Federal Trade Commission v. AbbVie, Inc., (E.D. Penn. December 13, 2015)

The U.S. District Court for the Eastern District of Pennsylvania ordered AbbVie, Inc. and Besins Healthcare to produce unredacted documents to the Federal Trade Commission (FTC), because the documents were relevant to the FTC’s pay-for-delay and sham litigation claims and contained business advice and analysis provided by attorneys, not legal advice. Federal Trade Commission v. AbbVie, Inc., 2015 WL 8623076, Civil Action No. 14-5151 (E.D. Penn. Dec. 13, 2015), (Bartle, J.).

The current FTC case relates to prior patent litigation involving U.S. Patent No. 6,503,894, which covered the brand-name testosterone drug, AndroGel® (testosterone gel). AndroGel was developed by Unimed Pharmaceuticals—which was later acquired by Solvay Pharmaceuticals—and Besins Healthcare. In 2009, Perrigo Company filed an abbreviated new drug application (ANDA) for a generic version of AndroGel. Solvay and Besins considered bringing a patent infringement claim, but ultimately decided against doing so. Then, in 2010, AbbVie acquired Solvay and subsequently sued both Perrigo and Teva Pharmaceutical Industries (who had also filed an ANDA) for infringement of the ‘894 patent. AbbVie and Teva eventually reached a settlement agreement.

In September 2014, the FTC initiated this case, alleging that AbbVie and Besins filed a sham patent litigation against Teva and Perrigo in order to delay approval of the companies’ generic version of AndroGel. The FTC further alleged that the AbbVie/Teva settlement agreement was anticompetitive—claiming that Teva delayed its generic launch in return for the right to market an authorized generic version of AbbVie cholesterol drug TriCor® (fenofibrate).

After initial discovery in the case, the FTC filed a motion to compel production from both Besins and AbbVie. The FTC alleged that AbbVie and Besins improperly withheld and redacted documents. AbbVie and Besins responded by stating the documents themselves (or the redacted portions) were protected by the attorney-client privilege, the work product doctrine or both.

Besins’ Challenged Documents

The first challenged document was an email from Besins’ outside counsel in the United States to outside counsel in Europe, and contained a redacted sentence relaying a statement by a U.S. Patent and Trademark Office examiner during prosecution of the ‘894 patent. The court determined that even though the statement was from a lawyer, it simply reported a fact gathered during conversation with a third party and did not constitute legal advice and ordered production of the email.

Next, Besins redacted an email from in-house counsel in which in-house counsel reported on ongoing litigation and estimated the expected launch date of specific drugs based on that litigation. In finding the material non-privileged, the court stated that the report on ongoing litigation was for the business purpose of identifying expected launch dates, and was not providing legal advice.

Finally, Besins withheld two documents that were sent for the purpose of providing outside counsel with technical information necessary for outside counsel to provide legal advice. The court found that those documents were privileged and did not need to be produced.

AbbVie Challenged Documents

The first set of challenged AbbVie documents related to spreadsheets prepared by a non-lawyer relating to forecasting analysis for AndroGel. Because these documents were prepared at the request of counsel in order to conduct legal analysis regarding settlement discussions with Teva, the court found that the documents were protected by the work product doctrine.

Next, AbbVie withheld an email chain in which an AbbVie employee stated to another employee his desire to speak with in-house counsel. The court found that this type of communication is not between two privileged persons and is therefore not protected by privilege.

AbbVie also withheld several documents, including presentations, prepared as part of AbbVie’s due diligence research in advance of its possible acquisition of Solvay. Since these documents were prepared as part of the business decision to acquire Solvay and did not relate to any pending or future litigation, the court found that the documents were not protected by attorney-client privilege or the work product doctrine.

Alternatively, the court found that communications between counsel and AbbVie and counsel for Solvay (that were exchanged after AbbVie had agreed to acquire Solvay) were protected, even though the acquisition had not been completed. The emails were protected because they related to legal advice regarding AndroGel, and because AbbVie and Solvay shared a common legal interest in AndroGel after the acquisition agreement was signed.

Finally, the court evaluated several emails between business and legal employees at Solvay relating to the ‘894 patent. The court found that one email included legal advice from counsel regarding patent protection was protected by attorney-client privilege. However, the remaining documents were mainly between business employees at the company and included a discussion of business strategy. Therefore, the remaining documents were not protected by attorney-client privilege or the work product doctrine.