Chemi Spa v. Glaxosmithkline

• Decision Date: 08 February 2005
• Docket Number: No. Civ.A.04-4545.,Civ.A.04-4545.
• Citation: 356 F.Supp.2d 495
• Parties: CHEMI SPA v. GLAXOSMITHKLINE
• Court: U.S. District Court — Eastern District of Pennsylvania

356 F.Supp.2d 495

CHEMI SPA v. GLAXOSMITHKLINE

No. Civ.A.04-4545.

United States District Court, E.D. Pennsylvania.

February 8, 2005.

Howard Langer, Langer & Grogan P.C., Robert S. Silver, Caesar Rivise Bernstein Cohen & Pokotilow, Ltd., Philadelphia, PA, for Plaintiff.

Jamie B. Bischoff, Eric S. Santoro, Ballard, Spahr, Andrews and Ingersoll, Philadelphia, PA, for Defendant.

MEMORANDUM

BARTLE, District Judge.

This is an antitrust action for unlawful monopolization pursuant to § 2 of the Sherman Act and § 4 of the Clayton Act. 15 U.S.C. §§ 2, 15. Before the court is the motion of defendant GlaxoSmithKline ("GSK") for judgment on the pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure on the grounds that this action is barred by the applicable statute of limitations and that plaintiff does not have standing to bring this lawsuit.

I.

In ruling on a motion for judgment on the pleadings, the well-pleaded facts of the complaint will be taken as true. In addition, we may consider matters of public record, and authentic documents upon which the complaint is based if attached to the complaint or as an exhibit to the motion. Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d 1380, 1391 (3d Cir.1994); Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196-97 (3d Cir.1993) (citations omitted), cert. denied, 510 U.S. 1042, 114 S.Ct. 687, 126 L.Ed.2d 655 (1994). A motion for judgment on the pleadings under Rule 12(c) is judged under the same standards as a motion to dismiss pursuant to Rule 12(b)(6). See Jubilee v. Horn, 975 F.Supp. 761, 763 (E.D.Pa.1997), aff'd 151 F.3d 1025 (3d Cir.1998).

II.

On September 27, 2004, plaintiff Chemi SpA ("Chemi") sued GSK for unlawful monopolization of the market for nabumetone, an anti-inflammatory drug. According to the complaint, Chemi, an Italian corporation with its headquarters in Italy, is the largest manufacturer of nabumetone in the world. GSK is a pharmaceutical manufacturer with headquarters here in Philadelphia.

On December 13, 1983, the Patent and Trademark Office ("PTO") issued U.S. Patent No. 4,420,639 for nabumetone, which was ultimately assigned to GSK. In December, 1991, defendant¹ received final marketing approval from the Food and Drug Administration ("FDA"). It began marketing the drug in 1992 and in that year listed the nabumetone patent in the Orange Book of the FDA. Under the Drug Price Competition and Patent Term Restoration Act ("Hatch-Waxman Act"), a patent holder which identifies its patent in this way receives certain benefits. See 21 U.S.C. § 355. When an entity other than a patent holder of the drug listed in the Orange book seeks FDA approval of a new drug that is for the same use or has a reference to the listed drug, that entity must file with the FDA "an abbreviated application for the approval of a new drug." 21 U.S.C. § 355(j)(1). The abbreviated new drug application ("ANDA") must contain a "certification, ... with respect to each patent [listed in the Orange Book] ... that such patent is invalid or will not be infringed by the manufacture, use, or sale of the new drug for which the application is submitted." 21 U.S.C. § 355(j)(2)(A)(vii)(IV). Thereafter, the patent holder may file suit to enforce its patent against the entity which filed an ANDA. Upon the filing of such a suit, the patent holder obtains an automatic injunction lasting thirty months barring the FDA from granting final approval of the alleged infringer's ANDA. Id.

Chemi avers that in 1996 it decided that it could manufacture nabumetone on a commercial scale. It approached Teva Pharmaceuticals USA ("Teva") and Eon Labs Manufacturing, Inc. ("Eon") to determine its potential demand and then to market it. Compl. at ¶ 15. It provided Teva with batches of test nabumetone. Id. On December 23, 1996, Chemi filed a Drug Master File ("DMF") with the FDA, in which it specified its production data and set forth other required information for FDA approval of its nabumetone product. It listed Teva and Eon as companies authorized to reference its application in any subsequent filings those companies might make with the FDA. Thereafter, Teva and Eon filed with the FDA their own ANDA's for nabumetone. These companies, and other manufacturers who also intended to market nabumetone, certified in their applications with the FDA that defendant's nabumetone patent was invalid. See 21 U.S.C. § 355(j)(2)(A)(vii)(IV).

In October and December, 1997, defendant filed patent infringement actions against Teva and Eon in the United States District Court for the District of Massachusetts. Compl. at ¶ 19. The filing of these actions resulted in an automatic thirty-month stay of the FDA's authority to grant final approval to the pending applications for nabumetone. As a result of the stay, Teva and Eon could not purchase and sell Chemi's nabumetone. On August 14, 2001, Judge Reginald C. Lindsay, following a trial in the District of Massachusetts, held that defendant had procured the nabumetone patent through fraudulent misrepresentations to the PTO and that the patent was thus unenforceable.² See In re '639 Patent Litig., 154 F.Supp.2d 157 (D.Mass.2001), aff'd, 45 Fed.Appx. 915 (Fed.Cir.2002). The district court found that defendant had procured the nabumetone patent by knowingly misrepresenting the prior art and the research conducted by its scientists.

After GSK's nabumetone patent was found invalid, Copley Pharmaceuticals ("Copley"), another company that manufactured generic nabumetone products, and Teva filed antitrust suits against GSK in the District of Massachusetts. In addition, various direct purchasers and end-payors filed individual class actions in both the District of Massachusetts and the Eastern District of Pennsylvania. These actions were eventually consolidated before Judge William G. Young in the District of Massachusetts.³ In re Relafen Antitrust Litig., CIV.A. No. 01-12239 (D.Mass.). The parties have entered into settlement agreements, which we are told are currently awaiting judicial approval.⁴

Similar to other drug companies' allegations in the actions before Judge Young, Chemi's complaint in the instant action alleges that defendant undertook to obtain the patent unlawfully for the purpose of maintaining its monopoly on the sale of nabumetone. Chemi contends that GSK filed patent infringement actions that were motivated by a desire to trigger regulatory delays by the FDA and to frustrate Chemi's sales of nabumetone in the United States.

III.

We turn first to GSK's contention that Chemi's claims are barred by the four-year statute of limitations for an antitrust claim. 15 U.S.C. § 15b.

Section 15b of the Clayton Act requires that suits to recover damages for violations of the federal antitrust laws be "commenced within four years after the cause of action accrued." A cause of action under the antitrust laws "accrues and the statute begins to run when a defendant commits an act that injures a plaintiff's business." Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 338, 91 S.Ct. 795, 28 L.Ed.2d 77 (1971). The Supreme Court has held that the limitations period does not begin to run until the damages are inflicted and ascertainable. Id. at 338-40, 91 S.Ct. 795. In addition, the Court has "rejected the argument that, in the context of a defendant's continuing violation of the Sherman Act, the statute of limitations runs from the violation's earliest impact on a plaintiff." In re Lower Lake Erie Iron Ore Antitrust Litig., 998 F.2d 1144, 1171 (3d Cir.1993) (citing Hanover Shoe, Inc. v. United Shoe Mach. Corp., 392 U.S. 481, 502 n. 15, 88 S.Ct. 2224, 20 L.Ed.2d 1231 (1968)). Instead, "[u]nder the continuing violations theory, ... each time a plaintiff is injured by an act of the Defendants, a cause of action accrues and the statute of limitations runs from the commission of the act, allowing Plaintiff to recover for the damages from that act." In re K-Dur Antitrust Litig., 338 F.Supp.2d 517, 551 (D.N.J.2004) (citing Zenith Radio Corp., 401 U.S. at 328, 91 S.Ct. 795).

As our Court of Appeals has recognized, statute of limitations issues "present mixed questions of law and fact." In re Lower Lake Erie, 998 F.2d at 1171. In order to be entitled to a judgment as a matter of law on the ground that the action is time barred, GSK must "point to undisputed facts in the record which demonstrate conclusively that [Chemi] had notice of [its] claims, and, that, had it exercised reasonable diligence, it would have discovered adequate grounds for filing this antitrust lawsuit during the limitations period." Morton's Market, Inc. v. Gustafson's Dairy, Inc. 198 F.3d 823, 832 (11th Cir.1999) (citations omitted). "It is not enough... to point to facts which might have caused a plaintiff to inquire, or could have led to evidence supporting his claim." Id. at 833 (emphasis in original) (citations omitted). Moreover, our Court of Appeals has cautioned that generally the statute of limitations defense cannot be decided in the context of a Rule 12 motion, except in situations where "the complaint facially shows noncompliance with the limitations period and the affirmative defense clearly appears on the face of the pleading." See Oshiver, 38 F.3d at 1385 n. 1 (citations omitted)

GSK contends that Chemi's claims accrued when GSK filed its sham patent infringement actions against Copley and Teva in October and November, 1997,⁵ more than four years before the filing of this lawsuit on September 27, 2004. It also argues in the alternative that the statute began to run no later than August 17, 2000, the date on which the thirty-month stay on the FDA final approval of the ANDA's for nabumetone expired. According to GSK, Chemi should have assumed that GSK's patent was invalid and that GSK was conducting the infringement action in bad faith prior to the court's judgment of invalidity.

Chemi counters that its cause of action did not accrue until August, 2001...