In this action, plaintiffs asserted that defendant, which manufactured a drug called Miralax®, violated Section 2 of the Sherman Act by engaging in a course of unlawful conduct that delayed the FDA’s approval of a competing generic drug, Glycolax®. Plaintiffs alleged that defendant’s course of conduct, including the initiation of earlier “sham” litigation, resulted in extending defendant’s monopoly power over its pioneer drug, and required plaintiffs to pay higher prices for Glycolax® during the period of delay in FDA approval of the generic version.
In this opinion, Judge Robinson denied defendant’s motion to dismiss the complaint, rejecting defendant’s argument that it was immune under the Noerr- Pennington doctrine from the plaintiffs’ sham litigation claim. A patent owner asserting its rights through an infringement action is normally immune from antitrust liability under the Noerr-Pennington doctrine, except in the case of sham litigation. Defendant noted that in the prior action, the court rejected a counterclaim, which, similar to plaintiffs’ claim in the present case, alleged that the earlier action was a sham brought for the unlawful purpose of extending a monopoly. Therefore, defendant argued, the prior litigation was not a sham as a matter of law. The court disagreed, finding that the ruling in the prior case was based on the record presented in that case, and rested on a finding that the counterclaimant failed to establish its sham litigation claim by clear and convincing evidence. Also, plaintiff in the present case was not a party to the prior litigation, and thus res judicata does not bar its claim. The court concluded that plaintiff sufficiently alleged an overall scheme that resulted in antitrust injury, and the court would not parse plaintiff’s theory into its component parts, or exclude the prior litigation from the overall scheme.