Ethypharm SA France v. Abbott Laboratories

Filing 207

MEMORANDUM OPINION. Signed by Judge Sue L. Robinson on 8/23/2011. (nmf)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
ETHYPHARM S.A. FRANCE,
Plaintiff,
v.
ABBOTT LABORATORIES,
Defendant.

)
)
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) Civ. No. 08-126-SLR
)
)
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)

Gregory B. Williams, Esquire and Austen C. Endersby, Esquire of Fox Rothchild LLP,
Wilmington, Delaware. Counsel for Plaintiff. Of Counsel: Dwight P. Bostwick, Esquire
and Carlos T. Angulo, Esquire of Zuckerman Spaeder LLC.
David J. Margules, Esquire and Sean M. Brennecke, Esquire of Bouchard Margules &
Friedlander, P.A., Wilmington, Delaware. Counsel for Defendant. Of Counsel: William
F. Cavanaugh, Jr., Esquire, Chad J. Peterman, Esquire, Thomas W. Pippert, Esquire,
and Edward R. Tempesta, Esquire of Patterson Belknap Webb & Tyler LLP; Jeffrey I.
Weinberger, Esquire, Stuart N. Senator, Esquire and Mark R. Conrad, Esquire of
Munger, Tolles & Olson LLP; Thomas W. Pippert, Esquire and Timothy A. Waters,
Esquire of Patterson Belknap Webb & Tyler, LLP.

MEMORANDUM OPINION

Dated: August 23, 2011
Wilmington, Delaware

RM,
I. INTRODUCTION

Plaintiff Ethypharm S.A. France ("Ethypharm") brought this action against
defendant Abbott Laboratories ("Abbott") on March 3, 2008. (0.1. 1) Both parties are
manufacturers of pharmaceutical drugs, more specifically, fenofibrate. Ethypharm
alleges that Abbott has interfered with Ethypharm's licensee from marketing and selling
Ethypharm's fenofibrate product under an exclusive licensing agreement with a United
States distributor. Ethypharm brought antitrust claims under Sections 1 and 2 of the
Sherman Act, as well as several common law claims and a claim for sham litigation.
On February 20, 2009, the court granted Abbott's motion to dismiss with respect to
Ethypharm's common law restraint of trade claim (count six) and denied Abbott's
motion to dismiss all other counts of the amended complaint. (0.1. 39)

~iscovery

has

been completed and trial is scheduled to commence on September 30,2011. Currently
before the court are Abbott's motions for summary judgment: (1) on counts one
through five regarding its alleged "anticompetitive conduct" (0.1. 176); and (2) on count
seven and Ethypharm's allegations of "sham litigation" (0.1. 180).
II. BACKGROUND

Ethypharm is a privately-held French pharmaceutical company that develops,
formulates and manufactures numerous drug products, including a fenofibrate product
called Antara®. (0.1. 26

at,-r,-r 4, 6,

37) Antara® is not a generic product; it is a

branded drug marketed directly to physicians. (Id. at,-r 53) Ethypharm does not directly
sell or distribute Antara® in the United States; it contracted with an American company,
Reliant Pharmaceuticals, Inc. ("Reliant"), to market and distribute the drug. (Id.

at,-r,-r 5,

6)
Abbott is a pharmaceutical company that manufactures, markets and sells a
brand name fenofibrate drug product called TriCor® in the United States. (Id. at ¶ 2)
Abbott licenses the exclusive rights to manufacture and sell TriCor® in the United
States from a French company called Laboratoires Fournier (“Fournier”). (Id.) Abbott
and Fournier have been involved in extensive antitrust litigation in this district regarding
TriCor®. Civ. No. 02-1512 (lead case).
Ethypharm gave Reliant an exclusive license in 2001, termed the “Development,
License, and Supply Agreement” (“the DLS Agreement”), through which Reliant
licensed Ethypharm’s intellectual property rights and agreed to seek FDA approval for
Antara® and market Antara® in the United States. (D.I. 179, pt.1 at ex. 2)
Reliant did not file a Paragraph IV certification1 for the patents that Abbott had
identified in the Orange Book for TriCor®. Rather, Reliant elected to market Antara®
immediately upon FDA approval. In light of the risk of exposure to infringement claims
by Abbott, Reliant filed suit in this court on June 1, 2004, seeking a declaration of noninfringement vis a vis four Fournier fenofibrate patents: U.S. Patent Nos. 6,074,670
(“the ‘670 patent”); 6,277,405 (“the ‘405 patent”); 6,589,552 (“the ‘552 patent”); and
6,652,881 (“the ‘881 patent”). Civ. No. 04-350 (“the Abbott/Reliant action”) Reliant also
sought a declaration that the foregoing TriCor® patents are unenforceable due to

1

See 21 U.S.C. § 355(j)(2)(A)(vii)(IV). The filing of a Paragraph IV certification
under the Hatch-Waxman Act is itself an act of patent infringement. See 35 U.S.C. §
271(e)(2)(A).
2

inequitable conduct.2 Abbott filed a counterclaim for infringement of the ‘405 and ‘881
patents. According to Ethypharm, the counterclaims were a sham and further
restrained Antara®’s sales prospects in the United States.
Reliant’s NDA for Antara® was filed pursuant to Section 505(b)(2) of the Federal
Food Drugs and Cosmetics Act. That is, Reliant did not present its own safety and
efficacy studies for Antara®, but presented data showing that patients taking Antara®
would attain similar blood concentrations of fenofibrate as would patients taking
TriCor® 200, and relied on Abbott’s studies showing the safety and efficacy of TriCor®
200. (D.I. 179, pt. 1 at ex. 3) Antara® received FDA approval in November of 2004,
and Reliant began marketing Antara® in February 2005.
Ethypharm states that Antara®’s net sales totaled $23.5 million in 2005. (D.I. 1
at ¶ 55) According to Reliant documents, sales of Antara® exceeded expectation in
April and May 2005, but came short of projection in June 2005. (D.I. 192, pt. 2 at ex. 9,
RLNTE00062604) Notwithstanding, sales of Antara® increased during this period,
while sales of TriCor® decreased.3 (Id. at RLNTE00062604, RLNTE00062608)
According to the complaint, Antara® earned $18.9 million in net sales in the first half of
2006. (D.I. 1 at ¶ 56)
On April 3, 2006, Abbott and Reliant settled the Abbott/Reliant action and
executed a “Settlement Term Sheet” embodying the terms of their agreement (the

2

At this time, Abbott was simultaneously defending another charge of inequitable
conduct in the context of litigation in this court with Impax Laboratories, Inc. (Civ. No.
03-120)
3

Other competitors in the market included Lofibra®, Triglide®, gemfibrozil,
Lopid® and fenofibrate.
3

“STS”).4 The STS permits Reliant to sell Antara® without the risk of infringement. That
is, the STS grants Reliant a nonexclusive license to the ‘670, ‘405, ‘552, and ‘881
patents (the “Stamm patents”), as well as U.S. Patent No. 4,895,726 (“the ‘726 patent”),
another Fournier fenofibrate patent (collectively hereinafter, the “Fournier patents”).
(STS §§ 1(q); 2) The Reliant products subject to the license were defined as
the 43 mg, 87 mg and 130 mg fenofibrate capsule products that are the subject
of Reliant’s New Drug Application 21-695, as supplemented and/or amended
from time to time. Reliant Products do not include (i) any pharmaceutical
products where fenofibrate is not the sole active ingredient, (ii) any combination
therapy products or (iii) any products in a form other than a 43 mg, 87 mg or 130
mg fenofibrate capsule.
(STS § 1(o)) The license also extended to “any continuations, continuations-in-part or
divisional applications and patents thereof and any reissued or reexamined version(s)”
of the Stamm patents. (STS § 1(q))
As consideration, Reliant agreed to a 7% royalty on net sales of the Reliant
Products. (STS § 3(a)) The royalty would increase, however, to 10% of net sales
under specified conditions relating to a change of control, e.g., acquisition of Reliant or
any portion of its business relating to the Reliant Products. (STS §§ 3(a), (d), (e)) The
parties dispute the proper interpretation of Section 8(ii) of the STS, providing as follows.
Other Licensing Terms. The license would contain additional customary terms
and conditions including, without limitation, the following: (i) reports and audits
and (ii) no assignment, sublicense or other transfer of any rights relating to the
Reliant Products (including the right to market and promote the Reliant Products)
except: . . . (e) to acquirers . . . of any portion of Reliant [or its business] relating
to the Reliant Products other than pursuant to a Change of Control, provided that
any assignment, sublicense or other transfer of rights granted pursuant to
4

The STS is docketed at D.I. 179 (pt. 1), ex. 1; hereinafter, the court will cite
“STS §__” for ease of reference. The parties did not subsequently negotiate a definitive
agreement.
4

Section 8(ii)(e), (A) to a Restricted Entity or Affiliate thereof, shall require the
prior written consent of Abbott and (B) to any entity other than a Restricted Entity
or Affiliate thereof shall be limited to [the ‘726, ‘670, ‘405, ‘552 and ‘881 patents]
unless Abbott consents to the assignment, sublicense or other transfer (in which
case, Reliant’s rights to all of the Stamm Patents may be included).
Schedules I and II to the STS identify the Restricted Entities under that agreement:
about 20 large pharmaceutical companies, 10 generic companies and a few specialty
pharmaceutical companies. Reliant was also permitted under the STS to “authorize
Contract Sales Organizations[5] to market the Reliant products” on its behalf. (STS §
8(ii)(b))
On or about July 24, 2006, Reliant sold the exclusive rights to market and sell
Antara® to Oscient Pharmaceutical Company (“Oscient”), a smaller, specialty
pharmaceutical company not listed in schedules I or II of the STS. (D.I. 179, pt.1 at ex.
27; D.I. 192, pt. 5 at ex. 66) Oscient paid $78 million plus the cost of the existing
Antara® inventory. (D.I. 179, pt.1 at ex. 6, § 3.1) The DLS provided Ethypharm a right
of first offer with respect to the divestiture of Antara®. (Id., ex. 2 at § 12.4) Ethypharm
executed a document approving the sale. (Id., ex. 4) Abbott did not consent to the
transfer of Reliant’s rights to any later-issued patents in the Stamm patent family, and
Reliant and Oscient entered into a separate agreement addressing any risk that Abbott
may sue Oscient in this regard. (Id., ex. 40)
In the summer of 2009, Oscient discontinued its sales force promotion of

5

Defined as “a pharmaceutical sales and marketing organization that is not a
Restricted Entity [listed on schedules I and II to the STS] and whose principal business
is the marketing and sale of pharmaceutical products for third parties (for example,
Innovex), engaged by a Reliant Licensed Entity to detail the Reliant Products on a feefor-service basis.” (STS § 1(f))
5

Antara® and filed for bankruptcy. (D.I. 192, pt. 5 at exs. 76, 77) This is, in Ethypharm’s
characterization, directly related to Reliant’s sale of Antara® to Oscient, a company with
“limited resources and a relatively small sales force” that “[did] not have the capacity to
promote and develop Antara® in the marketplace to compete with TriCor® effectively.”
(D.I. 1 at ¶ 11) Ethypharm asserts that the 7% royalty to Abbott weakened the
profitability of Antara® and raised the cost of its promotion, sales and distribution. (Id.
at ¶ 74) Ethypharm argues that the STS restricts its abilities to develop new fenofibrate
formulations or combination products, or by adding to the indications for which
physicians can prescribe Antara®. (Id. at ¶ 75) Ethypharm characterizes the STS as
equivalent to an “output restraining agreement” in these regards. (Id. at ¶ 78)
Ethypharm brings antitrust claims under Sections 1 and 2 of the Sherman Act,
and also alleges violations of the common laws of unfair competition; tortious
interference with contract; tortious interference with prospective economic advantage;
that Abbott committed a common law restraint of trade; and that Abbott’s infringement
counterclaim in the Abbott/Reliant action constituted sham litigation in violation of 15
U.S.C. § 1. On Abbott’s motion to dismiss, the court found that Ethypharm had
standing vis a vis its Sherman Act claims.6 See Ethypharm S.A. France v. Abbott
Labs., 598 F. Supp. 2d 611, 618 (D. Del. 2009). The court also held that Ethypharm
articulated the essential elements of its unfair competition and tortious interference

6

The court characterized the question posed by Abbott’s motion as “whether a
foreign name-brand drug manufacturer, which does not itself market and distribute its
product in the United States but does so through an exclusive United States distributor,
is entitled to avail itself of the protection of the antitrust laws for the purpose of
challenging the conduct of a manufacturer of a competing brand name drug.”
6

claims under Delaware law. Id. at 619-20. The court granted Abbott’s motion with
respect to Ethypharm’s common law restraint of trade claim, however, insofar as such
actions (pursuant to 6 Del. C. § 2103) may only be brought by Delaware’s Attorney
General. Id. at 620.
III. STANDARD
A court shall grant summary judgment only if “the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the affidavits, if any,
show that there is no genuine issue as to any material fact and that the moving party is
entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c). The moving party bears
the burden of proving that no genuine issue of material fact exists. See Matsushita
Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 n.10 (1986). “Facts that
could alter the outcome are ‘material,’ and disputes are ‘genuine’ if evidence exists from
which a rational person could conclude that the position of the person with the burden
of proof on the disputed issue is correct.” Horowitz v. Fed. Kemper Life Assurance Co.,
57 F.3d 300, 302 n.1 (3d Cir. 1995) (internal citations omitted). If the moving party has
demonstrated an absence of material fact, the nonmoving party then “must come
forward with ‘specific facts showing that there is a genuine issue for trial.’” Matsushita,
475 U.S. at 587 (quoting Fed. R. Civ. P. 56(e)). The court will “view the underlying facts
and all reasonable inferences therefrom in the light most favorable to the party
opposing the motion.” Pa. Coal Ass’n v. Babbitt, 63 F.3d 231, 236 (3d Cir. 1995). The
mere existence of some evidence in support of the nonmoving party, however, will not
be sufficient for denial of a motion for summary judgment; there must be enough

7

evidence to enable a jury reasonably to find for the nonmoving party on that issue. See
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). If the nonmoving party fails
to make a sufficient showing on an essential element of its case with respect to which it
has the burden of proof, the moving party is entitled to judgment as a matter of law.
See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
IV. DISCUSSION
A. Counts Relating to Reliant’s Alleged “Anticompetitive Agreement”7
Abbott moves to dismiss Ethypharm’s claims on several bases. First, Abbott
argues that it has the right to refuse to license a patent. (D.I. 177 at 11-13) Secondly,
Abbott argues that the STS did not prohibit Reliant’s divestiture of Antara® to anyone it
saw fit; only the Stamm patent rights were subject to a condition precedent (Abbott’s
consent). (D.I. 177 at 13, 15) Finally, Abbott argues that Ethypharm has no direct
evidence of antitrust injury, insofar as it cannot demonstrate (with any reasonable
certainty) that another company (other than Oscient) would have bought Antara® and
made that product a commercial success. (Id. at 17-20)
1. Scope of the patent test
The first inquiry at bar is the legality of the STS. The Federal Circuit has stated
that a district court analyzing the anticompetitive effects of a settlement agreement may
begin its analysis under either antitrust law (by applying a rule of reason approach to
evaluate the agreement’s anticompetitive effects) or patent law (by analyzing the right
to exclude afforded by the patent); the essence of either inquiry is “whether the [STS]
7

All asserted claims but for Ethypharm’s allegations that Abbott engaged in sham
litigation.
8

restrict[s] competition beyond the exclusionary zone of the [Stamm patents].”8 In re
Ciprofloxacin Hydrochloride Antitrust Litig., 544 F.3d 1323, 1336 (Fed. Cir. 2008). The
parties at bar present their arguments under the “scope of the patent” framework (D.I.
141 at 11; D.I. 177 at 11), and the court agrees that it must discern whether the STS
grants greater rights than those conferred under the Stamm patents. Cf. King Drug Co.
of Florence, Inc. v. Cephalon, Inc., 702 F. Supp. 2d 514 (E.D. Pa. 2010).
2. Contract interpretation
The parties dispute the interpretation of the STS. Ethypharm argues that
Section 8(ii) of the STS is a general prohibition on Reliant’s divestiture of Antara®.
(D.I. 191 at 1) Abbott, on the other hand, reads the STS as prohibiting the future
transfer of the intellectual property rights licensed under the STS absent Abbott’s
consent. (D.I. 177 at 13)
The threshold inquiry is whether the contract is ambiguous. See, e.g., GB
Biosciences Corp. v. Ishihara Sangyo Kaisha, Ltd., 270 F. Supp. 2d 476, 481 (D. Del.
2003) (“[D]isputes involving the interpretation of unambiguous contracts are resolvable
as a matter of law”); Johnston v. Tally Ho, Inc., 303 A.2d 677, 679 (Del. Super. 1973)
(clear and unambiguous language in a contract should be given its ordinary and usual
meaning). The court answers this question in the affirmative.
Section 2 of the STS provides that “Abbott and Fournier would grant Reliant a
non-exclusive license (subject to the provisions of Section 8) under the Stamm Patents
(the “License”) to exploit the Reliant Products in the United States and its territories and
8

A patent is, of course, a carefully-crafted exception to the general rule against
monopolies.
9

possessions[.]” (STS § 2) While the STS also contemplates that the future License
would contain “additional customary terms and conditions,” these specifically include
“no assignment, sublicense or other transfer of any rights relating to the Reliant
Products (including the right to market and promote the Reliant Products).” (STS §
8)(emphasis added) As noted above, Reliant Products are narrowly defined as the 43
mg, 87 mg and 130 mg fenofibrate capsule products that are the subject of Reliant’s
NDA, and exclude all other product forms, including “any combination therapy products”
or other products having fenofibrate as their sole active ingredient. (STS § 1(o)) The
restriction on permissible activities is broad, however, encompassing “any rights”
relating to these named products. (STS § 8)
The inquiry does not end here, however. In its subsections, STS § 8
subsequently flip-flops in focus from the Reliant Products to intellectual property rights.
STS § 8(ii)(e), containing exceptions to the “no transfer” clause, provides that an
exception is made if a “transfer of rights” “relating to the Reliant Products” is made to a
Restricted Entity with Abbott’s consent. Alternatively, this section provides that transfer
of rights under the ‘726, ‘670, ‘405, ‘552 and ‘881 patents may be made without
Abbott’s consent, while transfer to “all of the Stamm patents” may only occur with
Abbott’s consent. (STS § 8(ii)(e)(B)) In sum, the STS is ambiguous insofar as it
inconsistently restricts the right to sell Reliant Products with the right to sublicense
rights under Abbott’s patents.
The remaining question is whether, in view of the parole evidence of record, a
genuine issue of material fact exists as to the parties’ interpretation of the STS. See,

10

gen., Nova Chemicals, Inc. v. Sekisui Plastics Co., Ltd., 579 F.3d 319, 323 (3d Cir.
2009) (where contract language is ambiguous, parol evidence is properly considered to
determine the intent of the parties) (citation omitted); Eagle Industries, Inc. v. DeVilbiss
Health Care, Inc., 702 A.2d 1228, 1233 (Del. Supr. 1997) (“In construing an ambiguous
contractual provision, a court may consider evidence of prior agreements and
communications of the parties as well as trade usage or course of dealing.”). In this
regard, Abbott argues that all of Reliant’s witnesses have testified that they neither
understood nor intended STS § 8 to have the meaning Ethypharm now ascribes to it.
For example, Reliant’s “architect” of the STS, Joe Zakrzewski (“Zakrzewski”), testified
that he read the STS to mean that Reliant “had the ability to deal with anybody on [the
Restricted Entity] list [ ] with or without Abbott’s consent.” (D.I. 179, pt. 2, ex. K at
167:9-168:5, 341:20-343:14) John Poulos (“Poulos”), Abbott’s counterpart “architect” of
the STS (D.I. 191 at 7), testified that Abbott did not want sublicensing, while Reliant did,
and STS § 8(ii)(e) was the resulting compromise. (D.I. 179, pt. 2, ex. E at 181:3182:16) Poulos stated that the deal “had nothing to do with restricting [the right to sell]
Antara® or the sale of the company[; t]his was only . . . on a sublicense right of the
Stamm patents. We weren’t restricting [the right to sell] Antara® or the sale of the
company at all.” (Id.) Fournier’s 30(b)(6) witness testified that his personal
understanding of the purpose of including Restricted Entities was that, “in the event
Reliant decide[d] to sublicense its rights to one of these compan[ies] and if one of these
compan[ies] want[ed] to have our license on our Stamm patents or on the patents
covered by this agreement, they would have to ask us for consent.” (Id., ex. L at 69:716)
11

In response, Ethypharm points to a presentation from a June 2006 Reliant Board
of Directors Meeting contrasting Reliant’s divestiture of a drug called InnoPran EL, for
which Reliant stated it was “contacting more than 100 pharma/biotech companies,” with
Antara®, for which Reliant was “surgically approaching select companies.” (D.I. 192,
pt. 4, ex. 60) Ethypharm argues that Reliant’s approach of contacting “a small handful
of companies on a discrete basis” evidences Reliant’s view that it was severely
restricted by the STS. (Id.) Ethypharm also points to a July 10, 2006 email from
Poulos to Mary Szela of Abbott indicating that Abbott was concerned with “Oscient’s
financial status.” (Id., ex. 81) Poulos stated that, if Abbott consents, it “should
strengthen the change of control provision that Oscient will assume.” (Id.) In July 2006,
Zakrzewski expressed concern about Abbott’s response to the potential divestiture of
Antara® as follows:
I think the verbatim goes that Poulos gave us his word Abbott would not stand in
[the] way of [a] small company when we did [the] deal in April.
Now [a] small company is a problem and it really doesn’t feel right. They state
concerns about what [a] small company would do to [the] market. I think we hit
them frontal with the antitrust implications.
(Id., ex. 65)9
The foregoing parol evidence does not resolve the “product” versus “patent”
differentiation at the core of the contract dispute. While Poulos testified that he did not
believe the STS restricted Reliant’s right to divest Antara®, this interpretation is directly
contrary to certain language used in the STS itself. Issues of intent and contract
interpretation, when arising out of the ambiguous use of language, are rarely amenable
9

This is an email from Zakrzewski to an Ernest Mario dated July 25, 2006.
12

to summary judgment. See Peck v. Donovan, Civ. No. 07-5500, 2010 WL 4628198, *2
(D.N.J. Nov. 4, 2010). The court would not take the decision of whether the STS
exceeds the scope of the patents away from the jury on this record.
3. Injury
The court next addresses Abbott’s argument that judgment should be entered in
its favor because Ethypharm has not sufficiently alleged antitrust injury.
a. Standards
Antitrust injury is “an injury of the type the antitrust laws were intended to prevent
and that flows from that which makes the defendants’ acts unlawful.” Brunswick Corp.
v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489 (1977). “The injury should reflect the
anticompetitive effect either of the violation or of anticompetitive acts made possible by
the violation.” Id. “The antitrust-injury requirement helps ensure ‘that the harm claimed
by the plaintiff corresponds to the rationale for finding a violation of the antitrust laws in
the first place, and it prevents losses that stem from competition from supporting suits
by private plaintiffs for . . . damages.’” West Penn Allegheny Heath Sys. Inc. v. UPMC,
627 F.3d 85, 101 (3d Cir. 2010) (citing Atl. Richfield Co. v. USA Petroleum Co., 495
U.S. 328, 342 (1990)).
b. Discussion
The court agrees with Abbott that Ethypharm has not proffered evidence of
a “causal connection between the [alleged] antitrust violation and actual damage
suffered.” See Callahan v. A.E.V., Inc., 182 F.3d 237, 250 (3d Cir. 1999) (citations and
internal brackets omitted). In its opposition papers to Abbott’s motion, Ethypharm

13

describes its injury (without citation to record evidence) as follows:
First, Abbott itself licensed Ethypharm’s technology for just this purpose [of
competing against TriCor®] in Latin America. Second, Ethypharm initially
approached certain Restricted Entities who expressed interest in purchasing
Antara®. Third, AstraZeneca, one of the Restricted Entities, partnered with
Abbott in an effort to develop a fenofibrate/statin combination just after the STS.
Ethypharm’s product was equally, if not better, positioned with a lower dose of
fenofibrate to do so. Finally, a jury is entitled to exercise its common sense and
ask: if Abbott did not believe these 36 companies would be interested in
purchasing the Antara® Rights, what possible reason did Abbott have to include
them on a Restricted Entities list?
(D.I. 191 at 20) At oral argument, Ethypharm directed the court to a 2009 Abbott Latin
America “Executive Summary” on fenofibrate licensing, describing the competitive
landscape for ControLip®, the Latin American version of Antara®. (D.I. 192, pt. 3, ex.
36) That document states that “[Ethypharm’s] ControLip® 130mg would provide Abbott
with a new and innovative next generation fenofibrate product[,] thus staying one step
ahead of the generic competition and protecting its fenofibrate market from possible
new competitors.” (Id.) Ethypharm also pointed to a 2006 Abbott presentation
regarding TriCor® competition; in the context of Reliant’s sale to Oscient, Abbott stated
that “[t]he sale of Antara® was not a surprise, however Oscient is[.]” (Id., ex. 26 at 17)
Abbott believed at that time that “Oscient’s lack of resources, coupled with a small, nonspecialty sales force, are unlikely to pose significant competition to TriCor®.” (Id.)
Ultimately, it is Ethypharm’s position that “Abbott can’t restrict 36 companies
from bidding on the Antara® Rights and then argue that Ethypharm has no specific
proof that any of these 36 companies was interested.” (D.I. 191 at 19) It is true that “[i]t
is not necessary to show with total certainty the amount of damages sustained, just that
the antitrust violation caused the antitrust injury suffered by the plaintiff.” Rossi v.
14

Standard Roofing, Inc., 156 F.3d 452, 483 (3d Cir. 1998). As the Supreme Court has
held,
damage issues in [antitrust] cases are rarely susceptible of the kind of concrete,
detailed proof of injury which is available in other contexts. . . [T]he factfinder
may conclude as a matter of just and reasonable interference from the proof of
defendants’ wrongful acts and their tendency to injure plaintiffs’ business, and
from the evidence of the decline in prices, profits and values, not shown to be
attributable to other causes, that defendants’ wrongful acts had caused damage
to the plaintiffs.
J. Truett Payne Co., Inc. v. Chrysler Motors Corp., 451 U.S. 557, 565 (1981) (quoting
Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 123-24 (1969) (internal
quotations omitted)). Ethypharm, however, does not cite evidence from which a jury
could infer a “decline in [ ] profits and values, not shown to be attributable to other
causes.” Id.
The crux of Ethypharm’s argument is that Oscient did not have the ability to
effectively compete from the outset. (D.I. 191 at 19-20) Even if the court were to
assume that the Restricted Entities were better equipped to market Antara® (due to, for
example, having larger sales forces and more expendable resources), there is no
factual basis from which the court (or a jury) could infer that such a company would
have had success with Antara® where Oscient failed. Put simply, there are many
market influences that may have contributed to Oscient’s failure with Antara®.
Ethypharm’s arguments are speculative and, absent more, Ethypharm has not
evidenced any causal connection to an antitrust injury. Abbott’s motion for summary
judgment is granted on this ground.
B. Sham Litigation

15

Ethypharm asserts two sham litigation theories, focusing on: (1) Abbott’s
counterclaims of infringement (as to the ‘405 and ‘881 patents in the Reliant action);
and (2) Abbott’s supposed knowledge of inequitable conduct by a Fournier employee
(Reginault). Abbott moves for summary judgment on each claim.10
1. Standard for Noerr-Pennington immunity
A patent owner asserting its rights through patent infringement litigation is
generally immune from antitrust liability. Eastern R.R. Presidents Conference v. Noerr
Motor Freight, 365 U.S. 127 (1961); United Mine Workers of Am. v. Pennington, 381
U.S. 657 (1965). Commonly referred to as the Noerr-Pennington doctrine, this
immunity extends to persons who petition all types of government entities, including
legislatures, administrative agencies, and courts. California Motor Transp. Co. v.
Trucking Unlimited, 404 U.S. 508, 510 (1972). Noerr-Pennington immunity, however, is
subject to an exception for “sham” litigation. In this regard, the Supreme Court has
outlined a two-part test to determine whether the “sham litigation” exception applies.
See Prof’l Real Estate Investors, Inc. v. Columbia Pictures Indus., Ind., 508 U.S. 49
(1993). As an objective first part, “the lawsuit must be objectively baseless in the sense
that no reasonable litigant could realistically expect success on the merits.” Id. at 60. If
an objective litigant could conclude that the suit is reasonably calculated to elicit a
favorable outcome, then the suit does not qualify as sham litigation and is immunized
under the Noerr-Pennington doctrine. Id. The subjective second part of the definition
10

Abbott also moved for judgment on Ethypharm’s former allegation that Abbott
lacked a reasonable basis to believe that any Stamm patent was valid; Ethypharm
expressly abandons this theory in their answering brief. (D.I. 189 at 1, n.2) Judgment,
therefore, should be entered for Abbott on this particular claim.
16

arises only if the challenged litigation is objectively meritless. In such a case, the court
must decide whether the “baseless lawsuit conceals ‘an attempt to interfere directly with
the business relationships of a competitor.’” Id. at 60-61. To invoke the “sham”
exception, plaintiffs must prove, by clear and convincing evidence, that defendant’s
activities were not really efforts to vindicate its rights in court. See C.R. Bard, Inc. v. M3
Systems, Inc., 157 F.3d 1340, 1368-69 (Fed. Cir. 1998) (“sham litigation requires more
than a failed legal theory”) (quoting Handgards, Inc. v. Ethicon, Inc., 743 F.2d 1282,
1288 (9th Cir. 1984)); MCI Communications v. Am. Telephone and Telegraph Co., 708
F.2d 1081, 1155 (7th Cir. 1983).
2. Sham litigation based on infringement
Claim 1 of the ‘405 patent and claim 37 of the ‘881 patent are representative of
the asserted claims in the Abbott/Reliant action:
1. A composition comprising a hydrosoluble carrier and micronized fenofibrate
having a dissolution of at least 10% in 5 minutes, 20% in 10 minutes, 50% in
20 minutes and 75% in 30 minutes, as measured using the rotating blade
method at 75 rpm according to the European Pharmacopoeia, in a dissolution
medium constituted by water with 2% by weight polysorbate 80 or with 0.025M
sodium lauryl sulfate.
37. A granulate comprising micronized fenofibrate, wherein the granulate has a
dissolution of at least 10% in 5 minutes, 20% in 10 minutes, 50% in 20
minutes and 75% in 30 minutes, as measured using the rotating blade method
at 75 rpm according to the European Pharmacopoeia, in a dissolution medium
constituted by water with 2% by weight polysorbate 80 or a dissolution medium
constituted by water with 0.025 M sodium lauryl sulfate.
(emphasis added) It is not disputed that, before filing its counterclaims, Abbott received
from Reliant the full Antara® NDA, which included testing data showing that Antara®
does not dissolve close to the “at least 10% in 5 minutes” level required by the patents.

17

(D.I. 189 at 3; D.I. 181 at 8; D.I. 190 at ex. 7, p.3) Specifically, the Antara® NDA shows
that Antara®’s dissolution at 5 minutes is 1.2-2.5%.
a. Abbott’s infringement theories
Abbott argues that its counterclaims were premised upon two theories of
infringement with respect to Antara®: the “Granulate Theory;” and the “10% in 6
minutes” DOE theory. As noted above, claim 37 of the ‘881 patent claims “[a] granulate
comprising micronized fenofibrate, wherein the granulate has a dissolution of at least
10% in 5 minutes, 20% in 10 minutes, [etc.]” The Granulate Theory is that the
granulates within Antara® literally meet the “at least 10% in 5 minutes” limitation. The
Granulate Theory is based on the belief of Abbott’s expert, Dr. Robert O. Williams III
(“Williams”), that, because granulates dissolve more quickly than the capsule product,
one can “reasonably expect” that the granulates achieve 10% dissolution at or near five
minutes.11 (D.I. 181 at 11-12; D.I. 190, ex. 10 at ¶ 39) Abbott argues that, because
Reliant’s NDA does not disclose the dissolution rate for the granulates within capsules
of Antara®, there is no data contradicting its theory.
The “10% in 6 minutes DOE Theory” is also supported by Williams, who opines
that reaching 10% in 6 minutes is equivalent under the DOE to 10% in 5 minutes.
Abbott argues that Antara® reaches a dissolution rate of at least 10% in 6 minutes and,
therefore, infringes under the doctrine of equivalents. The parties do not dispute that
the NDA shows a rapid rise in dissolution for Antara® between 5 and 10 minutes. For

11

Ethypharm’s 30(b)(6) witness admitted that, if the granulates were tested
without the capsule, the dissolution results “could be slightly superior probably” over
testing the intact capsule. (D.I. 182, ex. 19 at 117:7-23)
18

example, one batch went from 3% at 5 minutes to 64.5% in 10 minutes. Thus, Abbott
argues, Antara® must “pass through” the 10% point sometime between 5 and 10
minutes.12 (D.I. 197 at 3; D.I. 190, ex. 10 at ¶ 43)
b. Discussion
Neither party to the Reliant action did scientific testing to either verify or discredit
the Granulate Theory or 10% in 6 minutes DOE Theory. After Abbott proffered its
counterclaims on the ‘405 and ‘881 patents on January 7, 2005, the parties entered into
settlement discussions which culminated in a settlement agreement in April 2006. The
Reliant action was dismissed on April 19, 2006 prior to the close of discovery.
Ethypharm argues that Abbott’s DOE theories were shams in two regards. First,
Ethypharm asserts that, because Williams did not rely on actual testing, his opinion
cannot be reasonable.13 However, Ethypharm does not cite, and the court is not aware
of, caselaw suggesting that Williams was required to do actual testing (as compared to
mathematical estimation) in support of his DOE theory before Abbott filed its
compulsory counterclaims.
Ethypharm also argues that Abbott’s theory is invalid as a matter of law, insofar
as it vitiates the “at least 10% in 5 minutes” limitation. It is certainly true that the
doctrine of equivalents is not unlimited, and it cannot be “used to ignore the actual

12

Ethypharm’s expert stated it is not “impossible” that Antara® dissolves at 10%
in 6 minutes. (D.I. 181 at 10) (further citation omitted)
13

Williams estimated the dissolution at 6 minutes by “approximat[ing] by
interpolation” the 5- and 10-minute data in the Antara® NDA, and relied on his beliefs
that granulates dissolve more quickly than do capsules. (D.I. 189 at 12; D.I. 190, ex. 9
at 104:5-9; 96:14-97:14)
19

language of the patent.” See K-2 Corp. v. Salomon S.A., 191 F.3d 1356, 1366-67 (Fed.
Cir. 1999) (cited by Ethypharm at D.I. 189 at 15). However, the Federal Circuit has
specifically determined that the doctrine of equivalents may apply to claims containing
specific numeric ranges, regardless of whether the claim also contains words of
approximation. See Adams Respiratory Therapeutics, Inc. v. Perrigo Co., 616 F.3d
1283, 1291, 1293 (Fed. Cir. 2010) (vacating district court’s grant of summary judgment
of noninfringement on the doctrine of equivalents, as plaintiff introduced sufficient
evidence from which the jury could conclude that a mean response (AUC) value of
3493.38 hr*ng/mL is insubstantially different from the claimed value of “at least 3500
hr*ng/mL”). “The proper inquiry is whether the accused value is insubstantially different
from the claimed value.” Id.
Because the Reliant action settled expeditiously, neither the court nor the jury is
in the position to judge the veracity of Abbott’s position in this regard. Ethypharm does
not point to anything in the prosecution history of the ‘405 and ‘881 patents that would
preclude Abbott’s arguments, which are not demonstrably invalid as a matter of law.
For these reasons, there is insufficient evidence of record from which a reasonable jury
could conclude that Abbott’s DOE theories were a sham, and the court grants Abbott’s
motion for summary judgment of no sham litigation on its infringement counterclaims.
3. Sham litigation based on inequitable conduct
Ethypharm also argues that Abbott lacked a reasonable basis to believe that the
Stamm patents were enforceable because Abbott was aware that Fournier committed
inequitable conduct before the PTO. Ethypharm’s theory of inequitable conduct in this

20

regard is that Fournier’s chief scientist, Philippe Reginault (“Reginault”), violated his
duty of candor by not informing the PTO in 2003 that a curve corresponding to “Lot
2177” of Fournier’s Lipanthyl 200 fenofibrate product, which Fournier relied on to show
the improved dissolution of its new fenofibrate formulation, was “inherently unreliable.”
(D.I. 189 at 17) The Lot 2177 data set was incorporated into the ‘405 and ‘881 patents
as figure 1 of those patents, wherein it provided a contrast to the dissolution percentage
of the tablet of the “invention.”
It is Ethypharm’s position that Abbott relied exclusively on the Lot 2177 data
during prosecution of the Stamm patents without confirmation of the data from other
sources, and despite 16 other Lipanthyl 200 dissolution data sets using either of the two
dissolution media included in the patents (0.025M SLS or “Tween”). (Id. at 7-8) These
16 data sets were: (1) obtained in 1997; (2) “homogenous” (D.I. 190, ex. 16 at 88:11);
(3) indicative of a faster dissolution of Lipanthyl 200 than that reported to the PTO by
the Lot 2177 curve (id., ex. 10, ¶ 61);14 (4) incorporated into a 2005 declaration to the
PTO; but (5) not disclosed to the PTO during prosecution of the Stamm patents.
The court need only address one aspect of Ethypharm’s theory to resolve the
motion at bar: specific intent. In this regard, Ethypharm stresses Reginault’s testimony
that the results of a single lot are not indicative of a sample’s dissolution range, which

14

In other words, the 16 other data sets provide a similar dissolution profile to the
invention, rendering the contrast between the plot for the invention and for Lipanthyl
200 moot. Ethypharm provides a colored chart of these plots in its opposition papers.
(D.I. 189 at 8)
21

can be comprised of variable results.15 (D.I. 189 at 17 (citing D.I. 190, ex. 16 at 86:2287:12, 93:3-94:16)) Ethypharm also argues that Abbott’s characterization of the
Lipanthyl 200 testing in prior litigation with Teva Pharmaceuticals USA, Inc. (“Teva”)
demonstrates Abbott’s understanding that the Lot 2177 curve was inconsistent with
other Lipanthyl 200 data. (D.I. 189 at 19) Specifically, Abbott previously dismissed
Teva’s argument that it committed inequitable conduct by failing to identify the 16
Lipanthyl 200 data sets to the PTO, by arguing that two inconsistent data sets were
insufficient to demonstrate the falsity of the data supplied to the PTO against a
backdrop of hundreds of tests overall. See Teva Pharmaceuticals USA, Inc. v. Abbott
Labs., 580 F. Supp. 2d 345, 366 (D. Del. 2008) (hereinafter, “Teva”).16 At oral
argument, Ethypharm argued that the number of withheld results – 16, rather than
“hundreds” – also demonstrates specific intent by Reginault. (D.I. 205 at 44-46)
On this record, Ethypharm cannot clear the high hurdle of proving that Abbott’s
counterclaims were objectively baseless based on inequitable conduct. To prove
inequitable conduct, Ethypharm must ultimately show, by clear and convincing
evidence, that Reginault17 “knew of the [unreliability of the Lot 2177 curve], knew that it

15

Reginault stated that “the regularity standards for these tests are that the range
is 20 percent minimum. So traditionally, it is known that results will vary, and this
applies to any product.” (D.I. 190, ex. 16 at 96:14-19)
16

With respect to inequitable conduct, this court in Teva ultimately held that the
record lacked evidence that Reginault recalled, and knowingly withheld, the two
inconsistent data sets three years after receiving the data. 580 F. Supp. 2d at 369.
17

Reginault is the only named person at Abbott specifically alleged to have
committed inequitable conduct. Ethypharm couches many of its arguments in terms of
what “Abbott” knew or intended; such allegations are too general to withstand scrutiny.
22

was material, and made a deliberate decision to withhold” this information from the
PTO. See Therasense, Inc. v. Becton, Dickinson & Co., --- F.3d ---, 2011 WL 2028255,
*9 (Fed. Cir. May 25, 2011). Ethypharm has simply suggested that Reginault’s
omission was grossly negligent or negligent under a “should have known” standard,
which is not sufficient.18 Id. Reginault’s testimony that several data sets make up a
dissolution curve is too attenuated from the proposition that the Lot 2177 data was
“unreliable.” If it is true as a scientific principle, as Reginault testified, that one data set
can never provide a complete portrait of the relevant information, the PTO would have
taken this into account in its consideration of figure 1. Regardless, there is no evidence
that Reginault deliberately set out to deceive the PTO in the manner suggested.19
Abbott’s motion for summary judgment of no sham litigation is granted.
V. CONCLUSION
For the foregoing reasons, Abbott’s motions for summary judgment of no
anticompetitive conduct and no sham litigation are granted. An appropriate order shall
issue.

18

The Therasense decision issued two days prior to defendant’s motion for
summary judgment; Ethypharm does not address it in its answering papers.
19

For example, as Abbott points out, there is no indication that Reginault was
asked “when he came to this alleged understanding about inherent unreliability and
[he] was never asked whether he had that understanding in mind when he submitted
his 2003 declaration in connection with prosecution of the ‘881 patent.” (D.I. 197 at 9,
n.9) (emphasis in original)
23