On Aug. 6, 2014, a split three-judge panel from U.S. Court of Appeals for the Federal Circuit restored two of Mutual Pharmaceutical Company Inc.'s antitrust counterclaims against Tyco Healthcare Group LP that stemmed from Tyco's 2006 patent infringement suit against the company. See Tyco Healthcare Grp. LP v. Mut. Pharm. Co., Inc., 762 F.3d 1338 (2014).
Tyco sued Mutual for infringement and also filed a citizen petition with the U.S. Food and Drug Administration to prevent Mutual from marketing a generic version of Tyco's insomnia drug, Restoril. In response, Mutual filed four antitrust counterclaims, alleging that the infringement suit and citizen petition—filed a day after Tyco lost a summary judgment motion as to the validity of the Restoril patent—each was a sham and that no reasonable litigant would expect the patents to withstand an invalidity challenge. Mutual also asserted a Walker Process claim alleging that Tyco procured its patents by fraud on the patent office. The district court rejected each of Mutual's counterclaims. On appeal, the Federal Circuit affirmed the dismissal of the validity and Walker Process counterclaims, but remanded the infringement and citizen petition counterclaims to the district court.
In remanding the infringement and citizen petition counterclaims, the Federal Circuit panel found that there were disputed issues of fact that precluded summary judgment. The panel held that the fact that the FDA ultimately denied the citizen petition as "wholly without merit" was "[p]articularly probative" of whether the petition was objectively baseless, and remanded this factual inquiry to the district court for further consideration. In a harshly worded dissent, Judge Pauline Newman accused the majority of creating an antitrust cause of action out of routine patent litigation. Among other things, the dissent claimed that an accurate communication—like Tyco's petition to the FDA—"cannot be an antitrust violation." Implied from Judge Newman's dissent is that the majority had carved a path for true and accurate agency communications to nevertheless create a basis for a sham claim. Depending on how the district court rules, the issue may well find itself back before the Federal Circuit.
The panel's decision is available here.
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.