IP Law Daily, PATENT—E.D. Wis.: Patent infringement suit against Nexus Pharmaceuticals dismissed, (Mar 28, 2024)

By Thomas K. Lauletta, J.D.

The court had neither personal nor specific jurisdiction over Illinois-based Nexus.

The U.S. District Court in Milwaukee, Wisconsin dismissed the patent infringement suit of Endo Venture (“Endo”) against defendant Nexus Pharmaceuticals for lack of jurisdiction. The court held that it lacked general jurisdiction over Nexus, a company with a place of incorporation and principal place of business in Illinois, rather than Wisconsin, and whose contacts with Wisconsin were not “sufficiently pervasive.” The court lacked specific jurisdiction over Nexus because Endo had not proven that as of the time its complaint was filed Nexus had manufactured allegedly infringing products in its Wisconsin facility or otherwise engaged in infringing conduct in Wisconsin (Endo Ventures Unlimited Co. v. Nexus Pharmaceuticals Inc., March 25, 2024, Ludwig, B.).

The plaintiff Endo is an Irish company with offices in Dublin, Ireland. On May 31, 2023, Endo transferred part of its business to plaintiff Operand, which is also an Irish company. Operand is also the exclusive licensee of two patents related to ephedrine sulfate injections, U.S. Patent Nos. 10,869,845 (’845 Patent), issued in December 2020, and 11,491,121 (’121 Patent), issued in November 2022.

The defendant Nexus is a corporation organized and existing under Illinois law with its principal place of business in Lincolnshire, Illinois. Nexus is in the business of developing, manufacturing, marketing, and distributing pharmaceutical products around the United States, including in Wisconsin. In addition to its Illinois operations, Nexus has a facility in Pleasant Prairie, Wisconsin. Nexus manufactures the products at issue in this lawsuit solely in Italy. In April 2020, the FDA approved Nexus’s New Drug Application that also related to ephedrine sulfate injections in glass vials.

The plaintiffs brought two claims against Nexus for infringement of the plaintiffs’ ‘845 and ‘patents. Nexus moved to dismiss the plaintiffs’ complaint for lack of personal jurisdiction under Federal Rule 12(b)(2). Nexus argued that the court did not have either general or specific jurisdiction over it.

Personal jurisdiction. The court ruled that the record did not support a finding that Nexus was subject to the general jurisdiction of the Wisconsin court. Nexus’s place of incorporation and principal place of business are in Illinois, rather than in Wisconsin. Although Nexus stated that it had started construction of a facility in Pleasant Prairie, Wisconsin, it had not as of the filing of the plaintiffs’ complaint, manufacture products there. The court concluded that Nexus’s contacts in Wisconsin were not sufficiently pervasive to make it at home in Wisconsin.

The court rejected as irrelevant the plaintiffs’ argument that Nexus planned in the future to invest hundreds of millions of dollars and employ more than 400 people at its Pleasant Prairie facility. The court stated that it is well settled that jurisdiction is decided based on the jurisdictional facts existing when the complaint was filed (here, March 5, 2023). As of this date it was undisputed that Nexus’s products at issue were manufactured in Italy, rather than Wisconsin.

Finding Nexus is not at home in Wisconsin, the court held that it did not have general jurisdiction over Nexus.

Specific jurisdiction. Nexus argued that the plaintiffs failed to allege sufficient facts to support specific jurisdiction because their claims do not arise out of and are unrelated to Nexus’s activities in Wisconsin. Nexus offered sworn testimony that it had not made, used, sold, offered for sale, imported, or otherwise prepared ephedrine sulfate injections in Wisconsin as of the date of the complaint, March 5, 2023.

The plaintiffs counter-argued that Nexus was purposefully availing itself of the privilege of conducting activities in Wisconsin, and that by the filing of its New Drug Application with the FDA, Nexus established a plan to market and sell the drug nationwide, including in Wisconsin.

The court ruled that the plaintiffs had not met their burden of establishing that the court had specific personal jurisdiction over Nexus. In so ruling, that court dismissed as irrelevant statements made by Nexus that infringing sales occurred in Wisconsin after the plaintiffs’ complaint was filed on March 5, 2023. As it had stated with regard to its general jurisdiction analysis, the court stated that its jurisdiction is based on the state of affairs at the time of the filing of the complaint, not thereafter.

Court action. The court granted Nexus’s motion to dismiss the complaint for lack of personal jurisdiction. Because of this ruling the court denied as moot Nexus’s motion to dismiss for improper venue.

The Case is No. 2:23-cv-00299-BHL.

Attorneys: Aaron T. Olejniczak (Andrus Intellectual Property Law LLP) for Endo Ventures Unlimited Co., Operand Pharmaceuticals III Ltd. and Par Sterile Products LLC. Isha S. Shah (Marshall Gerstein & Borun LLP) for Nexus Pharmaceuticals Inc.

Companies: Endo Ventures Unlimited Co.; Operand Pharmaceuticals III Ltd.; Par Sterile Products LLC; Nexus Pharmaceuticals Inc.

Cases: Patent WisconsinNews