Case: 1:19-cv-01873 Document #: 170 Filed: 06/08/20 Page 1 of 73 PageID #:1928
`
`UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF ILLINOIS
`EASTERN DIVISION
`
`
`
`
`IN RE: HUMIRA (ADALIMUMAB)
`ANTITRUST LITIGATION
`
`
`
`No. 19 CV 1873
`
`Judge Manish S. Shah
`
`
`
`
`
`MEMORANDUM OPINION AND ORDER
`
`Defendant AbbVie Inc. makes a lot of money selling the prescription drug
`
`Humira. One reason for Humira’s profitability is that AbbVie’s Humira-related
`
`patents (more than a hundred) make it difficult (if not impossible) to sell competing
`
`drugs. Another reason may be that the Food and Drug Administration’s lengthy
`
`approval process imposes additional costs on competitors hoping to reach the market.
`
`Still a third reason might be the expensive, complicated, and contentious patent
`
`infringement litigation that often follows on the heels of FDA approval.
`
`Plaintiffs, indirect purchasers of Humira, allege a different reason: AbbVie
`
`cornered the market for Humira (and other biosimilar drugs) through anticompetitive
`
`conduct. They say that AbbVie (and its subsidiary, AbbVie Biotechnology, Ltd.)
`
`applied for, obtained, and asserted patents to gain the power it needed to elbow its
`
`competitors (the other defendants in this case, Amgen, Inc., Samsung Bioepis Co.,
`
`Ltd., and Sandoz, Inc.) out of the Humira market in the United States (in violation of
`
`§ 2 of the Sherman Act) and then entered into agreements with those competitors to
`
`keep their competing drugs off the market (in violation of § 1). In return, AbbVie gave
`
`

`

`Case: 1:19-cv-01873 Document #: 170 Filed: 06/08/20 Page 2 of 73 PageID #:1929
`
`those competitors permission to market their drugs in Europe (where AbbVie also
`
`possessed an imposing patent portfolio that blocked competition).
`
`The legal and regulatory backdrop for patented biologic drugs, together with a
`
`well-resourced litigation strategy, gave AbbVie the ability to maintain control over
`
`Humira. Plaintiffs say that AbbVie’s plan to extend its power over Humira amounts
`
`to a scheme to violate federal and state antitrust laws. But what plaintiffs describe
`
`is not an antitrust violation. AbbVie has exploited advantages conferred on it through
`
`lawful practices and to the extent this has kept prices high for Humira, existing
`
`antitrust doctrine does not prohibit it. Much of AbbVie’s petitioning was protected by
`
`the Noerr–Pennington doctrine, and plaintiffs’ theory of antitrust injury is too
`
`speculative. Because the federal antitrust claims fail, the state antitrust claims fail,
`
`too. And although the complaint is lengthy and detailed, its application to state
`
`statutes that prohibit unfair and unconscionable conduct falls short. The complaint
`
`is dismissed without prejudice.
`
`I.
`
`Legal Standards
`
`A complaint must contain a short and plain statement that plausibly suggests
`
`a right to relief. Ashcroft v. Iqbal, 556 U.S. 662, 677–78 (2009); Fed. R. Civ. P. 8(a)(2).
`
`In ruling on a motion to dismiss, a court must accept all factual allegations in the
`
`complaint as true and draw all reasonable inferences in plaintiffs’ favor, but need not
`
`accept legal conclusions, bare assertions, or conclusory allegations. Iqbal, 556 U.S. at
`
`680–82. The complaint does not need to include detailed factual allegations, but it
`
`must provide more than labels and formulaic recitations of the elements of the cause
`
`
`
`2
`
`

`

`Case: 1:19-cv-01873 Document #: 170 Filed: 06/08/20 Page 3 of 73 PageID #:1930
`
`of action, Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007), and must “present a
`
`story that holds together.” Swanson v. Citibank, N.A., 614 F.3d 400, 404 (7th Cir.
`
`2010). If a complaint pleads facts that are “merely consistent with” liability, it “stops
`
`short of the line between possibility and plausibility of entitlement to relief.” Iqbal,
`
`556 U.S. at 678.
`
`II.
`
`Facts
`
`A. Humira and the ’382 Patent
`
`Humira is an anti-inflammatory biologic (a drug derived from living organisms
`
`that helps slow down overactive immune systems). [109] ¶¶ 2, 32, 77.1 Originally
`
`developed for rheumatoid arthritis, Humira is now used to treat a variety of auto-
`
`immune disorders ranging from Crohn’s disease to plaque psoriasis. Id. ¶ 81.
`
`Humira generated almost $20 billion in worldwide sales in 2018 alone and
`
`more than $56 billion in the United States between 2012 and 2018, id. ¶ 84, making
`
`it the best-selling drug in the country. Id. ¶¶ 2, 84. Its sales dollars come not from
`
`volume, but from price: a one-month prescription of Humira injections costs about
`
`$4,500. See id. ¶ 84.
`
`Humira’s active ingredient is an antibody called “adalimumab.” See id. ¶¶ 77–
`
`78. Abbott Laboratories bought the patent for adalimumab (U.S. Patent No.
`
`6,090,382, originally assigned to BASF AG in 2000) and used it to launch a new
`
`
`1 Bracketed numbers refer to entries on the district court docket. The facts are taken from
`the consolidated class action complaint, [109], plaintiffs’ opposition to defendants’ motions to
`dismiss, [144], and, where noted, from sources outside of those documents through judicial
`notice.
`
`
`
`3
`
`

`

`Case: 1:19-cv-01873 Document #: 170 Filed: 06/08/20 Page 4 of 73 PageID #:1931
`
`drug—Humira—in 2002. Id. ¶¶ 78–80. Abbott sold Humira throughout the world for
`
`eleven years before passing the patent off to its spin-off biologic and branded drug
`
`business, AbbVie, Inc. Id. ¶ 87. The ’382 patent expired on December 31, 2016. Id.
`
`¶ 78.
`
`The plaintiffs in this lawsuit—indirect purchasers of Humira, including the
`
`City of Baltimore, id. ¶ 13, an insurance trust fund for Miami Police Department
`
`officers, id. ¶ 14, and a Minnesota-based employee welfare benefit plan for plumbers,
`
`pipefitters, and other workers in the pipe trades industries, id. ¶ 15, among others—
`
`say that, in the months and years leading up to the expiration of the ’382 patent,
`
`AbbVie created a thicket of intellectual property protection so dense that it prevented
`
`would-be challengers from entering the market with cheaper biosimilar alternatives.2
`
`See id. ¶¶ 4–9. Then, plaintiffs say, defendants AbbVie Inc. and AbbVie
`
`Biotechnology Ltd. used that intellectual property as leverage during negotiations
`
`with the other defendants (Amgen, Inc., Samsung Bioepis Co., Ltd., and Sandoz,
`
`Inc.3), forcing them to agree to delay their market entry in return for licensing
`
`agreements that cut through AbbVie’s patent thicket. Id. ¶¶ 4, 7.
`
`B.
`
`The Patent System
`
` Anyone who invents or discovers any new and useful machine, manufacture,
`
`or composition of matter (e.g., a new drug) may apply for a patent from the United
`
`
`2 Biosimilars are to biologics what generics are to small molecule drugs. See [109] ¶ 47. Small
`molecule drugs are those made from chemical processes. See id. ¶¶ 32, 47.
`3 Fresenius Kabi USA LLC was originally named as a defendant but was dismissed shortly
`before the filing of the motion to dismiss. See [120].
`
`
`
`4
`
`

`

`Case: 1:19-cv-01873 Document #: 170 Filed: 06/08/20 Page 5 of 73 PageID #:1932
`
`States Patent and Trademark Office. See 35 U.S.C. § 101. Once issued, the patent
`
`comes with an exclusive right to make, use, and sell the invention in the United
`
`States. 35 U.S.C. § 154(a). This “limited monopoly,” Nautilus, Inc. v. Biosig
`
`Instruments, Inc., 572 U.S. 898, 901 (2014), lasts for twenty years. 35 U.S.C.
`
`§ 154(a)(2). But see P. Areeda & H. Hovenkamp, Antitrust Law: An Analysis of
`
`Antitrust Principles and Their Application § 704a (4th ed. 2019) (Areeda &
`
`Hovenkamp) (a patent is more akin to a property right than a monopoly because the
`
`“great majority” of patents do not confer sufficient market power to dominate a
`
`properly defined market).
`
`Novel inventions are those not disclosed in the prior art. 35 U.S.C. § 102(a).
`
`The prior art includes anything that has already been patented or described in a
`
`printed publication, or that is in public use, on sale to the public, or otherwise
`
`available to the public. Id. The patent application process is nonadversarial and relies
`
`on applicants to abide by their duty of disclosure, candor, and good faith. 37 C.F.R.
`
`§ 1.56(a); Kingsland v. Dorsey, 338 U.S. 318, 319 (1949); Elkay Mfg. Co. v. Ebco Mfg.
`
`Co., No. 93 C 5106, 1995 WL 389822, at *11 (N.D. Ill. Feb. 15, 1995). See also [109]
`
`¶ 58. If the applicant does not disclose (and the examiner does not find) all of the
`
`pertinent prior art, patents may issue to underserving inventions.
`
`As prior art accumulates, applicants face an increasingly crowded space. There
`
`are, however, ways to navigate around some of that prior art. For instance, inventors
`
`are granted a one-year grace period to file their patent applications after any public
`
`disclosure of their own invention. 35 U.S.C. § 102(b)(1). Continuation applications
`
`
`
`5
`
`

`

`Case: 1:19-cv-01873 Document #: 170 Filed: 06/08/20 Page 6 of 73 PageID #:1933
`
`offer another work around: any applicant with a pending application may later tack
`
`on new, related claims.4 35 U.S.C. § 120; 37 C.F.R. § 1.78(d). If the new claims are
`
`sufficiently related to the original claim, they are backdated and do not have to
`
`account for any prior art developed after the original application’s filing date. Id. See
`
`also [109] ¶¶ 55–56. The catch is that if the new claims are simple, obvious variations
`
`on the invention described in the original application, the applicant “generally must”
`
`([109] ¶ 56) file a terminal disclaimer (see 37 C.F.R. § 1.321(b)) relinquishing any
`
`portion of the new claim’s term that would extend beyond the expiration date of the
`
`patent that is the subject of the pending application. [109] ¶ 56. In other words, if the
`
`applicant wants to use the original filing date for a simple and obvious variation on
`
`the original invention, the applicant has to accept the original expiration date, too.
`
`See id.
`
`C.
`
`The Food and Drug Administration’s Approval Process
`
`Manufacturers that want to bring a new drug (patented or not) to market must
`
`first receive approval from the Food and Drug Administration. See 21 U.S.C. § 355;
`
`42 U.S.C. § 262(a). Different kinds of drugs require different kinds of approvals. See
`
`id. The process for biologic drugs starts when a manufacturer submits a “Biologic
`
`License Application” demonstrating that its new drug is (among other things) “safe,
`
`pure, and potent.” 42 U.S.C. § 262(a)(2)(C)(i). See also [109] ¶ 35. If the application is
`
`
`4 The claims “define the exact boundaries beyond which no member of the public may pass
`without invading the exclusive rights of the patentee.” Nat’l Carbon Co. v. W. Shade Cloth
`Co., 93 F.2d 94, 96 (7th Cir. 1937). Claims force the patentee to “define precisely what his
`invention is.” White v. Dunbar, 119 U.S. 47, 52 (1886).
`
`
`
`6
`
`

`

`Case: 1:19-cv-01873 Document #: 170 Filed: 06/08/20 Page 7 of 73 PageID #:1934
`
`approved, the manufacturer enjoys a period of exclusivity during which it is the only
`
`entity that can market the drug for the approved purpose. 42 U.S.C. § 262(k)(7). See
`
`also [109] ¶ 34. Manufacturers often charge supracompetitive prices during this
`
`period in order to recoup their research and development costs and obtain a profit.
`
`[109] ¶ 34.
`
`Eventually, that exclusivity ends. One way it can end is when a different
`
`manufacturer designs a biosimilar and submits (and has approved) an “Abbreviated
`
`Biologic License Application.” 42 U.S.C. §§ 262(k)(2)(A), (k)(6). See also [109] ¶¶ 39–
`
`40. Abbreviated applications piggyback on existing approvals by identifying an
`
`approved reference biologic and demonstrating that there is no “clinically meaningful
`
`difference” between the reference biologic and the proposed biosimilar. 42 U.S.C.
`
`§§ 262(k)(2)(B), (k)(4). See also [109] ¶ 39. Biosimilar manufacturers have to wait four
`
`years from the date the reference biologic was approved before submitting an
`
`abbreviated application, and the FDA has to wait twelve years from that same date
`
`before approving any abbreviated applications. 42 U.S.C. §§ 262(k)(7)(A), (B). See also
`
`[109] ¶ 41. Once approved, the biosimilar can be marketed to the public—assuming
`
`the drug is not also patented. [109] ¶ 41. Prices tend to drop shortly after a new
`
`biosimilar is introduced. See id. ¶¶ 43–45.
`
`Often, the drug is patented. The regulatory framework sets out a five-step
`
`series of required prelitigation exchanges (sometimes called the “patent dance”)
`
`aimed at resolving patent disputes between the biosimilar manufacturer (the
`
`“applicant”) and the reference biologic’s manufacturer (the “sponsor”). 42 U.S.C.
`
`
`
`7
`
`

`

`Case: 1:19-cv-01873 Document #: 170 Filed: 06/08/20 Page 8 of 73 PageID #:1935
`
`§ 262(l). See also [109] ¶ 61. Once the FDA accepts the application for review, the
`
`applicant is required to send information about its biosimilar to the sponsor (step
`
`one), see 42 U.S.C. § 262(l)(2), the sponsor must send back a list of the patents (if any)
`
`that it believes would be infringed if the biosimilar was put on the market (step two),
`
`see 42 U.S.C. § 262(l)(3)(A), the applicant explains why it believes those patents are
`
`invalid, unenforceable, or would not be infringed (step three), see 42 U.S.C.
`
`§ 262(l)(3)(B), and the sponsor responds (step four). See 42 U.S.C. § 262(l)(3)(C). See
`
`also [109] ¶¶ 62–66. At the fifth step the applicant tells the sponsor the number of
`
`patents it would like test in litigation, and then both sides simultaneously exchange
`
`a list of patents. See 42 U.S.C. § 262(l)(5); [109] ¶ 67. The sponsor then must initiate
`
`a lawsuit to determine the validity of the patents that appear on both lists (which, at
`
`most, includes double the number identified by the applicant, assuming no overlap).
`
`See 42 U.S.C. § 262(l)(6); [109] ¶¶ 65–67.
`
`At that point, the applicant has to decide whether to launch “at risk” by putting
`
`its biosimilar on the market notwithstanding the prospect of a large damages award
`
`against it in patent litigation. Unlike the Hatch-Waxman Act (which governs small
`
`molecule drugs and imposes an automatic 30-month stay on FDA approval whenever
`
`a brand-name manufacturer files an infringement lawsuit (and meets other
`
`prerequisites), see 21 U.S.C. § 355(j)(5)(B)(iii)), the Biologics Price Competition and
`
`Innovation Act allows the FDA to approve an abbreviated biologic application despite
`
`a pending infringement suit and only requires the applicant to give the sponsor 180-
`
`days’ notice before launching. 42 U.S.C. § 262(l)(8)(A). See also [109] ¶¶ 69–70. But
`
`
`
`8
`
`

`

`Case: 1:19-cv-01873 Document #: 170 Filed: 06/08/20 Page 9 of 73 PageID #:1936
`
`even if the biosimilar manufacturer decides to launch at risk, the sponsor can still
`
`file a second lawsuit seeking a preliminary injunction (sometimes referred to as
`
`“second phase” litigation). 42 U.S.C. § 262(l)(8)(B).
`
`D.
`
`AbbVie’s Patents
`
`In the lead up to the expiration of the ’382 patent, AbbVie started applying for
`
`Humira-related patents. [109] ¶ 90. It sought patents on not only the many uses of
`
`Humira but also the process for manufacturing it and the ingredients and
`
`formulations that AbbVie anticipated its competition might seek to employ. Id. One
`
`estimate suggests that AbbVie filed a total of 247 patent applications related to
`
`Humira and obtained 132 patents (a batting average of .534). Id. ¶ 99. More than 90%
`
`of those patents were issued in 2014 or later, despite the fact that Humira was first
`
`marketed in 2002. Id. ¶ 4.
`
`In the process, AbbVie relied heavily on continuation applications. See id.
`
`¶¶ 99–100. For instance, AbbVie used one application from 2002 (U.S. Patent
`
`Application 10/22,140) to serve as the basis for twenty-two continuation applications,
`
`all of which would have been barred by prior art but-for their ability to relate back.
`
`Id. ¶¶ 102–104. AbbVie’s 100-plus Humira-related patents can be traced back to
`
`twenty root patents, forming twenty patent trees. Id. ¶¶ 130–131. By targeting the
`
`root patents that lie at the base of these trees, plaintiffs say they can quickly identify
`
`whole swaths of AbbVie’s IP portfolio that should not have issued. See id. ¶¶ 107, 131,
`
`132.
`
`
`
`9
`
`

`

`Case: 1:19-cv-01873 Document #: 170 Filed: 06/08/20 Page 10 of 73 PageID #:1937
`
`For
`
`instance, fifteen of those trees are rooted
`
`in formulation and
`
`manufacturing process patents that, together, serve as the source of eighty-four of
`
`AbbVie’s Humira-related patents. Id. ¶ 131. Twelve of those fifteen root patents were
`
`filed after 2006. Id. ¶ 132. Humira launched on New Year’s eve of 2002, meaning
`
`AbbVie had until the first day of 2004 (the end of the one-year grace period) to apply
`
`for any patent describing a formulation or manufacturing process that was used to
`
`make Humira when it launched. Id. ¶¶ 126–128; 35 U.S.C. § 102(a)(1). As a result,
`
`the twelve patents filed after 2006 (and the nearly sixty patents that were issued as
`
`a result of continuation applications based on those underlying patents) are invalid
`
`because they describe inventions that were not novel when the patents issued. [109]
`
`¶¶ 132–140.
`
`Plaintiffs add that any formulation patent that describes a variant of Humira,
`
`(i.e., one that does not describe Humira as it was approved by the FDA) should not
`
`be used to block biosimilars of Humira. Id. ¶ 129. And, plaintiffs reason, any
`
`manufacturing process that was not used to make Humira when it launched must
`
`not be necessary to make Humira, meaning it should be no bar to making a biosimilar.
`
`Id.
`
`AbbVie’s wrongdoing was not limited to its continuation applications. For
`
`instance, AbbVie withheld information from the United States Patent and
`
`Trademark Office, such as the fact that it had already been using a way to make and
`
`sell a certain product for several years when it told the Patent and Trademark Office
`
`that the method was not obvious. Id. ¶ 114. And while prosecuting another patent,
`
`
`
`10
`
`

`

`Case: 1:19-cv-01873 Document #: 170 Filed: 06/08/20 Page 11 of 73 PageID #:1938
`
`AbbVie filed a declaration affirming that a certain process was unexpected to be
`
`successful despite earlier disclosures that suggested the process was not only likely
`
`to be successful but was in fact the standard method for achieving that result. Id.
`
`¶¶ 115–120. Some of AbbVie’s other patents are invalid because they claim methods
`
`that were already in the prior art. Id. ¶¶ 109–113.
`
`When the Patent Trial and Appeal Board heard challenges to five of AbbVie’s
`
`Humira-related patents, it ruled that three were invalid. [109] ¶ 108. AbbVie
`
`terminated the other two before the board reached any final determination. Id.5
`
`At the same time that AbbVie was obtaining these patents, its executives were
`
`discussing AbbVie’s broader IP strategy with investors. For instance, in 2014,
`
`AbbVie’s CFO said that AbbVie was “obviously not very specific about what” it was
`
`putting into its “very robust collection of IP” because “with a product as important
`
`and as attractive as Humira, you do everything you can on the IP front to ensure that
`
`you’ve protected it to the best you can.” Id. ¶ 90. He added that the bulk of AbbVie’s
`
`IP strategy was to “make it more difficult for a biosimilar to follow behind.” Id. In an
`
`email to investors, AbbVie’s CEO noted that market entry for any Humira biosimilars
`
`
`5 In its motion to dismiss, AbbVie adds that, on thirteen occasions that plaintiffs neglect to
`mention, the Patent Trial and Appeal Board declined to initiate inter partes review of
`AbbVie’s patents, finding that there was no reasonable likelihood that the challengers of
`AbbVie’s patents (among them defendants Amgen and Sandoz and nondefendant Coherus)
`would succeed. [124] at 17–18. Plaintiffs do not object to AbbVie’s request to take judicial
`notice of these decisions. [144]. The decisions are public court documents and beyond
`reasonable dispute. Fed. R. Evid. 201(b); White v. Keely, 814 F.3d 883, 886 (7th Cir. 2016);
`Finjan, Inc. v. Blue Coat Sys., Inc., 2016 WL 7732542, at *1 n.1 (N.D. Cal. July 25, 2016);
`[124-1]; [124-2]; [124-3]; [124-4]; [124-5]; [124-6]; [124-7]; [124-8]; [124-9]; [124-10]; [124-11];
`[124-12]; [124-13]. I take notice of them.
`
`
`
`11
`
`

`

`Case: 1:19-cv-01873 Document #: 170 Filed: 06/08/20 Page 12 of 73 PageID #:1939
`
`would likely be delayed because patent litigation takes more than four years and at-
`
`risk launches are rare. Id. ¶ 94.
`
`E.
`
`The Other Defendants’ Applications for Biosimilars and the U.S.
`Market Settlements
`As AbbVie pursued new patents, its competitors applied for FDA approval to
`
`manufacture biosimilars. Amgen filed the first abbreviated biologic application for its
`
`biosimilar, Amjevita, in November of 2015. [109] ¶ 142. During the patent dance,
`
`AbbVie identified sixty-six patents that it believed Amjevita would infringe. Id. ¶ 143.
`
`Amgen responded by saying that it believed sixty-five of those patents (all but the
`
`original ’382 patent) were invalid, and that it did not plan to market Amjevita until
`
`the ’382 patent expired. See id. ¶¶ 140–146. By August of 2016, Amgen and AbbVie
`
`had finished the patent dance and AbbVie had filed suit. Id. ¶ 148. One month later,
`
`the FDA approved Amgen’s abbreviated application to market Amjevita. Id. ¶ 149.
`
`On December 31, 2016, the ’382 patent expired. Id. ¶ 78. Amgen did not launch at
`
`risk. See id. ¶¶ 149–51.
`
`One year into litigation, in the fall of 2017, Amgen and AbbVie settled. Id.
`
`¶ 151. At the time, a bench trial was scheduled to start in the fall of 2019. Id. ¶ 150.
`
`Any appeal would have taken (on average) at least another year to resolve.6 See [125]
`
`at 3 n.3. The terms of the settlement are confidential, but AbbVie’s press release made
`
`
`6 Plaintiffs do not object to judicial notice of the fact that patent appeals, on average, take
`more than one year to complete. See [125] at 3 n.3; U.S. Court of Appeals for the Federal
`Circuit, Median Disposition Time for Cases Decided by Merits Panels, 2009–2018, available
`at
`http://www.cafc.uscourts.gov/sites/default/files/the-
`court/statistics/06_Med_Disp_Time_MERITS_table_-_Final.pdf (last visited June 4, 2020);
`[144].
`
`
`
`12
`
`

`

`Case: 1:19-cv-01873 Document #: 170 Filed: 06/08/20 Page 13 of 73 PageID #:1940
`
`clear that Amgen had agreed to drop its patent challenges and delay Amjevita’s
`
`market entry until January of 2023. Id. ¶ 151.7
`
`AbbVie
`
`reached
`
`similar
`
`settlement agreements with eight other
`
`manufacturers seeking to market Humira biosimilars, including defendants
`
`Samsung Bioepis and Sandoz and nondefendants Mylan, Fresenius, Momenta,
`
`Pfizer, Coherus, and Boehringer. [109] ¶¶ 157–184. Each agreed to U.S. market entry
`
`dates ranging from June 30, 2023 (Samsung Bioepis) to December 15, 2023 (Coherus).
`
`Id. ¶¶ 157–184, 211. AbbVie reached these settlements at different stages of its
`
`disputes with these companies. It settled with Samsung Bioepis before that company
`
`even filed its abbreviated application, id. ¶ 157, with Sandoz after AbbVie had
`
`initiated litigation but before Sandoz had responded to the complaint, id. ¶ 170, and
`
`with Boehringer only after it had responded to AbbVie’s infringement complaint and
`
`asserted counterclaims seeking to invalidate many of AbbVie’s patents. Id. ¶¶ 183–
`
`84. In the process, AbbVie occasionally asserted patents for which there was not even
`
`an arguable claim of infringement. Id. ¶ 167. Only four of the biosimilar
`
`manufacturers that settled with AbbVie (Amgen, Samsung Bioepis, Sandoz, and
`
`Boehringer) ever received FDA approval to market their biosimilars. Id. ¶ 211. Only
`
`two (Amgen and Boehringer) received approval before they had entered into
`
`settlement agreements with AbbVie. Id.
`
`
`7 The complaint alleges that AbbVie promised to not let any other manufacturer enter the
`market until the end of June 2023, ensuring Amgen a five-month period of (semi) exclusivity
`worth nearly a billion dollars. [109] ¶¶ 151, 153, 154. AbbVie filed under seal copies of its
`settlement agreements with Amgen, [124-14]; [124-15]; [126-1]; [126-2], and, in response,
`plaintiffs dropped their claims that Amgen’s de facto five months of exclusivity constituted a
`reverse payment. [144] at 46 n.15.
`
`
`
`13
`
`

`

`Case: 1:19-cv-01873 Document #: 170 Filed: 06/08/20 Page 14 of 73 PageID #:1941
`
`F.
`
`The European Market Settlements
`
`At the same time, in Europe, plaintiffs say that AbbVie took advantage of a
`
`more fractured patent system (and a type of European patent application similar to
`
`the continuation application, known as a “divisional application”) to pressure the
`
`biosimilar defendants into settling there, too. See id. ¶¶ 185–89. AbbVie’s strategy in
`
`Europe was to abandon or withdraw patents as soon as they were challenged in one
`
`jurisdiction and then use its pending applications in other jurisdictions as the basis
`
`for divisional applications that covered much the same material it had just
`
`abandoned. Id. ¶¶ 185–90.
`
`For instance, when Samsung Bioepis and another company challenged two of
`
`AbbVie’s patents in the U.K., AbbVie decided to abandon those patents rather than
`
`risk an adverse judicial verdict that could have been used to preclusive effect
`
`elsewhere. [109] ¶¶ 191–192. The judge issued an order finding that AbbVie “made
`
`every effort to shield the claims of its patents from scrutiny.” Id. ¶ 199. AbbVie then
`
`turned around and filed divisional patents in other countries covering much the same
`
`subject matter as that in the patents it had just abandoned. Id. ¶ 198. As a result,
`
`AbbVie was able to extend the life of its patent protection for Humira in Europe.
`
`The settlements AbbVie entered into in the U.S. included European market
`
`entry dates. See id. ¶ 203. AbbVie’s agreement with Amgen allowed Amgen to enter
`
`the European market in October of 2018—more than four years before Amgen’s
`
`January 2023 date for the U.S. market. Id. Samsung Bioepis’s and Sandoz’s
`
`agreements contained the same European early entry date (October 16, 2018). Id.
`
`
`
`14
`
`

`

`Case: 1:19-cv-01873 Document #: 170 Filed: 06/08/20 Page 15 of 73 PageID #:1942
`
`That date coincided with the expiration of AbbVie’s European patent for adalimumab.
`
`Id.
`
`The early European entry dates were extremely valuable to Amgen, Samsung
`
`Bioepis, and Sandoz. Id. ¶ 205. And plaintiffs say that AbbVie used those early
`
`European entry dates as bargaining chips during negotiations over the entry dates
`
`for the U.S. market, inducing Amgen, Samsung Bioepis, and Sandoz to delay their
`
`U.S. market entry by offering the quid pro quo of earlier entry dates in Europe. [109]
`
`¶ 206. AbbVie’s motive was to keep prices in the U.S. artificially high for as long as
`
`possible. Id. ¶ 207. It succeeded: the cost of Humira to treat arthritis in the U.S.
`
`remains 50% more expensive than the cost of the same treatment in Spain (and 155%
`
`more expensive than in Switzerland). Id. ¶ 207.
`
`G.
`
`The Claims in the Consolidated Complaint
`
`Plaintiffs bring class action claims on behalf of two representative classes. The
`
`first seeks injunctive relief and is defined as, “[a]ll entities in the United States, the
`
`District of Columbia, and Puerto Rico who indirectly purchased, paid and/or provided
`
`reimbursement for some or all of the purchase price of Humira, other than for resale,
`
`from December 31, 2016, through the present.” [109] ¶ 224.
`
`The second seeks damages and is defined as, “[a]ll entities who indirectly
`
`purchased, paid and/or provided reimbursement for some or all of the purchase price
`
`for Humira, other than for resale,” in thirty-one states and the District of Columbia,
`
`“from December 31, 2016, through the present, for consumption by their members,
`
`employees, insureds, participants, or beneficiaries.” Id. ¶ 225.
`
`
`
`15
`
`

`

`Case: 1:19-cv-01873 Document #: 170 Filed: 06/08/20 Page 16 of 73 PageID #:1943
`
`The complaint has seven counts, seeking injunctive relief under federal law
`
`and damages under state law. Count I asserts a pay-for-delay theory of liability under
`
`§ 1 of the Sherman Act against all defendants (i.e., AbbVie, Inc., AbbVie
`
`Biotechnology, Ltd., Amgen, Inc., Samsung Bioepis Co., Ltd., and Sandoz, Inc.), [109]
`
`¶¶ 261–68, Count III asserts a market-allocation-agreement theory of liability under
`
`§ 1 of the Sherman Act against all defendants, id. ¶¶ 279–85, and Count V asserts a
`
`violation of § 2 of the Sherman Act against AbbVie. Id. ¶¶ 295–300. Each federal
`
`antitrust claim comes with its state-law analog: Count II asserts a pay-for-delay
`
`theory of liability under state antitrust laws (and consumer protection laws that
`
`prohibit anticompetitive conduct) against all defendants, id. ¶¶ 269–78, Count IV
`
`asserts a market-allocation-agreement theory of liability under state antitrust laws
`
`(and consumer protection laws that prohibit anticompetitive conduct) against all
`
`defendants, id. ¶¶ 286–94, and Count VI asserts a monopolization theory of liability
`
`under state antitrust
`
`laws
`
`(and consumer protection
`
`laws that prohibit
`
`anticompetitive conduct) against AbbVie. Id. ¶¶ 301–08. Lastly, Count VII asserts
`
`violations of state laws that prohibit unfair and unconscionable conduct against
`
`AbbVie. Id. ¶¶ 309–406. For purposes of the Sherman Act claims, the complaint
`
`defines the relevant geographic market as the United States, id. ¶ 236, and alleges
`
`that AbbVie maintains 100% of the relevant market share for adalimumab. Id. ¶ 238.
`
`III. Analysis
`
`Defendants move to dismiss the complaint. With regard to the § 2 claims,
`
`AbbVie says there is nothing illegal about amassing a broad portfolio of legitimate
`
`
`
`16
`
`

`

`Case: 1:19-cv-01873 Document #: 170 Filed: 06/08/20 Page 17 of 73 PageID #:1944
`
`patents and that, even if a few were issued erroneously, the Noerr–Pennington
`
`doctrine immunizes them from liability. With regard to the § 1 claims, defendants say
`
`that the settlements at issue do not violate antitrust law because they: allow AbbVie’s
`
`competitors to enter the market before the expiration of AbbVie’s patents, do not
`
`involve any reverse payments from AbbVie (the patentee) to Amgen, Samsung
`
`Bioepis, and Sandoz (the alleged infringers), and only divvy up the market in ways
`
`consistent with AbbVie’s patent rights. Third, with regard to both the § 1 and § 2
`
`claims, defendants argue that if a single one of AbbVie’s patents is valid, that patent
`
`would have prevented plaintiffs from entering the market at all. Defendants’
`
`unlawful conduct was only the but-for cause of plaintiffs’ alleged injury if defendants
`
`obtained every single one of their patents unlawfully. And that, defendants say, is
`
`not plausible. Lastly, defendants advance arguments particular to each of the dozens
`
`of state-law claims.
`
`Amgen, Samsung Bioepis, and Sandoz add that they had to enter into the
`
`settlement agreements because their only other choices were years of expensive
`
`litigation over an impassable patent thicket or an at-risk launch likely to result in a
`
`hefty damages award. They say the complaint’s assessment of their bargaining
`
`position is too rosy and that their negotiated entry dates did not harm competition.
`
`As plaintiffs recognize, theirs is a new kind of antitrust claim. [144] at 28–35.
`
`Although the § 2 claim in some ways resembles the one asserted in Walker Process
`
`Equip., Inc. v. Food Mach. & Chem. Corp., which held that obtaining a patent by
`
`fraud can violate § 2 of the Sherman Act, 382 U.S. 172, 174 (1965), and the one
`
`
`
`17
`
`

`

`Case: 1:19-cv-01873 Document #: 170 Filed: 06/08/20 Page 18 of 73 PageID #:1945
`
`asserted in Prof’l Real Estate Inv’rs, Inc. v. Columbia Pictures Indus., Inc., which
`
`assigned antitrust liability to “objectively baseless” petitioning that falls outside the
`
`protection of the Noerr–Pennington doctrine, 508 U.S. 49, 51 (1993) (“PRE”), plaintiffs
`
`disclaim reliance on those cases. [144] at 26 n.3, 38. And while the § 1 claims rely
`
`heavily on F.T.C. v. Actavis, Inc., 570 U.S. 136, 141 (2013), which calls for scrutiny of
`
`settlement agreements that require patent holders to pay money to alleged infringers
`
`(rather than the other way around), those claims bump against a sentence in Actavis
`
`that approved of settlements where the only reverse payment is an agreement
`
`permitting the alleged infringer to “enter the patentee’s market prior to the patent’s
`
`expiration.” Id. at 158.
`
`The complaint brings together a disparate set of aggressive but mostly
`
`protected actions to allege a scheme to harm competition and maintain h