The Noerr-Pennington doctrine immunizes petitioning conduct protected by the First Amendment from the antitrust laws. It applies even where the petitioning party seeks legislation or other government action that is anticompetitive. The filing and prosecution of lawsuits is a form of petitioning conduct immune under Noerr-Pennington. California Motor Transport v. Trucking Unlimited, 404 U.S. 508 (1972). Noerr-Pennington immunity, however, has its limits and those limits were tested in MedImmune, Inc. v. Genentech, Inc., et al., 2003 U.S. Dist. LEXIS 23443 (C.D. Cal. 2003) (amended January 14, 2004).

In MedImmune, the Patent and Trademark Office ("PTO") Board of Patent Appeals and Interferences declared an interference between the "Boss" patent of defendant Celltech and a pending continuation application of defendant Genentech, the "new Cabilly patent". After the PTO Board awarded priority to Celltech, Genentech filed a district court action to overturn the Board's priority determination. Genentech sought summary judgment. Judge Chesney of the Northern District Court of California, denied the motion and suggested the parties consider mediation or some other form of dispute resolution. Thereafter, Genentech and Celltech reached a settlement and entered into a license agreement. They submitted a proposed judgment overturning the Board's priority decision to Judge Chesney, which was signed and entered. Genentech then filed the court's judgment with the PTO. The PTO directed that Genentech's continuation application be returned to an examiner. After further proceedings, the examiner issued the new Cabilly patent in 2001.

Plaintiff MedImmune is a biotechnology company that sold a respiratory drug, Synagis, which utilized techniques covered by the patents. It filed suit in the Central District of California alleging that Celltech and Genentech illegally resolved the priority dispute in such a manner that neither company gave anything up and caused a real loss to others in the industry. Celltech's Boss patent was due to expire in 2006, but the new Cabilly patent covering the same techniques did not expire until 2018. This was because under the law existing at that time, the start date for the new patent was the time the interference was resolved, rather than the time the interference began. Plaintiff thus alleged that the resolution of the priority dispute, the license agreement, and the issuance of the new Cabilly patent operated to create a 29 year monopoly over this technology. Plaintiff asserted claims under federal and state antitrust laws, as well as California's unfair competition laws.

Judge Pfaelzer granted summary judgment for defendants based on Noerr-Pennington immunity. After reviewing the basis for the Noerr-Pennington doctrine, the court concluded that petitioning activity sufficient for Noerr- Pennington is any "attempt to persuade the government to take action". Both the filing of the lawsuit to resolve the priority dispute and the later PTO proceedings to issue the patent were attempts to persuade the government to take action and thus qualified as petitioning under Noerr-Pennington. In a footnote, the court stated that Noerr-Pennington immunity would still apply even if only one of the two prongs involving petitioning were met since the Noerr-Pennington doctrine protects not only petitioning activity but other "related activity" as well, citing Sessions Tank Liners v. Joor Manufacturing, 17 F. 3d 295, 299 (9th Cir. 1994). Moreover "where a restraint …is the result of valid governmental action, as opposed to private action, those urging the governmental action enjoy absolute immunity from antitrust liability…" Joor, 17 F. 3d. at 301 (quoting Allied Tube & Conduit Corp. v. Indian Head, Inc., 486 U. S. 492, 498 (1988)).

Judge Pfaelzer rejected MedImmune's argument that Noerr-Pennington did not apply since the result could have been achieved without government action by Celltech filing a disclaimer under 35 U.S.C. 253 to cancel the claims of the Boss patent. This was both factually incorrect and without any law to support it. Even if Celltech canceled its claims, the Board's outstanding priority decision would still need to be overturned. Further, there was no case law to support the argument that, if the same result can be achieved without government action, Noerr-Pennington would not apply. The court stated that Noerr- Pennington immunity is not dependent on there being a nongovernmental way to achieve the anticompetitive result, but depends simply on whether the alleged violation actually involved petitioning.

Judge Pfaelzer also found that Judge Chesney's entry of judgment following settlement was entitled to Noerr-Pennington immunity even though apparently neither the settlement nor license agreement was submitted to Judge Chesney for review. All parties agreed that routine court orders following settlements are not entitled to Noerr- Pennington protection, and the same is true of private anticompetitive settlements that simply receive a court's stamp of approval. Here, however, Judge Pfaelzer concluded that the anticompetitiveness of the agreement depends on the government exercising its independent power to decide the priority dispute and issue the new Cabilly patent. Noerr-Pennington would apply to that government action. It did not matter that Judge Chesney did not make a "considered, substantive judgment" that Genentech deserved priority as that would require deconstructing the decision making process, an inquiry forbidden by Joor, 17 F. 3d. at 300.

Judge Pfaelzer also found wanting the arguments of plaintiff that immunity was lost due to misrepresentations by defendants, both to Judge Chesney about the priority dispute and to the PTO in the later issuance of the continuation patent. While some misrepresentations may cause loss of Noerr- Pennington immunity, simply telling the court how the priority dispute should be resolved - the ultimate issue in the case - was not such a misrepresentation, if perhaps one at all. As to the later PTO prosecution of the new Cabilly patent, Judge Pfaelzer found that only actual fraud - not just inequitable conduct - is required to lose Noerr-Pennington immunity in that context. Walker Process Equip., Inc. v. Food Mach. & Chem. Corp., 382 U.S. 172 (1965); Nobelpharma AB v. Implant Innovations, Inc., 141 F. 3d 1059 (Fed. Cir. 1998). Here, plaintiff's allegations fell short of that standard. In fact, in response to earlier motions in the case, plaintiffs had characterized their allegations as inequitable conduct falling short of fraud.

The final issue was whether the licensing agreement itself was price fixing. It provided that Celltech would receive royalty payments from Genentech, who would use its best efforts to charge third parties, including plaintiff, at least certain minimum royalties. Judge Pfaelzer likewise dismissed this claim, holding it was not alleged in the Complaint and plaintiff lacked standing since it had previously signed a license agreement with Genentech for the product in question.

MedImmune is one of the first cases to explicitly apply the Noerr-Pennington doctrine to PTO proceedings where no fraud within the meaning of Walker Process or Nobelpharma is alleged. Its application of Noerr-Pennington to the court judgment after settlement of the priority case will be controversial as some courts have suggested that Noerr-Pennington immunity may not apply unless the court makes a substantive decision on the merits. See, e.g., In re Ciprofloxacin Antitrust Litigation, 261 F. Supp. 2d 188, 212-14 (E.D.N.Y. 2003). The key fact underlying the entire decision was that the anticompetitive restraints were the result of government action - entry of the judgment overturning the priority decision and the issuance of the new Cabilly patent - after petitioning and that provides the basis for Noerr-Pennington immunity.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.