Ain’t That a Sham? FTC awarded $448 million over sham litigation claim for Androgel

On Friday, June 29, the FTC prevailed against Abbvie and Besins after a bench trial in which the FTC sought disgorgement damages for sham litigation against generic competitors over the drug, Androgel.  The FTC rang the bell for $448 million.

The FTC first filed the complaint in 2014 in the United States District Court for the Eastern District of Pennsylvania alleging the defendants  illegally maintained their monopoly over Androgel by filing bogus patent suits against Teva and Perrigo over U.S. Patent No. 6,503,894.  Essentially, the FTC alleged the defendants knew they had no chance of success, and file the suits only to hurt competition.   To prevail, the FTC had to prove that the suits were objectively and subjectively baseless.  To prove objective baselessness, the FTC had to prove that the case was so meritless that no reasonable party could believe it would prevail.  To prove subjective baselessness, the FTC would need to prove that Abbvie and Besins filed the suits solely to harm competition, and not to prevail on the patent.

As I noted in 2016,  the FTC is permitted, it chose to file in federal court, instead of before an Administrative Law Judge.   This allows the FTC to select the forum, and the Circuit to which any appeal will lie.  Here, the FTC’s choice of the Eastern District of Pennsylvania worked out much better for them than in the Lidoderm and Opana cases, where Judge Diamond chastised the FTC severely and the FTC fled the District for greener pastures, apparently regretting its forum selection, although in Opana, it did not fare so well

The FTC fared much better in Androgel, where Judge Harvey Bartle had granted summary judgment to the FTC last September on the objective baselessness prong of the case.  The key issue for trial was proof of defendants’ intent in filing the case, whether they had monopoly power, and the fact and amount of establish damages.  After a three week bench trial, Judge Bartle held that the FTC proved that Abbvie had market power, and that the Defendants “subjectively intended to interfere directly with a competitor’s business interests by using the government process as an anticompetitive weapon.”

In its post-verdict press release, FTC Chairman Joe Simons said: “This decision is a double victory, both for patients who rely on Androgel and for competition more broadly. It sends a clear signal that pharmaceutical companies can’t use baseless litigation to forestall competition from low-cost generics.”

The FTC’s forum selection means that the Third Circuit will hear any appeal.

About Faruqi & Faruqi, LLP

Faruqi & Faruqi, LLP focuses on complex civil litigation, including securities, antitrust, wage and hour, and consumer class actions as well as shareholder derivative and merger and transactional litigation.  The firm is headquartered in New York, and maintains offices in California, Delaware and Pennsylvania.

Since its founding in 1995, Faruqi & Faruqi, LLP has served as lead or co-lead counsel in numerous high-profile cases which ultimately provided significant recoveries to investors, direct purchasers, consumers and employees.

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About Joe Lukens

Joe Lukens is a partner in the firm’s antitrust practice group, resident in the firm’s Pennsylvania office.  He has represented plaintiffs in antitrust litigation for over 20 years.

Posted by Joseph T. Lukens

Partner at Faruqi & Faruqi, LLP
Pennsylvania Office
Tel: (215) 277-5770
Fax: (215) 277-5771
Email: jlukens@faruqilaw.com
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