Amphastar Pharmaceuticals, Inc, et al v. Momenta Pharmaceuticals, Inc, et al

Filing

OPINION issued by Jeffrey R. Howard, Chief Appellate Judge; Sandra L. Lynch, Appellate Judge and Kermit V. Lipez, Appellate Judge. Published. [16-2113]

Case: 16-2113

Document: 00117125937

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Date Filed: 03/06/2017

Entry ID: 6074203

United States Court of Appeals
For the First Circuit

No. 16-2113
AMPHASTAR PHARMACEUTICALS INC.;
INTERNATIONAL MEDICATION SYSTEMS LTD.,
Plaintiffs, Appellants,
v.
MOMENTA PHARMACEUTICALS, INC.; SANDOZ INC.,
Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Nathaniel M. Gorton, U.S. District Judge]

Before
Howard, Chief Judge,
Lynch and Lipez, Circuit Judges.

Chul Pak, with whom Jonathan M. Jacobson, Jeffrey C. Bank,
Daniel P. Weick, Seth C. Silber, Elyse Dorsey, Wilson Sonsini
Goodrich & Rosati, P.C., Alan D. Rose, Sr., Meredith W. Doty,
Michael L. Chinitz, and Rose Chinitz & Rose were on brief, for
appellants.
Robert S. Frank, Jr., with whom Robert M. Buchanan, Jr.,
Sophie F. Wang, Greta A. Fails, Choate Hall & Stewart LLP, Michael
P. Kenny, Teresa T. Bonder, Matthew D. Kent, D. Andrew Hatchett,
and Alston & Bird LLP were on brief, for appellees.
Deborah L. Feinstein, Director, Bureau of Competition,

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Bradley S. Albert, Deputy Assistant Director, Bureau of
Competition, Heather M. Johnson, Attorney, Bureau of Competition,
Rajesh James, Attorney, Bureau of Competition, June Im, Attorney,
Bureau of Competition, David C. Shonka, Acting General Counsel,
Federal Trade Commission, Joel Marcus, Deputy General Counsel,
Federal Trade Commission, and Imad D. Abyad, Attorney, Federal
Trade Commission, on brief for amicus curiae Federal Trade
Commission.
David A. Balto, Bradley A. Wasser, Matthew C. Lane, and Law
Offices of David A. Balto on brief for amici curiae Consumer
Action, National Health Law Program, and United States Public
Interest Research Group.

March 6, 2017

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HOWARD,

Chief

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Judge.

Plaintiff-Appellant

Entry ID: 6074203

Amphastar

Pharmaceuticals Inc. and its wholly owned subsidiary International
Medication Systems Ltd. (collectively, "Amphastar") appeal from
the

district

court's

dismissal

of

their

complaint

alleging

antitrust violations by Defendant-Appellees Sandoz Inc. ("Sandoz")
and Momenta Pharmaceuticals, Inc. ("Momenta").

Amphastar and

Sandoz are competitors in the United States market for generic
enoxaparin, an anticoagulant.

Momenta serves as Sandoz's contract

laboratory.
Amphastar's suit is predicated upon the defendants'
alleged misrepresentations to the United States Pharmacopeial
Convention

("USP"),

a

private

standard-setting

organization

("SSO") charged with ensuring the quality of drugs.

According to

the complaint, the defendants, in violation of a duty imposed by
the USP, knowingly failed to disclose to the standard-setting body
that a proposed method for testing generic enoxaparin might be
covered by Momenta's pending patent application.

The USP, in

reliance

adopted

on

the

defendants'

misrepresentations,

the

method, and the Food and Drug Administration ("FDA") required
Amphastar to comply with it.
The defendants promptly brought an infringement suit
against Amphastar, resulting in a temporary restraining order
("TRO")
Amphastar

and
from

subsequent
selling

preliminary

enoxaparin.

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injunction
Although

the

prohibiting
preliminary

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injunction was ultimately vacated, it did prevent Amphastar from
selling its generic enoxaparin for a period of roughly three
months.
Amphastar responded with the instant suit under the
Sherman Act, see 15 U.S.C. §§ 1, 2, seeking damages for profits
lost during the pendency of the TRO and injunction.

The district

court dismissed Amphastar's complaint under the so-called NoerrPennington doctrine, which immunizes good-faith petitioning of
government entities from antitrust liability.

Because its Noerr-

Pennington ruling was dispositive, the court expressly declined to
address the defendants' other arguments for dismissal.

We hold

that the district court erroneously applied Noerr-Pennington.
Accordingly, we reverse the dismissal of Amphastar's complaint and
remand for the district court to consider the defendants' other
arguments in the first instance.
I.
In reviewing the district court's dismissal under Fed.
R. Civ. P. 12(b)(6), we take as true the facts from the well-pled
allegations in Amphastar's complaint.

See, e.g., In re Loestrin

24 Fe Antitrust Litig., 814 F.3d 538, 549 (1st Cir. 2016).
In November 2003, Sandoz and Momenta entered into a
collaboration agreement for the development and commercialization
of enoxaparin.

The agreement granted Sandoz an exclusive license

to Momenta's (as yet unissued) United States Patent No. 7,575,886

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("'886 patent").

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It also created heavy incentives to ensure that

Sandoz remained the sole provider of generic enoxaparin, including
milestone and profit share payments to Momenta.

Sandoz benefited

because, as long as it was the only generic entrant in the market,
it would be able to price enoxaparin at close to brand levels.
In early 2007, the USP began the process of establishing
standards for enoxaparin, including a testing method to determine
whether the relevant criteria have been met.

Ultimately, in late

2009, the USP would adopt Method <207> ("Method 207") as the
testing

standard.

Federal

law

requires

that

products comply with applicable USP standards.

pharmaceutical
See 21 U.S.C. §

351(b).
USP policy requires all members and participants in the
standard-setting process to disclose any potential conflicts of
interest, including intellectual property rights.

The USP staff

typically reviews these conflict of interest policies at the
beginning of panel meetings.

Dr. Zachary Shriver, a Momenta

employee who would later be named as an inventor on the '886
patent,

represented

Momenta

on

the

developing the enoxaparin standard.

USP

panels

involved

in

Sandoz also participated in

the panel discussions.
During the standard-setting process, the USP was unaware
of the pending '886 patent application.

After the patent issued

in August 2009, the defendants would take the position that it

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covered Method 207.

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Notwithstanding this potential conflict, the

defendants failed to disclose the pending application to the USP.
The defendants' failure to disclose their own potential
conflict stands in sharp contrast to their vigilance in raising a
similar issue relating to Sanofi-Aventis ("Aventis").

In 1995,

Aventis had obtained approval for the original branded version of
enoxaparin.

During the standard-setting process, the defendants

complained to the USP that Aventis had a pending patent application
that, if issued, would potentially cover Method 207.

The USP

accordingly persuaded Aventis to allow its application to lapse.
Subsequently, the USP staff reported that it was "not aware of any
patent issue that may cover the test."
In December 2009, the USP approved and adopted Method
207.

The method thus became "the official test method that the

FDA required of Amphastar to test . . . its enoxaparin in order to
obtain and maintain its generic enoxaparin approval."

Sandoz

became the first entity to receive FDA approval to sell generic
enoxaparin in July 2010.

Amphastar received approval in September

2011.
Just two days after Amphastar's approval, the defendants
filed the suit, mentioned earlier, claiming infringement of the
'886 patent.

The district court issued a TRO on October 7, 2011,

and a preliminary injunction on October 28. The TRO and subsequent
injunction prohibited Amphastar from selling enoxaparin.

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The

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injunction was stayed (and later vacated) on appeal by the Federal
Circuit on January 25, 2012. See Momenta Pharm., Inc. v. Amphastar
Pharm., Inc., 686 F.3d 1348, 1352, 1361 (Fed. Cir. 2012).
In September 2015, Amphastar filed the instant antitrust
action, seeking damages for profits lost during the pendency of
the TRO and preliminary injunction entered in the infringement
suit.

Amphastar initially filed in the Central District of

California, but the case was later transferred to the District of
Massachusetts.

After the transfer, the district court granted the

defendants' motion to dismiss.
In

dismissing

the

complaint,

the

court

relied

exclusively upon the Noerr-Pennington doctrine, which immunizes
from

antitrust

liability

"valid

efforts

to

elicit

favorable

government action . . . even if the ultimate purpose or incidental
consequence of the efforts is an anti-competitive restraint on
trade." The court noted that Amphastar's claimed injuries resulted
from the injunction issued in the patent infringement case.

It

then went on to find "that the asserted injuries arise from the
FDA's purported adoption of the 207 Method" and, for that reason,
Noerr-Pennington barred the antitrust claims.

The court rejected

Amphastar's argument that the defendants' misrepresentations to
the USP deprived them of immunity.

Finally, the district judge

expressly "decline[d] to address [the defendants'] other arguments

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for

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dismissal"

because

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its

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Noerr-Pennington

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ruling

was

"dispositive."
II.
We review the dismissal of Amphastar's complaint de
novo.

See, e.g., Loestrin, 814 F.3d at 549.

Applying this

standard, we hold that the district court erred in dismissing the
complaint under Noerr-Pennington.
The Noerr-Pennington doctrine provides that a Sherman
Act violation cannot be "predicated upon mere attempts to influence
the passage or enforcement of laws." E. R.R. Presidents Conference
v. Noerr Motor Freight, Inc., 365 U.S. 127, 135 (1961); see also
United Mine Workers v. Pennington, 381 U.S. 657, 670 (1965) ("Joint
efforts to influence public officials do not violate the antitrust
laws even though intended to eliminate competition."). While Noerr
and Pennington dealt with petitioning of the legislative and
executive

branches,

the

Court

later

held

that

"[t]he

same

philosophy governs the approach of citizens . . . to administrative
agencies . . . and to courts."

Cal. Motor Transp. Co. v. Trucking

Unlimited, 404 U.S. 508, 510 (1972).

Here, the defendants argue

that Noerr-Pennington protects their petitioning of the federal
court in the infringement suit.
At oral argument, the defendants expressly declined to
take the position that Noerr-Pennington separately immunizes their
conduct before the USP.

Indeed, the Supreme Court has held that

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petitioning of a private SSO, like the USP, generally does not
trigger Noerr-Pennington protection.

See Allied Tube & Conduit

Corp. v. Indian Head, Inc., 486 U.S. 492, 500 (1988).

And we need

not decide whether "the context and nature of the activity" at
issue here is sufficiently distinct from that addressed in Allied
Tube to warrant a different result.

Id. at 507 n.10.

This is

because, even assuming the questionable proposition that NoerrPennington

immunity

would

otherwise

apply,

it

has

a

well-

established exception for knowing "[m]isrepresentations," at least
in the administrative and adjudicatory contexts.

Cal. Motor, 404

U.S. at 513; see also, e.g., Allied Tube, 486 U.S. at 500.
Amphastar's allegations, if proven, are sufficient to establish
such an intentional misrepresentation.
The defendants similarly do not rely on the FDA's alleged
adoption of Method 207 in support of their immunity argument.
While the district court appeared to base its dismissal order, at
least

in

part,

on

the

FDA's

involvement,

neither

party

has

identified any direct petitioning activity before that agency.
Indeed, the defendants did not even raise this theory for dismissal
in district court.

Accordingly, the district court erred in

applying Noerr-Pennington on this ground.1

1

It
liability
Tri-State
(1st Cir.

is true that, under another line of cases, antitrust
cannot be predicated upon government action. See, e.g.,
Rubbish, Inc. v. Waste Mgmt., Inc., 998 F.2d 1073, 1076
1993) (citing Parker v. Brown, 317 U.S. 341 (1943)).
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Before reaching the merits, we are confronted with a
choice-of-law question.

The defendants assert that we must apply

the law of the Federal Circuit.

See, e.g., Nobelpharma AB v.

Implant Innovations, Inc., 141 F.3d 1059, 1067 (Fed. Cir. 1998)
(holding that "[w]hether conduct in the prosecution of a patent is
sufficient to strip a patentee of its immunity from the antitrust
laws" implicates the Federal Circuit's "exclusive jurisdiction"
and, accordingly, should be decided under the law of that circuit).
As an initial matter, Nobelpharma is not binding on us.

And, in

any event, the present dispute involves conduct before a private
SSO, not patent prosecution or any other issue within the Federal
Circuit's exclusive jurisdiction.
1295(a).

See generally 28 U.S.C. §

Accordingly, we apply our own precedent.2
Turning to substance, the defendants primarily contend

that, regardless of whether Noerr-Pennington applies to their
conduct

during

the

standard-setting

process,

the

doctrine

precludes Amphastar from recovering damages resulting from the TRO
and injunction issued in the infringement suit.

This argument

conflates the alleged antitrust violation with the damages caused

The defendants, however, do not develop any argument on this point,
and we, therefore, decline to address the applicability of this
distinct basis for immunity.
2

We also note that the parties have failed to demonstrate
any meaningful difference between our own law and that of the
Federal Circuit on the issues relevant to this appeal.

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by that violation.
important

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Courts have recognized that "[t]here is an

difference,

for

purposes

of

the

Noerr-Pennington

doctrine, between using litigation . . . as a basis of antitrust
liability and awarding damages for efforts to use the courts to
carry out private cartel agreements."

Premier Elec. Constr. Co.

v. Nat'l Elec. Contractors Ass'n, Inc., 814 F.2d 358, 374 (7th
Cir. 1987) (Easterbrook, J.); see also McGuire Oil Co. v. Mapco,
Inc., 958 F.2d 1552, 1561 (11th Cir. 1992) (citing Premier for the
proposition

that

"the

institution

of

state

court

litigation

against the Sherman Act plaintiff . . . could furnish the source
of the antitrust injury . . . even if it could not provide a basis
for a Sherman Act violation under the Noerr-Pennington doctrine").
The mere existence of a lawsuit does not retroactively immunize
prior anti-competitive conduct.

See, e.g., Walker Process Equip.,

Inc. v. Food Mach. & Chem. Corp., 382 U.S. 172, 177 (1965); United
States v. Singer Mfg. Co., 374 U.S. 174, 196-97 (1963); Primetime
24 Joint Venture v. Nat'l Broad. Co., Inc., 219 F.3d 92, 102-03
(2d Cir. 2000).3
Applying these principles to the present context, the
defendants' infringement suit "cannot itself be the antitrust

3

The Federal Trade Commission, in its amicus brief, similarly
takes the position that "Noerr does not retroactively protect
unlawful agreements or schemes to acquire, maintain, or jointly
exercise market power that defendants subsequently exploit through
litigation."

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violation without invoking Noerr."

Entry ID: 6074203

2 Hovenkamp et al., IP &

Antitrust § 35.05[B] (3d ed. 2017).

But where "the antitrust

violation

of

is

intentional

deception

the

standard-setting

organization," the mere fact that the alleged damages are based,
in part, on a lawsuit seeking an injunction does not "defeat the
antitrust

claim

organization."4

based

on

Id.

conduct

(quoting

before

the

Microsoft

standard-setting
Mobile

Inc.

v.

Interdigital, Inc., No. 15-723-RGA, 2016 WL 1464545, at *3 (D.
Del.

Apr.

13,

2016)).

In

essence,

the

mere

fact

that

the

defendants brought protected patent litigation against Amphastar
does not immunize them from liability for the full amount of
damages

caused

by

their

alleged

antitrust

violation.

Significantly, the antitrust violation need not be the "sole cause"
of Amphastar's injury, so long as it was a "material cause."
Sullivan v. Nat'l Football League, 34 F.3d 1091, 1103 (1st Cir.
1994) (citation omitted).
Aside from the question of immunity, the defendants
argue on appeal that Amphastar's complaint is insufficient with
respect to certain elements of an antitrust claim, including

4

As explained below, we hold only that the defendants are
not protected by Noerr-Pennington immunity and otherwise express
no opinion on whether Amphastar's allegations are sufficient to
state a claim. We do, however, note that intentional deception of
an SSO may, at least in some circumstances, constitute an antitrust
violation. See, e.g., Broadcom Corp. v. Qualcomm Inc., 501 F.3d
297, 314 (3d Cir. 2007); 2 Hovenkamp et al., IP & Antitrust
§ 35.05[B] (3d ed. 2017).

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causation.

They

also

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contend

Date Filed: 03/06/2017

that

the

alleged

Entry ID: 6074203

Sherman

Act

violations were compulsory counterclaims, which had to be raised,
if at all, in the infringement suit.

Because it found that the

defendants were protected by Noerr-Pennington, the district court
expressly declined to rule on these issues.

Accordingly, we leave

the defendants' additional arguments for the district court to
address in the first instance on remand.
III.
For the foregoing reasons, we REVERSE the dismissal of
Amphastar's complaint and remand to the district court for further
proceedings consistent with this opinion.

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No costs are awarded.