Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Pharmacy alleges sham patent litigation by brand drug manufacturers to delay generic competition, (Jun 10, 2014)

By Linda O’Brien, J.D., LL.M.

Brand name pharmaceutical manufacturers Kyorin Pharmaceutical Co. and Senju Pharmaceutical Co. and generic drug manufacturer Allergan, Inc. filed sham patent litigation against competitors, engaged in “product hopping,” and made misrepresentations to the USPTO to delay generic competition for brand name pharmaceuticals Zymar and Zymaxid, according to a complaint filed in the federal district court of Wilmington (Hartig Drug Company, Inc. v. Senju Pharmaceutical Co., Ltd., June 6, 2014).

Kyorin Pharmaceutical Co. developed Zymar and Zymaxid—gatifloxacin ophthalmic formulations used to treat bacterial infections. Hartig Drug Company is a retail pharmacy chain that purchased branded Zymar and Zymaxid.

The complaint alleges that gatifloxacin was first patented in 1990 by Kyorin researchers in U.S. Patent No. 4,980,470 (“the ‘470 patent”). 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 a patent application that named Senju researchers as the only inventors. Kyorin participated in the patent prosecution efforts, even though the formulations claimed in the patent application were first invented by Kyorin. The patent application was issued as U.S. Patent No. 6,333,045 (the ‘045 patent), which is set to expire in February 2020.

Kyorin and Senju gave pharmaceutical company Allergan, Inc. a license under the ‘045 patent to market gatifloxacin ophthalmic formulations in the United States. In 2003, Allergan filed a New Drug Application (NDA), which was approved by the Food and Drug Administration (FDA), and listed three patents for the NDA—the ‘470 patent, the ‘045 patent, and U.S. Patent No. 5,880,283 (the ‘283 patent) for a crystalline form gatifloxacin. Allergan subsequently entered into an agreement with generic drug manufacturer Lupin to promote Zymar to high volume pediatric prescribers on Allergan’s behalf, the complaint alleged.

After generic drug manufacturer Apotex filed an application with the FDA to market a generic version of Zymar, Kyorin, Senju, and Allergan filed a patent infringement suit against Apotex, according to the complaint. Although they were informed by their expert that certain claims would be invalid, the defendants filed litigation against Allergan to prevent or delay Apotex from marketing its proposed generic version in competition with the defendants. But for the defendants’ lawsuit, Apotex would have brought to the market a generic version of Zymar after the ‘470 patent expired in June 2010.

Allergan filed an NDA for gatifloxacin ophthalmic solution under the brand name Zymaxid as a new product rather than a supplement for Zymar, even though Zymaxid was the same product as Zymar with a higher concentration of gatifloxacin. The NDA was an attempt to exclude further competition by obtaining three additional years of regulatory exclusivity for the brand name drug and requiring new certifications against the same patents. The NDA also was part of a product switching strategy (“product hopping”) to deny purchasers access to Apotex’s lower cost generic version of Zymar. After the launch of Zymaxid, Allergan ceased marketing Zymar to physicians to encourage the switch to Zymaxid. Zymaxid does not possess any clinical or therapeutic benefit or superiority in comparison to Zymar, the complaint charged.

In June 2010, the court entered a judgment of obviousness on certain claims in the litigation against Allergan. In an effort to further delay Apotex from entering the market and to allow for the product switching strategy to be completed, Allergan filed a meritless motion for a new trial in the litigation, Hartig alleged. The defendants also filed an ex parte request for reexamination of those patent claims with the U.S. Patent and Trademark Office (USPTO). As part of the request, the defendants filed excerpts of the trial but did not include expert reports that disclosed that Kyorin researchers were the first to develop gatifloxacin ophthalmic solutions and testimony that conceded that the compositions would have been obvious. The withheld information allegedly was material and was withheld in an attempt to deceive and mislead the USPTO regarding the patentability of its amended claims. The USPTO subsequently issued a reexamination certificate determining that the amended claims were patentable and the examiner would not have reached those conclusions but for the defendants’ fraud on the USPTO, the complaint alleged.

Hartig asserts claims for monopolization, conspiracy to monopolize, unreasonable restraint of trade, and violations of Sections 1 and 2 of the Sherman Act. The action seeks declaratory relief, treble damages, costs of suit, attorneys’ fees, and any other just and proper relief.

The case is No. 1:14-cv-00719-UNA.

Attorneys: J. Clayton Athey (Prickett, Jones & Elliott, P.A.), Brent W. Landau and Melinda R. Coolidge (Hausfeld LLP), and Gregory A. Frank (Frank & Bianco LLP) for Hartig Drug Company, Inc.

Companies: Hartig Drug Company, Inc.; Senju Pharmaceutical Co., Ltd.; Kyorin Pharmaceutical Co., Ltd.; Allergan, Inc.

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