The Ninth Circuit recently reached a split decision in the antitrust litigation relating to the hypertension drug Hytrin. First, it affirmed a jury decision that had found no liability arising out of a patent settlement between Abbott Laboratories, Inc. and a generic drug manufacturer that included a so-called reverse payment. Second, it reversed the lower court’s award of summary judgment for Abbott on the antitrust plaintiff’s Walker Process claim.
In 1996, Abbott sued Geneva Pharmaceuticals Technology Corporation, accusing the generic manufacturer of infringing on Abbott’s Hytrin patent when it sought FDA approval to market a generic version of the drug. Two years later, while the litigation was still pending, the parties entered into an interim settlement whereby Abbott agreed to pay Geneva $4.5 million per month in exchange for Geneva’s promise not to market its generic version of Hytrin until the patent case was resolved. A district court held Abbott’s patent invalid later that year, and the Federal Circuit affirmed. Geneva launched its generic equivalent of Hytrin within weeks of the Federal Circuit’s decision.
Antitrust litigation was subsequently filed against Abbott and Geneva by several plaintiffs, alleging that the interim patent settlement unlawfully delayed Geneva’s entry into the market and thus violated the antitrust laws. The antitrust plaintiffs also alleged that Abbott engaged in monopolization by means of supposed sham litigation and fraud before the PTO (often called a “Walker Process” claim after the decision in Walker Process Equipment, Inc. v. Food Machinery & Chemical Corp.). The district court awarded Abbott summary judgment on the monopolization claims on Noerr-Pennington grounds, but also found that the reverse payments constituted a per se violation of the antitrust laws. (At that point, all plaintiffs except Kaiser Foundation Health Plan, Inc. settled their reverse payment claims.) However, following a trial on the issues of causation and damages for the reverse payment claim, a jury decided that the settlement had not delayed Geneva’s entry into the market because Geneva’s generic Hytrin product was not yet ready to be sold, and that the remaining plaintiff therefore had suffered no injury. The plaintiff appealed both the summary judgment and the jury’s verdict.
The Ninth Circuit affirmed the jury’s verdict on the reverse payment claim (upholding several evidentiary rulings), and agreed with the lower court’s finding that the plaintiff had failed to produce sufficient evidence to go to trial on its sham litigation claim. The appellate court disagreed, however, with the lower court’s conclusion that the plaintiff was not entitled to go to trial on its claim of Walker Process fraud. The Ninth Circuit rejected the district court’s finding that the plaintiff “did not present ‘any evidence’ that there was an intent to deceive or that, in the absence of the deceit, the patent would nonetheless have issued,” citing the plaintiff’s arguments that Abbott had (a) failed to provide the patent examiner with an English translation of an earlier Japanese patent application, and (b) neglected to mention a relevant decision by the U.S. Court of Appeals for the Federal Circuit in its application for the Hytrin patent. The court found this evidence sufficient to entitle the antitrust plaintiff to proceed to trial on the Walker Process claim.