A Blog About Intellectual Property Litigation and the District of Delaware

The intersection of patent and anti-trust law is tricky. Like, Boston intersection tricky.

"It used to be a cow-path that avoided a snakepit, but now we let cars use it!" Leon Bredella, Unsplash

Judge Williams had an interesting opinion on the issue last week in Jazz Pharms., Inc. v. Avadel CNS Pharms., LLC, C.A. No. 22-941 (D. Del. May 24, 2024), ruling on a motion to dismiss various antitrust counterclaims. In this ANDA case, Jazz sued Avadel for infringing one of its Orange Book patents. Avadel, however, successfully moved the Court to de-list that patent from the Orange Book grounds that it did not claim a method of use (it was instead directed to a risk mitigation strategy for distributing the drug).

Avadel thus raised antitrust claims in a follow-on suit arguing that that this inappropriate listing, and the subsequent suit, were an improper attempt to enlarge the patent monopoly in violation of the Sherman Act. Jazz moved to dismiss.

In a break from several other District Courts, Judge Williams held that Avadel did not have to show that Jazz acted in bad faith by improperly listing the patent in the Orange Book:

Avadel does not have to allege that Jazz lacked a reasonable basis for listing the '963 patent to state a claim under Section 2 of the Sherman Act . . .
Jazz cites Organon Inc. v. Mylan Pharm., Inc., 293 F. Supp. 2d 453 (D.N.J. 2003), for the proposition that Avadel must adequately allege that Jazz listed the '963 patent in bad faith to successfully state a claim under Section 2 of the Sherman Act. The Court is not convinced . . .
[T[his Court can only guess that the court in Organon found that an antitrust claimant who asserts a claim against a defendant for improperly listing its patent in the Orange Book must show that defendant's decision to do so was both (1) not supported by law, and (2) not supported by a reasonable interpretation of the law. This Court declines to adopt that rationale, however, because a defendant's decision to list its patent in the Orange Book is not "petitioning activity" entitled to Noerr-Pennington immunity. Accordingly, this Court is not persuaded that an antitrust claimant seeking to allege a violation of Section 2 of the Sherman Act must plead the additional threshold allegation that a defendant's decision to list its patent in the Orange Book was unreasonable.

Id. at 6-7 (internal citations omitted)

Moreover, he held that the further step of bringing suit based on that patent could qualify as Walker Process fraud which "allows for a plaintiff to bring an antitrust suit against a defendant when that defendant fraudulently obtains its patent and seeks to maintain a monopoly over a product by bringing patent infringement suits against competitors based on that fraudulently-obtained patent." Id. at 12.

The Court finds that Avadel has plead facts sufficient to show that the Walker Process fraud exception applies in this case. Specifically, Avadel plead that Jazz committed fraud on the FDA by listing the '963 patent (a patent that it knew did not qualify for listing) in the Orange Book for the purpose of delaying competition by obtaining a stay of up to thirty (30) months of the FDA's approval of LUMRYZ.

There's some other good general antitrust stuff in there too, look for a deep-dive on that from our sister-blog AT/DE.

(Eds. Note -- made you look)

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