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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`Case No. 2:15-CV-1455-WCB
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`ALLERGAN, INC.
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`Plaintiff,
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`TEVA PHARMACEUTICALS USA, INC.,
`et al.,
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`v.
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`Defendants.
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`MEMORANDUM OPINION AND ORDER
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`Before the Court is a motion by defendant Teva Pharmaceuticals USA, Inc., (“Teva”) to
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`dismiss the complaint for lack of personal jurisdiction and improper venue. Dkt. No. 38. Also
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`before the Court is the motion of Mylan Pharmaceuticals Inc. and Mylan Inc. (collectively, “the
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`Mylan entities”) to dismiss the complaint for failure to state a claim and for lack of personal
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`jurisdiction and improper venue. Dkt. No. 32. Both motions are DENIED.
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`I. BACKGROUND
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`This patent infringement action arises from Abbreviated New Drug Applications
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`(“ANDAs”) submitted by Teva and Mylan to market generic versions of Allergan’s cyclosporine
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`ophthalmic emulsion product marketed as RESTASIS. RESTASIS is an eye drop treatment for
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`chronic dry eyes.
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`Allergan is a pharmaceutical company. It is incorporated in the State of Delaware and
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`has its principal place of business in California. It owns several patents relating to RESTASIS—
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`United States Patent Numbers 8,629,111 (“the ’111 patent”), 8,633,162 (“the ’162 patent”),
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`8,642,556 (“the ’556 patent”), 8,648,048 (“the ’048 patent”), 8,685,930 (“the ’930 patent”), and
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`Case 2:15-cv-01455-WCB Document 130 Filed 04/19/16 Page 2 of 11 PageID #: 2868
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`9,248,191 (“the ’191 patent”). Those patents are listed in the “Orange Book,” the publication of
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`the Food and Drug Administration (“FDA”) that identifies approved drug products and lists the
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`patents that are asserted to protect each drug.
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`Teva is a Delaware corporation with its principal place of business in Pennsylvania. It
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`submitted an Abbreviated New Drug Application (“ANDA”) to the FDA seeking regulatory
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`approval for a generic cyclosporine ophthalmic emulsion product. As part of its ANDA, referred
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`to as ANDA No. 203880, Teva included a certification (known as a “Paragraph IV certification,”
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`see 21 U.S.C. § 355(b)(2)(A)(iv)) that all of the patents in Allergan’s Orange Book listing are
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`invalid, not infringed, or unenforceable. On July 22, 2015, Teva sent written notice to Allergan
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`of its filing of ANDA No. 203880 as well as its Paragraph IV allegations with respect to the
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`’111, ’162, ’556, ’048, and ’930 patents.1
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`Mylan Pharmaceuticals is a West Virginia corporation with its principal place of business
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`in West Virginia. It submitted an ANDA, referred to as ANDA No. 205894 seeking regulatory
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`approval for a generic cyclosporine ophthalmic emulsion product. As part of ANDA No.
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`205894, Mylan Pharmaceuticals included a Paragraph IV certification that all of the patents in
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`Allergan’s Orange Book listing are invalid, not infringed, or unenforceable. On July 20, 2015,
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`Mylan Pharmaceuticals sent a notification informing Allergan of ANDA No. 205894 and its
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`position that the ’111, ’162, ’556, ’048, and ’930 patents are invalid or not infringed.2
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`Mylan Inc. is the parent company and owner of Mylan Pharmaceuticals. Dkt. No. 98, at
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`¶ 11. Mylan Inc. is a Pennsylvania corporation with its principal place of business in
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`Pennsylvania. According to Allergan, Mylan Inc. is responsible for marketing and selling the
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`1 The ’191 patent had not issued as of the date of Teva’s ANDA filing.
`2 The ’191 patent had not issued as of the date of Mylan’s ANDA filing.
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`generic drugs manufactured and supplied by Mylan Pharmaceuticals. Dkt. No. 96, at ¶ 49.
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`Allergan also alleges that “Mylan Pharmaceuticals and Mylan Inc. are agents of each other
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`and/or work in active concert with respect to the development, regulatory approval, marketing,
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`sale and distribution of pharmaceutical products,” including the product at issue in this litigation.
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`Id. at ¶ 45. According to the Mylan entities, however, Mylan Pharmaceuticals was solely
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`responsible for the preparation and filing of the ANDA. Mylan Motion to Dismiss, Dkt. No. 32,
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`at 1.
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`On August 24, 2105, Allergan filed this action against Teva, the Mylan entities, and
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`others, alleging that the proposed generic drugs would infringe one or more of the ’111, ’162,
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`’556, ’048, and ’930 patents. Allergan later amended its complaint to include the ’191 patent
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`after that patent issued. Teva and the Mylan entities filed motions to dismiss for lack of personal
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`jurisdiction and venue. Mylan Inc. also filed a motion to dismiss for failure to state a claim,
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`arguing that Allergan failed to plausibly allege that it was the submitter of ANDA No. 205894.
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`A. Personal Jurisdiction
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`II. DISCUSSION
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`This Court may assert personal jurisdiction over a non-resident defendant if the defendant
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`“is subject to the jurisdiction of a court of general jurisdiction in the state where the district court
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`is located,” which in this case is Texas. Johnston v. Multidata Sys. Int’l Corp., 523 F.3d 602,
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`609 (5th Cir. 2008) (internal citations omitted); Fed. R. Civ. P. 4(k)(1)(A). “Because the Texas
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`long-arm statute extends to the limits of federal due process, the two-step inquiry collapses into
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`one federal due process analysis.” Id.; Inamed v. Kuzmak, 249 F.3d 1356,1360 (Fed. Cir. 2001).
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`In order for due process to be satisfied, the defendant must have “certain minimum contacts with
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`[the forum] such that the maintenance of the suit does not offend ‘traditional notions of fair play
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`and substantial justice.’” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (quoting
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`Milliken v. Meyer, 311 U.S. 457, 463 (1940).
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`There are two independent bases for the exercise of personal jurisdiction over a
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`defendant—general and specific. General personal jurisdiction is available when the defendant’s
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`contacts with the forum State are “continuous and systematic.” In such cases, the court in the
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`forum State may exercise personal jurisdiction over the defendant even if the cause of action
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`does not arise from or relate to activities conducted within that State. Autogenomics, Inc. v.
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`Oxford Gene Tech. Ltd., 566 F.3d 1012, 1017 (Fed. Cir. 2009). In contrast, specific personal
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`jurisdiction “must be based on activities that arise out of or relate to the cause of action, and can
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`exist even if the defendant’s contacts are not continuous and systematic.” Id. “So long as it
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`creates a ‘substantial connection’ with the forum, even a single act can support jurisdiction.”
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`Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 n.18 (1985). Moreover, specific personal
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`jurisdiction may be based on acts outside the forum State when the defendant knew that the
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`injury resulting from those acts would be felt by the plaintiff in the forum State. Calder v. Jones,
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`465 U.S. 783, 790-91 (1984).
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`For patent cases, the due process elements of personal jurisdiction are governed by
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`Federal Circuit law. Accorda Therapeutics Inc. v. Mylan Pharmaceuticals Inc., No. 15-1456,
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`2016 WL 1077048, at *2 (Fed. Cir. Mar. 18, 2016). Where the parties have not conducted
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`discovery, the plaintiff need only make a prima facie showing that the defendants are subject to
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`personal jurisdiction; the pleadings and supporting material are construed in the plaintiff’s favor.
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`Autogenomics, 566 F.3d at 1017.
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`In Accorda Therapeutics, the Federal Circuit addressed minimum contacts issue in the
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`context of ANDA filings. The court held that a non-Delaware drug maker had sufficient contacts
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`Case 2:15-cv-01455-WCB Document 130 Filed 04/19/16 Page 5 of 11 PageID #: 2871
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`with the State of Delaware to support personal jurisdiction when it filed an ANDA, because it
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`was undisputed that if the drug maker were to receive FDA approval to sell its generic drug, it
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`would sell the drug throughout the United States, including in Delaware. Accorda, 2016 WL
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`1077048, at *7. The Federal Circuit explained that by filing an ANDA a drug company
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`“confirm[s] its plan to commit real-world acts that would make it liable for infringement if it
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`commits them without the patentees’ permission.” Id. at *4. Because of the close connection
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`between the filing of the ANDA and real world acts of infringement in the forum State that
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`would follow the FDA’s approval of the ANDA, the court held that sufficient contacts were
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`present to support the exercise of personal jurisdiction in the forum State. Id. at 7.
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`Because the Federal Circuit issued the Accorda decision after these motions were fully
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`briefed, the Court directed Teva and the Mylan entities to submit supplemental briefs on how the
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`decision affected the pending motions. Dkt. No. 108. Teva acknowledged that it intends to sell
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`its generic cyclosporine ophthalmic emulsion product in Texas, and that under the reasoning of
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`Accorda it is subject to personal jurisdiction in this Court. Dkt. No. 110, at 1. Therefore, Teva’s
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`motion to dismiss for lack of personal jurisdiction is DENIED.
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`The Mylan entities, on the other hand, argued that “the Federal Circuit’s decision should
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`have no immediate impact on Mylan’s pending Motion to Dismiss.” Dkt. No. 111, at 1. Their
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`position does not appear to be based on any factual distinction between Accorda and this case.
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`Rather their position seems to be premised on the hope that Accorda will be overturned on
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`further review. By the Mylan entities’ own characterization of the Accorda decision, an ANDA
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`filing “gives rise to specific personal jurisdiction in any suit related to that filing in every
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`jurisdiction in the nation.” Dkt. No. 111, at 1. Nonetheless, because the Mylan entities do not
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`concede that Accorda governs this case, the Court will consider the merits of the question
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`whether the Court has specific personal jurisdiction over them.3
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`The Court has specific personal jurisdiction over the Mylan entities because the purpose
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`of their ANDA submission is to market a generic drug nationwide, including in Texas. Allergan
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`has made plausible allegations that if the Mylan entities were to receive FDA approval, they
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`would sell a generic cyclosporine ophthalmic emulsion product in Texas and in this district.
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`Allergan has alleged that Mylan Pharmaceuticals is licensed to distribute drugs in the State of
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`Texas and is actively registered to do business in Texas. Dkt. No. 96, at ¶¶ 46-47. Allergan has
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`also alleged that since 2014 Mylan Inc. has sold more than $1.3 billion of Mylan
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`Pharmaceuticals’ products in Texas, including $460 million in the Eastern District. Id. at ¶ 49.
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`Furthermore, Allergan has alleged that the Mylan entities have established channels of
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`distribution in Texas, the second largest market for prescription drugs in the United States, and
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`that it would likely take advantage of those channels should it receive approval to sell its generic
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`cyclosporine ophthalmic emulsion product. Id. at ¶ 54.
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`The Mylan entities have described Allergan’s allegations that they would sell in Texas as
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`“nothing more than baseless allegations,” and they argue that “[i]t is entirely speculative that
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`[Mylan Pharmaceuticals] would ever sell an infringing generic product in Texas.” Dkt. No. 63,
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`at 5-6. However, the Mylan entities have not represented that they will not sell nationally,
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`including in Texas, if they receive FDA approval. Nor have they offered any reason to believe
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`that it is at all likely that they would sell their product in some States, but not in Texas. To the
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`contrary, it seems highly unlikely that they would undergo the considerable effort and expense of
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`preparing an ANDA filing and litigating this case if they did not intend to market and distribute
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`3 Should further review by the Federal Circuit or the Supreme Court alter the Accorda
`decision, the Court will of course revisit this decision.
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`the drug throughout the United States, including in the second largest State in the nation. The
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`mere assertion that the possibility of such sales is “speculative” is not enough to answer
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`Allergan’s allegations.
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`In the Accorda decision, the Federal Circuit stated that “[t]he magnitude and costs of the
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`work required before the ANDA is filed soundly link the ANDA filing to the filer’s entry into
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`the market to compete with the brand-name manufacturer if approval is obtained.” Accorda,
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`2016 WL 1077048, at *5. Allergan has provided evidence that Texas is the third largest market
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`for RESTASIS. Dkt. No. 52, at 3. Under the logic of the Accorda decision, the filing of ANDA
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`No. 205894 is linked to an entry into the Texas market to compete with Allergan and displace its
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`sales in that market. The ANDA filed by the Mylan entities therefore established minimum
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`contacts with the forum State.
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`After a plaintiff makes a showing of minimum contacts with the forum, the defendant has
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`an opportunity to address whether the court asserting jurisdiction “would comport with fair play
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`and substantial justice.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477 (1985) (internal
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`citations omitted). The “fair play and substantial justice” factor gives the defendant an
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`opportunity to present a case that some other considerations would render the exercise of
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`jurisdiction unreasonable. The burden, however, is on the defendant to point to those other
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`considerations. Inamed Corp. v. Kuzmak, 249 F.3d 1356, 1360 (Fed. Cir. 2001). In this case,
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`the Mylan entities do not argue that any such “fairness” considerations apply.
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`Because Allergan has made an uncontroverted showing of suit-related minimum contacts
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`in this case and the Mylan entities have not made a showing of other considerations that would
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`cut against the exercise of specific personal jurisdiction, this Court concludes that it has specific
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`personal jurisdiction over them.
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`The parties also dispute whether this court has general personal jurisdiction over Teva
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`and the Mylan entities. Because the Court has found that it has specific personal jurisdiction
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`over the defendants in this case, it need not address general personal jurisdiction.
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`B. Venue
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`Allergan has asserted that venue in the Eastern District of Texas is proper with regard to
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`both defendants under 28 U.S.C. §§ 1391(c) and 1400(b). Under section 1400(b), venue is
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`proper “in the judicial district where the defendant resides.” 28 U.S.C. § 1400(b). Section
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`1391(c)(2) provides that a corporation “shall be deemed to reside, if a defendant, in any judicial
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`district in which such defendant is subject to the court’s personal jurisdiction with respect to the
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`civil action in question.” In a State which has more than one judicial district, and in which a
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`defendant that is a corporation is subject to personal jurisdiction at the time the action is
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`commenced, such corporation shall be deemed to reside in any district in that State within which
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`its contacts would be sufficient to subject it to personal jurisdiction if that district were a separate
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`State.” 28 U.S.C. § 1391(d).
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`In this case, the Mylan entities do not make a freestanding venue argument. Rather, they
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`argue that because this Court does not have personal jurisdiction over them, venue in this district
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`is improper as well. Dkt. No. 63, at 10. Because this Court has personal jurisdiction over the
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`Mylan entities, their venue argument fails. In addition, because of the $460 million of
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`RESTASIS sales that Allergan has alleged take place in the Eastern District, Allergan would be
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`able to establish minimum contacts with the district as well.
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`Teva concedes that, in light of the Accorda decision, venue is proper in the Eastern
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`District of Texas. Dkt. No. 110, at 3.
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`C. Dismissal for Failure to State a Claim
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`Federal Rule of Civil Procedure 12(b)(6) authorizes a court to dismiss a complaint if the
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`complaint “fail[s] to state a claim upon which relief can be granted.” The question resolved on a
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`motion to dismiss for a failure to state a claim is not whether the plaintiff will ultimately prevail,
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`“but whether [the] complaint was sufficient to cross the federal court’s threshold.” Skinner v.
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`Switzer, 562 U.S. 521, 530 (2011). When considering a motion to dismiss under Rule 12(b)(6),
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`a court “accept[s] all well-pleaded facts as true, and view[s] those facts in the light most
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`favorable to the plaintiff.” Bustos v. Martini Club, Inc., 599 F.3d 458, 461 (5th Cir. 2010).
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`Upon viewing the pleaded facts most favorably to the plaintiff, the court must then decide
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`whether those facts state a claim for relief that is plausible on its face. Bowlby v. City of
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`Aberdeen, Miss., 681 F.3d 215, 217 (5th Cir. 2012). “A claim is plausible if ‘the plaintiff pleads
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`factual content that allows the court to draw the reasonable inference that the defendant is liable
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`for the misconduct alleged. The plausibility standard is not akin to a ‘probability requirement,’
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`but it asks for more than a sheer possibility that a defendant has acted unlawfully.” United States
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`v. Bollinger Shipyards, Inc., 775 F.3d 255, 260 (5th Cir. 2014) (citing Ashcroft v. Iqbal, 556
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`U.S. 662, 678 (2009)). Instead, the standard “simply calls for enough facts to raise a reasonable
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`expectation that discovery will reveal evidence of [the claim].” Bell Atl. Corp. v. Twombly, 550
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`U.S. 544, 545 (2007). “The factual allegations in the complaint need only ‘be enough to raise a
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`right to relief above the speculative level, on the assumption that all the allegations in the
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`complaint are true (even if doubtful in fact).’” Wooten v. McDonald Transit Assocs., Inc., 788
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`F.3d 490, 498 (5th Cir. 2015) (quoting Twombly, 550 U.S. at 555)).
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`The plausibility standard “does not give district courts license to look behind [a
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`complaint’s] allegations and independently assess the likelihood that the plaintiff will be able to
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`prove them at trial.” Harold H. Huggins Realty, Inc. v. FNC, Inc., 634 F.3d 787, 803 n.44 (5th
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`Cir. 2011)). Under Rule 8(a)(2) of the Federal Rules of Civil Procedure, a plaintiff is generally
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`required to provide “only a plausible ‘short and plain’ statement of the plaintiff’s claim, not an
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`exposition of [the plaintiff’s] legal argument.” Skinner, 562 U.S. at 530. The “short and plain”
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`statement does not “countenance dismissal of a complaint for imperfect statement of the legal
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`theory supporting the claim asserted.” Johnson v. City of Shelby, Miss., 135 S. Ct. 346, 346
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`(2014) (citing 5 C. Wright & A. Miller, § 1215, p. 172 (3d ed. 2002) (Rule 8(a)(2) “indicates that
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`that a basic objective of the rules is to avoid civil cases turning on technicalities.”)).
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`The Mylan entities argue that Allergan fails to state a claim against Mylan Inc. because
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`Mylan Inc. was not the entity that submitted the ANDA application. The Hatch-Waxman Act
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`makes it “an act of infringement to submit” an ANDA on a drug covered by valid and infringed
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`patents found in the Orange Book listing for a drug. 35 U.S.C. § 271(e)(2). An entity submits an
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`ANDA if it participates in the preparation of the ANDA and intends to benefit directly from the
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`ANDA by selling the ANDA product upon approval. In re Rousvastatin Calcium Patent Litig.,
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`703 F.3d 511, 528-29 (Fed. Cir. 2012). An entity can be an ANDA submitter without signing the
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`ANDA. Cephalon, Inc. v. Watson Pharm., Inc., 629 F. Supp. 2d 338, 349 (D. Del. 2009)
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`(“Parties ‘actively involved’ in preparing the ANDA are deemed to have ‘submit[ted]’ the
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`ANDA, regardless of whether they are the named applicant; this is especially true where the
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`parties involved are in the same corporate family.”) (quoting Wyeth v. Lupin Ltd., 505 F. Supp.
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`2d 303, 306-07 (D. Md. 2007)).
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`Mylan Inc. argues that it is not a submitter because Mylan Pharmaceuticals “prepared and
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`submitted the ANDA,” and Mylan Inc. did not. Dkt. No. 32, at ¶¶ 45. However, Allergan has
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`alleged that “Mylan Pharmaceuticals and Mylan Inc. are agents of each other and/or work in
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`active concert with respect to the development, regulatory approval, marketing, sale and
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`distribution of pharmaceutical products,” including the drug at issue in this case. Dkt. No. 96,
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`at 8. Allergan has also alleged that Mylan Inc. markets and sells the drugs manufactured by
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`Mylan Pharmaceuticals. Id. at ¶ 49. Therefore, Allergan alleges that if the ANDA is approved
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`Mylan Inc. will become the generic product’s marketer, seller, and distributor in the United
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`States, and that it would benefit from the ANDA’s approval. Furthermore, Allergan has alleged
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`that Mylan Inc. has worked in concert with Mylan Pharmaceuticals with respect to the regulatory
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`approval of the drugs at issue in this case, which suggests that Mylan Inc. was participating in
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`the preparation of the ANDA. These allegations are sufficient to plead a claim that Mylan Inc.
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`submitted ANDA No. 205894.
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`IT IS SO ORDERED.
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`SIGNED this 19th of April, 2016.
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`_____________________________
`WILLIAM C. BRYSON
`UNITED STATES CIRCUIT JUDGE
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