Suing Competitors for Patent Infringement or Filing a Citizen Petition with the FDA May Violate Antitrust Laws
In addressing whether a competitor’s patent infringement suit and filing of a Citizen Petition with the Federal Drug Administration can result in the violation of antitrust laws, the Court of Appeals for the Federal Circuit affirmed a district court’s finding that the patentee’s assertion of the validity of its patents was a sham. The court vacated the summary judgment in favor of the accused infringer that the patentee’s claim of patent infringement was not a sham, and remanded for further action. The court also vacated the summary judgment that patentee’s citizen petition to the FDA was not a sham and remanded to determine whether the patentee’s action resulted in any injury.
Tyco Healthcare (Tyco) sued Mutual Pharmaceuticals (Mutual) for violating the antitrust laws by filing a patent infringement suit against Mutual and by filing a “Citizen Petition” with the Food and Drug Administration (FDA) attempting to bar Mutual from receiving FDA approval to market and sell its generic version of temazepam, a drug used for treating insomnia.
Tyco owns several patents directed to formulations and methods of treatment of insomnia with temazepam, which Tyco markets under the brand Restoril. The patents claim a 7.5 mg formulation of temazepam with a specific surface area between 0.65 and 1.1 square meters per gram. Specific surface area is a measure of the surface area of a drug per unit of weight. However, the claims of the temazepam patents do not recite any specific techniques for the measurement. Instead, they state that the measurements are done according to known standards such as BET techniques.
Mutual saw an opportunity to compete with Tyco by producing and selling a generic version of temazepam. To that end, Mutual filed an Abbreviated New Drug Application (ANDA) with the FDA seeking approval to sell the drug. It also sent a letter to Tyco notifying it of its position that the generic drug does not infringe any of Tyco’s patents since its products would have a specific surface area of not less than 2.2 square meters per gram, which was well above the range claimed in the temazepam patents.
In response, Tyco sued Mutual for patent infringement and also filed a Citizen Petition with the FDA. After a lengthy series of litigation between the two competitors, Mutual filed for summary judgment arguing that Tyco has no reasonable basis for the filing of the suit and that Tyco had engaged in sham litigation. Mutual argued that the sham litigation was intended to keep the competitors out of the market and thus it violated the U.S. antitrust laws.
The Federal Circuit relying on a voluminous record which included testimony and evidence form earlier actions of Tyco concluded that the granting of summary judgment was not proper and sent the case back to the district court for further inquiries. Although the court agreed with Tyco that it is not unreasonable for a patent owner to allege infringement under section 271(e)(2)(A) if the patent owner has evidence that the as-marketed commercial ANDA product will infringe, even though a hypothetical product could not infringe, the court stated that does not end the inquiry. The Federal Circuit concluded that there was enough evidence to show that Tyco’s patent infringement action as well as the filing of the Citizen Petition which was not granted by the FDA was objectively baseless and accordingly sent the case back for additional proceedings.
As this case highlights, patent owners should always be careful when alleging patent infringement, but this case has raised the bar even further by declaring that such conduct could be the basis for an antitrust claim if it can be proven that the litigation was baseless and instituted to curb competition.
David V. Jafari
JAFARI LAW GROUP®, INC.