Antitrust Law Daily Interlocutory appeal denied in standard setting case
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Monday, June 4, 2018

Interlocutory appeal denied in standard setting case

By Nicole D. Prysby, J.D.

A motion for certification of an interlocutory appeal raised by a pharmaceutical company that failed to win dismissal of the antitrust claims asserted against it was denied by the federal district court in Boston, where the two issues proposed for appeal did not represent controlling questions of law and both involved questions of fact and the application of law to facts. The two issues raised for interlocutory appeal were: (1) whether antitrust liability in the standard-setting context requires that the alleged misconduct cause the standard-setting organization to eliminate alternative technologies and (2) whether antitrust plaintiffs must allege that the standard setting organization would not have adopted the patented technology but for the defendant’s misrepresentation. In denying the motion, the court held that neither presented a question of law because the First Circuit had already held in a prior decision in the case that the question of whether the method adopted by the standard-setting organization was mandatory was a fact-intensive question that could not be resolved in a motion to dismiss. In addition, other precedent stated that specific allegations of an alternate method were not necessary to survive a motion to dismiss; allegations that the method would not have been adopted but for the alleged deceptive conduct were sufficient (Amphastar Pharmaceuticals, Inc. v. Momenta Pharmaceuticals, Inc., June 1, 2018, Gorton, N.).The underlying case concerns claims by Amphastar that Sandoz Inc. and Momenta Pharmaceuticals, Inc., illegally conspired to restrain competition and wrongfully acquired monopoly power in the market for a generic anticoagulant drug used to prevent blood clots by deceiving the industry’s standard setting body into adopting a standard which they later claimed was covered by their own patent. In July 2016, the district court found that claims against Momenta should be dismissed because they were precluded under the Noerr-Pennington doctrine. Amphastar appealed that order and the First Circuit reversed and remanded the case to the district court to consider the defendants’ alternate arguments for dismissal. In March 2018, the court denied the defendants’ motion for dismissal, finding that Amphastar pleaded sufficient facts to establish that the defendants’ actions during the standard setting process were a material cause of its antitrust injury and amounted to a cognizable claim of monopolization and stated a cognizable claim that the defendants wrongfully acquired monopoly power by deceiving the standard setting organization. The defendants then filed a motion for certification of an interlocutory appeal, seeking a second review by the First Circuit.

Interlocutory appeal. Momenta argued that interlocutory review was needed to resolve two controlling questions of law: (1) whether antitrust liability in the standard-setting context requires that the alleged misconduct cause the standard-setting organization to eliminate alternative technologies and (2) whether antitrust plaintiffs must allege that the standard setting organization would not have adopted the patented technology but for the defendant’s misrepresentation. Amphastar argued that there were no controlling questions of law because it is well-established that deception to a standard-setting organization which leads to the exclusion of competitors can form the basis for antitrust liability, and that the whether the adoption of the 207 Method by the U.S. Pharmacopeial (USP) Convention represented a mandatory method, as well as questions on causation, concerned issues of fact.

The court sided with Amphastar, noting that the First Circuit had already stated that the question of whether the 207 Method was mandatory was a fact-intensive question that could not be resolved in a motion to dismiss. Momenta argued that that Amphastar was required to allege that alternative technologies existed and were considered by the USP. But Third Circuit precedent states that specific allegations of an alternate method are not necessary to survive a motion to dismiss. Even if the method in question was the only candidate for inclusion in the standard, allegations that the method would not have been adopted but for the alleged deceptive conduct are sufficient to survive a motion to dismiss. Therefore, the two issues proposed by Momenta did not involve controlling questions of law. Because they involve questions of fact and application of law to facts, interlocutory appeal would be inappropriate.

This case is No. 1:16-cv-10112-NMG.

Attorneys: Alan D. Rose, Sr. (Rose, Chinitz & Rose) and Chul Pak (Wilson Sonsini Goodrich And Rosati PC) for Amphastar Pharmaceuticals, Inc. and International Medication Systems, Ltd. Julia Jill Bredrup (Caldwell Leslie And Proctor PC) and Michael L. Keeley (Axinn, Veltrop & Harkrider, LLP) for Momenta Pharmaceuticals, Inc. D. Andrew Hatchett (Alston & Bird LLP) and Joshua N. Ruby (Donnelly, Conroy & Gelhaar, LLP) for Sandoz Inc.

Companies: Amphastar Pharmaceuticals, Inc.; International Medication Systems, Ltd.; Momenta Pharmaceuticals, Inc.; Sandoz Inc.

MainStory: TopStory Antitrust MassachusettsNews

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