Antitrust Law Daily Seventh Circuit urged to revive case alleging that AbbVie used patents to suppress competition for Humira
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Friday, October 16, 2020

Seventh Circuit urged to revive case alleging that AbbVie used patents to suppress competition for Humira

By Wendy Biddle, J.D.

Friend-of-the-court briefs argue that the district court erred in its interpretation of Actavis, which was the basis for dismissal of claims alleging an effort to create a "patent thicket" related to arthritis treatment Humira.

Twenty state attorneys general, the FTC, and the Open Markets Institute have filed friend-of-the-court briefs urging the U.S. Court of Appeals in Chicago to address perceived mistakes made by the federal district court in Chicago in dismissing a lawsuit that claimed AbbVie built an anticompetitive web of patents around its popular immunosuppressant, Humira, to prevent cheaper biosimilars from entering the market (UFCW Local 1500 Welfare Fund v. AbbVie Inc., Case No. 20-2402).

Indirect purchasers of Humira® (a biologic injectable therapy indicated to treat a variety of chronic conditions, including rheumatoid arthritis) alleged that its manufacturer, AbbVie, prevented other manufacturers from launching generic versions of Humira by creating a "patent thicket." The primary patent for Humira expired in 2016 and the complaint alleged that AbbVie applied for a number of patents since the drug was developed—collecting dozens and dozens of patents, many of which were overlapping and non-inventive—as a means to block competition in the U.S. market. AbbVie sought patents on not only the many uses of Humira but also the process for manufacturing it and the ingredients and formulations that AbbVie anticipated its competition might seek to employ.

To carry out its patent thicket scheme, AbbVie allegedly pursued "infringement" litigation against biosimilar manufacturers. Several competitors previously sued by AbbVie over adalimumab biosimilars opted to settle patent claims. The complaint alleged that AbbVie then entered into unlawful market division agreements with those biosimilar manufacturers (who were also named as defendants), which permitted competition in Europe, but which delayed biosimilars in the U.S. market until at least January 2023.

A federal district court in Chicago dismissed the suit after finding AbbVie's patent litigation was not objectively baseless and was largely protected by the Noerr-Pennington doctrine, which shields certain activity intended to influence the government. The court also rejected accusations that AbbVie's settlements with potential biosimilar competitors, including Amgen Inc. and Sandoz Inc., were unlawful because they allowed immediate entry in Europe in exchange for staying out of the United States.

In separate amicus briefs, the FTC, Open Markets Institute, and the attorneys general from 20 states took issue with the district court’s application of the U.S. Supreme Court's decision in FTC v. Actavis Inc., which said so-called pay-for-delay or reverse payment settlements staving off generic competition could be anti-competitive in some circumstances.

The state attorneys general and Open Markets Institute directly support the buyer's bid to revive their suit. They argued that the district court erred in holding that any agreements granting market entry before patent expiration are automatically immune from antitrust scrutiny, directly contradicting the Actavis holding. They also argued the court erred in relying on unwarranted factual and legal assumptions about procompetitive effects, like "deliver value to consumers" and "increased competition" which were disputed facts. Lastly, they claimed the district court gave undue weight to the public policy goal of "encouraging patent litigants to settle worldwide patent disputes" which Actavis rejected.

The state attorneys general of California, Colorado, Connecticut, Delaware, Idaho, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nebraska, New Mexico, New York, North Carolina, Oregon, Rhode Island, Virginia, Washington, and Wisconsin argued that in addition to overturning the lower court's Actavis interpretation, the court of appeals should adopt the U.S. Supreme Court's 1972 ruling in California Motor Transport Co. Trucking Unlimited to serial sham petitioning, which is followed by a majority of the courts of appeals.

"In the face of a monopolist’s scorched earth patenting policy, would-be rivals may delay or even terminate plans to enter a market. That’s what is happening with Humira. We urge the Seventh Circuit to reverse the district court’s improper granting of AbbVie’s motion to dismiss and allow the case to proceed to discovery. AbbVie’s patent abuses block competition for a medication used to treat rheumatoid arthritis and other debilitating autoimmune conditions," stated Sandeep Vaheesan, the legal director of Open Markets Institute. The Open Markets Institute (OMI) is a non-profit organization dedicated to promoting fair and competitive markets. It does not accept any funding or donations from for-profit corporations.

The FTC did not back either party, but instead argued that the trial court erred in interpreting and applying the Actavis analysis. The FTC argued that the district court placed undue weight on the fact that the challenged settlements allowed "early" competition before AbbVie’s patents expired. The FTC also criticized the lower court for protecting the settlements in the name of encouraging patent litigants to reach worldwide patent dispute deals.

The case is No. 20-2402.

Attorneys: Gregory S. Asciolla (Labaton Sucharow LLP) for UFCW Local 1500 Welfare Fund and Louisiana Health Service & Indemnity Co. James F. Hurst (Kirkland & Ellis LLP) for AbbVie Inc. Steven J. Horowitz (Sidley Austin LLP) for Amgen Inc. Adam J. Levitt and John E. Tangren (DiCello Levitt Gutzler LLC) for Open Markets Institute. Bradley Grossman for FTC. Nathaniel M. Hopkin for State of Washington.

Companies: UFCW Local 1500 Welfare Fund; Louisiana Health Service & Indemnity Co.; AbbVie Inc.; Amgen Inc.

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