In re Androgel Antitrust Litig. (No. II), MDL Docket No. 2084.

• Decision Date: 30 October 2012
• Docket Number: No. 1:09–MD–2084–TWT.,MDL Docket No. 2084.,1:09–MD–2084–TWT.
• Citation: 888 F.Supp.2d 1336
• Parties: In re ANDROGEL ANTITRUST LITIGATION (NO. II).
• Court: U.S. District Court — Northern District of Georgia

888 F.Supp.2d 1336

In re ANDROGEL ANTITRUST LITIGATION (NO. II).

MDL Docket No. 2084.

No. 1:09–MD–2084–TWT.

United States District Court,

N.D. Georgia,

Atlanta Division.

Oct. 30, 2012.

Andrew C. Curley, Daniel C. Simons, David F. Sorensen, Eric Cramer, Nicholas Urban, Berger & Montague, P.C., Philadelphia, PA, David Balto, Law Office of David A. Balto, Washington, DC, Joshua P. Davis, Law Offices of Joshua P. Davis, San Francisco, CA, Kenneth S. Canfield, Doffermyre Shields Canfield & Knowles, LLC, Atlanta, GA, Peter R. Kohn, Faruqi & Faruqi, LLP, Jenkintown, PA, for Plaintiffs.

Christopher J. Kelly, John Roberti, Rebecca Valentine, Mayer Brown LLP, Washington, DC, Kelly A. Welchans, Arnold & Porter, LLP, Adam R. Lawton, David C. Lachman, Jeffrey Ira Weinberger, Munger Tolles & Olson, Los Angeles, CA, Matthew David Kent, Teresa Thebaut Bonder, Alston & Bird, LLP, Brian Joel Levy, David Alan Rabin, Morris Manning & Martin, LLP, Atlanta, GA, Michelle Friedland, Rohit K. Singla, Munger, Tolles & Olson, LLP, San Francisco, CA, Eric Grannon, J. Mark Gidley, Mika Ikeda, White & Case, LLP, Washington, DC, Mark Gerald Trigg, Ryan C. Grelecki, Greenberg Traurig, LLP, Atlanta, GA, for Defendants.

CORRECTED OPINION AND ORDER

THOMAS W. THRASH, JR., District Judge.

This is a multidistrict litigation proceeding involving antitrust actions that are consolidated for pretrial proceedings. It is before the Court on Par Pharmaceutical Companies, Inc. and Paddock Laboratories, Inc.'s Motion for Summary Judgment on Objective Baselessness [Doc. 555] ¹, Par Pharmaceutical Companies, Inc. and Paddock Laboratories, Inc.'s Motion for Summary Judgment on Improper Subjective Motivation [Doc. 567], Par Pharmaceutical Companies, Inc. and Paddock Laboratories, Inc.'s Motion for Summary Judgment on Plaintiffs' Substantive Antitrust Claims [Doc. 574], Watson Pharmaceuticals, Inc.'s Motion for Summary Judgment on Plaintiffs' Conspiracy Claims for Lack of Subjective Bad Faith [Doc. 579], Solvay Pharmaceuticals, Inc., Unimed Pharmaceuticals, Inc., Abbott Products, Inc., and Watson Pharmaceuticals, Inc.'s Motion for Summary Judgment on Objective Baselessness [Doc. 587], Solvay Pharmaceuticals, Inc., Unimed Pharmaceuticals, Inc., and Abbott Products, Inc.'s Motion for Summary Judgment on Subjective Bad Faith [Doc. 589], the Direct Purchaser Plaintiffs' Motion to Exclude Portions of Dr. Norman Weiner's Expert Report [Doc. 598], the Direct Purchaser Plaintiffs and End–Payor Class Plaintiffs' Motions for Summary Judgment on Sham Litigation [Docs. 603 & 588], and the Direct Purchaser Plaintiffs' Motion to Strike the Declaration of Joseph A. Mahoney and Limit Dr. Stanley Kaplan's Testimony [Doc. 708]. For the reasons set forth below, the Court GRANTS Par Pharmaceutical Companies, Inc. and Paddock Laboratories, Inc.'s Motion for Summary Judgment on Objective Baselessness [Doc. 555], DENIES AS MOOT Par Pharmaceutical Companies, Inc. and Paddock Laboratories, Inc.'s Motion for Summary Judgment on Improper Subjective Motivation [Doc. 567], DENIES AS MOOT Par Pharmaceutical Companies, Inc. and Paddock Laboratories, Inc.'s Motion for Summary Judgment on Plaintiffs' Substantive Antitrust Claims [Doc. 574], DENIES AS MOOT Watson Pharmaceuticals, Inc.'s Motion for Summary Judgment on Plaintiffs' Conspiracy Claims for Lack of Subjective Bad Faith [Doc. 579], GRANTS Solvay Pharmaceuticals, Inc., Unimed Pharmaceuticals, Inc., Abbott Products, Inc., and Watson Pharmaceuticals, Inc.'s Motion for Summary Judgment on Objective Baselessness [Doc. 587], DENIES AS MOOT Solvay Pharmaceuticals, Inc., Unimed Pharmaceuticals, Inc., and Abbott Products, Inc.'s Motion for Summary Judgment on Subjective Bad Faith [Doc. 589], DENIES the Direct Purchaser Plaintiffs' Motion to Exclude Portions of Dr. Norman Weiner's Expert Report [Doc. 598], DENIES the Direct Purchaser Plaintiffs and End–Payor Class Plaintiffs' Motions for Summary Judgment on Sham Litigation [Docs. 603 & 588], and DENIES AS MOOT the Direct Purchaser Plaintiffs' Motion to Strike the Declaration of Joseph A. Mahoney and Limit Dr. Stanley Kaplan's Testimony [Doc. 708].

I. Background

This case involves the patent for AndroGel, a testosterone replacement gel that has been a huge commercial success. In 1995, Unimed Pharmaceuticals and Besins Healthcare, S.A. (“Besins”) agreed to develop a testosterone replacement product designed to treat male hypogonadism² [ see Docs. 587–87 & 587–86]. To that end, Besins developed a pharmaceutical formula called AndroGel, granted Solvay ³ a license to sell AndroGel in the United States, and agreed to supply AndroGel to Solvay when and if Besins received approval to sell the drug (the “1995 Supply Agreement”) [ see Doc. 587–87, ¶ 2.3]. Solvay began clinical trials of AndroGel in 1996.

In April 1999, Solvay filed a New Drug Application (“NDA”) with the Food and Drug Administration, seeking approval to commercially market AndroGel [ see Doc. 587–68]. See21 U.S.C. § 355(a). The FDA approved the NDA in February 2000, and Solvay began marketing AndroGel in June 2000. On August 30, 2000, Solvay and Besins filed a patent application with the U.S. Patent and Trademark Office (“PTO”) [ see Doc. 587–68]. Initially, the PTO examiner rejected Solvay's patent claims based on public use and sales of AndroGel during clinical testing, but the examiner later withdrew his rejection [Doc. 587–70]. The examiner also initially rejected Solvay's patent claims disclosing a solution “comprising of” certain ingredients [Doc. 604–70]. Solvay subsequently amended its patent application to disclose claims for a “pharmaceutical composition ... consisting essentially of” certain ingredients [Doc. 587–69] (emphasis added).

On January 7, 2003, the patent application issued as U.S. Patent No. 6,503,894 (the “'894 Patent”) [Doc. 587–66]. Within thirty days after the PTO issued the '894 Patent, Solvay submitted the patent to the FDA for listing in the Orange Book. The Orange Book is a publication containing information about each FDA approved drug. See21 U.S.C. § 355(j)(7)(A). The FDA accepted Solvay's submission and listed the patent in the Orange Book.

AndroGel is the preferred embodiment of the '894 Patent. To that end, the specification discloses, in Table 5, the formula for AndroGel. The formula states that 100 grams of AndroGel contains: 1.0 g testosterone, 0.90 g Carbopol 980, 0.50 g isopropyl myristate, 72.5 g ethanol; Carbopol (0.9%); a gelling agent; 4.72g .1 N sodium hydroxide (0.0188%); and water. The '894 Patent states that the ingredients can be varied within certain ranges. The patent recites 42 claims. Claims 1, 9, 10, 18, and 31 are independent claims, and the remaining claims are dependent. Claims 1, 10, and 18 each describe a formulation “consisting essentially of” about 1% to about 5% sodium hydroxide. Claim 9 describes a formulation “consisting essentially of ... about 1% to about 3% sodium hydroxide.” Finally, Claim 31 recites:

[a] method for administering an active agent to a human subject in need thereof, the method comprising: a. Providing a pharmnaceutical [sic] composition consisting essentially of: (i) about 0.5% to about 5% testosterone; (ii) about 0.1% to about 5% isopropyl myristate; (iii) about 30% to about 98% of an alcohol selected from the group consisting of ethanol and isopropanol; and (iv) about 0.1% to about 5% of a gelling agent; wherein the percentages are weight to weight of the composition.

Thus, Claim 31, upon which Claims 32–42 are dependent, states that the composition consists essentially of only four ingredients, none of which are water or sodium hydroxide.

The initial version of the '894 Patent provided a range of sodium hydroxide concentration in the specification that appeared to be much less than the range of sodium hydroxide listed in the claims. While the specification provided for 4.72g 0.1 N sodium hydroxide (resulting in a 0.0188% sodium hydroxide concentration in AndroGel), the claims recited different ranges. Specifically, Claims 1, 10, and 18 list ranges of sodium hydroxide at 1% to 5%, Claim 9 lists a range of 1% to 3%, and Claim 31 does not mention sodium hydroxide, only a “gelling agent.” On June 12, 2003, Solvay filed a request for a certificate of correction to the '894 Patent [Doc. 587–75]. The request sought to replace the term “sodium hydroxide” in Claims 1–30 with the term “0.1 N sodium hydroxide” to reflect the language in Table 5 of the specification. The PTO issued the certificate of correction on December 16, 2003 [Doc. 587–66]. See35 U.S.C. § 255.

Before the '894 Patent issued, Watson Pharmaceuticals, Inc. (“Watson”) and Paddock Laboratories, Inc. (“Paddock”) (collectively, the “Generics”) began developing generic versions of AndroGel. The Generics attempted to copy AndroGel “as close as humanly possible” ⁴ [Doc. 555, Ex. 1, at 14]. The Generics completed development even after learning of the ' 894 Patent. Watson filed a Paragraph–IV Abbreviated New Drug Application (“ANDA”) ⁵ for genericAndroGel in May 2003 [Doc. 587–13]. See21 U.S.C. § 355(j)(2)(A)(vii). Shortly thereafter, Paddock filed its own Paragraph IV ANDA for its own generic AndroGel [Doc. 587–22]. Watson's formulation of generic AndroGel contained 0.0158% sodium hydroxide and Paddock's contained 0.0144% sodium hydroxide [Doc. 603, at 18]. In July 2003, Paddock entered into an agreement with Par Pharmaceutical Companies, Inc. (“Par”) (collectively “Par/Paddock”) whereby Par agreed to share potential patent litigation costs with Paddock and to sell Paddock's generic AndroGel. In return, Paddock agreed to share profits with Par. See In re AndroGel, 687 F.Supp.2d 1371, 1374 (N.D.Ga.2010). As required by 21 U.S.C. § 355(j)(2)(A)(vii), both Watson and Par/Paddock notified Solvay of the ANDAs and asserted that the ' 894 Patent was invalid or would not be infringed by their generic drugs.

Solvay responded to the ANDA notices by asserting its rights under the '894 Patent,...