Hosp. Auth. of Metro. Gov't of Nashville & Davidson Cnty. v. Momenta Pharms., Inc.
| Decision Date | 29 September 2016 |
| Docket Number | No. 3:15-1100,3:15-1100 |
| Parties | THE HOSPITAL AUTHORITY OF METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY, TENNESSEE, d/b/a/ NASHVILLE GENERAL HOSPITAL, v. MOMENTA PHARMACEUTICALS, INC. and SANDOZ, INC. |
| Court | U.S. District Court — Middle District of Tennessee |
This matter was referred to the Magistrate Judge, pursuant to 28 U.S.C. § 636(b)(1)(A) and (B) and Fed. R. Civ. P. 72. See Order at Docket Entry No. ("DE") 71. Presently pending are Defendants' Motion to Transfer Case to the District of Massachusetts (the "Motion to Transfer") (DE 58), Defendant Momenta Pharmaceuticals, Inc.'s Motion to Dismiss or Transfer for Improper Venue (the "Rule 12(b)(3) Motion") (DE 62), and, Defendants' Motion to Dismiss (the "Motion to Dismiss") (DE 65). For the reasons stated below, the Magistrate Judge recommends that each of these motions (DE 58, 62, 65) be DENIED.
Nashville General Hospital ("Plaintiff" or "NGH") is a hospital that is part of the consolidated municipal government of Nashville and Davidson County, Tennessee. DE 1 at ¶ 10. As part of its operation, Plaintiff buys pharmaceutical drugs that are either dispensed to patients in the hospital or resold through the hospital pharmacy. Id. at ¶ 11. Momenta Pharmaceuticals, Inc. ("Momenta") and Sandoz, Inc. ("Sandoz") (collectively referred to as "Defendants") are part of a corporate structure that provides pharmaceutical drugs to buyers such as Plaintiff. DE 59 at 6.2 Momenta, a Delaware corporation with a principal place of business located in Massachusetts, is a biotechnology company that engages in the "analysis, characterization, and design of complex pharmaceutical products," (DE 1 at ¶ 12; DE 77 at ¶ 3), while Sandoz, a Colorado corporation with a principal place of business located in New Jersey, is a distributor of pharmaceutical products. DE 1 at ¶ 13.
In 1995, non-party Sanofi-Aventis ("Aventis"), a pharmaceutical company, brought a drug called Lovenox® to market in the United States and was eventually awarded a patent for the drug. Id. at ¶ 20. Momenta and Sandoz subsequently entered into an agreement to produce and sell a generic version of Lovenox®, called enoxaparin, which is used to treat deep vein thrombosis. Id. at ¶¶ 19, 26. Plaintiff does not buy enoxaparin directly from Defendants, but instead purchasesenoxaparin from McKesson Corporation ("McKesson"), a drug wholesaler, which obtains the drug from Sandoz. DE 1 at ¶ 11.
Also relevant to the pending motions is non-party Amphastar Pharmaceuticals, Inc. ("Amphastar"), a separate pharmaceutical company located in California. DE 1 at ¶ 14. Like Defendants, Amphastar manufactures and sells a generic version of enoxaparin.
On March 4, 2003, Amphastar filed an Abbreviated New Drug Application ("ANDA") with the Food and Drug Administration ("FDA"), which represents a "fast-track method" of bringing generic drugs, such as enoxaparin, to market. Id. at ¶¶ 21-22. Plaintiff succinctly describes the process:
The drug maker must in general demonstrate that its drug is the "same" in all relevant respects as a brand name drug already on the market, and that the drug maker will otherwise comply with all necessary laws and FDA regulations. In addition, the ANDA process includes what is known as "Paragraph IV" certification. This specific regulatory pathway allows the generic drug maker to declare that the patent protecting the brand-name drug is invalid or otherwise unenforceable and immediately force the issue to litigation in federal court, without having to first enter the market and risk being held liable for patent infringement.
Id. at ¶ 21. By way of the ANDA, Amphastar successfully established that Aventis' patent for Lovenox® was invalid and unenforceable, thus opening the door for the marketing of generic enoxaparin by other pharmaceutical companies. Id. at ¶¶ 22-23.
In November of 2003, prior to receiving approval to sell enoxaparin, Sandoz entered into a Collaboration and Licensing Agreement with Momenta (the "Collaboration Agreement") to develop and sell enoxaparin sodium injections in the United States. Id. at ¶ 26. Plaintiff claims that Defendants, via this collaborative agreement, intended to create a monopoly in the market with respect to enoxaparin. Id. at ¶ 27. Plaintiff alleges that the Collaboration Agreement provided that Momenta would receive at least 45% of all profits earned by Sandoz's future sales of enoxaparin as long as Defendants remained the only supplier of enoxaparin in the United States. Id. at ¶ 27-28. Plaintiff claims that this agreement was intended to incentivize Momenta to prevent any other providers from selling enoxaparin in the United States.3 Id. at ¶ 28.
As part of the Collaboration Agreement, Momenta's patents were licensed exclusively to Sandoz, including what would later become Patent No. 7,575,886 (the "#886 Patent"), which, as discussed below, was issued in April of 2009.4 Id at ¶29. The #886 Patent describes a method for controlling the commercial production of enoxaparin by "ensur[ing] that each batch includes the structural features that are characteristic of enoxaparin—including the presence of a 1,6-anhydro ring structure at the reducing end of 15-25% of the enoxaparin oligosaccharides." DE 59 at 7. One of the named inventors of this process is Dr. Zachary Shriver, a former Momenta employee. DE 1 at ¶ 29.
The United States Pharmacopeial Convention ("USP") is a scientific nonprofit organization that sets the standards for testing, among other things, the quality and purity of globally distributed pharmaceuticals. Id. at ¶ 32. The standards set forth by the USP are enforced by the FDA. Id.
While Momenta's #886 Patent application was still pending, non-party Aventis requested that the USP adopt a process that it had developed, known as Method , which, like the #886 Patent, was used to ensure that 15-25% of the carbohydrate chains in each batch of enoxaparin had a 1,6-anhydro ring structure on one of the terminal ends. Id. at ¶ 39. Dr. Shriver, then a Momenta employee, served on a USP panel that oversaw the development and approval of the USP's enoxaparin standards. Id. at ¶ 40. While the USP was considering whether to adopt Method ,Defendants learned that Aventis had a pending patent application that, if issued, would read on USP Method , which would make the use of Method by any other manufacturers a potential infringement on Aventis' patent. Id. at ¶ 42. After learning of Aventis' patent application, Defendants encouraged the USP to require Aventis to abandon its patent application, which, Defendants argued, would ensure that Method would be free for anyone to utilize. Id. In November of 2008, the USP announced that Aventis had abandoned its application for the patent that included Method . Id. at ¶ 44.
Despite encouraging the USP to facilitate Aventis' abandonment of its pending patent application, and thus ostensibly securing the free use of Method by all manufacturers, Defendants and Dr. Shriver failed to disclose to the USP that they too had a pending application (the #886 Patent) that read on Method , which, if issued, would allow Defendants to block anyone else's use of Method . Id. at ¶ 45. In other words, Defendants advocated before the USP that Aventis not be allowed to gain patent protection regarding Method , while simultaneously attempting to gain precisely such patent protection.
Plaintiff claims that Defendants therefore deceived the USP into adopting a standard (Method ) that they knew would soon be protected by the #886 Patent, which was eventually issued in 2009, thereby ensuring that anyone who utilized Method would be infringing on Defendants' patent rights. DE 1 at ¶ 92. Plaintiff notes that such conduct violated the USP's Code of Ethics, which requires all members of USP committees, including the panel on which Dr. Shriver served, to disclose any potential conflicts of interest to the USP, such as a pending patent application that would have bearing on a decision by the USP. Id. at ¶¶ 34-35. Plaintiff claims that this deception allowed Defendants to monopolize the generic market and charge inflated prices for enoxaparin. Id. at ¶ 77.
Defendants ultimately obtained approval from the FDA to sell generic enoxaparin in July of 2010, while non-party Amphastar received such approval in September of 2011. Id. at ¶¶ 50-51. Shortly after Amphastar obtained approval from the FDA to sell enoxaparin, Defendants filed a patent action against Amphastar (the "Patent Action") in the United States District Court for the District of Massachusetts (the "Massachusetts District Court"), alleging that Amphastar's process for manufacturing enoxaparin, which included Method , infringed upon Momenta's #886 Patent. Id. at ¶ 51; DE 59 at 8-9. In October of 2011, the Honorable Nathaniel Gorton, United States District Judge for the District of Massachusetts, issued a temporary restraining order and preliminary injunction that enjoined Amphastar from selling generic enoxaparin. DE 59 at 9. In August of 2012, the Court of Appeals for the Federal Circuit vacated the preliminary injunction, at which point the Patent Action was remanded to Massachusetts District Court. Id. After the parties conducted discovery, Amphastar filed a motion for summary judgment, which was granted by the Massachusetts District Court. Id. Defendants appealed this ruling, however, and the Federal Circuit ultimately reversed and remanded for further proceedings. Id. At this time, the Patent Action remains pending in the Massachusetts District Court. Id. at 9-10.
In addition to the Massachusetts Patent Action, there is a separate lawsuit that is relevant to the Court's analysis. In September of 2015, Amphastar filed an antitrust action against Defendants in California (the "Amphastar Antitrust Action"). Id. at 10. Similar to Plaintiff's claims, Amphastar alleged that Momenta and...
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