Antitrust Law Daily Wrap Up, TOP STORY—D.N.J.: Monopolization counterclaim crushed in Abilify® patent infringement suit, (May 5, 2016)

By Greg Hammond, J.D.

A generic pharmaceutical company failed to support allegations that its individual incurrence of defense costs in patent infringement litigation over the prescription drug Abilify® amounted to antitrust injury. The federal district court in Newark consequently dismissed the generic pharmaceutical company’s monopolization counterclaim (Otsuka Pharmaceutical Co., Ltd. v. Torrent Pharmaceuticals Ltd., Inc., May 4, 2016, Simandle, J.).

Otsuka Pharmaceutical Co., Ltd. filed a patent infringement action against Torrent Pharmaceuticals Ltd., Inc. and Torrent Pharma Inc., alleging that Torrent infringed various patents covering Otsuka’s aripiprazole product, Abilify. Conversely, Torrent filed a counterclaim, alleging unlawful monopolization in violation of the Sherman Act and sham litigation. Otsuka moved to dismiss the counterclaim, arguing that Torrent’s current presence on the newly-formed generic aripiprazole market precludes Torrent from demonstrating the antitrust injury necessary for antitrust standing.

The district court granted the motion to dismiss, but with leave to amend. Torrent conceded that its claim rests exclusively upon its individual incurrence of defense costs in this litigation, but this theory is not supported by allegations in Torrent’s antitrust counterclaim, the court stated. Rather, the counterclaim is solely rooted on market exclusion, not the defense costs incurred in defending against the patent infringement litigation. This deficiency, according to the court, requires dismissal of Torrent’s counterclaim.

Even assuming that the allegations concerning costs of defense constituted a qualifying antitrust injury, the court concluded that Torrent failed to allege that Otsuka’s anticompetitive conduct has, through the costs of litigation, somehow harmed the competitive landscape or that these costs have prevented Torrent from pursuing its entry into the aripiprazole market.

The case is No. 14-4671 (JBS/KMW).

Attorneys: Brian Ronald Zurich (Pepper Hamilton LLP) for Otsuka Pharmaceutical Co., Ltd. Claire J. Evans (Wiley Rein LLP) for Torrent Pharmaceuticals Ltd. and Torrent Pharma Inc. Michael S. Weinstein (Cole Schotz PC) for Hetero Labs Ltd.

Companies: Otsuka Pharmaceutical Co., Ltd.; Torrent Pharmaceuticals Ltd., Inc.; Torrent Pharma Inc.; Hetero Labs Ltd.

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