throbber
No. 20-
`IN THE
`Supreme Court of the United States
`
`ABBVIE INC., ABBOTT LABORATORIES, UNIMED
`PHARMACEUTICALS LLC, AND BESINS HEALTHCARE, INC.,
`Petitioners,
`
`v.
`
`FEDERAL TRADE COMMISSION,
`Respondent.
`
`
`ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED
`STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
`
`PETITION FOR A WRIT OF CERTIORARI
`
`
`SETH P. WAXMAN
` Counsel of Record
`LEON B. GREENFIELD
`CATHERINE M.A. CARROLL
`BRITTANY BLUEITT AMADI
`CLAIRE H. CHUNG
`MEDHA GARGEYA
`WILMER CUTLER PICKERING
` HALE AND DORR LLP
`1875 Pennsylvania Ave., NW
`Washington, DC 20006
`(202) 663-6000
`seth.waxman@wilmerhale.com
`
`WILLIAM F. LEE
`WILMER CUTLER PICKERING
` HALE AND DORR LLP
`60 State Street
`Boston, MA 02109
`
`JEFFREY I. WEINBERGER
`STUART N. SENATOR
`ADAM R. LAWTON
`MUNGER, TOLLES & OLSON LLP
`350 South Grand Avenue
`Los Angeles, CA 90071
`
`ELAINE J. GOLDENBERG
`MUNGER, TOLLES & OLSON LLP
`601 Massachusetts Ave., NW
`Suite 500 East
`Washington, DC 20001
`Counsel for AbbVie Inc., Abbott Laboratories, and Unimed
`Pharmaceuticals LLC
`
`MELINDA F. LEVITT
`GREGORY E. NEPPL
`FOLEY & LARDNER, LLP
`3000 K Street, NW
`Washington, DC 20007
`Counsel for Besins Healthcare, Inc.
`
`
`
`
`

`

`
`
`QUESTION PRESENTED
`
`Whether the subjective element of the “sham liti-
`gation” exception to Noerr-Pennington immunity may
`be met by an inference from a finding that a challenged
`lawsuit was objectively baseless, even without evidence
`that the antitrust defendant actually believed the suit
`lacked merit or was indifferent to the outcome.
`
`(i)
`
`

`

`
`
`PARTIES TO THE PROCEEDING
`
`Petitioners are AbbVie Inc., Abbott Laboratories,
`Unimed Pharmaceuticals LLC, and Besins Healthcare,
`Inc., which were defendants in the district court and
`appellees and cross-appellants in the court of appeals.
`Teva Pharmaceuticals USA, Inc. was a defendant
`in the district court but was dismissed as a party by the
`court of appeals.
`Respondent is the Federal Trade Commission,
`which was the plaintiff in the district court and appel-
`lant and cross-appellee in the court of appeals.
`
`
`
`
`(ii)
`
`

`

`
`
`CORPORATE DISCLOSURE STATEMENT
`
`AbbVie Inc. has no parent corporation, and no pub-
`licly held company owns 10% or more of its stock.
`Abbott Laboratories has no parent corporation,
`and no publicly held company owns 10% or more of its
`stock.
`Unimed Pharmaceuticals LLC is an indirect, whol-
`ly owned subsidiary of AbbVie Inc., a publicly traded
`company.
`Besins Healthcare, Inc., is a wholly owned U.S.
`corporate subsidiary of Belgian company Besins
`Healthcare, S.A. Neither Besins Healthcare, S.A. nor
`its parent entity Besins Healthcare Holding LTD are
`publicly traded companies.
`
`
`(iii)
`
`

`

`
`
`RELATED PROCEEDINGS
`
`Federal Trade Commission v. AbbVie Inc., et al.,
`Nos. 18-2621, -2748, -2758 (3d Cir.) (opinion and judg-
`ment issued September 30, 2020; opinion amended De-
`cember 4, 2020; rehearing denied December 4, 2020).
`Federal Trade Commission v. AbbVie Inc., et al.,
`No. 2:14-cv-05151-HB (E.D. Pa.) (judgment issued July
`18, 2018).
`
`
`(iv)
`
`

`

`
`
`TABLE OF CONTENTS
`
`Page
`QUESTION PRESENTED ............................................... i
`PARTIES TO THE PROCEEDING .............................. ii
`CORPORATE DISCLOSURE STATEMENT ............ iii
`RELATED PROCEEDINGS.......................................... iv
`TABLE OF AUTHORITIES .........................................vii
`INTRODUCTION .............................................................. 1
`OPINIONS BELOW .......................................................... 6
`JURISDICTION ................................................................. 6
`CONSTITUTIONAL AND STATUTORY
`PROVISIONS INVOLVED ...................................... 6
`STATEMENT ..................................................................... 7
`A. Noerr-Pennington Immunity And The
`Sham-Litigation Exception ................................. 7
`B. AbbVie’s Hatch-Waxman Act Lawsuit ............. 9
`C. The FTC’s Antitrust Claim And
`Proceedings Below .............................................. 13
`REASONS FOR GRANTING THE PETITION .......... 16
`I. THE DECISION BELOW CONFLICTS WITH
`THIS COURT’S PRECEDENT ....................................... 17
`II. OTHER COURTS OF APPEALS HAVE
`APPLIED A MORE RIGOROUS SUBJECTIVE
`MOTIVATION STANDARD ............................................ 25
`III. THE DECISION BELOW WILL HAVE
`SIGNIFICANT NEGATIVE CONSEQUENCES ............ 27
`IV. THIS CASE IS AN APPROPRIATE VEHICLE ............. 32
`
`(v)
`
`

`

`vi
`
`TABLE OF CONTENTS—Continued
`
`Page
`CONCLUSION ................................................................. 34
`APPENDIX A: Opinion of the United States
`Court of Appeals for the Third Circuit,
`dated September 30, 2020 ......................................... 1a
`APPENDIX B:
` Findings of Fact and
`Conclusions of Law of the United States
`District Court for the Eastern District of
`Pennsylvania, dated June 29, 2018......................... 93a
`APPENDIX C: Memorandum of the United
`States District Court for the Eastern
`District of Pennsylvania, dated September
`15, 2017 ..................................................................... 177a
`APPENDIX D: Sur Petition for Rehearing
`denial of the United States Court of
`Appeals
`for
`the
`Third
`Circuit,
`dated December 4, 2020......................................... 205a
`APPENDIX E:
` Judgment of the United
`States Court of Appeals for the Third
`Circuit, dated January 15, 2020 ............................ 207a
`APPENDIX F: Relevant Constitutional and
`Statutory Provisions:
` U.S. Const. amend. I .............................................. 211a
`21 U.S.C. § 355 ........................................................ 211a
`
`
`
`
`
`

`

`vii
`
`TABLE OF AUTHORITIES
`
`CASES
`
`Page(s)
`
`Athena Diagnostics, Inc. v. Mayo
`Collaborative Services, LLC, 927 F.3d 1333
`(Fed. Cir. 2019) ........................................................... 31
`BE&K Construction Co. v. NLRB, 536 U.S.
`516 (2002) ............................................................ passim
`C.R. Bard, Inc. v. M3 Systems, Inc., 157 F.3d
`1340 (Fed. Cir. 1998) ...................................... 25, 26, 29
`California Motor Transportation Co. v.
`Trucking Unlimited, 404 U.S. 508 (1972) .. 7, 20, 28, 32
`Caraco Pharmaceutical Laboratories, Ltd. v.
`Novo Nordisk A/S, 566 U.S. 399 (2012) ....... 10, 11, 29
`City of Columbia v. Omni Outdoor
`Advertising, Inc., 499 U.S. 365 (1991) ............ passim
`CSMN Investments, LLC v. Cordillera
`Metropolitan District, 956 F.3d 1276 (10th
`Cir. 2020) ...................................................................... 28
`Dawson Chemical Co. v. Rohm & Haas Co.,
`448 U.S. 176 (1980) ..................................................... 21
`Eastern Railroad Presidents Conference v.
`Noerr Motor Freight, Inc., 365 U.S. 127
`(1961) .............................................................................. 7
`Eli Lilly & Co. v. Hospira, Inc., 933 F.3d 1320
`(Fed. Cir. 2019) ........................................................... 14
`Festo Corp. v. Shoketsu Kinzoku Kogyo
`Kabushiki Co., 535 U.S. 722 (2002) .............. 11, 12, 31
`FTC v. Actavis, Inc., 570 U.S. 136 (2013) ...................... 13
`
`
`
`

`

`viii
`
`TABLE OF AUTHORITIES—Continued
`
`Page(s)
`
`Handgards, Inc. v. Ethicon, Inc., 743 F.2d 1282
`(9th Cir. 1984) .............................................................. 26
`In re DDAVP Direct Purchaser Antitrust
`Litigation, 585 F.3d 677 (2d Cir. 2009) .................... 26
`Kottle v. Northwest Kidney Centers, 146 F.3d
`1056 (9th Cir. 1998) ..................................................... 28
`KSR International Co. v. Teleflex Inc.,
`550 U.S. 398 (2007) ..................................................... 30
`Mohawk Industries, Inc. v. Carpenter,
`558 U.S. 100 (2009) ..................................................... 32
`Octane Fitness, LLC v. ICON Health &
`Fitness, Inc., 572 U.S. 545 (2014) ....... 9, 18, 23, 24, 27
`Professional Real Estate Investors, Inc. v.
`Columbia Pictures Industries, Inc.,
`508 U.S. 49 (1993) .............................................. passim
`Teva Pharmaceuticals USA, Inc. v. Sandoz,
`Inc., 574 U.S. 318 (2015) ............................................ 30
`Theme Promotions, Inc. v. News America
`Marketing FSI, 546 F.3d 991 (9th Cir.
`2008) ............................................................................. 13
`Tyco Healthcare Group LP v. Mutual
`Pharmaceutical Co., 762 F.3d 1338
`(Fed. Cir. 2014) ..................................................... 25, 28
`United Mine Workers v. Pennington, 381 U.S.
`657 (1965) ....................................................................... 7
`Virtue v. Creamery Package Manufacturing
`Co., 227 U.S. 8 (1913) ................................................. 29
`
`
`
`

`

`ix
`
`TABLE OF AUTHORITIES—Continued
`
`Page(s)
`
`Warner-Jenkinson Co. v. Hilton Davis
`Chemical Co., 520 U.S. 17 (1997) ............................. 11
`
`DOCKETED CASES
`AMG Capital Management, LLC v. FTC,
`No. 19-508 (U.S.) ......................................................... 16
`King Drug Company of Florence, Inc. v.
`Abbott Laboratories, No. 2:19-cv-03565-HB
`(E.D. Pa.) ..................................................................... 33
`Perrigo Co. v. AbbVie, Inc., No. 3:20-cv-17560-
`BRM-DEA (D.N.J.) ................................................... 33
`
`CONSTITUTIONAL AND STATUTORY PROVISIONS
`U.S. Const. amend. I ........................................................... 7
`15 U.S.C.
`§ 15 ................................................................................ 24
`§ 45 ................................................................................ 13
`§ 53 ................................................................................ 13
`21 U.S.C. § 355 ......................................................... 6, 10, 11
`28 U.S.C. § 1254 ................................................................... 6
`35 U.S.C.
`§ 271 .............................................................................. 11
`§ 285 .............................................................................. 23
`
`REGULATIONS AND LEGISLATIVE MATERIALS
`21 C.F.R. § 314.54 .............................................................. 10
`H.R. Rep. No. 98-857, pt. 1 (1984) ................................... 28
`
`
`
`

`

`x
`
`TABLE OF AUTHORITIES—Continued
`
`Page(s)
`
`OTHER AUTHORITIES
`Brachmann, Steve, Hatch-Waxman Litigation:
`60 Percent Increase in ANDA Lawsuits
`from 2016 to 2017, IPWatchdog (May 16,
`2018), https://www.ipwatchdog.com/2018/05/
`16/hatch-waxman-litigation-60-percent-incr
`ease-anda-lawsuits/id=96985/ ................................... 30
`
`
`
`
`
`

`

`
`
`IN THE
`Supreme Court of the United States
`
`No. 20-
`
`
`ABBVIE INC., ABBOTT LABORATORIES, UNIMED
`PHARMACEUTICALS LLC, AND BESINS HEALTHCARE, INC.,
`Petitioners,
`
`v.
`
`FEDERAL TRADE COMMISSION,
`Respondent.
`
`
`ON PETITION FOR A WRIT OF CERTIORARI TO THE
`UNITED STATES COURT OF APPEALS
`FOR THE THIRD CIRCUIT
`
`PETITION FOR A WRIT OF CERTIORARI
`
`
`AbbVie Inc., Abbott Laboratories, Unimed Phar-
`maceuticals LLC, and Besins Healthcare, Inc. (collec-
`tively, “AbbVie”) respectfully petition for a writ of cer-
`tiorari to review the judgment of the United States
`Court of Appeals for the Third Circuit in this case.1
`
`INTRODUCTION
`This petition concerns a crucial and recurring issue
`at the intersection of patent law, antitrust law, and the
`First Amendment: When may a patent owner be held
`
`
`1 “AbbVie” refers here to all petitioners, except where Besins
`Healthcare, Inc. (“Besins”) is separately mentioned.
`
`
`
`

`

`2
`
`liable under the antitrust laws for suing a competitor to
`enforce a valid patent? The Noerr-Pennington doctrine
`allows litigants to exercise their First Amendment
`right to petition the government for redress of griev-
`ances, including by litigating against a competitor,
`without fear of antitrust liability and attendant treble
`damages. Although this Court has recognized an ex-
`ception to that immunity for “sham” litigation, the
`Court has insisted on a stringent test for identifying
`sham suits, to ensure adequate “‘breathing space’” for
`First Amendment rights. BE&K Constr. Co. v. NLRB,
`536 U.S. 516, 531 (2002). Thus, a plaintiff who claims
`that a lawsuit violated the antitrust laws must prove
`both (1) that the challenged suit was objectively base-
`less, and (2) that the antitrust defendant was subjec-
`tively motivated by an improper purpose in bringing
`the challenged suit. Professional Real Estate Inv’rs,
`Inc. v. Columbia Pictures Indus., Inc., 508 U.S. 49, 60-
`61 (1993) (“PRE”).
`Under the subjective prong, the plaintiff must es-
`tablish that the defendant’s “subjective motivation” for
`suing was “to interfere directly with the business rela-
`tionships of a competitor” by using “the [litigation] pro-
`cess—as opposed to the outcome of that process—as an
`anticompetitive weapon.” PRE, 508 U.S. at 60-61 (quo-
`tation marks omitted). A “classic example” is litigation
`undertaken “with no expectation of achieving” success,
`“but simply in order to impose expense and delay.”
`City of Columbia v. Omni Outdoor Advert., Inc., 499
`U.S. 365, 380 (1991). In contrast, a litigant’s mere in-
`tent to undermine a competitor—i.e., “an intent to re-
`strain trade as a result of the government action
`sought”—“does not foreclose protection” under the
`First Amendment. Id. at 380-381.
`
`
`
`

`

`3
`
`The decision below vitiates the subjective element
`of the sham exception. In this antitrust action brought
`by the Federal Trade Commission, the court of appeals
`held that a patent-infringement suit AbbVie brought
`against Perrigo Company under the Hatch-Waxman
`Act was a sham and that AbbVie violated the antitrust
`laws by seeking to enforce its valid patent. The court
`first concluded that the infringement suit was objec-
`tively baseless. But then, rather than requiring the
`FTC independently to prove subjective bad faith, the
`court held that the subjective element could be inferred
`from the finding of objective baselessness. App. 68a-
`69a. In the court’s view, a mere “intent to thwart com-
`petition” suffices to establish improper subjective mo-
`tivation, App. 67a (quotation marks omitted); see App.
`49a, and such an intent can be inferred through a logical
`“syllogism” whenever a litigant brings an objectively
`baseless lawsuit, App. 68a. Although the FTC had of-
`fered no probative evidence that AbbVie actually was
`indifferent to the outcome of the infringement suit or
`believed that the suit lacked any prospect of success,
`the court held that “evidence of [the] defendant’s belief
`about the merits of its claims … is not required.” Id.
`Instead, the court treated circumstances that are pre-
`sent in virtually all Hatch-Waxman Act litigation—that
`AbbVie’s patent-infringement suit was directed by ex-
`perienced lawyers who understood the law and the fi-
`nancial stakes of the cases and who knew that a lawsuit
`under the Hatch-Waxman Act would automatically
`stay FDA approval of Perrigo’s product—as supporting
`the inference of bad faith. App. 69a-70a.
`That analysis conflicts with this Court’s precedent
`and stands in significant tension with decisions of other
`courts. Whereas this Court has held that a lawsuit can
`violate the antitrust laws only if a plaintiff proves the
`
`
`
`

`

`4
`
`suit is a sham “both objectively and subjectively,”
`BE&K, 536 U.S. at 526; see PRE, 508 U.S. at 61, the
`court of appeals relieved the FTC of its burden to
`prove the latter component, allowing subjective moti-
`vation to be inferred from the finding of objective base-
`lessness (at least where AbbVie had not waived attor-
`ney-client privilege to introduce its own direct evidence
`overcoming the inference), App. 68a-70a. Whereas this
`Court has emphatically held that an intent to thwart
`competition alone “does not render [petitioning] activi-
`ty a ‘sham,’” Omni, 499 U.S. at 381, the court of appeals
`agreed with the FTC that “what matters is the intent
`to thwart competition,” App. 67a (quotation marks
`omitted); see App. 49a. And whereas this Court has
`held that a litigant’s “indifferen[ce] to the outcome on
`the merits” is the hallmark of sham litigation, PRE, 508
`U.S. at 65; see Omni, 499 U.S. at 380—and other courts
`have treated such evidence as dispositive—the court of
`appeals here held that evidence of AbbVie’s belief
`about the merits was “not required,” App. 68a.
`The decision below thus eviscerates the Court’s
`two-pronged sham-litigation exception, to the detri-
`ment of First Amendment rights and the innovation
`that patents protect. The court of appeals’ analysis im-
`putes a subjective intent to sue in bad faith to any law-
`suit that seeks a competitive advantage if the suit is
`later found objectively baseless, without distinguishing
`between litigants who hoped to achieve their objectives
`through a successful outcome and those who sought on-
`ly to abuse the litigation process itself. As a result, liti-
`gants who seek to enforce their rights against a rival
`must face the substantial chilling effects of antitrust
`liability and treble damages whenever the objective
`merit of a suit is in question.
`
`
`
`

`

`5
`
`Those consequences will be especially pernicious in
`a large and important category of cases: those in which
`patent owners rely on the mechanisms Congress pro-
`vided in the Hatch-Waxman Act to enforce their intel-
`lectual-property rights, which account for some ten
`percent of all patent-infringement suits in the United
`States. To balance the rights of patent owners against
`the benefits of competition, the Hatch-Waxman Act en-
`courages patent owners to file infringement suits
`promptly against potential generic competitors—and
`rewards them for doing so with a stay of FDA approval
`of the generic—so that intellectual-property disputes
`can be resolved expeditiously before a generic drug
`goes to market. But the court of appeals treated the
`fact that AbbVie followed that statutory scheme (and
`thus benefited
`from
`the automatic
`stay) as
`“[e]specially” indicative of bad faith. App. 70a; see App.
`50a. And the court held that the circumstances of the
`suit—that it was overseen by experienced lawyers fa-
`miliar with the Hatch-Waxman framework and that
`AbbVie stood to gain financially—supported the infer-
`ence of subjective bad faith. App. 70a. On that reason-
`ing, any Hatch-Waxman suit later found to be objec-
`tively baseless will automatically be deemed a sham,
`unless the antitrust defendant can overcome the infer-
`ence and affirmatively establish its good faith by waiv-
`ing attorney-client privilege. That rule improperly
`shifts the burden of proof to the antitrust defendant
`and imperils the attorney-client privilege.
`It provides little solace to patent owners and inno-
`vators that these consequences will follow only where
`an infringement suit is deemed objectively baseless.
`Patent law is notoriously complicated, hard to predict,
`and constantly changing. Thus, the “breathing space”
`that this Court has emphasized for suits that are adju-
`
`
`
`

`

`6
`
`dicated to be objectively baseless is particularly neces-
`sary, lest a defendant be subjected to antitrust liability
`and treble damages for incorrectly assessing the merits
`of enforcing a patent under inherently complex and
`evolving law. That is precisely why the Court estab-
`lished the subjective prong as an independent element
`of the test and why the decision below will be so dam-
`aging to First Amendment rights and innovation alike.
`
`OPINIONS BELOW
`The court of appeals’ amended opinion (App. 1a-
`92a) is reported at 976 F.3d 327. The order denying re-
`hearing (App. 205a-206a) is unreported. The district
`court’s findings of fact and conclusions of law after a
`bench trial (App. 93a-175a) are reported at 329 F. Supp.
`3d 98. The district court’s decision granting partial
`summary judgment to the FTC (App. 177a-204a) is un-
`published but is available at 2017 WL 4098688.
`
`JURISDICTION
`The court of appeals entered judgment on Septem-
`ber 30, 2020, and denied a timely rehearing petition on
`December 4, 2020. On March 19, 2020, this Court ex-
`tended the deadline to file petitions for writs of certio-
`rari to 150 days from the date of the lower court judg-
`ment or order denying rehearing. This Court has ju-
`risdiction under 28 U.S.C. § 1254(1).
`
`CONSTITUTIONAL AND STATUTORY
`PROVISIONS INVOLVED
`The First Amendment to the U.S. Constitution and
`relevant provisions of the Hatch-Waxman Act, 21
`U.S.C. § 355(a), (b), (c), (j)(1)-(2), (j)(5)(A)-(B), are re-
`produced in the Appendix.
`
`
`
`

`

`7
`
`STATEMENT
`
`A. Noerr-Pennington Immunity And The Sham-
`Litigation Exception
`The First Amendment protects “the right of the
`people … to petition the Government for a redress of
`grievances.” U.S. Const. amend. I. The right to peti-
`tion is “one of ‘the most precious of the liberties safe-
`guarded by the Bill of Rights,’” implied in “‘[t]he very
`idea of a government, republican in form.’” BE&K
`Const. Co. v. NLRB, 536 U.S. 516, 524-525 (2002).
`To safeguard that right, this Court has long held
`that people may seek “anticompetitive action from the
`government” without fear of antitrust liability. City of
`Columbia v. Omni Outdoor Advert., Inc., 499 U.S. 365,
`379-380 (1991). The antitrust laws, the Court has ex-
`plained, do not prohibit attempts to “persuade the leg-
`islature or the executive to take particular action with
`respect to a law that would produce a restraint or a
`monopoly.” Eastern R.R. Presidents Conference v.
`Noerr Motor Freight, Inc., 365 U.S. 127, 136 (1961); ac-
`cord United Mine Workers v. Pennington, 381 U.S. 657,
`669 (1965).
`That principle—known as the Noerr-Pennington
`doctrine—applies equally to litigation in courts. When
`parties “use … courts to advocate their causes and
`points of view respecting resolution of their business
`and economic interests vis-a-vis their competitors,”
`they are exercising their right to petition the govern-
`ment, and the litigation generally cannot be the basis of
`antitrust liability. California Motor Transp. Co. v.
`Trucking Unlimited, 404 U.S. 508, 510-511 (1972).
`This Court has recognized a limited exception to
`Noerr-Pennington immunity for when petitioning is “‘a
`
`
`
`

`

`8
`
`mere sham to cover … an attempt to interfere directly
`with the business relationships of a competitor,’” rather
`than a “genuine” effort to influence governmental ac-
`tion. Omni, 499 U.S. at 380, 382. To show that litiga-
`tion was a sham, an antitrust plaintiff bears the burden
`of satisfying the “two-part definition” set forth in Pro-
`fessional Real Estate Investors, Inc. v. Columbia Pic-
`tures Industries, Inc., 508 U.S. 49, 60 (1993) (“PRE”).
`“First, the lawsuit must be objectively baseless in the
`sense that no reasonable litigant could realistically ex-
`pect success on the merits.” Id. Second, the litigant
`must have been subjectively motivated by an improper
`purpose in bringing the suit. Id. The subjective ele-
`ment “focus[es] on whether the baseless lawsuit con-
`ceals an attempt to interfere directly with the business
`relationships of a competitor, through the use [of] the
`governmental process—as opposed to the outcome of
`that process—as an anticompetitive weapon.” Id. at 60-
`61 (quotation marks and internal citations omitted).
`The subjective element serves a distinct role in the
`sham inquiry. Whereas the objective element requires
`the antitrust plaintiff to “disprove the challenged law-
`suit’s legal viability,” the subjective element requires
`the plaintiff to disprove the suit’s “economic viability.”
`PRE, 508 U.S. at 61. Litigation may be motivated by
`an improper purpose (and economically irrational)
`when the litigant is “indifferent to the outcome on the
`merits of the … suit,” when “any damages” to be re-
`covered from the suit are “too low to justify [the liti-
`gant’s] investment in the suit,” or when the litigant
`sues “primarily for the benefit of collateral injuries in-
`flicted through the use of legal process.” Id. at 65. A
`“classic example” of sham litigation, this Court has not-
`ed, is where a party files suit “with no expectation of”
`
`
`
`

`

`9
`
`prevailing, “simply in order to impose expense and de-
`lay.” Omni, 499 U.S. at 380.
`By contrast, a litigant’s mere “purpose of delaying
`a competitor’s entry into the market does not render
`[the lawsuit] a sham,” absent proof that “the delay is
`sought to be achieved only by the [litigation] process
`itself, and not by the governmental action that the [liti-
`gation] seeks.” Omni, 499 U.S. at 381 (emphasis add-
`ed). As the Court has explained, a litigant’s “ill will”
`toward a competitor “does not mean” the dispute is
`“not genuine.” BE&K, 536 U.S. at 534.
`This Court has cautioned that the sham exception
`to Noerr-Pennington immunity is and must be “nar-
`row,” “to avoid chilling the exercise of the First
`Amendment right to petition.” Octane Fitness, LLC v.
`ICON Health & Fitness, Inc., 572 U.S. 545, 556 (2014);
`see BE&K, 536 U.S. at 528-529. Particularly in the an-
`titrust context, the threat of liability and “attendant
`treble damages” “significantly chills” the right to bring
`suit against a competitor. Octane Fitness, 572 U.S. at
`556. Thus, the Court has “never held that the entire
`class of objectively baseless litigation may be enjoined
`or declared unlawful even though such suits may ad-
`vance no First Amendment interests of their own.”
`BE&K, 536 U.S. at 531. Instead, recognizing that
`“‘breathing space’”
`is necessary for robust First
`Amendment protection, the Court has made clear that
`only those suits that are “both objectively baseless and
`subjectively motivated by an unlawful purpose” can
`give rise to antitrust liability. Id.
`
`B. AbbVie’s Hatch-Waxman Act Lawsuit
`AbbVie and Besins co-own the patent that covered
`AndroGel, a revolutionary drug for treating low testos-
`
`
`
`

`

`10
`
`terone levels.2 As the first topical testosterone re-
`placement therapy offered in a convenient gel form,
`AndroGel offers patients numerous benefits and be-
`came a commercial success after it launched in 2000.
`App. 8a-10a.
`In 2011, nine years before the AndroGel patent was
`set to expire, Teva Pharmaceuticals USA and Perrigo
`Company each sought FDA approval under the Hatch-
`Waxman Act to market generic versions of AndroGel.
`App. 14a-15a. Ordinarily, a manufacturer seeking to
`market a new drug must submit a New Drug Applica-
`tion (NDA) and undergo a lengthy testing process for
`safety and efficacy. The Hatch-Waxman Act, however,
`facilitates competition by permitting generic manufac-
`turers to pursue abbreviated approval pathways by
`“piggy-backing on the brand’s NDA” and supporting
`data. Caraco Pharm. Labs., Ltd. v. Novo Nordisk A/S,
`566 U.S. 399, 405 (2012); see 21 U.S.C. § 355(b)(2),
`(j)(2)(A); 21 C.F.R. § 314.54. To protect patent rights in
`such cases, the Hatch-Waxman Act requires a generic
`manufacturer seeking abbreviated approval to certify
`either that the branded drug is not covered by an exist-
`ing patent or—in what is commonly known as a para-
`graph IV certification—that any applicable patent “is
`invalid or will not be infringed” by the manufacture,
`use, or sale of the generic drug.
` 21 U.S.C.
`§ 355(b)(2)(A)(iv), (j)(2)(A)(vii)(IV).
`Filing a paragraph IV certification “means provok-
`ing litigation.” Caraco, 566 U.S. at 407. To facilitate
`the prompt resolution of any patent disputes between
`generic and brand manufacturers, the patent statute
`deems the submission of a paragraph IV certification
`
`
`2 The AndroGel patent expired in August 2020. App. 12a.
`
`
`
`

`

`11
`
`“an act of infringement” that “gives the brand an im-
`mediate right to sue” without waiting for the generic
`drug’s manufacture or sale. Id. (citing 35 U.S.C.
`§ 271(e)(2)(A)). And the Hatch-Waxman Act incentiv-
`izes brand manufacturers to file such suits quickly, by
`providing that if the patent owner sues for infringe-
`ment within 45 days after receiving the paragraph IV
`certification then the FDA must withhold approval of
`the generic drug for 30 months or until the infringe-
`ment suit ends, whichever occurs first. 21 U.S.C.
`§ 355(c)(3)(C), (j)(5)(B)(iii).
`Teva and Perrigo each submitted paragraph IV
`certifications asserting that their testosterone gels
`would not infringe the AndroGel patent because they
`contained an ingredient—the “penetration enhancer,”
`which accelerates drug delivery through the skin—that
`differed chemically from the penetration enhancer
`claimed in the AndroGel patent. AbbVie promptly
`sued Teva and Perrigo for infringement, triggering the
`statutory stay of FDA approval of Teva’s and Perrigo’s
`products. App. 14a-15a.
`AbbVie alleged in the infringement suits that alt-
`hough Teva’s and Perrigo’s products did not literally
`infringe the AndroGel patent, they infringed the patent
`under the “doctrine of equivalents,” because the differ-
`ences between the penetration enhancer claimed in the
`patent and the penetration enhancers used in those
`products were insubstantial. App. 184a, 187a-188a; see
`Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co.,
`535 U.S. 722, 732 (2002); Warner-Jenkinson Co. v. Hil-
`ton Davis Chem. Co., 520 U.S. 17, 21 (1997). Teva and
`Perrigo did not dispute the validity of the AndroGel pa-
`tent or that their products were substantially equiva-
`lent. Instead, relying on the doctrine of “prosecution
`history estoppel,” they each contended that AbbVie
`
`
`
`

`

`12
`
`had surrendered patent protection for equivalent pene-
`tration enhancers by narrowing the scope of the An-
`droGel patent during prosecution. App. 107a, 110a,
`189a-193a; C.A.J.A. 429-440; see Festo, 535 U.S. at 739-
`740. AbbVie responded that no estoppel applied be-
`cause the narrowing amendments it made to the patent
`application during prosecution were not made for pur-
`poses of patentability and were only tangentially relat-
`ed to the Teva and Perrigo penetration enhancers. See
`Festo, 535 U.S. at 735-741 (discussing tangentiality and
`other exceptions to prosecution-history estoppel).
`Throughout the relevant period, while acknowledg-
`ing some risk to AndroGel from potential market entry
`by Teva or Perrigo, AbbVie’s internal business plan-
`ning documents reflected overall confidence that An-
`droGel would continue to maintain market exclusivity
`and experience growing sales. C.A.J.A. 1827-1865,
`2016-2070, 2538-2596, 2599-2662, 3378-3391, 3393-3401,
`3403-3470, 3966, 3971, 3977-3982. For example, even
`after AbbVie received Teva’s paragraph IV certifica-
`tion, AbbVie’s Long Range Plan as of April 2011 re-
`flected the “key assumption for the business” that An-
`droGel would have exclusivity through August 2015
`(the date two other generics were licensed to enter the
`market). C.A.J.A. 3966; see C.A.J.A. 4119 (dates used
`in planning documents “universally c[a]me from … our
`legal teams”). And even after both lawsuits began,
`AbbVie’s annual plan for 2012 continued to reflect that
`confidence. C.A.J.A. 3977-3982.
`Both infringement suits settled on terms favorable
`to AbbVie. App. 16a-17a. Although Teva and Perrigo
`each initially pushed for agreements that would have
`allowed an earlier launch of their respective products,
`AbbVie held firm and successfully insisted on later
`launch dates—dates far later than the maximum 30-
`
`
`
`

`

`13
`
`month stay that would have applied under the Hatch-
`Waxman Act had the lawsuits continued. Id. As Per-
`rigo’s in-house lawyer later explained, Perrigo accepted
`a later date based in part on its assessment of AbbVie’s
`chances of winning the infringement litigation. App.
`16a. Cf. Theme Promotions, Inc. v. News Am. Mktg.
`FSI, 546 F.3d 991, 1008 (9th Cir. 2008) (that “ongoing
`litigation settled suggests that the original suit was not
`objectively baseless”).
`
`C. The FTC’s Antitrust Claim And Proceedings
`Below
`Nearly three years after the patent-infringement
`suits settled, the FTC brought this antitrust action
`against AbbVie under the FTC Act, 15 U.S.C. §§ 45(a),
`53(b). As relevant here, the FTC alleged that AbbVie
`engaged in monopolization by filing sham litigation
`against Teva and Perrigo to delay entry of their generic
`products. App. 19a.3
`The district court held that both lawsuits were
`sham litigation that violated the antitrust laws and
`awarded the FTC nearly $500 million in disgorgement.
`App. 175a; C.A.J.A. 171-172. Addressing the subjective
`prong of t

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