Antitrust Law Daily Wrap Up, ANTITRUST—E.D. Pa.: FTC wins removal of documents from privilege log in suits against branded AndroGel makers, (Aug 26, 2016)

By E. Darius Sturmer, J.D.

The federal district court in Philadelphia ordered the production of numerous documents withheld or redacted by AbbVie, Inc., Abbott Laboratories, and Unimed Pharmaceuticals LLC from an antitrust enforcement action the FTC brought against the companies. The FTC claimed that they filed sham patent infringement actions against Teva and Perrigo Co. in order to delay generic competition in the marketing for the testosterone replacement drug AndroGel. Conducting an in camera review of 80 documents for which the companies asserted attorney-client or work product doctrine privilege across two related FTC suits pending in Pennsylvania and Georgia, the court found that only 15 of the documents were protected from production by the doctrines (FTC v. AbbVie, Inc., August 25, 2016, Bartle, H.).

The AbbVie defendants failed to meet their burden to prove that five documents of handwritten notes purportedly reflecting legal advice regarding the AndroGel patent application were shielded by the attorney-client privilege. Portions of the documents, whose author on the privilege was misidentified, appeared to contain attorney musings rather than client information. Notes were not privileged simply because some unidentified parts might contain client information, the court said.

Of 24 documents of various types that were "sent to an attorney for review at some point after they were created, only one was a protected attorney-client communication. The documents ranged from pre-existing spreadsheets and layperson-created presentations to "reports providing information for the purpose of obtaining legal advice" on the patent application. Such documents did not become privileged merely because they were transferred to or routed through an attorney, the court observed. The privileged document, an e-mail among non-attorney employees related to presentations on the discontinuation of an AndroGel product, to which in-house counsel were copied, was distinguished by its analysis regarding the obtaining of specific legal advice.

Another 11 documents, forecasting presentations allegedly prepared by AbbVie employees for use in the Teva and Perrigo patent litigations, were neither prepared in anticipation of litigation nor privileged attorney-client communications, the court held. An assertion that the presentations were created for legal purposes did not explain one non-attorney executive’s involvement or apparent request that they be created.

Only 14 of the 40 other documents that the court saw as skirting the line between "privileged legal or unprivileged business advice" were protected from production, the court concluded. A pair of handwritten notes memorializing legal advice that in-house counsel had provided to employees at a discussion were privileged, as were another two e-mails sent by counsel conveying legal advice to employees even though the need for this advice arose in the context of a business decision. Redacted attorney-created material from e-mail chains regarding various matters including negotiations with another drug maker over a potential co-promotion agreement and an amended license and supply agreement for AndroGel also constituted memorialized legal advice, and several follow-up emails by non-employees amounted to the conveying of such advice. An e-mail regarding testosterone pricing was privileged work product for use in pending patent infringement litigation. A draft FDA citizen petition concerning generic competition to AndroGel, prepared by in-house counsel, was attorney-client privileged, even if portions of e-mail chains related to that citizen petition were not.

However, the court also held that AbbVie failed to clearly demonstrate that materials such as long range business planning documents and redacted portions of e-mails purportedly requesting legal advice on marketing plans and AndroGel pricing were actually "made for the express purpose of securing legal not business advice" or that another executive’s email copied to employees was sufficiently connected to the Teva patent litigation for privilege to apply. An argument that redactions from two draft reports regarding patent analysis of multiple androgen products and markets contained legal advice arising in the context of a business decision was rejected. They instead concerned business strategy. Six documents purportedly containing or recounting legal advice from in-house counsel concerning patent and other exclusivity rights had no apparent legal nature at all, the court observed.

The case is No. 14-5151.

Attorneys: Markus Meier for the Federal Trade Commission. Adam R. Lawton (Munger Tolles & Olson LLP) and Paul H. Saint-Antoine (Drinker, Biddle & Reath LLP) for AbbVie Inc.

Companies: AbbVie Inc.

Cases: Antitrust PennsylvaniaNews