FTC v. Actavis On Remand: A New Chapter

District Court refuses to grant renewed motion to dismiss based on Noerr-Pennington doctrine. In re AndroGel Antitrust Litigation (No. II), MDL No. 2084 (re Federal Trade Commission v. Actavis, Inc., No. 1:09-CV-955-TWT) (N.D. GA April 21, 2014).

In April 1999, Solvay Pharmaceuticals, LLC ("Solvay") filed a New Drug Application ("NDA") with the Food and Drug Administration ("FDA") seeking approval to commercially market a testosterone replacement gel ("AndroGel"). The gel had been developed from a pharmaceutical formula by Besins Healthcare, S.A. ("Besins"). Solvay and Besins thereafter filed a patent application with the U.S. Patent and Trademark Office ("PTO"). A patent was subsequently issued.

Before its issuance, other companies developed generic versions of AndroGel. After one generic was developed, an Abbreviated New Drug Application ("ANDA") was filed. Thereafter, the patentees agreed to share potential patent litigation costs, and to sell the generic AndroGel. They also agreed to share profits. See In re AndroGel Antitrust Litigation (No. II), 687 F. Supp. 2d 1371, 1374 (N.D. Ga. 2010). The generic producers notified the patentees of the ANDA's and asserted that their patent was invalid or would not be infringed by their generic. The patentees responded to the ANDA notice by filing an action for infringement.

Before the ANDA issues were resolved, the action were settled. As part of the settlement, Solvay agreed to a consent judgment dismissing its infringement action. However, it also agreed to share profits for AndroGel sales with the settling defendants. The payment structure was not disclosed to the court, and was not included in the consent judgment.

The settlement prompted an investigation by the Federal Trade Commission ("FTC"). The FTC and a number of private parties filed actions. The actions were consolidated before the District Court for the Northern District of Georgia. On motions to dismiss, the court concluded, in part that, pursuant to Eleventh Circuit law, the settlement agreement would pass antitrust scrutiny unless the underlying litigation itself was a "sham". The Eleventh Circuit affirmed, on the ground that the settlement did not exceed the scope of the underlying patent.

In FTC v. Actavis, Inc., 570 U.S. ____, 133 S. Ct. 2233 (June 17, 2013) the Supreme Court reversed. It held, inter alia, that the "near-automatic antitrust immunity" for reverse payment patent settlements should be replaced by a full "rule of...