‘Sham Litigation' Sufficiently Plead When Generic Provides Detailed Statement And Access To ANDA

Otsuka Pharm. Co., Ltd. v. Torrent Pharms. Ltd., Inc., (D.N.J. June 22, 2015)

Explaining the differences between the pleading standards for antitrust and patent misuse defenses, the U.S. District Court for the District of New Jersey denied Otsuka's motion to dismiss Torrent's antitrust counterclaim but granted Otsuka's motion dismissing a counter claim for patent misuse. Otsuka Pharm. Co., Ltd. v. Torrent Pharms. Ltd., Inc., No. 2014-1078, __ F.Supp.3d ___, 2015 WL 3869677 (D.N.J. June 22, 2015) (Simandle, C.J.).

Otsuka brought over 25 patent infringement actions seeking to block generic versions of Otsuka's antipsychotic drug Abilify® (aripiprazole) from the market. Torrent brought antitrust and patent misuse counterclaims alleging Otsuka monopolized the aripiprazole market by bringing objectively baseless and sham litigation in order to delay and eliminate competition and improperly maintain its exclusive monopoly over the aripiprazole market. Otsuka moved to dismiss Torrent's antitrust and patent misuse counterclaims under Rule 12(b)(6) arguing Torrent: (1) failed to allege an anticompetitive injury required for antitrust standing; (2) failed to overcome the presumption of Noerr-Pennington immunity; and (3) failed as a matter of law to state a claim for patent misuse.

Otsuka challenged only the "antitrust injury" factor of the multi-factor test used by the U.S. Court of Appeals for the Third Circuit to determine antitrust standing. Otsuka argued that its infringement lawsuit has not caused Torrent to suffer any anticompetitive injury, because Torrent voluntarily chose to delay seeking regulatory approval until after the main compound patent for aripiprazole expired and Torrent's allegations of delayed market entry lacked the immediacy required for antitrust standing. In rejecting these arguments, Chief Judge Jerome B. Simandle found a real and immediate injury because expiration of the compound patent did not create a present barrier for Torrent to enter the market, and the U.S. Food and Drug Administration (FDA) had already approved Torrent's generic application for Abilify. The only barrier to market entry for Torrent was the lawsuit brought by Otsuka.

The court then found that Torrent pleaded sufficient facts to confer antitrust standing. The court focused on the "hallmark" for evaluating an allegation of antitrust injurywhether the actions alleged to be anticompetitive affect the overall market, rather than only an individual...