Hatch-Waxman's Renegades

Abstract

No intellectual property rights impact society more forcefully than pa tents on pharmaceuticals. But as a practical matter, only a handful of jurists resolve disputes involving them. Two neighboring federal districts, Dela ware and New Jersey, adjudicate the vast majority of patent contests between brand-name drug companies and generic manufacturers. And in contrast to Eastern Texas, which has been persistently derided as a renegade jurisdiction, the authority of the mid-Atlantic courts has seldom been questioned. The complex workings of the Hatch-Waxman Act, the compromise legislation that governs pharmaceutical patent litigation, go a long way to explaining such distinct shareholder reactions to highly similar judicial behaviors. 

Yet the dominance of Delaware and New Jersey in pharmaceutical patent litigation may have come to an end. A recent decision of the U.S. Court of Appeals for the Federal Circuit, Valeant v. Mylan, has narrowed the rules for venue in Hatch-Waxman cases. We are now poised to see multiple, parallel trials involving the same patented pharmaceutical proceeding in courts across the country. The new order of pharmaceutical patent litigation affords an opportunity to reconsider an intellectual property environment that aims to promote pharmaceutical innovation but also increase public access to medications. 

Venue determinations are puzzling in pharmaceutical patent cases due to a concept originating within the Hatch-Waxman Act, the tort of “artificial” infringement. Artificial infringement occurs when a manufacturer petitions the federal government to obtain permission to market a generic drug. But the federal government both issues patents, and awards regulatory approval to sell a drug, with effect across the entire nation. Congress gave no thought towards situating artificial infringement at a certain place, and judicial efforts to do so have amounted to a facile and strained exercise. Venue is not artificial infringement’s only problem. Artificial infringement also creates disconnects with personal jurisdiction principles, incorporates obsolete remedial provisions, and fails to comply with the international commitments of the United States.  Courts should instead recognize their authority to accept declaratory judgment actions to resolve pharmaceutical patent infringement cases, with legislative abolition of artificial infringement presenting another, preferred possibility.