CVS MERIDIAN, INC., et al v. PFIZER INC., et al

Filing 14

AMENDED OPINION. Signed by Judge Faith S. Hochberg on 8/27/09. (dc, )

FOR PUBLICATION UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY : : : : : : : : : : : : : Hon. Faith S. Hochberg, U.S.D.J. MDL No. 1479 Master File No. 02-1390 OPINION Date: August 27, 2009 Civil Action Nos. 02-1830 (FSH) 02-2731 (FSH) 02-5583 (FSH)

IN RE NEURONTIN ANTITRUST LITIGATION

APP E A RA N CE S: Jonathan D. Clemente, Esq. CLE M E N T E MUELLER, P.A. 218 Ridgedale Avenue Cedar Knolls, New Jersey 07927 LIA ISO N COUNSEL FOR DIRECT PURCHASER CLASS PLAINTIFFS Barry L. Refsin, Esq. Steve D. Shadowen, Esq. HA N G LE Y ARONCHICK SEGAL & PUDLIN LLP One Logan Square, 27th Floor Philadelphia, Pennsylvania 19103 AT T O RN E Y S FOR PLAINTIFFS CVS PHARMACY, INC., RITE AID CORPORATION, AND RITE AID HDQTRS. CORP. Richard Kilsheimer, Esq. KA P LA N , FOX & KILSHEIMER LLP 850 Third Avenue, 14th Floor New York, New York 10022 AT T O RN E Y S FOR PLAINTIFF MEIJER, INC.

Adam Steinfeld, Esq. Bruce Gerstein, Esq. Brett Cebulash, Esq. GA RV IN , GERSTEIN & FISHER, LLP 1501 Broadway New York, New York 10036 AT T O RN E Y S FOR PLAINTIFF LOUSIANA WHOLESALE DRUG CO. John J. Francis, Jr., Esq. Michael C. Zogby, Esq. DRIN KE R BIDDLE & REATH LLP 500 Campus Drive Florham Park, New Jersey 07932 Gerald Sobel, Esq. Myron Kirschbaum, Esq. Stephen J. Elliott, Esq. Peta Gordon, Esq. KA Y E SCHOLER LLP 425 Park Avenue New York, New York 10022 Jack. B. Blumenfeld, Esq. Karen Jacobs Louden, Esq. MO RRIS, NICHOLS, ARSHT & TUNNELL LLP 1201 N. Market Street P.O. Box 1347 Wilmington, Delaware 19899 AT T O RN E Y S FOR DEFENDANTS PFIZER INC., AND WARNER-LAMBERT COMPANY LLC

HOCHBERG, District Judge. This matter comes before the Court upon the consolidated Motion to Dismiss the Direct Purchaser Plaintiffs' Claims (Docket # 90) filed by Defendants Warner-Lambert Company LLC and Pfizer Inc. (collectively, "Warner-Lambert"), pursuant to Fed. R. Civ. P. 12(b)(6). The Court has considered the briefs of the parties, and oral argument held on April 22, 2009. I. Factual Background This matter arises from actions brought by direct purchasers of the anti-epilepsy drug gabapentin, which has been marketed by Defendants under the tradename Neurontin since 1994.1 Plaintiffs assert that Defendants violated federal antitrust laws by using patents for or related to gabapentin to block generic competition for Neurontin. The Judicial Panel on Multidistrict Litigation transferred several related actions to this Court for coordinated and consolidated pretrial proceedings, pursuant to 28 U.S.C. § 1407.2 Certain facts and allegations underlying this action have been discussed extensively in two Opinions handed down by this Court today in a

This proceeding involves several interrelated Defendants. Pfizer Inc. is a Delaware corporation. Warner-Lambert Company LLC, formerly Warner-Lambert Company, is a Delaware limited liability company, which became a wholly-owned subsidiary of Pfizer Inc. on or about June 19, 2000. Both Defendants are currently in the business of developing, manufacturing, distributing, advertising and selling Neurontin, among other drugs, throughout the United States. These proceedings were originally transferred to Hon. John C. Lifland, U.S.D.J. on August 15, 2002. They were reassigned to this Court on March 9, 2007. 1
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related matter, In re Gabapentin Patent Litig. (No. 00-2931, MDL No. 1384).3 For purposes of the instant motion, however, the following background is relevant and bears repeating. A. Warner-Lambert's Gabapentin Patents

Having discovered gabapentin and its usefulness in preventing and limiting epileptic seizures in the 1970s, Warner-Lambert obtained various patents covering the drug and its uses. Warner-Lambert obtained U.S. Patent No. 4,024,175 (the "`175 Patent"), which claimed the chemical molecule gabapentin anhydrous in 1977. The `175 Patent expired in 1994. In 1979, Warner-Lambert obtained U.S. Patent No. 4,087,544 (the "`544 Patent") covering the use of gabapentin to treat epilepsy. The `544 Patent expired in 2000.4 Warner-Lambert developed its Neurontin products on the basis of these patents. Following clinical trials, Warner-Lambert submitted New Drug Applications ("NDAs") to the FDA for the use of gabapentin to treat epilepsy. The FDA approved NDA No. 20-235, for gabapentin capsules, on December 30, 1993 and NDA No. 20-882, for gabapentin tablets, on October 9, 1998. Pursuant to these NDAs, Neurontin was only approved for use as an adjunctive therapy for the treatment of epilepsy.

The Court recommends that this Opinion be read in conjunction with the Opinion deciding Warner-Lambert's Motion to Strike Certain Affirmative Defenses of the Teva, IVAX, and Eon Defendants (the "Teva Opinion") and the Opinion deciding Warner-Lambert's Motion to Strike Certain Affirmative Defenses and to Dismiss Certain Counterclaims of Purepac Defendants (the "Purepac Opinion") in In re Gabapentin Patent Litig. The Court presumes familiarity with the facts and arguments set forth in the Teva and Purepac Opinions as well as with the abbreviations and acronyms used therein. To the extent the facts and arguments in those Opinions are relevant, yet not reiterated in this Opinion, they are incorporated by reference. The `544 Patent would have expired on May 2, 1995, but its term was extended under 35 U.S.C. § 156 until January 16, 2000. It was subsequently further extended until July 16, 2000 pursuant to the FDA's pediatric exclusivity regulations. 2
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Warner-Lambert filed several Orange Book listings in connection with the development and sale of Neurontin. In January 1992, Warner-Lambert certified that the `175 and `544 Patents covered the formulation, composition and/or method of use of the drug product that was the subject of NDA No. 20-235. Both patents were then listed in the Orange Book. Plaintiffs contend that Neurontin, as it was approved by the FDA, is protected only by these two patents. In addition to the `175 and `544 Patents, Warner-Lambert has obtained and listed in the Orange Book several other gabapentin-related patents. In the late 1980s, Warner-Lambert applied for a patent covering a monohydrate form of the gabapentin compound in which each gabapentin molecule is associated with one molecule of water.5 U.S. Patent No. 4,894,476 (the "`476 Patent"), claiming gabapentin monohydrate, issued on January 16, 1990 and expired on May 2, 2008. At about the same time, Warner-Lambert also discovered that gabapentin could be useful in slowing or preventing neurodegeneration. On January 28, 1992, Warner-Lambert obtained U.S. Patent No. 5,084,479 (the "`479 Patent"), claiming the use of gabapentin anhydrous to treat neurodegenerative diseases.6 This patent expires on January 2, 2010.

Before this time, gabapentin was known to exist in two principal forms: (1) an anhydrous form where no water is associated with the gabapentin molecules and (2) a hydrated form where some water is associated with the gabapentin molecules. Only two hydrated forms were then known: (1) two gabapentin molecules associated with each molecule of water and (2) four gabapentin molecules associated with each molecule of water. Gabapentin monohydrate, by contrast, is very crystalline and can be purified to a high degree. After purification, the monohydrate form can be readily converted back to the anhydrous form, containing no water. The `479 Patent's dependent claims describe a method wherein the neurodegenerative disease is stroke, Alzheimer's disease, Huntington's disease, Amyotrophic Lateral Sclerosis (A.L.S.), and Parkinson's disease. Warner-Lambert has neither sought nor received FDA approval to promote or market Neurontin for the treatment of neurodegenerative diseases. 3
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At about the time Neurontin was approved by the FDA, Warner-Lambert amended its patent notification statement to include the `476 and `479 Patents, certifying that they also covered the formulation, composition and/or method of use of the drug product that was the subject of its NDAs. The `476 and `479 Patents were listed in the Orange Book in May 1994 and January 1996, respectively. Warner-Lambert filed a final patent application, U.S. Patent Application No. 07/570,500 ("the `500 Application"), in August 1990. This patent covered the manufacturing process developed by the company to create a low-lactam form of gabapentin.7 As described below, the parties dispute the details and objectives of the resulting patent prosecution. The low-lactam gabapentin patent was ultimately issued as U.S. Patent No. 6,054,482 (the "`482 Patent") on April 25, 2000 and it will expire on April 25, 2017.8 Shortly after the `482 Patent issued, Warner-Lambert certified that it also covered the drug product at issue in both NDA No. 20-235 and NDA No. 20-882, resulting in an Orange Book listing for the `482 Patent as well.

Warner-Lambert scientists had discovered that under certain conditions during the manufacturing process, gabapentin has a tendency to form a lactam, which makes the drug unstable and unsafe. Warner-Lambert ultimately determined that all gabapentin products had to be essentially free from mineral acid impurities, and that certain adjuvants that promote the conversion of gabapentin to gabapentin lactam must be avoided. In an effort to minimize the formation of lactam during the manufacturing process, Warner Lambert developed the manufacturing process disclosed and claimed in this patent application. The `482 Patent discloses that gabapentin must be highly purified before being formulated into the pharmaceutical preparation. The patent also incorporates limits on the types of adjuvants (inactive ingredients) that can be used, since certain adjuvants reduce the stability of the drug. Accordingly, Claim 7 of the `482 Patent claims a "stable and pure pharmaceutical composition ... consisting essentially of" gabapentin containing "less than 0.5% by weight of its corresponding lactam" as well as "less than 20 ppm of an anion of a mineral acid," and "one or more pharmaceutically acceptable adjuvants that do not promote conversion of more than 0.2% by weight of the gabapentin to ... lactam" when stored under certain conditions. U.S. Patent No. 6,054,482. 4
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B.

The Market For Neurontin

Warner-Lambert first began selling Neurontin capsules in early 1994. According to the FDA's required labeling, gabapentin is useful for "adjunctive therapy in the treatment of partial seizures with and without secondary generalization in adults with epilepsy." This was the only use approved by the FDA prior to the launch of Neurontin.9 Once Warner-Lambert began marketing Neurontin however, doctors also began to use Neurontin to treat neurodegenerative conditions such as Parkinson's disease, A.L.S., and neuropathic pain, the uses covered by the `479 Patent but not approved by the FDA.10 Increased awareness of Neurontin's off-label uses led to significant sales of the drug to treat conditions other than epilepsy. By 1998, Neurontin was being prescribed and used almost exclusively for off-label uses. See First Amended Complaint and Demand for Jury Trial of Plaintiffs CVS Pharmacy, Inc., Rite Aid Corporation and Rite Aid HDQTRS. Corp. ¶ 93, In re Neurontin Antitrust Litig., No. 02-5583 (D.N.J. Feb. 14, 2008) ("Direct Purchaser Non-Class Complaint" or "DPNC Complaint").

Neurontin has subsequently been FDA-approved for the treatment of post-therapeutic neuralgia, a chronic debilitating pain frequently accompanying Shingles. Such use is not directly at issue in this proceeding. Under the Federal Food, Drug and Cosmetics Act ("FDCA"), pharmaceutical manufacturers may not market or promote a drug for a use that has not been approved by the FDA unless certain "stringent requirements" are met and the manufacturer resubmits the drug to the FDA testing and approval process. United States ex re. Franklin v. Parke-Davis, 147 F. Supp. 2d 39, 44 (D. Mass. 2001). Once a drug is approved for a one use, however, the FDA does not prevent doctors from prescribing the drug for uses that are different than those approved by the FDA. Allowing physicians to prescribe drugs for such "off-label" usage is a widely-accepted practice that corresponds with the FDA's fundamental mission of regulating pharmaceuticals without interfering directly with the practice of medicine. 5
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C.

Abbreviated New Drug Applications And The Resulting Patent Infringement Litigation

Beginning in 1998, several generic drug manufacturers filed Abbreviated New Drug Applications ("ANDAs") seeking FDA approval to market generic gabapentin products after the expiration of the `544 patent (and its pediatric extension).11 Purepac Pharmaceutical Co. ("Purepac"), the first generic applicant, filed two ANDAs: No. 75-370 for gabapentin capsules on March 30, 1998 and No. 75-694 for gabapentin tablets on September 3, 1999. When Purepac initially filed ANDAs, it submitted a Paragraph IV Certification concerning the `476 Patent and a section viii statement concerning the `479 Patent. Apotex Corp. ("Apotex") filed ANDA No. 75360 for gabapentin capsules on April 17, 1998, and included a Paragraph IV Certification for both the `476 and `479 Patents. Similar ANDAs were subsequently filed by Geneva
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In an ANDA, a generic manufacturer must make one of four certifications concerning each patent that is listed in the Orange Book in conjunction with the approved pioneer drug: I. II. III. That no patent for the pioneer drug has been filed with the FDA (Paragraph I Certification); That the patent for the pioneer drug has expired (Paragraph II Certification); That the patent for the pioneer drug will expire on a particular date and the generic company does not seek to market its generic product before that date (Paragraph III Certification); or That the patent for the pioneer drug is invalid or will not be infringed by the generic company's proposed product (Paragraph IV Certification).

IV.

21 U.S.C. § 355(j)(2)(A)(vii). Alternatively, an ANDA may assert that a patent is inapplicable to the indication for which the drug product will be marketed (a "section viii statement"). If a generic manufacturer files a Paragraph III Certification, the FDA will not approve the ANDA until the patent at issue expires. If a generic manufacturer chooses to file a Paragraph IV Certification, it must promptly disclose its Certification to both the NDA-owner and the patentowner. Upon receipt of a Paragraph IV Certification, the patent-owner may initiate an action for patent infringement within 45 days, and if no such action is brought, the FDA may approve the generic manufacturer's ANDA. If an infringement action is brought within 45 days, FDA approval of the ANDA is automatically postponed for 30 months (unless a court issues a final decision that the patent is invalid or not infringed). 21 U.S.C. § 355(j)(5)(B)(iii). 6

Pharmaceuticals, Inc., Teva Pharmaceuticals USA, Zenith Goldline Pharmaceuticals, and Eon Labs Manufacturing, among others. Based on these ANDA submissions, Warner-Lambert commenced patent infringement litigation against several generic applicants, alleging infringement of the `476 and `479 Patents.12 In response, Purepac, Apotex and several other generic applicants asserted antitrust or unfair competition counterclaims similar to those pending before this Court in the instant action and in In re Gabapentin Patent Litig. By initiating infringement litigation, Warner-Lambert invoked the automatic 30-month stay provision, thereby requiring the FDA to stay approval of the generic manufacturers' ANDAs. Summary judgement of noninfringement was ultimately granted in favor of the generic applicants. See, e.g., Warner-Lambert Co. v. Purepac Pharm. Co., et al., Nos. 98-2749, 99-5948, 2003 WL 21698310 (D.N.J. May 22, 2003) (the "May 22 Opinion"). Plaintiffs now assert that these initial lawsuits were "objectively baseless and intended solely to illegally extend [Defendants'] monopoly by delaying the entrance of generic manufacturers into the gabapentin anhydrous market." DPNC Complaint ¶ 63.
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Warner-Lambert filed, for example, two separate lawsuits in the United States District Court for the District of New Jersey against Purepac, one based on the ANDA for generic gabapentin capsules and the other based on the ANDA for generic gabapentin tablets. The "Capsule Lawsuit" was initiated in June 1998 (No. 98-2749) and the "Tablet Lawsuit" was initiated in December 1999 (No. 99-5948). In each lawsuit, Warner-Lambert asserted actual infringement of the `476 Patent and induced infringement of the `479 Patent. The lawsuits were consolidated for trial purposes in April 2001 in front of Hon. John C. Lifland, U.S.D.J. Warner-Lambert filed a similar patent infringement action against Apotex in the United States District Court for the District of Illinois in July 1998. Warner-Lambert Co. v. Apotex Corp., No. 98-4293 (N.D. Ill. filed July 14, 1998). Successive ANDA filings by other generic applicants led to the filing of subsequent infringement actions. See, e.g, Pfizer Inc. v. Zenith Labs., No. 01-577 (D.N.J. filed Feb. 5, 2001); Pfizer Inc. v. Pharm. Holding. Corp., No. 03-4017 (D.N.J. filed Feb. 5, 2003); Pfizer Inc. v. Geneva Pharm., Inc., No. 03-1545 (D.N.J. filed Apr. 8, 2003). 7

Once the `482 Patent was issued and listed in the Orange Book, generic applicants amended their ANDAs to include Paragraph IV Certifications concerning that patent. The updated certifications led to another round of litigation, beginning in June 2000, as WarnerLambert again filed multiple patent infringement actions against several generic manufacturers. These actions, asserting infringement of the `482 Patent, are those now pending before this Court in In re Gabapentin Patent Litig.13 Generic manufacturers began selling their gabapentin products "at risk" before a court ruling on infringement liability had issued. Purepac, for example, launched its gabapentin capsules in October 2004, and its gabapentin tablets in December 2004. Other manufacturers began selling generic gabapentin products in 2004 and 2005 as well. II. Direct Purchaser Antitrust Actions Plaintiffs in the instant action are direct purchasers of Neurontin.14 Plaintiffs Louisiana Wholesale Drug Company ("Louisiana Wholesale"), Meijer, Inc., and Meijer Distribution, Inc.

A detailed and lengthy account of the procedural posture of the pending `482 Patent infringement actions is set forth in the Teva Opinion. Such information need not be reiterated in full for purposes of the instant motion, and is incorporated herein by reference. This proceeding originally involved actions filed by direct purchasers, individual consumers, insurers and others. Litigation was temporarily stayed on October 23, 2002, pending decisions in In re Gabapentin Patent Litig., and was reactivated in February 2008 with the filing of amended complaints. A Consolidated Class Action Complaint was filed by individual consumers and thirdparty payors (the "End Payors"), alleging violations of the antitrust and/or deceptive practices statutes of 22 states and the District of Columbia. The End Payors' Consolidated Complaint was dismissed on April 2, 2009, following the voluntary dismissal of each underlying individual End Payor action. The instant motion pertains to the two remaining, active Amended Complaints, Louisiana Wholesale Drug Co., Inc. v. Pfizer (Nos. 02-1830, 02-2731) and CVS Pharmacy, Inc. v. Pfizer (No. 02-5583), each of which alleges various federal antitrust claims under Section 2 of the Sherman Act. 8
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(collectively, "Meijer," and all collectively "Direct Purchaser Class Plaintiffs") filed an Amended Complaint asserting two counts of monopolization in violation of Section 2 of the Sherman Act.15 The Direct Purchaser Class Plaintiffs bring this action on behalf of themselves and as representatives of a class of "[a]ll persons who directly purchased Neurontin from Defendant at any time during the period of July 16, 2000 until the effects of Defendant's conduct ceased." First Amended and Consolidated Class Action Complaint of Plaintiffs Louisiana Wholesale Drug Company, Inc., Meijer, Inc., and Meijer Distribution, Inc. ¶ 24, In re Neurontin Antitrust Litig., Nos. 02-1830, 02-2731(D.N.J. Feb. 14, 2008) ("Direct Purchaser Class Complaint" or "DPC Complaint"). Excluded from the class are Defendants and their officers, directors, management and employees, predecessors, subsidiaries and affiliates, and all federal government entities.16 Plaintiffs CVS Pharmacy, Inc. (formerly CVS Meridian, Inc., "CVS"), Rite Aid Corporation, and Rite Aid HDQTRS. Corp. (collectively, "Rite Aid" and all collectively "Direct

Louisiana Wholesale, a Louisiana corporation, purchased Neurontin directly from Warner-Lambert. Meijer Distribution is a Michigan corporation and a wholly-owned subsidiary of Meijer, Inc., also a Michigan corporation. The Meijer Plaintiffs allege standing to assert federal antitrust claims as a direct purchaser of Neurontin by virtue of assignment to them of claims from Frank W. Kerr Co., which purchased Neurontin directly from Defendants during the class period. The Direct Purchaser Class Plaintiffs provide initial allegations in support of proceeding as a class action including: (1) that membership of the class is so numerous that joinder is impracticable; (2) that Plaintiffs' claims are typical, in that Plaintiffs and all class members were damaged by the same wrongful conduct; (3) that Plaintiffs will fairly and adequately protect and represent the interests of the class; (4) that Plaintiffs are represented by experienced and competent class counsel; (5) that common questions of law and fact predominate over those that may affect only individual class members because Defendants have acted on grounds generally applicable to the entire class; and (6) that class treatment is a superior method for the adjudication of this controversy and substantially outweighs any difficulties that may arise in management of this class action. DPC Complaint ¶¶ 25-31. The Court will address these issues, if necessary, upon a separate motion for class certification. 9
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Purchaser Non-Class Plaintiffs") filed an Amended Complaint asserting one count of monopolization and one count of attempted monopolization, also in violation of Section 2 of the Sherman Act.17 Plaintiffs in both actions seek similar relief, primarily a judgment that WarnerLambert's actions are an unlawful restraint of trade in violation of the Sherman Act, treble damages for such actions, and reasonable costs and attorneys' fees. See DPC Complaint at 53; DPNC Complaint at 41. Although the claims in each action are styled slightly differently, Plaintiffs have set forth virtually identical allegations concerning Warner-Lambert's anticompetitive conduct. Plaintiffs primarily allege that Warner-Lambert engaged in an "overall scheme" to monopolize the market for gabapentin anhydrous products by forestalling, if not completely preventing, generic competition for Neurontin.18 Warner-Lambert is alleged to have carried out this scheme by: (1) procuring two additional patents that it improperly listed in the Orange Book; (2) manipulating the patent approval process so that a third patent with claims so limited that they are impossible to accurately measure or distinguish from the prior art so that the patent could be used to delay generic entry; (3) filing and prosecuting multiple sham

CVS, a Rhode Island corporation, purchases substantial quantities of pharmaceutical products and other goods for resale to the public through drugstores operated by affiliates. CVS purchased Neurontin from a range of wholesalers, who purchased the drug directly from WarnerLambert. CVS is the assignee of its wholesalers' antitrust claims. Rite Aid, a Delaware corporation, also purchases substantial quantities of pharmaceutical products and other goods for resale to the public through drugstores operated by affiliates. Rite Aid purchased Neurontin from one wholesaler, McKesson, which purchased Neurontin directly from Warner-Lambert. Rite Aid is the assignee of McKesson's antitrust claims. Both CVS and Rite Aid bring this action in their own right and on behalf of the assignor wholesalers. The Direct Purchaser Class Plaintiffs also assert a separate count of monopolization based solely on Warner-Lambert's allegedly baseless patent infringement litigation. The allegations pled in support of this claim are identical to and subsumed within those pled in support of the "overall scheme" claim and do not, therefore, require separate analysis. This separate count will survive the instant motion to the same extent, and for the same reasons, that the allegations of sham litigation as part of an overall monopolization scheme survive. 10
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lawsuits on these patents that no reasonable litigant could have expected to succeed; and (4) engaging in fraudulent off-label promotion to convince doctors to prescribe Neurontin for uses for which it was not approved. DPNC Complaint ¶ 29. Plaintiffs claim that these actions, taken together, foreclosed generic competition in the gabapentin anhydrous market and enabled Warner-Lambert to charge supracompetitive prices for Neurontin. As a result, consumers of gabapentin anhydrous were compelled to pay, and did pay, artificially inflated prices for the drug. A. Allegations Of Patent Prosecution Misconduct

Specifically, Plaintiffs allege that Warner-Lambert manipulated the prosecution of the `482 Patent to provide additional protection for the Neurontin franchise and maximize the delay of generic competition through successive 30-month stays of generic approval. The filing of the initial `500 Application in 1990 led to a series of rejections by the patent examiner and continuation applications by Warner-Lambert. Continuation Application No. 08/020,270 (the "`270 Application"), filed in February 1993, was finally approved for issuance as U.S. Patent No. 5,395,852 (the "`852 Patent"). The `852 Patent was scheduled to issue on March 7, 1995. Shortly before the issuance date, however, Warner-Lambert requested that the approved application be withdrawn in exchange for another continuation application, so that the patent examiner could consider the `476 Patent as well as U.S. Patent No. 4,152,326 (the "`326 Patent"), which is also directed to compounds related to gabapentin, assigned to Warner-Lambert and lists the same inventors. Plaintiffs now contend that Warner-Lambert knew about both patents and should have brought them to the examiner's attention far earlier in the prosecution process. They further allege that these delays were designed to provide Warner-Lambert with "the ability to time the eventual issuance of the patent to its greatest advantage." DPC Complaint 11

¶ 97; see also DPNC Complaint at 53-54. Warner-Lambert prosecuted its final continuation application over the next five years, allegedly stepping up its efforts only when it appeared that protection for Neurontin under other patents would soon expire. The `482 Patent, as issued, has claims similar to those approved years earlier under the `270 Application, thereby implying, according to Plaintiffs, that Warner-Lambert could have patented the low-lactam formulation much earlier if the patent itself had been the company's actual objective. But this patent, Plaintiffs allege, was merely a "contingency" patent held in reserve for use in further delaying the launch of generic gabapentin.19 Plaintiffs claim, in sum, that "Defendant intentionally delayed and prolonged the prosecution of its patent application in order to better use the patent ... to delay generic competition by improperly obtaining another automatic 30-month stay of FDA approval of generic ANDAs." DPC Complaint ¶ 99. B. Allegations Of Improper Orange Book Listings

Plaintiffs further allege that Warner-Lambert submitted false and fraudulent information to the FDA in order to improperly list the `476 and `479 Patents in the Orange Book. They assert that Warner-Lambert listed these patents despite knowing that the patents "(1) did not claim an

Plaintiffs further allege Warner-Lambert was hoping to use the delayed issuance of the `482 Patent to establish that patent as a "gap filler" between the originally expected expiration of Neurontin market exclusivity and the approval and launch of pregabalin, a successor drug to Neurontin. Warner-Lambert allegedly hoped to have pregabalin ready for launch prior to generic entry, so that it could shift consumers of Neurontin to pregabalin before losing those consumers to generic versions of Neurontin. Even with an accelerated timetable for the approval and launch of pregabalin, however, Warner-Lambert needed patent protection beyond that provided solely by the `175 and `544 Patents and allegedly used the `482 Patent to provide such protection. DPC Complaint ¶ 5; DPNC Complaint ¶ 30. Pregabalin was finally approved by the FDA in December 2004 for use in treating two forms of neuropathic pain. It is now sold as Lyrica. 12

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approved drug or an approved method of using a drug, and (2) could not reasonably be asserted to be infringed upon by the sale of generic gabapentin anhydrous." DPNC Complaint ¶ 36. Warner-Lambert's certification concerning the `476 Patent was allegedly false and fraudulent because Warner-Lambert knew the `476 Patent claimed a different formulation or composition than the drug approved for sale as Neurontin. Id. ¶ 41. Plaintiffs contend that the certification concerning the `479 Patent was similarly false and fraudulent because that patent claimed only the use of gabapentin anhydrous to treat neurodegenerative disorders, not the FDA-approved use of Neurontin to treat epilepsy. Id. ¶ 43. Plaintiffs allege that Warner-Lambert listed these patents in the Orange Book "only so that it could take advantage of the ANDA approval process to delay generic approvals for up to 30 months." Id. ¶ 47. Plaintiffs also challenge Warner-Lambert's subsequent listing of the `482 Patent. They allege that Warner-Lambert intentionally narrowed the patent claims covering the gabapentin substance, but nevertheless listed the `482 Patent in the Orange Book, certifying that it related to Neurontin and that infringement could be reasonably asserted against generic applicants. According to Plaintiffs, "this was improper ... because it is not possible to distinguish infringing from non-infringing generic products with regard to each claimed specification of the `482 patent and therefore the `482 patent should not have been listed in the Orange Book." DPC Complaint ¶ 101. C. Allegations Of Sham Patent Litigation

Warner-Lambert's enforcement of the `476, `479, and `482 Patents through infringement litigation is also alleged to be a key component of the company's monopolization scheme. The initial lawsuits asserting the `476 and `479 Patents were, according to Plaintiffs, pursued without 13

either a reasonable basis or reasonable expectation for success, and were initiated "solely to illegally extend [Defendant's] monopoly by delaying the entrance of generic manufacturers into the gabapentin anhydrous market." DPNC Complaint ¶ 63. The `476 Patent actions were allegedly baseless because the targeted ANDAs sought approval for a generic product using gabapentin anhydrous, not gabapentin monohydrate as claimed by the `476 Patent. Without an approved NDA for a drug containing gabapentin monohydrate, Plaintiffs allege that generic manufacturers were neither required nor permitted to file ANDAs for that substance.20 The `479 Patent lawsuits were allegedly baseless because that patent claimed only a use of gabapentin that had not been approved by the FDA and for which the generic applicants were not seeking approval.21 Plaintiffs thus contend that their generic products could not, therefore, infringe upon the `479 Patent. Without any real expectation of

Plaintiffs assert that Warner-Lambert's conduct during the `476 Patent actions further confirms that Defendants knew these lawsuits were neither objectively reasonable nor meritorious. Once the 30-month stay attributable to the various `476 Patent cases expired, and the lawsuits offered no further protection from generic competition under Hatch-Waxman, Warner-Lambert stopped pursuing the `476 Patent claims. Indeed, Warner-Lambert did not oppose summary judgment motions in the `476 infringement lawsuits, conceding that the generic products would not infringe that patent. See May 22 Opinion, 2003 WL 21698310. According to Plaintiffs, "Defendant's infringement complaints asserted that, since the `479 patent claimed a use of gabapentin (regardless of whether that use had passed muster with the FDA), any ANDA for generic Neurontin would be an act of infringement under this section, regardless of the fact that generic manufacturers would be unable to market gabapentin for the use claimed in the `479 patent." DPC Complaint ¶ 80. The Federal Circuit ultimately rejected this theory, finding that it was "inconsistent with both the stated purposes of the Hatch Waxman Act, and would confer substantial additional rights on pioneer drug patent owners that Congress quite clearly did not intend to confer." Warner-Lambert, Co. v. Apotex Corp., 316 F.3d 1348, 1359 (Fed. Cir. 2003). As a result, the Federal Circuit held that "because an ANDA may not seek approval for an unapproved or offlabel use of a drug ... it necessarily follows that 35 U.S.C. 271(e)(2)(A) does not apply to a use patent claiming only such use." Id. at 1356. 14
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success on the merits of these actions, "Defendant simply used these two patents to secure the 30-month stay of approval of generic ANDAs that is automatically triggered by the filing of an infringement suit regarding an Orange Book-listed patent." DPC Complaint ¶ 7. Plaintiffs similarly allege that the litigation concerning the `482 Patent is baseless and likewise intended to further delay the approval and launch of generic products. Plaintiffs assert that because the claims of the `482 Patent are formulated so narrowly, it is not possible to determine whether generic products would actually infringe that patent.22 According to Plaintiffs, Warner-Lambert was well aware of this fact yet still initiated infringement actions. "A reasonable litigant," however, "would have realized that the inability of technology to quantify and distinguish the level of chloride ions at the low levels specified by the `482 patent would make it objectively impossible to succeed on the litigation based on infringement of the `482 patent." DPC Complaint ¶ 106.23

Plaintiffs allege that there are no analytical tests at this time to sufficiently or accurately differentiate the 20 ppm chloride ions from the 22 ppm chloride ions covered by prior patents. DPC Complaint ¶ 105. Plaintiffs support many of the allegations just described by referring to certain internal marketing documents created and maintained by Warner-Lambert. According to Plaintiffs, despite the existence, listing and litigation of the `476, `479, and `482 Patents, Warner-Lambert was still predicting generic competition for Neurontin in 2000, when the `544 Patent expired, rather than when the other patents expired years later. Other internal documents indicate that Warner-Lambert chose not to seek FDA approval for additional indications because there was not enough time to do so before the expiration of the patents that Warner-Lambert believed were protecting the market. Plaintiffs allege that these documents establish that Warner-Lambert "recognized that these patents provided no genuine exclusionary force because Defendant could not use these patents to obtain a court order enjoining generic competition." DPC Complaint ¶ 7. If WarnerLambert believed that the `476 and `479 Patents, for example, were actually "capable of providing patent protection by covering an approved drug or use, as required for listing in the Orange Book [and subsequent patent infringement litigation] then Defendant would have been projecting internally that Neurontin had patent protection through at least 2008 (or 2010), and 15
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D.

Allegations Of Off-Label Marketing

Finally, Plaintiffs allege that Warner-Lambert, having recognized that potential lifetime sales of Neurontin would be limited, also attempted to unlawfully maintain its monopoly over the gabapentin anhydrous market by fraudulently promoting the drug for off-label uses.24 Rather than facing this challenge in a lawful manner or developing legitimate alternative profit streams, Warner-Lambert allegedly decided to aggressively and illegally promote Neurontin for a variety of off-label uses without seeking additional FDA approval.25 "Defendant's purpose in pursuing

would have developed its plans and strategies in reliance upon that protection." Id. at 50. Plaintiffs present similar allegations about the `482 Patent and Warner-Lambert's recognition that it would protect the Neurontin franchise only for the duration of the automatic 30-monthstay. Id. at 102. These documents, Plaintiffs allege, confirm the anticompetitive nature of any actions taken by Warner-Lambert with respect to these patents. Defendants dispute the conclusions drawn by Plaintiffs. Plaintiffs allege that Defendants conceived their monopolization scheme upon realizing that there were significant regulatory limits to their ability to generate sufficient revenues and profits from Neurontin: "First, Defendant recognized that its ability to legally market Neurontin was limited, since it had only received FDA approval for a single indication, as an adjunctive therapy for epilepsy. Second, Defendant recognized that it had just six years during which Neurontin would be free from generic competition." DPNC Complaint ¶ 27. Defendants allegedly attempted to respond to this situation by unlawfully expanding the market and delaying entry of generic competitors. The Direct Purchaser Plaintiffs are not the first to challenge Warner-Lambert's marketing of Neurontin. The Department of Justice investigated Warner-Lambert's marketing conduct over a seven-year period, filing felony criminal charges in the District of Massachusetts on May 13, 2004. Warner-Lambert was charged with the criminal distribution of an unapproved new drug and distribution of a misbranded drug. Warner-Lambert ultimately admitted that its marketing of Neurontin was criminal, pled guilty to the charges on June 7, 2004, and agreed to pay more than $430 million in sanctions, along with restitution to federally-funded Medicaid programs. Consumer purchasers and third-party payors also brought suit against Warner-Lambert for violations of the Racketeer Influenced and Corrupt Organizations Act (RICO) and the New Jersey Consumer Fraud Act (NJCFA), alleging that Warner-Lambert engaged in a fraudulent scheme to promote and sell the drug Neurontin for "off-label" conditions. That proceeding is currently pending before Hon. Patti B. Saris, U.S.D.J., in the District of Massachusetts. In re: 16
25 24

the illegal promotion campaign" was, Plaintiffs assert, "to quickly and dramatically grow the market for Neurontin in the years prior to anticipated loss of market exclusivity." DPC Complaint ¶ 67. By publishing misleading articles, withholding studies showing that Neurontin was not effective for certain off-label uses, and encouraging salespeople to use biased "medical liaisons" in sales pitches to physicians, among other tactics, Warner-Lambert allegedly hoped to induce prescription of Neurontin for unapproved uses. This would then inflate WarnerLambert's market share and profits without having to satisfy the FDA's rigorous requirements for approving additional indications for Neurontin. Plaintiffs claim that Warner-Lambert's off-label marketing campaign directly affected the market for gabapentin anhydrous and must, therefore, be considered as integral to the company's overall monopolization scheme. III. Legal Standards A. Motion To Dismiss

On April 1, 2008, Defendants filed a consolidated motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6), seeking to dismiss all of the federal antitrust claims asserted by the Direct Purchaser Plaintiffs. To survive a motion to dismiss filed under Rule 12(b)(6), "[f]actual allegations must be enough to raise a right to relief above the speculative level on the assumption that all of the complaint's allegations are true," even if doubtful in fact. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 545 (2007) ("Twombly"). According to the Third Circuit, "stating ... a claim requires a complaint with enough factual matter (taken as true) to suggest the required element. This does not impose a probability requirement at the pleading stage, but instead

Neurontin Marketing, Sales Practices and Products Liability Litig. No. 04-10981, MDL No. 1629; see also In re Neurontin Marketing, Sales Practices and Products Liability Litig., 618 F. Supp. 2d 96 (2009) (outlining history of and claims asserted in the civil multi-district litigation). 17

simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of the necessary element." Phillips v. County of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008) (internal quotations omitted) (citing Twombly, 550 U.S. at 555-56). Although a court does not need to credit a complaint's "bald assertions" or "legal conclusions," it must view all of the allegations in the complaint as well as all reasonable inferences that can be drawn therefrom in the light most favorable to the plaintiff. Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997) (citing Rocks v. City of Philadelphia, 868 F.2d 644, 645 (3d Cir. 1989)); see also In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1429-30 (3d Cir. 1997). The Supreme Court recently held that "once a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint." Twombly, 550 U.S. at 546.26 Antitrust complaints, in particular, are to be liberally construed at this stage of the proceeding. See In re Hypodermic Prods. Antitrust Litig., MDL No. 1730, 2007 WL 1959224, at *5 (D.N.J. June 29, 2007) (citing Commonwealth of Pa. ex rel. Zimmerman v. PepsiCo, Inc., 836 F.2d 173, 179 (3d Cir. 1988)). "[I]n antitrust cases, where `the proof is largely in the hands of the alleged conspirators,' dismissals prior to giving the plaintiff ample opportunity for discovery should be granted very sparingly." Hosp. Building Co. v. Trustees of Rex Hosp., 425 U.S. 738 (1976) (quoting Poller v. Colombia Broad., 368 U.S. 464, 473 (1962)). "The liberal approach to the consideration of antitrust complaints is important because inherent in such an action is the
26

In evaluating a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6), the Court may consider only the allegations pled in the complaint, exhibits attached to the complaint, matters of public record, and undisputedly authentic documents if a plaintiff's claims are based on those documents. Pension Ben. Guar. Corp. v. White Consol. Indus., 998 F.2d 1192, 1196 (3d Cir. 1992). 18

fact that all details and specific facts relied upon cannot properly be set forth as part of the pleadings." See Lucas Indus. v. Kendiesel, Inc., No. 93-4480, 1995 WL 350050, at *2 (D.N.J. June 9, 1995). Nevertheless, courts have determined that "the heavy costs of modern federal litigation, especially antitrust litigation, and the mounting caseload pressure on the federal courts," militate in favor of requiring some reasonable particularity in pleading violations of the federal antitrust laws. See Sutliff, Inc. v. Donovan, Co., 727 F.2d 648, 654 (7th Cir. 1984); Garshman v. Universal Res. Holding, Inc., 641 F.Supp. 1359, 1367 (D.N.J. 1986). B. Antitrust Claims

The purpose of the Sherman Act is "to protect the public from the failure of the market." 15 U.S.C.A. § 2 n.5 (quoting Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447 (1993)). The Direct Purchaser Plaintiffs have asserted claims of monopolization and attempted monopolization under Section 2 of the Sherman Act, which provides in pertinent part that "[e]very person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony." 15 U.S.C. § 2. Section 16 of the Clayton Act allows a person "threatened [with] loss or damage by a violation of the antitrust laws" to seek injunctive relief. The Clayton Act includes the Sherman Act as one of the applicable "antitrust laws." A claim for monopolization has two elements: "(1) the possession of monopoly power in the relevant market and (2) the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or

19

historic accident." United States v. Grinnell Corp., 384 U.S. 563, 570-71 (1966).27 A monopolization claim does not require proof of the specific intent to monopolize, demanding only proof of "a general intent to do the act, for no monopolist monopolizes unconscious of what he is doing." Times-Picayune Publ'g Co. v. United States, 345 U.S. 594, 626 (1953) (internal quotations and citations omitted). Nevertheless, "the possession of monopoly power will not be found unlawful unless it is accompanied by an element of anticompetitive conduct." Verizon Commc'ns v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398, 407 (2004). This requirement is particularly important in the patent context, because patents inherently grant certain rights to exclude competition. Actions that are permissible under the patent laws, such as the mere maintenance of the statutory patent monopoly, cannot therefore give rise to antitrust liability. See, e.g., Hoffman-La Roche Inc. v. Genpharm Inc., 50 F. Supp. 2d 367, 378 (D.N.J. 1999); Sheet Metal Duct, Inc. v. Lindab, Inc., No. 99-6299, 2000 WL 987865, at *2-3 (E.D. Pa. July 18, 2000).28

Monopoly power is defined as "the power to control prices or to exclude competition." Barr Labs., Inc. v. Abbott Labs., 978 F.2d 98, 111-12 (3d Cir. 1992). As one court observed, "[t]he presence of a patent informs our entire analysis here, because patent laws and antitrust laws exist in tension, as the patent laws protect monopoly power while antitrust laws seek to restrain it. ... Thus, any allegation of antitrust resulting from a patent must extend beyond the rights granted in the patent, and conduct permissible under the patent laws cannot trigger antitrust liability." Sheet Metal Duct, Inc., 2000 WL 987865, at *2 (internal quotations and citations omitted). However, patent holders can violate antitrust laws if they seek to expand the limited monopoly granted by their patents. See, e.g., DiscoVision Assoc. v. Disc Mfg., Inc., Nos. 95-21 & 95-345, 1997 WL 309499, at *8 (D. Del. Apr. 3, 1997) (citing United States v. Westinghouse Elec. Corp., 648 F.2d 642, 647 (9th Cir. 1981)). "[A]ntitrust liability under section 2 of the Sherman Act may arise when a patent has been procured by knowing and willful fraud, the patentee has market power in the relevant market, and has used its fraudulently obtained patent to restrain competition." C.R. Bard, Inc. v. M3 Sys., Inc., 157 F.3d 1340, 1367 (Fed. Cir. 1998), cert. denied, 526 U.S. 1130 (1999). In addition, a claim may be stated for violation of Section 2 20
28

27

A claim for attempted monopolization has three elements: (1) predatory or exclusionary conduct; (2) the possession of the specific intent to monopolize; and (3) a dangerous probability of achieving monopoly power or succeeding in the attempt to monopolize. Ideal Dairy Farms, Inc. v. John Labatt, Ltd., 90 F.3d 737, 750 (3d Cir. 1996) (citing Spectrum Sports, 506 U.S. at 454-58). "Whether a party violates § 2 of the Sherman Act by attempting to monopolize is a question of proximity and degree." Id. (citations omitted). To determine whether there is a "dangerous probability of monopolization," courts will consider "the relevant market and the defendant's ability to lessen or destroy competition in that market." Spectrum Sports, 506 U.S. at 456.29 IV. Discussion Warner-Lambert seeks dismissal of both the Direct Purchaser Class Complaint and the Direct Purchaser Non-Class Complaint for failure to state a claim. According to WarnerLambert, Plaintiffs' claims are simply an attempt to reargue that Warner-Lambert's Orange Book listings and gabapentin patent infringement lawsuits were baseless, even though "these issues

if the patentee brings an infringement suit as "a mere sham to cover what is actually nothing more than an attempt to interfere directly with the business relationships of a competitor." Eastern R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 144 (1961) ("Noerr"). Antitrust claims may also be based on allegations of manipulation of the HatchWaxman regulatory framework. See, e.g., Abbott Labs. v. Teva Pharm. USA, Inc., 432 F. Supp. 2d 408 (D. Del. 2006) ("Teva Pharmaceuticals"); In re Remeron Antitrust Litig., 335 F. Supp. 2d 522 (D.N.J. 2004) ("Remeron"). "[A]lthough the size of a defendant's market share is a significant determinant of whether a defendant has a dangerous probability of successfully monopolizing the relevant market, it is not exclusive." Barr Labs., 978 F.2d at 112. "Other factors to be considered include the strength of the competition, probable development of the industry, the barriers to entry, the nature of the anticompetitive conduct, and the elasticity of consumer demand." Id.; see also Crossroads Cogeneration Corp. v. Orange & Rockland Util., Inc., 159 F.3d 129, 141 (3d Cir. 1998). 21
29

have been evaluated favorably to [Warner-Lambert] by the courts during 10 years of patent litigation." Memorandum in Support of Defendants' Motion to Dismiss the Direct Purchaser Plaintiffs' Claims at 2, In re Neurontin Antitrust Litig., No. 02-1390 (D.N.J. Apr. 1, 2008) ("Defendants' Opening Brief"). Furthermore, "[P]laintiffs' claims are foreclosed by their failure to satisfy fundamental antitrust requirements concerning competitive impact, antitrust injury, causation and the four-year statute of limitations." Id. In response, Plaintiffs emphasize the sufficiency of their Amended Complaints. They argue that they have more than adequately pled cognizable violations of Section 2 of the Sherman Act, and that such violations are not immunized by the Noerr-Pennington doctrine. They also challenge Warner-Lambert's attempts to use certain opinions in the related patent infringement lawsuits to validate the company's actions, because those opinions are not binding in this litigation and should not, Plaintiffs argue, even be considered by this Court. The instant motion challenges the Direct Purchaser Complaints on both substantive and procedural grounds. For the sake of clarity, the Court will first address Warner-Lambert's procedural grounds for dismissal and then turn to Defendants' substantive arguments for dismissal. A. Statute Of Limitations

Warner-Lambert argues that Plaintiffs' claims based on the delayed prosecution of the `482 Patent and the off-label marketing of Neurontin should be dismissed because they are barred by the relevant statute of limitations. An antitrust cause of action has a 4-year limitations period, plus any additional number of years during which the statute of limitations was tolled, and

22

generally accrues "when a defendant commits an act that injures" the plaintiff. Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 338 (1971). Warner-Lambert asserts that any antitrust action based on the prosecution of the `482 Patent accrued, at the latest, on July 20, 2000, when Warner-Lambert sued Purepac and Apotex for infringing the `482 Patent and thereby imposed an additional 30-month stay of generic approval. Any claims concerning Warner-Lambert's off-label marketing activities accrued, according to Defendants, in 1995, when Warner-Lambert executives allegedly implemented their plans for off-label promotional efforts. Warner-Lambert argues that these actions all occurred more than four years prior to the date on which the Direct Purchaser Plaintiffs' Complaints were filed, and are, therefore, beyond the applicable statute of limitations. Plaintiffs respond that their claims survive because they were timely filed and that any new allegations in the Amended Complaints relate back to those pled originally. The first complaint in the consolidated antitrust action was filed on March 26, 2002, and it alleged monopolization in the market for gabapentin anhydrous as well as the baselessness of the infringement actions concerning the `476, `479, and `482 Patents. The Amended Complaints that now control this proceeding were filed on February 14, 2008 pursuant to a schedule set by the Court. While these Complaints include additional factual allegations based on information obtained by Plaintiffs through discovery in the related patent proceedings or information that has come to light in the intervening years, particularly with respect to Warner-Lambert's off-label marketing efforts, such allegations are pled in support of the same monopolization claims asserted originally. These allegations are not now presented as the basis for additional,

23

independent causes of action. These allegations thus relate back, within the meaning of Fed. R. Civ. P. 15(c)(1)(B), to those in the original complaints.30 Furthermore, the Court notes that this proceeding was stayed by an Order of Hon. John Lifland, U.S.D.J., from October 31, 2002 until early 2008, and the intervening years do not impact the statute of limitations period. See DiPippa v. United States, 687 F.2d 14, 20 (3d Cir. 1982) (recommending that the district court stay proceedings pending the resolution of related matters in order to "avoid statute of limitations problems"); Baglione v. Clara Maass Med. Center, Inc., No. 99-4069, 2006 WL 2591119, at *3 (D.N.J. Sept. 8, 2006) (noting that "a stay of proceedings ... would have tolled the statute of limitations and avoided any statute of limitations problems."). Accordingly, this Court finds that the Direct Purchaser Plaintiffs' antitrust claims,

Rule 15(c)(1)(B) provides in pertinent part that an amendment relates back to the date of the original pleading when "the amendment states a claim or defense that arose out of the conduct, transaction or occurrence set out - or attempted to be set out - in the original pleading." Specifically, Warner-Lambert argues that any new allegations concerning the prosecution of the `482 Patent do not relate back to those originally pled because they do not arise out of the same "conduct, transaction or occurrence." See Mayle v. Felix, 545 U.S. 644, 659 (2005) (holding that "relation back depends on the existence of a common `core of operative facts' uniting the original and newly asserted claims."). Defendants claim that the new allegations differ in time from the original allegations "because the entire prosecution of the `482 Patent necessarily occurred before the patent issued, while the listing and subsequent infringement actions necessarily occurred afterwards." Reply Memorandum in Support of Defendants' Motion to Dismiss the Direct Purchaser Plaintiffs' Claims at 28, In re Neurontin Antitrust Litig., No. 021390 (D.N.J. June 5, 2008) ("Defendants' Reply Brief"). They also claim that the new allegations differ in type because they "implicate Patent Office regulations regarding continuing applications whereas the original claims involved FDA listing regulations and whether the generics infringed the patent claims." Id. These arguments are unpersuasive. All of Plaintiffs' allegations concerning the `482 Patent arise out of the alleged overarching monopolization scheme, and can, therefore, be considered part of the same overall "conduct, transaction or occurrence." Similarly, Plaintiffs' allegations of off-label promotion also relate back to the original allegations of WarnerLambert's overall monopolization scheme and are pled in support of the same causes of action. 24

30

as pled in the currently-operative Amended Complaints, are not barred by the applicable statute of limitations. B. Antitrust Injury

Warner-Lambert also argues that Plaintiffs' antitrust claims based on `476 and `479 Patent infringement lawsuits as well as those based on the off-label marketing of Neurontin should be dismissed because Plaintiffs did not suffer an antitrust injury from these actions. Antitrust plaintiffs must establish standing to pursue their claims. A threshold requirement for antitrust standing is proof of "antitrust injury," which requires that the injury be "causally linked to an illegal presence in the market." Brunswick v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489 (1977). To this end, a plaintiff must show both harm of the type the antitrust laws were intended to prevent, and an injury to the plaintiff which flows from that which makes the defendant's actions unlawful. Gulfstream III Assocs., Inc. v. Gulfstream Aerospace Corp., 995 F.2d 425, 429 (3d Cir. 1993). Once an antitrust injury has been established, the plaintiff must further establish that he or she is a proper antitrust plaintiff.31
31

Antitrust standing requirements insure that litigants will use the antitrust laws to prevent anticompetitive actions and to deal only with the economic problems whose solutions those laws were specifically intended to effect. To determine whether a plaintiff has standing to pursue antitrust claims, courts consider the following: (1) whether there is a causal connection between an antitrust violation and harm to the plaintiff and the defendants intended to cause that harm; (2) whether the nature of the plaintiff's alleged injury was of the type the antitrust laws were intended to forestall; (3) the directness or indirectness of the asserted injury; (4) whether the claim rests on some abstract or speculative measure of harm; and (5) the strong interest in keeping the scope of complex antitrust trials within judicially manageable limits, avoiding both duplicative recoveries and the complex apportionment of damages. Warner-Lambert Co. v. Purepac Pharm. Co., Nos. 98-2749, 99-5948, 00-2053, 2000 WL 34213890, at *7-8 (D.N.J. Dec. 22, 2000) (the "December 22 Opinion"); see also Indium Corp. 25

Warner-Lambert's arguments that Plaintiffs have failed to plead antitrust injury focus on the second element of the Gulfstream standard and are essentially causation arguments. Defendants contend that Plaintiffs' claims should be dismissed because Plaintiffs fail to allege antitrust injury specifically flowing from the `476 and `479 infringement actions or the off-label promotion of Neurontin. Warner-Lambert argues that: (1) Plaintiffs' allegations concerning the patent litigation cannot support antitrust claims because generic competition was impossible regardless of the 30-month stay imposed by the `476 and `479 patent actions;32 and (2) that the inability of generic manufacturers to obtain even tentative FDA approval until after the stays associated with the `476 and `479 Patent suits expired was an independent barrier to generic entry.33

of America v. Semi-Alloys, Inc., 781 F.2d 879, 882 (Fed. Cir. 1985) (quoting Associated Gen. Contractors v. Cal. State Council of Carpenters, 459 U.S. 519, 534-45 (1983)); St. Clair v. Citizens Fin. Group, No. 08-1257, 2008 WL 4911870, at *4 (D.N.J. 2008) (same). Nevertheless, there is no black-letter rule for determining standing in every antitrust case. Steamfitters Local Union No. 420 Welfare Fund v. Philip Morris, Inc., 171 F.3d 912, 922 (3d Cir. 1999) (observing that "[t]he [Supreme] Court has emphasized that lower courts should avoid applying bright-line rules and instead should analyze the circumstance of each case, focusing on certain key factors."). According to Warner-Lambert, the `544 Patent term began before and the `482 Patent 30-month stay ended after the stays associated with the `476 and `479 Patents and, therefore, foreclosed generic entry into the market regardless of the `476 and `479 lawsuits. An ANDA applicant cannot receive final FDA approval during the 30-month stay period. Nevertheless, the FDA grants "tentative approval" when it determines that the ANDA has satisfied the FDA's non-patent regulatory requirements and would receive final approval but for the 30-month stay. 21 C.F.R. §§ 314.105(a); 314.107(b)(3)(v). Warner-Lambert emphasizes that Purepac, the first generic filer (and therefore entitled to an 180-day period of generic exclusivity) did not meet the FDA requirements for approval until April 25, 2002, four months after the stays caused by the `476 and `479 Patents had expired. 26
33 32

Similarly, Warner-Lambert contends that Plaintiffs cannot show an antitrust injury from any off-label marketing of Neurontin because the alleged injury is not connected to an antitrust violation. "All the alleged off-label marketing could have done," Defendants argue, "was enhance competition between Neurontin® and alternative drugs in some undefined, unpleaded relevant market. This does not meet the requirement that injury must flow from that which would make the alleged conduct an antitrust violation." Defendants' Opening Brief at 6.34 Proving antitrust injury depends, at least in part, on establishing a causal link to an antitrust violation. See Brunswick, 429 U.S. at 489. Warner-Lambert's arguments are, in essence, that Plaintiffs cannot prove that such a causal link exists in this case. Such arguments do not, however, require the dismissal of Plaintiffs' claims at this stage of the litigation. First, the Court notes that "the existence of antitrust injury is not typically resolved through motions to dismiss." Schuylkill Energy Res., Inc. v. Pa. Power & Light Co., 113 F.3d 405, 417 (3d Cir. 1997) (citing Brader v. Allegheny Gen. Hosp., 64 F.3d 869, 876 (3d Cir. 1995)); see also In re Wellbutrin SR/Zyban Antitrust Litig., 281 F. Supp. 2d 751, 757 (E.D. Pa. 2003) (denying motion to dismiss antitrust claims on similar grounds because "Plaintiffs may be able to prove that the allegedly frivolous lawsuits `materially caused' their alleged injuries.")

According to Warner-Lambert, any off-label promotion was designed to convince purchasers to buy Neurontin rather the competing drugs that would have otherwise been used to treat the conditions addressed by Neurontin's off-label uses. The impact of such conduct would, therefore, have occurred in the market for such other drugs. Defendants claim that, as a result, Plaintiffs cannot show that the off-label marketing contributed to market power or created anticompetitive results in the market for gabapentin anhydrous, such that this conduct is not actionable under Section 2. See, e.g., Fineman v. Armstrong World Indus., Inc., 980 F.2d 171, 205-06 (3d Cir. 1992) (holding that where a defendant is alleged to have leveraged monopoly power in one market to affect competition in a second market, that conduct cannot form the basis for a Section 2 claim unless the defendant also has market power in the second market). 27

34

("Wellbutrin"); Zenith Radio Corp., 395 U.S. at 114 n.9 (noting that an antitrust plaintiff may establish antitrust injury with "proof of some damage flowing from the unlawful conspiracy; inquiry beyond this minimum point goes only to the amount and not the fact of damage."). Second, in arguing that none of its alleged anticompetitive activities proximately caused the delayed launch of generic products, Warner-Lambert compartmentalizes or fragments Plaintiffs' allegations concerning an overall monopolization scheme. The Direct Purchaser Plaintiffs need not allege proximate cause or antitrust injury separately for each component of the alleged scheme. The injuries arguably inflicted by Warner-Lambert's allegedly anticompetitive activities should, instead, be viewed as a whole. Biovail Corp. Int'l v. Hoechst AG, 49 F. Supp. 2d 750, 767 (D.N.J. 1999) ("Again, this court will not evaluate whether each and every anticompetitive act upon which Biovail's antitrust claims are based directly caused Biovail injury. Instead, it will determine whether Biovail was injured by the anticompetitive conduct as a whole, an analysis the court will refrain from conducting until it is established that an antitrust violation has been pleaded."); see also SmithKline Beecham Corp. v. Apotex Corp., 383 F. Supp. 2d 686, 702 (E.D. Pa. 2004) (same); Teva Pharmaceuticals, 432 F. Supp. 2d at 430-31. Similarly, Plaintiffs need not allege that Warner-Lambert's anticompetitive actions were the sole cause of its injury. See Zenith Radio Corp., 395 U.S. at 114 n.9 ("It is enough that the illegality is shown to be a material cause of the injury; a plaintiff need not exhaust all possible alternative sources of injury."); Greater Rockford Energy & Tech. Corp. v. Shell Oil Co., 998 F.2d 391, 401 (7th Cir. 1993) ("An antitrust violation need not be the sole cause of the alleged injuries, but the plaintiff must establish, with a fair degree of certainty, that the violation was a material element of, and substantial factor in producing, the injury."). Plaintiffs need not "allege 28

(or dispose of) all alternative theories of causation to survive a motion to dismiss." In re K-Dur Antitr