In September 2017, Chief Judge Stark denied a motion filed by Mylan Pharmaceuticals Inc. (MPI) to dismiss for lack of proper venue in light of TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S. Ct. 1514, 1519 (2017). That dismissal was without prejudice because Judge Stark found that he could not determine whether venue was proper on the record before him. Accordingly, the Court ordered expedited, venue-related discovery into whether MPI had a “regular and established place of business,” as required by 28 U.S.C. § 1400(b). After expedited discovery, including three hearings of various discovery disputes, MPI renewed its motion to dismiss. On October 18, Judge Stark issued his decision on the renewed motion.
Although discovery was directed to the “regular and established place of business” inquiry under the second prong of § 1400(b), Judge Stark’s decision addressed both prongs of § 1400(b). Under the first prong—“where the defendant resides”—Plaintiff BMS argued that Delaware was the proper venue, despite the parties agreeing that MPI is incorporated in West Virginia. Specifically, BMS argued that the Delaware incorporation of a separate Mylan entity could be imputed to MPI as a corporate affiliate that had disregarded corporate formalities of separateness. Memo. Op. at 3-5.
Judge Stark “agree[d] with BMS that residency may be imputed under the first prong of the venue statute,” id. at 5, but emphasized that the “Court is not holding that one entity necessarily is a resident of two places . . . [i]nstead, the Court is allowing for the possibility that, for the purposes of venue in patent cases, there are circumstances under which it is appropriate to impute the residence of one entity to another entity – where there is an alter ego relationship or piercing of the corporate veil – and in those circumstances the law allows the Court to treat one entity as if it were a resident in a second district.” Id. at 6.