107 F. Supp. 3d 428
E.D. Pa.2015Background
- AbbVie (and predecessors), Unimed, and Besins own U.S. Patent No. 6,503,894 covering AndroGel, a topical testosterone gel using isopropyl myristate (IPM); the patent expires in 2020.
- Teva developed a testosterone gel using isopropyl palmitate (IPP) and filed a full NDA with a Paragraph IV certification asserting noninfringement; filing triggered a potential 30‑month FDA stay.
- Abbott/Unimed/Besins sued Teva for patent infringement in D. Del.; Teva counterclaimed that the suit was a sham and moved for summary judgment; the court scheduled a bench trial.
- The parties settled: (1) patentees permitted Teva to enter the AndroGel market on Dec. 27, 2014 (early entry, no patentee payment); (2) Abbott agreed to supply Teva an authorized generic of TriCor under favorable pricing/royalty terms.
- The FTC sued under §5 (and antitrust statutes), alleging sham litigation by the patentees (Count I) and that the settlement constituted an unlawful reverse payment and restraint of trade (Count II).
- The court considered Rule 12(b)(6) motions to dismiss Count II and to dismiss Count I insofar as it rests on the Delaware settlement terms.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the settlement (including TriCor supply deal) is an unlawful reverse payment in violation of §5/antitrust law | FTC: the TriCor agreement functions as a large, unjustified reverse payment from patentees to Teva that restrains trade (Actavis rule) | Defendants: no patentee payment to Teva; TriCor deal is a commercial supply/license favorable to consumers and procompetitive | Court: Dismissed — TriCor agreement is not an Actavis reverse payment; both agreements are procompetitive and lawful |
| Whether Teva can be charged with participating in a sham‑litigation restraint of trade by settling | FTC: Teva settled while allegedly knowing the suit was sham, so it concerted to restrain competition | Teva: it defended and litigated; there was no judicial finding of sham before settlement; a challenger cannot be liable for settling | Court: Dismissed Count II as to Teva — no plausible allegation that Teva agreed to bring or knowingly join in sham litigation |
| Whether an early‑entry license without patentee payment (first settlement) is unlawful under Actavis | FTC: when combined with other deal terms it amounts to anticompetitive settlement | Defendants: early entry without payment is permissible and procompetitive | Court: Early‑entry license alone is legal under Actavis and here promotes competition |
| Whether allegations suffice to state a claim under Twombly/Iqbal plausibility standard | FTC: complaint pleads facts showing anticompetitive purpose and unjustified value transfer | Defendants: allegations are conclusory or show lawful, procompetitive arrangements | Court: Dismissed Count II — complaint fails to plausibly allege an unlawful reverse payment or Teva conspiracy |
Key Cases Cited
- FTC v. Actavis, 133 S. Ct. 2223 (2013) (Supreme Court: large, unjustified reverse payments from patentee to challenger may be unlawful under rule‑of‑reason)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading must state a plausible claim; conclusory allegations insufficient)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (antitrust complaints must meet plausibility standard)
- Warner‑Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17 (1997) (doctrine of equivalents principle in patent law)
- Prof'l Real Estate Investors, Inc. v. Columbia Pictures Indus., Inc., 508 U.S. 49 (1993) (sham litigation standard: objectively baseless + subjective intent to interfere)
- FTC v. Watson Pharm., Inc., 677 F.3d 1298 (11th Cir. 2012) (discussing scope‑of‑patent test and reverse‑payment immunity under certain views)