A Delaware federal judge has dismissed an infringement lawsuit from Bristol-Myers Squibb and Pfizer seeking to block a generic version of their patented blood thinner drug Eliquis, finding that venue in the First State was improper after the U.S. Supreme Court's landmark decision in TC Heartland.

The 12-page ruling, from U.S. District Chief Judge Leonard P. Stark of the District of Delaware, followed more than eight months of venue discovery, and rejected an attempt by Bristol-Myers Squibb to attribute the Delaware residency of a Mylan Pharmaceuticals subsidiary to the parent company, which is incorporated in West Virginia.

Bristol-Myers Squibb had argued that there was an alter-ego relationship between the two firms and asked Stark to impute the residency of the subsidiary, Mylan Securitization, to Mylan. In court documents, Bristol-Myers Squibb noted that the wholly owned subsidiary was formed as a purpose vehicle to insulate Mylan from liability in the event of insolvency and said that it lacked any employees, revenue or facilities of its own.

Stark, however, said that Bristol-Myers Squibb had failed to meet its “heavy burden,” despite months of additional discovery, to overcome the presumption that the two entities were separate from one another.

“While these factors may show a close relationship between [Mylan] and Mylan Securitization, they are insufficient to pierce the corporate veil or render one entity the alter ego of the other,” he wrote. “As [Mylan] explains, there is nothing improper about forming a wholly-owned limited liability company for tax purposes.”

Under TC Heartland, a company can only be sued for infringement in a district where it is incorporated or maintains a “regular and established” place of business. The ruling has led to a significant uptick in patent filings in Delaware, the home to a majority of the nation's public companies. But it has also forced many cases out of federal court there under the high court's refined venue rules.

Last September, Stark denied Bristol-Myers Squibb's first motion to dismiss or transfer the case, saying that he did not have enough information before him to rule on whether venue was proper in Delaware. He ordered eight more months of expedited venue discovery, and Mylan renewed its motion in May.

In his ruling, Stark said the presumption of corporate separateness could only be broken on a showing of “fraud, injustice or unfairness,” and that Bristol-Myers Squibb had fallen short of supporting its allegations.

“Plaintiffs have failed to produce any evidence showing that corporate formalities were ignored or that anything illegal or improper occurred in setting up Mylan Securitization,” Stark said. “To the contrary, the record evidence shows that the two entities maintain corporate separateness, that Mylan Securitization is a registered LLC with its own books and records, and that all of its documents are publicly available.”

Attorneys for both sides were not immediately available to comment.

Bristol-Myers Squibb was represented by Amy K. Wigmore, Gregory H. Lantier, Heather M. Petruzzi, Tracey C. Allen and Jeffrey T. Hantson of Wilmer Cutler Pickering Hale and Dorr in Washington, D.C., and Kevin S. Prussia, Andrew J. Danford, Timothy A. Cook and Kevin M. Yurkerwich from the firm's Boston office. Joseph J. Farnan Jr., Brian E. Farnan and Michael J. Farnan of Farnan LLP acted as local counsel.

Mylan was represented by Shannon M. Bloodworth and Brandon M. White of Perkins Coie in Washington, D.C.; Robert L. Florence and Karen L. Carroll of Parker Poe Adams & Bernstein in Atlanta; and Stamatios Stamoulis of Stamoulis & Weinblatt in Wilmington.

The case was captioned Bristol-Myers Squibb v. Mylan Pharmaceuticals.