Antitrust Law Daily Wrap Up, ANTITRUST—E.D. Pa.: Expert testimony limited in Provigil pay-for-delay suit, (Nov 9, 2015)

By Greg Hammond, J.D.

The federal district court in Philadelphia has partially granted and partially denied a number of motions to preclude expert testimony in a consolidated class action alleging that Cephalon, Inc. and four generic drug companies entered into unlawful reverse-payment settlements for the prescription drug Provigil. Testimony contradicting the court’s previous patent invalidity rulings was dismissed, but testimony exploring the infringement opinions and arguments raised by the parties at the time of the earlier patent infringement litigation was admissible (King Drug Company of Florence, Inc. v. Cephalon, Inc., November 5, 2015, Goldberg, M.).

Direct purchasers of the sleeping disorder medication modafinil, sold under the brand name Provigil, along with end payors and a generic competitor, filed a series of class action suits against pharmaceutical manufacturer Cephalon, Inc. and four generic drug manufacturers—Barr, Mylan, Teva, and Ranbaxy—alleging anticompetitive conduct and monopolization by delaying generic competition to Provigil in violation of Sections 1 and 2 of the Sherman Act. In particular, the plaintiffs claim that the pharmaceutical defendants conspired to restrain trade by entering into reverse payment settlements to resolve patent infringement suits, thereby delaying generic competition for Provigil.

The plaintiffs seek to preclude defendants from offering the opinions of several experts concerning the validity and enforceability of U.S. Patent No. RE 37,516 (the ‘516 patent), as well as testimony on whether the generic defendants’ modafinil products infringed the patent.

Strength of patent positions. The plaintiffs first brought a blanket challenge to any defense expert testimony offered to establish the strength of the defendants’ patent positions, arguing that this evidence is irrelevant under FTC v. Actavis, Inc., 133 S. Ct. 2223 (2013), 2013-1 Trade Cases ¶78,419. The court noted that the plaintiffs have continually indicated that they intend to present evidence concerning the weakness of the ‘516 patent in the antitrust trial, but they seek to preclude defendants from responding to this evidence. Although the court was not prepared to make any specific ruling on evidence that has not yet been presented, it found that if the plaintiffs present admissible evidence that the payments made as part of the patent infringement settlements were made to keep the generic defendants off the market, the defendants will be able to rebut that evidence.

Patent validity. The court next determined that the validity experts’ opinions that the ‘516 patent is currently valid do not fit the facts of this case and are not admissible. In particular, the opinions directly contradict the court’s previous rulings that the patent was invalid for a number of reasons, which have been given preclusive effect in this antitrust litigation. Such testimony, according to the court, would likely confuse the jury and would not assist them in deciding the facts at issue in the antitrust suit.

Infringement opinions. Similarly, because the court already found the ‘516 patent invalid and that collateral estoppel applies to that ruling, Cephalon’s experts will not be permitted to opine that the generic defendants’ products currently infringe the ‘516 patent. This testimony, according to the court, would not fit the facts of the case and could potentially confuse the jury. The court therefore limited expert testimony concerning infringement to exploration of the infringement opinions and arguments raised by the parties at the time of the earlier patent infringement litigation.

Reasonableness opinions. Expert testimony that Cephalon had strong claims in the patent infringement litigation, such that a reasonable litigant could realistically have expected success on the merits would not be helpful to the jury, the court decided. Such opinions would only be derived by applying legal standards of invalidity and infringement to the relevant facts, which would clearly usurp the role of the jury and merely tell them which conclusion to reach. However, testimony providing background information on the ‘516 patent, the Hatch-Waxman regulatory framework, and the arguments raised by the parties during the patent infringement litigation with regard to claim construction, patent validity and infringement should not be excluded because it will be helpful to the jury.

The cases are Nos. 2:06-cv-1797, 2:06-cv-1833, and 2:06-cv-2768.

Attorneys: Andrew William Kelly (Odom & Des Roches LLP), Bruce E. Gerstein (Garwin Gerstein and Fisher LLP), and Daniel Berger (Berger & Montague, P.C.) for King Drug Co. of Florence, Inc. Brian J. Sodikoff (Katten Muchin Rosenmann LLP) and Edward A. Diver (Langer Grogan & Diver PC) for Apotex, Inc. Amy K. Wigmore (Wilmer Hale) for Cephalon, Inc. Edwin John U. (Kirkland & Ellis LLP) and Lathrop B. Nelson, III (Montgomery McCracken Walker And Rhoads, LLP) for Barr Laboratories, Inc. C. Fairley Spillman (Akin Gump Strauss Hauer & Feld LLP) and Daniel P. Margolskee (Cravath Swaine & Moore LLP) for Mylan Laboratories, Inc. Charles J. Bloom (Stevens & Lee PC) for Teva Pharmaceutical Industries, Ltd. Danielle R. Foley (Venable LLP) for Ranbaxy Laboratories, Ltd.

Companies: King Drug Co. of Florence, Inc.; Apotex, Inc.; Cephalon, Inc.; Barr Laboratories, Inc.; Mylan Laboratories, Inc.; Teva Pharmaceutical Industries, Ltd.; Ranbaxy Laboratories, Ltd.

Cases: Antitrust PennsylvaniaNews