relief against
infringing activity is part of the remedy that Plaintiffs seek,
it is plausible that an out-of-state defendant that has arranged
with an in-state manufacturer to produce the infringing product
is deeemed to commit an act of infringement in this state and to
thus subject itself to jurisdiction for purposes of injunctive
relief.
Because the record raises a possibility that Mayne Pharma
Group Limited has the requisite contacts with New Jersey
10
Although Plaintiffs assert in their supplemental letters that
Metrics, Inc. has a contract with Johnson-Matthey, their initial
briefs state only that “Defendants” have a contract with
Johnson-Matthey and it is unclear whether the connection is with
Metrics or Mayne Pharma Group Limited.
30
specific to the cause of action in this case, the Court will
grant Plaintiff’s request for jurisdictional discovery relevant
to the question of whether Mayne Pharma Group Limited has a
connection to Johnson-Matthey with regard to production or
distribution of bromfenac, and if so, the nature and extent of
such connection. As the Court has explained, as the parties did
not clarify in their initial briefs whether Johnson-Matthey has
a connection with Mayne Pharma Group Limited or Metrics, the
Court cannot at this time rule out the possibility of exerting
specific jurisdiction over Mayne Pharma Group Limited through
its potential connection with Johnson-Matthey. If, as
Plaintiffs’ subsequent submissions to the Court suggest (see Pl.
Oct. 15, 2014 Letter [Docket Item 66]; Pl. Oct. 20, 2014 Letter
[Docket Item 69]), the parties agree that Johnson-Matthey’s only
connection to Defendants is through Metrics, Inc., the parties
are invited to voluntarily dismiss Mayne Pharma Group Limited
from this case for lack of personal jurisdiction.
The Court will exert personal jurisdiction over Mayne
Pharma Group Limited to the extent necessary to require it to
provide this limited specific-jurisdiction related discovery.
The period for this discovery shall be 30 days. Within 7 days
thereafter, Plaintiff may file a supplemental brief to
demonstrate specific jurisdiction, and supplemental opposition
31
will be due 7 days thereafter. This inquiry will thus remain
open pending briefing.
IV.
MOTION TO ENJOIN INTER PARTES REVIEW
Shortly after they filed an Abbreviated New Drug
Application (“ANDA”) with the Food and Drug Administration
(“FDA”) which included a Paragraph IV Certification claiming
that Plaintiffs’ patents were “invalid or will not be infringed
by Defendants’ drug, Defendants filed petitions for inter partes
review (“IPR”) before the Patent Trial and Appeal Board (“PTAB”)
to review the validity of Plaintiffs’ ‘290 and ‘431 patents.
Plaintiffs seek to enjoin Defendants from participating in the
IPR proceeding under the novel argument that 35 U.S.C. §
325(a)(1), which governs the filing of IPR petitions, bars
Defendants from seeking IPR because they already filed a “civil
action” challenging the validity of the patent through the
filing of a Paragraph IV Certification with the FDA. Plaintiffs
argue that an injunction is also warranted under the “firstfiled” rule to prevent duplicative judicial effort and the risk
of inconsistent judgments.11
11
Plaintiffs seek an injunction under the All Writs Act. (Pl.
Mot. to Enjoin 5.) The All Writs Act provides a federal court
with those writs necessary to the preservation or exercise of
its subject matter jurisdiction. Pa. Bureau of Corr. v. U.S.
Marshals Serv., 474 U.S. 34, 40 (1985). Unlike a “traditional”
injunction, which is issued as an interim or permanent remedy
for certain breaches of common law, statutory, or constitutional
32
On February 19, 2015, the PTAB granted Defendants’ petition
for inter parties review of the ‘290 and ‘431 patents.
A. Inter Partes Review
Inter partes review, created in 2011 under the Leahy-Smith
America Invents Act (“AIA”), allows a party other than the
patentee to bring a proceeding before the Patent Trial and
Appeal Board to challenge the validity of a patent. 35 U.S.C. §
311. The current system of inter partes review replaces the old
system of inter partes reexamination. Unlike the inter partes
reexamination process, inter partes review is more akin to an
adjudicative proceeding. H.R. Rep. No. 112-98, 46 (2011),
reprinted in 2011 U.S.C.C.A.N. 67, 77 (the AIA “converts inter
partes reexamination from an examinational to an adjudicative
proceeding.”).
35 U.S.C. § 315(a) provides for the filing of inter partes
review in relation to other proceedings. Section 315(a)(1)
states:
An inter partes review may not be instituted if, before
the date on which the petition for such a review is
rights, the All Writs Act may properly be invoked to enjoin
almost any conduct “which, left unchecked, would have had the
practical effect of diminishing the court's power to bring the
litigation to a natural conclusion.” ITT Comty. Dev. Corp. v.
Barton, 569 F.2d 1351, 1359 (5th Cir. 1978). Although the Act
“empowers federal courts to fashion extraordinary remedies when
the need arises, it does not authorize them to issue ad hoc
writs whenever compliance with statutory procedures appears
inconvenient or less appropriate.” Pa. Bureau of Corr., 474 U.S.
at 43.
33
filed, the petitioner or real party in interest filed a
civil action challenging the validity of a claim of the
patent.
B. The Court will decline to enjoin Defendants from proceeding
before the PTAB
The Court first holds that 35 U.S.C. § 315(a) does not bar
Defendants from seeking inter partes review before the PTAB
because Defendants did not file a “civil action” by filing a
Paragraph IV Certification. The term “civil action” has
traditionally been defined as a judicial proceeding of some
kind. See BP Am. Prod. Co. v. Burton, 549 U.S. 84, 91 n.3 (2006)
(“These primary definitions have not changed in substance since
1966. Black’s (8th ed. 2004) now defines ‘action’ as ‘[a] civil
or criminal judicial proceeding’); United States v. El-Ghazali,
142 Fed. App’x 44, 46-47 (3d Cir. 2005) (collecting dictionary
definitions which define “action” as, among other things, a
“judicial proceeding,” “a proceeding instituted by one party
against another,” “proceedings in courts of law,” “a judicial
proceeding whose purpose is to obtain relief at the hands of the
court,” and “a legal process or suit.”). A Paragraph IV
Certification is merely an administrative application to the FDA
certifying that the patent in question is invalid or is not
infringed by the generic product; it is not part of any judicial
proceeding. The certification is not filed before an
adjudicative body, nor does it seek a ruling on the application
34
by a decisionmaker. There can be no real question that a
Paragraph IV Certification does not constitute a “civil action”
within the plain meaning of that term.12
The few opinions that have considered the precise argument
Plaintiffs make here have easily and soundly rejected
Plaintiffs’ interpretation of a “civil action.” As noted above,
the PTAB has now granted Defendants’ petition for inter partes
review. In doing so, it specifically rejected Plaintiffs’
argument that 35 U.S.C. § 325(a)(1) bars Defendants from filing
a petition for review. See Metrics, Inc. v. Senju Pharmaceutical
Co., Ltd., PTAB No. IPR2014-01041, slip op. at 8-9 (PTAB Feb.
19, 2015) (“When [35 U.S.C. § 325(a)(1) refers to filing a civil
action, it refers to filing a complaint with a court to commence
a civil action” (citing Baldwin Cnty. v. Welcome Ctr. v. Brown,
466 U.S. 147, 149 (1984)); Metrics, Inc. v. Senju Pharmaceutical
12
Nor does Plaintiff’s argument appear to be supported by
language within the AIA. “The plainness or ambiguity of
statutory language is determined by reference to the language
itself, the specific context in which that language is used, and
the broader context of the statute as a whole.” In Re Price, 370
F.3d 362, 369 (2004) (quoting Robinson v. Shell Oil Co., 519
U.S. 337, 341 (1997)). Here, in another part of the AIA, the
statute treats a “civil action” as distinct from a Paragraph IV
notification that is required as part of an ANDA, which further
suggests that Congress intended a “civil action” to mean
something other than an ANDA petition. See 35 U.S.C. §
257(c)(1)(2)(A) (“Paragraph (1) shall not apply to an allegation
pled with particularity in a civil action, or set forth with
particularity in a notice received by the patent owner under
section 505(j)(2)(B)(iv)(II) . . . .”).
35
Co., Ltd., PTAB No. IPR2014-01043, slip op. at 8-9 (PTAB Feb.
19, 2015) (stating same). In at least two other opinions, the
PTAB has held that the filing of a “civil action” in § 325(a)(1)
refers to “filing a complaint with a court to commence a civil
action,” and does not include the filing of a Paragraph IV
certification with the FDA. See Noven Pharmaceuticals, Inc. v.
Novartis AG and LTS Lohmann Therapie-Systeme AG, PTAB No.
IPR2014-00549, slip op. at 6-7 (PTAB Oct. 14, 2014) (holding
that petitioner’s filing of a Paragraph IV Certification “did
not involve filing of a complaint with a court” and thus did not
bar petitioner from instituting a petition under § 315(a));
Noven Pharmaceuticals, Inc. v. Novartis AG and LTS Lohmann
Therapie-Systeme AG., PTAB No. IPR2014-00550, slip op. at 6-7
(PTAB Oct. 14, 2014) (holding same and citing Ariosa Diagnostics
v. Isis Innovation Ltd, PTAB No. IPR2012-00022, slip op. at 4
(PTAB Feb. 12, 2013)).
Plaintiffs do not dispute that the PTAB’s interpretation of
a statute governing inter partes review is entitled to
deference, and the Court finds the PTAB’s rulings instructive
here. (See Pl. Feb. 26, 2015 Letter [Docket Item 77]);
Southeastern Comty. Coll. v. Davis, 442 U.S. 397, 411 (1979)
(noting that “an agency’s interpretation of the statute under
which it operates is entitled to some deference,” although court
must honor the “clear meaning of a statute”); Eli Lilly & Co. v.
36
Bd. of Regents of Univ. of Wash., 334 F.3d 1264, 1267 (Fed. Cir.
2003).
Nor is the Court persuaded that the statutory framework of
the Hatch-Waxman Act would be undermined if this Court allowed
inter partes review before the PTAB to proceed in parallel with
this case. Plaintiffs argue that by filing an ANDA, Defendants
“intiate[d] district court litigation” and therefore should not
be permitted to then seek review of the same patent by filing
for IPR in another forum. (Pl. Mot. to Enjoin 9.) As already
explained above, Defendants did not initiate litigation by
merely filing an ANDA with the FDA. The civil action before this
Court did not begin until Plaintiffs filed their Complaint on
June 20, 2014. [Docket Item 1.] Had Defendants wanted to
initiate litigation, they were free to file a declaratory
judgment action of non-infringement under 35 U.S.C. § 271(e)(5)
after filing their ANDA, and doing so would have precluded
Defendants, under 35 U.S.C. § 315(a), from seeking inter partes
review.
The Court does not find that an injunction is warranted
under the “first-filed” rule. The “first-filed” rule applies
when two lawsuits involving the same issues and parties are
filed in different courts. In such a situation, the first-filed
rule counsels deference to the earlier-filed suit. E.E.O.C. v.
Univ. of Penn., 850 F.2d 969, 971 (3d Cir. 1988) (quoting
37
Crosley Corp. v. Hazeltine Corp., 122 F.2d 925, 929 (3d Cir.
1941)). The purpose of the first-filed rule is to “encourage[]
sound judicial administration and promote[] comity among federal
courts of equal rank.” E.E.O.C. v. Univ. of Penn., 850 F.2d at
917 (emphasis added). “Courts have consistently recognized that
the first-filed rule “is not a rigid or inflexible rule to be
mechanically applied.” Id. at 976 (citation omitted). “District
courts have always had discretion to retain jurisdiction given
appropriate circumstances justifying departure from the firstfiled rule;” and in exercising its discretion, a district court
“must act with regard to what is right and equitable under the
circumstances and the law, and directed by the reason and
conscience of the judge to a just result.” Id. at 972, 977
(internal quotations and citation omitted).
The Court is not convinced that the “first-filed” rule
applies. The “first-filed” rule “promotes comity among federal
courts of equal rank.” E.E.O.C. v. Univ. of Penn., 850 F.2d at
971. Consistent with that principle, the rule is frequently used
by one district court to enjoin the prosecution of proceedings
involving the same parties and the same issues “already before
another district court.” Id.; see also Honeywell Intern. Inc. v.
Int’l Union, United Auto., Aerospace and Agr. Implement Workers
of Am., 502 Fed. Appx. 201, 205 (3d Cir. 2012) (first-filed rule
applies “when two lawsuits involving the same issues and parties
38
are pending in separate federal district courts.”); Cataneser v.
Unilever, 774 F.Supp.2d 684 (D.N.J. 2011); Abushalieh v. Am.
Eagle Exp., 716 F.Supp. 2d 361 (D.N.J. 2010); One World
Botanicals Ltd. v. Gulf Coast Nutritionals, Inc., 987 F. Supp.
317 (D.N.J. 1997). Plaintiffs have cited to no case in which a
district court applied the “first-filed” rule to enjoin a party
from proceeding before the PTAB, and the Court can find no
precedent for doing so.
The Court is also not convinced that inter partes review
would result in duplicative judicial effort, which the firstfiled rule is intended to prevent. Patents are reviewed in IPR
proceedings under a different standard of proof than in federal
district court. Before the courts, a patent is presumed valid
and the party asserting invalidity must prove the facts by clear
and convincing evidence. 35 U.S.C. § 282 (“The burden of
establishing invalidity of a patent or any claim thereof shall
rest on the party asserting such invalidity.”) By contrast, for
a patent reviewed under the IPR process, the petitioner need
only prove invalidity of a patent by a preponderance of the
evidence. 35 U.S.C. § 316(e). Thus, at least one Federal Circuit
court ruling has noted that “precise duplication of effort does
not occur because the PTO and the courts employ different
standards of proof when considering validity.” Ethicon v. Quigg,
849 F.2d 1422 (Fed. Cir. 1988).
39
The Court finally notes that although Plaintiffs cast this
injunction as one against Defendants, in reality it operates as
an injunction against the IPR process itself. When the PTAB
exercises its power to institute inter partes review, that
decision is final. 35 U.S.C. § 314(d) (“The determination by the
Director whether to institute an inter partes review under this
section shall be final and nonappealable.”); In re Bd. of
Trustees of Univ. of Ill., 564 Fed. App’x 1021, 1021 (Fed. Cir.
2014) (holding that statutory scheme precludes the court from
hearing an appeal from the decision to institute IPR); In re
Dominon Dealer Solutions, LLC, 749 F.3d 1379, 1381 (Fed. Cir.
2014) (same). To issue an injunction against Defendants now
would have the direct consequence of preventing the PTAB from
reviewing the case after a decision has already been made to
institute review, and would undermine the PTAB’s final decisionmaking authority. Whether, in an extraordinary case, a federal
court may exercise injunctive authority against the PTAB in aid
of the federal court’s jurisdiction or to enforce a federal
court judgment need not be addressed in the present
circumstances.
Accordingly, the Court will deny Plaintiff’s motion to
enjoin.
40
V.
CONCLUSION
For the foregoing reasons, the Court will deny Defendants’
motion to dismiss for lack of personal jurisdiction with respect
to Metrics, Inc. The Court will also deny Defendants’ motion
with respect to Mayne Pharma Group Limited without prejudice to
Defendants’ right renew the motion following jurisdictional
discovery and supplemental briefing.
Jurisdictional discovery will be permitted on the question
of whether Mayne Pharma Group Limited has a connection to
Johnson-Matthey with regard to production or distribution of
bromfenac and if so, the nature and extent of such a connection.
The period for this discovery shall be 30 days. Within 7 days
thereafter, the parties may file supplemental briefs on the
question of whether this Court has specific jurisdiction over
Mayne Pharma Group Limited.
Plaintiffs’ motion to enjoin proceedings before the PTAB
will be denied. An accompanying Order will be entered.
March 31, 2015
Date
s/ Jerome B. Simandle
JEROME B. SIMANDLE
Chief U.S. District Judge
41
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