United States: Not Everyone Is Subject To Jurisdiction In Delaware

Purdue Pharma, L.P., et al. v. Collegium Pharmaceutical, Inc. (D. Del. Aug. 6, 2015)

Addressing the parameters of general and specific jurisdiction and the proper venue for a Hatch-Waxman case, the U.S. District Court for the District of Delaware held that it did not have general or specific jurisdiction over the defendant and the case should instead be heard in the U.S. District Court for the District of Massachusetts where Plaintiff had filed a protective lawsuit. Purdue Pharma, L.P., et al. v. Collegium Pharmaceutical, Inc., Civ. No. 15-260-SLR (D. Del. Aug. 6, 2015) (Robinson, D.J.).

Background

Defendant, Collegium, is a Virginia corporation with its principal place of business in Massachusetts. In 2002, Collegium incorporated in Delaware; however it re-incorporated in Virginia in 2014, before it filed the new drug application (NDA) at issue.

Purdue sued Teva Pharmaceuticals in the U.S. District Court for the Southern District of New York for infringement of three of the Orange Book-listed patents also asserted against Collegium (the New York litigation). In 2014 the court found the asserted patents invalid as obviousness. At the time of the decision in this case, Purdue's appeal was pending.

In 2014, Collegium filed an NDA to market and sell an abuse-deterrent, extended-release formulation of oxycodone, branded as Xtampza ER". Purdue claimed it held data exclusivity for Oxycontin®'s abuse-deterrent clinical trials until April 2016.

On February 12, 2015, Purdue received Collegium's Paragraph IV notice letter. Purdue sued Collegium in the District of Delaware on March 25, 2015. Purdue then filed a protective suit in Massachusetts on March 26, 2015. Purdue indicated that it sought to stay litigation on the listed patents pending a final decision on its appeal in the New York litigation. Notably, one of the patents asserted against Collegium is not at issue in the New York litigation.

Collegium moved to dismiss the case for lack of personal jurisdiction, or in the alternative, a transfer to the Southern District of New York. Purdue argued that if transfer were required, the Massachusetts district court should hear the case.

Delaware Lacked Personal Jurisdiction

To support a general jurisdiction claim, Purdue pointed to the fact that Collegium was a Delaware corporation from 2002 to 2014. The district court rejected this argument, finding that Collegium changed its incorporation to Virginia before it filed its NDA, it was not registered to do business in Delaware and that its business activities were limited to Massachusetts and New York. The court noted that in Daimler AG v. Bauman, 134 S.Ct. 746, 749 (2014) the Supreme Court of the United States rejected the notion that "continuous and systematic contacts alone could confer general jurisdiction ..." Collegium's prior contacts with Delaware were insufficient to make it subject to general jurisdiction there.

Purdue next argued that Collegium's contacts with Delaware were sufficient for specific jurisdiction in this instance. The district court noted that specific jurisdiction in Hatch-Waxman litigation "has evoked multiple analyses." Courts have found the following contacts sufficient to establish specific jurisdiction: (1) sending a Paragraph IV notice letter into the state; (2) registration to do business in the state; (3) preparation of the U.S. Food and Drug Administration (FDA) application [NDA or abbreviated new drug application (ANDA)] in the state; and (4) design and development of the infringing product occurred in the state. The court concluded that Collegium's contacts with Delaware did not meet any of the established standards, finding that the fact that Collegium worked with a Delaware corporation to conduct its clinical trials and purchased the application program interface (API) for Xtampza ER from a Delaware manufacturer insufficient to confer jurisdiction. The court noted that even if Collegium's contacts satisfied Delaware's long-arm statute, "it would not pass constitutional muster" and Collegium's contacts with Delaware were not sufficient for Collegium to reasonably expect to be haled into a Delaware court.

The court dismissed the action for lack of personal jurisdiction over Collegium.

Massachusetts Was the Proper Venue

Collegium urged the court to transfer the case to the Southern District of New York, while Purdue argued that the case should be transferred to Massachusetts. The court agreed with Purdue and found that there was "no doubt" jurisdiction could be exercised over Collegium in Massachusetts, and the fact that the Southern District of New York had adjudicated the patents at issue was not compelling as the decision was on appeal and did not cover one of the patents Purdue asserted against Collegium.

The court noted the "unusual circumstances of this case" and dismissed the case to allow Purdue to pursue its protective lawsuit in Massachusetts, holding "that a straightforward venue like Massachusetts is the most reasonable solution to the parties' dispute in this regard."

Not Everyone Is Subject To Jurisdiction In Delaware

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