Louisiana Wholesale Drug Co. v. Shire LLC
929 F. Supp. 2d 256
S.D.N.Y.2013Background
- LWD sues Shire for alleged violation of 15 U.S.C. § 2, asserting antitrust claims related to Shire's Adderall XR patent and related settlements.
- Shire holds Adderall XR patents and NDA; Adderall XR approved by FDA in 2001 with substantial sales thereafter.
- Hatch-Waxman Act enables generics via ANDAs, with 30-month stays; Teva and Impax filed ANDAs challenging Shire’s patents.
- In 2006, Shire settled patent-infringement suits with Teva and Impax, agreeing three-year no-competition periods and licenses plus supply arrangements.
- LWD alleges Shire breached the agreements by limiting supply to Teva and Impax, keeping 40–50% of Adderall XR for itself, thereby maintaining monopolistic pricing.
- Court grants Shire’s Rule 12(b)(6) motion, dismissing all claims as LWD’s theories fail under the patent- and antitrust-law framework.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Shire’s patent-based conduct bars antitrust claim | LWD argues Shire breached duty to deal and extended monopoly despite licenses. | Shire relies on Tamoxifen framework: settlements within patent scope cannot violate antitrust laws. | No antitrust claim; conduct within patent scope, no unlawful monopolization. |
| Whether LWD adequately pleads a lawful “relevant market” | LWD contends a market analysis shows anticompetitive effects. | Court should require proper market definition; alleged effects fall within patent scope. | Court declines to address; dismissal on other grounds. |
| Whether Illinois Brick indirect-purchaser rule defeats the claim | LWD is an indirect purchaser seeking damages. | Illinois Brick bars indirect-purchaser claims. | Court declines to address; not necessary to decide after dismissal on other grounds. |
| Whether the settlements exceed the scope of the patents or constitute unlawful anticompetitive agreements | Shire’s licensing and breach of supply commitments extend beyond patent scope to restrain competition. | Tamoxifen distinguishes settlements within patent scope as not unlawful; Aspen Skiing not controlling here. | Settlements did not exceed patent scope; no antitrust violation. |
Key Cases Cited
- Tamoxifen Citrate Antitrust Litig., 466 F.3d 187 (2d Cir. 2006) (settlements within scope of patent not unlawful antitrust violations)
- Arkansas Carpenters Health & Welfare Fund v. Bayer AG, 604 F.3d 98 (2d Cir. 2010) (distinguishing Tamoxifen on patent-scope grounds)
- Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (S. Ct. 1985) (duty to deal; unilateral refusals may be anticompetitive in narrow circumstances)
- SCM Corp. v. Xerox Corp., 645 F.2d 1195 (2d Cir. 1981) (patent holder may exercise exclusionary power within patent scope)
- Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (S. Ct. 2004) ( Aspen Skiing cautioned; lawfulness of refusal to deal is narrow)
- In re Elevator Antitrust Litig., 502 F.3d 47 (2d Cir. 2007) (refusal-to-deal theories require careful limits; not extended to this case)