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In re Wellbutrin Sr Antitrust Litigation

August 31, 2010

IN RE: WELLBUTRIN SR ANTITRUST LITIGATION
MEDICAL MUTUAL OF OHIO, INC.
v.
GLAXOSMITHKLINE PLC, ET AL.



The opinion of the court was delivered by: Stengel, J.

MEMORANDUM

GlaxoSmithKline PLC, et al (GSK) has filed a renewed motion for summary judgment on all claims, presenting an argument that was absent from its original motions for summary judgment.*fn1 GSK asserts that because this court found that GSK had a reasonable basis for filing a claim alleging infringement of the '994 patent, and the '994 patent infringement claim and the '798 patent infringement claim were both included in one lawsuit, I must find as a matter of law that GSK had a reasonable basis for filing that lawsuit. In other words, GSK argues that the assertion of a "non-sham" claim along with a "sham" claim*fn2 together in one lawsuit, mandates a finding that the entire lawsuit was not objectively baseless.

I. FACTS*fn3

In July, 2000, the generic drug manufacturer Eon submitted an abbreviated new drug application ("ANDA") for generic Wellbutrin SR. Direct Purchaser Amended Class Action Complaint, ¶ 71. Eon's ANDA included a Paragraph IV certification asserting that it had not infringed the '798 patent. Id. On November 29, 2000, GSK filed suit against Eon in the Southern District of New York for infringement of the '798 and '994 patents, triggering a 30 month stay during which Eon could not market its generic version of Wellbutrin SR. Id. at ¶¶ 72-73. On January 24, 2002, Eon received tentative approval for generic Wellbutrin SR from the FDA. Id. at ¶ 74. Tentative approval means essentially that the FDA would have granted approval for marketing of the generic version but for the 30 month stay. Id. at ¶ 75.

On August 13, 2002, the Southern District of New York issued two opinions concerning the Eon infringement suit. In one, it denied Eon's motion for summary judgment on the '798 patent on the ground that a GSK had raised a genuine issue of fact whether HPC was foreseeable as an equivalent to HPMC at the time the '798 patent's claims were amended. See Glaxo Wellcome, Inc. v. Eon Labs Mfg., Inc., No. 00 Civ. 9089 LMM, 2002 WL 1874831 (S.D.N.Y. Aug. 13, 2002). In the second, it granted Eon's motion for summary judgment as to the '994 patent, finding that Eon proved by clear and convincing evidence that the specification for the '994 patent was invalid because it was not enabling under 35 U.S.C. § 112 ¶ 1. See Glaxo Wellcome, Inc. v. Eon Labs Mfg., Inc., No. 00 Civ. 9089 LMM, 2002 WL 1874830 (S.D.N.Y. Aug. 13, 2002).

After the 30 month stay expired in November, 2003, Eon received FDA approval for its generic version of Wellbutrin SR. Complaint ¶ 116. However, GSK was granted a temporary restraining order and preliminary injunction preventing Eon from marketing its drug before trial on the '798 claim. Id. at ¶ 117-118. After the Federal Circuit stayed the injunction in January, 2004, Eon finally began marketing its product. Id. at ¶ 120.

As described above, GSK's infringement suit against Eon covered both the '798 and '994 patents. GSK now claims this court's holding that there was a reasonable basis for GSK's filing of the '994 patent infringement claim means that GSK's lawsuit against Eon could have succeeded, and that under Prof'l Real Estate Investors, Inc., et al v. Columbia Pictures Indus., Inc., 508 U.S. 49, 113 S.Ct. 1920, 123 L.Ed.2d 611 (1993) ("PRE"), the controlling question is whether a "lawsuit" has a realistic chance of success. Renewed Mot. For Summary J., 2. In support of this claim, GSK relies on language in PRE describing the question at issue as whether "litigation," or "a lawsuit," is objectively baseless. It also relies on language in this Court's memorandum that whether the litigation was objectively baseless depends on the law and facts as they stood at the time the litigation was filed.

Alternatively, GSK seeks a ruling that plaintiffs cannot show, as a matter of law, that GSK caused any antitrust injury prior to August 13, 2002, since this is the date on which Eon's motion for summary judgment that the '994 patent was invalid was granted. GSK essentially reasons that, since I have ruled that its infringement claim based on the '994 patent had a reasonable chance of success and was therefore not objectively baseless, any damages incurred during the time it was still pending cannot be part of any ultimate recovery here.

The plaintiffs respond that "GSK's sham litigation on the '798 patent both (i) delayed resolution of the '994 patent claim and (ii) kept generic competition off the market solely by virtue of the sham claim itself for over a year after the '994 claim was dismissed." Resp. To Renewed Mot. For Summary J., 1 (emphasis in original). In response to GSK's alternative argument, it claims that I should not limit the damages period to one beginning after the '994 patent claim was dismissed because "there is a reasonable jury argument that GSK's pursuit of the '798 claim delayed summary judgment on the '994 claim by five months." Id. at 9.

II. DISCUSSION

A. GSK Claims Summary Judgment In Its Favor On the '994 Patent Sham Litigation Claim Mandates Dismissal of Plaintiffs' Entire Suit

In support of its argument, GSK cites few cases. In the first, Dentsply Intern. Inc. v. New Tech. Co., No. 96-272, 1996 WL 756766 (D.Del. Dec. 19, 1996), the plaintiffs filed suits alleging patent infringement against defendants, who in turn filed sham litigation antitrust counterclaims. The court, in deciding a motion to bifurcate trial on the patent infringement claims and the sham litigation counterclaims, observed that, "plaintiffs are correct in their assertion that if they can convince a jury that defendants have infringed their patent, an important aspect of the defendants' antitrust counterclaim-their allegations of 'sham' litigation-will be mooted." Id. at *2. It then stated, "[i]n fact, courts have indicated that litigation will not be considered a "sham" so long as at least one claim in the lawsuit has objective merit." Id. For this proposition, the court cited two cases: (1) PRE, for its statement that a "lawsuit must be objectively baseless," id. (emphasis added in Dentsply), and (2) Eden Hannon & Co. v. Sumitomo Trust & Banking Co., 914 F.2d 556, 565 (4th Cir. 1990). It granted the motion to bifurcate trial on the patent infringement claim and the sham litigation counterclaim. Id. at *5.

Dentsply is only somewhat helpful in deciding the instant motion and is distinguishable in three important respects. First, the motion at issue in Dentsply, to bifurcate trial on the claims and counterclaims, arose prior to discovery and more importantly, was not case dispositive. Additionally, the Dentsply court was faced with a different factual scenario than the one before us, in that the plaintiff asserted that defendant simultaneously infringed two patents, and a successful claim on either one would be sufficient to stop the defendant from marketing its products and from pursuing its sham litigation counterclaim. Here, it cannot be disputed that GSK's infringement claim on the '798 patent was solely responsible for plaintiffs' inability to market generic Wellbutrin SR after the '994 patent claim was dismissed.

Finally, neither case relied on by the Dentsply court for its statement that "litigation will not be considered a 'sham' so long as at least one claim in the lawsuit has objective merit," strongly supports that assertion. The first was PRE, and as pointed out by the plaintiffs and at least one other court, I should be careful to ascribe too much importance to the repeated use of the terms "lawsuit" and "litigation" in PRE, since there, defendant's antitrust counterclaims alleged that plaintiff's entire copyright claim was a sham. 508 U.S. at 52; see Resp. To Renewed Mot. For Summary J., 5; Intel Corp. v. Via Technologies, Inc., No. 99-03062, 2001 WL 777085 at *5 (N.D.Cal. Mar. 20, 2001) ("In fairness . . . the Supreme Court was addressing a different issue, namely the objective (as opposed to subjective) component of the sham test and its use of the phrase 'the lawsuit' was not directed at the instant issue [of 'a single lawsuit with multiple claims']."). In other words, the PRE court was simply not faced with the situation confronting me, where plaintiffs accused of filing sham litigation potentially asserted one sham and one non- sham claim. The other case relied on by the court in Dentsply, Eden Hannon, did not actually hold that a lawsuit is saved as long as one claim asserted within that suit is not objectively baseless. In Eden Hannon, the Fourth Court reviewed a District Court's finding that defendant had breached a non-circumvention and non-disclosure agreement with the plaintiff, and its subsequent dismissal of the defendant's antitrust sham litigation counterclaims. 914 F.2d at 557-58. It affirmed the District Court's ruling, reasoning that "[u]nder the Noerr-Pennington doctrine, the filing of a lawsuit (or the seeking of other government action) can only violate antitrust laws when it is a 'sham.' Since [the plaintiff] has succeeded in its breach of contract claim and won a constructive trust and an injunction, this suit is hardly a sham." 914 F.2d at 564-565. The District Court below had not dismissed the sham litigation counterclaims asserted by the defendants until the close of the plaintiff's evidence at trial, doing so because it was "satisfied that the case was not a sham." Id. at 557. Trial then continued, and the plaintiff was successful on its breach of ...


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