Antitrust Law Daily Maker of generic treatment for opioid dependency may add antitrust counterclaims to ongoing patent infringement dispute
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Tuesday, August 25, 2020

Maker of generic treatment for opioid dependency may add antitrust counterclaims to ongoing patent infringement dispute

By Elizabeth C. Pope, J.D.

The manufacturers of the generic treatment sufficiently alleged that the patent infringement suit was a sham litigation was intended to further anticompetitive conduct.

The manufacturers of a generic version of a treatment for opioid dependency, who were accused of patent infringement, may pursue their counterclaim that the patent infringement suit was a sham litigation intended to further anticompetitive conduct. The defendants adequately alleged that the patent infringement lawsuit was a "sham litigation" meant to further the plaintiffs’ allegedly anticompetitive strategy to take steps that they knew would delay or inhibit FDA authorization for generic competitors (Indivior Inc. v. Dr. Reddy’s Laboratories S.A., August 24, 2020, McNulty, K.).

Patents for opioid treatment. Indivior Inc., Indivior UK Limited (collectively "Indivior") and Aquestive Therapeutics, Inc. ("Aquestive") developed Suboxone film, a rapidly dissolving film that adheres to the tongue or cheek and is used to treat opioid dependency. Patents describing formulations of Suboxone film include the patents-in-suit: No. 9,931,305 (the ‘305 Patent), issued to Aquestive on April 3, 2018, and No. 9,687,454 (the ‘454 Patent), issued to Indivior on June 27, 2017 (other patents related to Suboxone film—No. 8,603,514 (the ‘514 Patent) and No. 8,475,832 (the ‘832 Patent) were at issue in related litigation but were not directly at issue here).

Indivior and Aquestive filed patent infringement claims against Dr. Reddy’s Laboratories S.A. and Dr. Reddy’s Laboratories, Inc. (collectively, DRL) and Alvogen Pine Brook, Inc. and Alvogen Pine Brook LLC (collectively, Alvogen). DRL and Alvogen are manufacturers and developers of generic competitors to Suboxone film. Ultimately the patent infringement claims were consolidated.

Meanwhile, dozens of states filed antitrust lawsuits against Indivior concerning its Suboxone products. As well, in July 2019 Indivior’s former parent company settled FTC charges that it allegedly conspired to prevent lower-priced generic competition to its branded drug Suboxone from entering the market through an illegal "product-hopping" scheme.

Subsequently, in November 2019 a magistrate judge permitted Alvogen and DRL to add counterclaims asserting monopolization and conspiracy to monopolize against Indivior and Aquestive. Indivior and Aquestive appealed the magistrate’s decision to the federal trial court and Aquestive then moved to dismiss the counterclaims (Indivior did not join this motion).

Possible sham litigation. The federal trial court upheld the magistrate judge’s decision permitting the defendants to assert the antitrust counterclaims and denied Aquestive’s motion to dismiss them. The court determined that DRL and Alvogen sufficiently alleged that the patent infringement lawsuit was a "sham litigation" meant to further the plaintiffs’ allegedly anticompetitive strategy to take steps that they knew would delay or inhibit FDA authorization for generic competitors. The counterclaims sufficiently allege particulars of an overall strategic anticompetitive effort to survive dismissal.

The court also rejected Aquestive’s arguments that there were no facts that establish Aquestive is a competitor in the relevant market and that the allegations improperly allege a shared monopoly. These arguments, which addressed a purported claim that Aquestive had monopoly power in the relevant market, were ancillary to the defendants’ claim. Their claim is that Aquestive conspired with Indivior to further Indivior’s monopoly power. The proof required to demonstrate a conspiracy to monopolize, the court explained, does not require a proof of market power in a relevant market. DLR and Alvogen assert that Aquestive helped conspire with Indivior to impermissibly protect Indivior’s market power and monopoly. These allegations were sufficient to establish a claim for conspiracy to monopolize at the motion to dismiss stage.

‘305 patent. The court also denied, without prejudice, DLR and Alvogen’s motion for entry of partial summary judgment as to the non-infringement of the ‘305 Patent.

This case is No. 2:17-cv-07111-KM-CLW.

Attorneys: Katherine Harihar (Troutman Pepper Hamilton Sanders LLP) and Charles Michael Lizza (Saul Ewing Arnstein & Lehr LLP) for Indivior Inc. William L. Mentlik (Lerner, David, Littenberg, Krumholz & Mentlik, LLP) for Dr. Reddy's Laboratories S.A.

Companies: Indivior Inc.; Dr. Reddy's Laboratories S.A.

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