Antitrust Law Daily Wrap Up, ANTITRUST—D. Del.: Drug maker alleged plausible relevant market for sham patent litigation claim, (May 4, 2015)

By Linda O’Brien, J.D., LL.M.

A generic drug manufacturer sufficiently alleged a plausible relevant market in its action against two brand drug manufacturers for allegedly using sham patent litigation to delay generic competition for the eye infection treatment drugs, Zymar and Zymaxid, the federal district court in Wilmington, Delaware has ruled (Apotex, Inc. v. Senju Pharmaceutical Co., May 1, 2015, Robinson, S.).

Kyorin Pharmaceutical Co. developed Zymar and Zymaxid—gatifloxacin ophthalmic formulations used to treat bacterial infections of the eye. Gatifloxacin was first patented in 1990 by Kyorin and, in 1995, Kyorin began formulating liquid ophthalmic formulations. Instead of seeking patent protection, Kyorin entered into a license agreement with Senju Pharmaceutical Co. that allowed Senju to develop and market liquid ophthalmic formulations of gatifloxacin. Senju filed patent applications naming only Senju as the inventors.

After generic drug manufacturer Apotex, Inc. filed its Abbreviated New Drug Applications for generic versions of branded Zymar and Zymaxid, Senju and Kyorin initiated several patent infringement actions. Apotex filed suit, alleging that the patent infringement suits were shams and asserted violations of Section 2 of the Sherman Act. In 2013, the defendants’ motion to dismiss and to stay pending the resolution of an appeal involving the reexamination of the one of their patents was granted. The plaintiff filed an amended complaint and the defendants’ again moved for dismissal.

The court determined that the plaintiff sufficiently alleged a plausible relevant market and offered an explanation as to why the market should be limited to survive a motion to dismiss. Liability under section 2 of the Sherman Act requires the possession of monopoly power in the relevant market and the willful acquisition or maintenance of that power. The plaintiff defined the relevant market in its amended complaint as “the market for gatifloxacin ophthalmic solution, which includes Zymar, Zymaxid, and generic equivalents.” In support of this market definition, Apotex alleged that gatifloxacin ophthalmic solution was not reasonably interchangeable with other ophthalmic solutions to treat bacterial infections of the eye because gatifloxacin has specific antibacterial properties that provide a unique spectrum of treatment.

The defendants contended that the Food and Drug Administration’s website includes multiple products other than Zymar and Zymaxid that treat bacterial infections of the eye. According to the court, “reasonable interchangeability of use” of a product is a factual issue and not properly addressed at the current stage of the litigation. In this case, a proper market definition could be determined only after a factual inquiry into the commercial realities faced by consumers. Thus, the motion to dismiss was denied.

The case is No. 1:12-cv-00196-SLR.

Attorneys: Francis J. Murphy, Jr. (Murphy, Spadaro & Landon) for Apotex Inc., and Apotex Corp. Richard D. Kirk (Bayard, PA) for Senju Pharmaceutical Co. Ltd. Benjamin J. Schladweiler (Ross Aronstam & Moritz LLP) for Kyorin Pharmaceutical Co. Ltd. Ashley E. Johnson (Gibson Dunn), and Jack B. Blumenfeld (Morris, Nichols, Arsht & Tunnell LLP) for Allergan Inc.

Companies: Apotex Inc.; Apotex Corp.; Senju Pharmaceutical Co. Ltd.; Kyorin Pharmaceutical Co. Ltd.; Allergan Inc.

Cases: Antitrust DelawareNews