United States District Court, D. New Jersey
MEMORANDUM AND ORDER
before the Court is Defendants Pfizer Inc., Pfizer
Manufacturing Limited, Pfizer Ireland Pharmaceuticals,
Warner-Lambert Co., and Warner-Lambert Co. LLC's Motion
for Judgment on the Pleadings pursuant Federal Rule of Civil
Procedure 12(c), regarding End-Payor Plaintiffs' Second
Amended Consolidated Complaint. (ECF No. 755). This case
arises from allegations that two drug companies, Pfizer and
Ranbaxy, engaged in an anticompetitive scheme that prevented
the generic drug of Lipitor from entering the market.
Plaintiffs are end-payor purchasers (hereinafter
"EPP") who claim to have paid inflated costs for
the brand-named drug, Lipitor, due to, among other things, a
delayed entry provision included in Pfizer and Ranbaxy's
settlement agreement. Unlike the Direct Purchaser Plaintiffs,
who assert claims under the Sherman Act, the EPPs base their
claims on their respective state's antitrust and consumer
are a collection of organizations including insurance
carriers, Taft-Hartley funds, municipalities, and
individuals, who have been indirectly affected by
Defendants' alleged schemes. For example, jointly
administered Taft-Hartley fund and employee welfare benefit
plaintiffs include: A.F.L.-A.G.C. Building Trades Welfare
Plan, a self-insured health and welfare benefit plan in
Alabama (Id. at ¶ 24); New Mexico United Food
and Commercial Workers Union's and Employers' Health
and Welfare Trust Fund, a Taft-Hartley fund (Id. at
¶ 26); Bakers Local 433 Health Fund of South Dakota; and
Minnesota's Twin Cities Bakery Workers Health and Welfare
Fund. (Id. at ¶¶ 28-29).
insurance carrier plaintiffs include: Louisiana Health
Services Indemnity Company d/b/a Bluecross/Blueshield of
Louisiana, a corporation licensed to conduct business in
Louisiana that provides health benefits to covered members
(Id. at ¶ 27); Fraternal Order of Police, Fort
Lauderdale Lodge 31, Insurance Trust Fund, a governmental
health insurance plan that provides health and major medical
insurance to active and retired Fort Lauderdale police
officers and their dependents. (Id. at ¶ 30).
plaintiffs include: the Mayor and City Council of Baltimore,
Maryland (Id. at ¶ 25), and the City of
Providence, Rhode Island, both municipal corporations with
self-insured health and welfare benefit plans. (Id.
at ¶ 31).
the six individual plaintiffs are Edward Czarnecki, a
Wisconsin resident; Emilie Heinle, a North Dakota resident;
Andrew Livenzey from Massachusetts; Edward Ellenson from
Hawaii; Jean Ellyne Dougan, an Arkansas resident; and Nancy
Billington of Montana (Id. at ¶¶ 32-37).
plaintiffs claim to have purchased or provided partial
payment for some of, or the entire price of, Lipitor or its
generic version. (Id. at ¶¶ 24-46).
Plaintiffs contend that they were all injured as a result of
Defendants' anticompetitive schemes, since they paid a
premium for the medication. (id).
in this case are Pfizer and Ranbaxy. (Id. at
¶¶ 38-46). Pfizer Inc., Pfizer Ireland
Pharmaceuticals, and Warner-Lambert Company are collectively
referred to as Pfizer. (Id. at ¶¶ 38-42).
Pfizer Inc. is the parent company of Pfizer Ireland
Pharmaceuticals, an Irish unlimited liability company that is
a wholly owned, indirect subsidiary of Pfizer Inc.
(Id. at ¶¶ 38-39). Pfizer acquired
Warner-Lambert Company in 2000. (Id. at ¶ 40).
According to the Complaint, reference to Warner-Lambert also
includes, but is not limited to, Warner-Lambert employees
Bruce D. Roth, Joan Thierstein, and Jerry F. Janssen.
(Id. at ¶ 41). In addition, the Complaint names
Defendants Ranbaxy Laboratories Limited, Ranbaxy Inc., and
Ranbaxy Pharmaceuticals Inc. collectively as Ranbaxy.
(Id. at ¶¶ 43-46). Ranbaxy Laboratories
Limited is an Indian corporation that wholly owns Ranbaxy
Inc., which has a place of business in New Jersey.
(Id. at ¶¶ 43-49).
Complaint, EPPs identify several anticompetitive schemes that
purportedly give rise to the present lawsuit. Specifically,
Plaintiffs allege that Defendants fraudulently obtained a
second, duplicative, patent from the United States Patent and
Trademark Office (PTO); listed that patent in the book of
Approved Drug Products with Therapeutic Equivalence
Evaluations (the "Orange Book"); engaged in sham
litigation relating to the second patent; filed a sham
citizen petition with the FDA; entered into an unlawful
reverse payment agreement with Ranbaxy; and manipulated the
statutorily created 180 day first-to-file
period to sustain Pfizer's and Ranbaxy's
exclusivity and collectively prevent other generic companies
from entering the market. The Court discusses each allegation
Walker Process and Fraudulent Orange Book Allegations
first present a Walker Process claim against
Pfizer, based on Pfizer's enforcement of an invalid
patent and fraudulent listing of the patent in the Orange
Book. By way of background, Warner-Lambert, which was later
acquired by Pfizer in 2000, applied for the Original Lipitor
Patent on March 30, 1986 and subsequently received Patent No.
4, 681, 893 ('893 Patent) on July 21, 1987. (Id.
at ¶¶ 95, 104). The Original Lipitor Patent was for
a racemic mixture, which contains equal amounts of two
enantiomers that inhibit the production of cholesterol.
(Id. at ¶ 7). Enantiomers are made of mirrored
images of stereoisomers, which are two or more compounds with
the same atoms but arranged differently. (Id. at
¶¶ 85-86). In a racemic mixture, it is common for
one enantiomer to have all or most of the biological
activity, while the other is largely inactive. (Id.
at ¶ 89).
to the Complaint, the compounds in the '893 Patent were
not limited to any particular stereochemistry; instead, the
structure included four different stereoisomers
possibilities: R-trans, S-trans, R-cis, and S-cis isomers.
(Id. at ¶ 103). Even though the '893 Patent
covered the multiple possibilities, Warner-Lambert focused on
developing the R-trans enantiomer of the compound, in calcium
salt form, which would eventually be sold as Lipitor.
(Id. at ¶¶ 106-07). Warner-Lambert
achieved patent extensions and regulatory exclusivities that
postponed the patent's expiration from May 30, 2006 to
March 24, 2010. (Id. at ¶ 104).
21, 1989, Warner-Lambert applied for a patent to specifically
protect the R-trans enantiomer, which later became the
'995 Enantiomer Patent. (Id. at ¶ 126).
According to the Complaint, Warner-Lambert had to prove the
R-trans enantiomer's activity had a
"surprising" or "unexpected"
characteristic to procure a subsequent patent; put
differently, they had to justify why the proposed patent was
not already protected by the by the '893 Patent.
(Id. at ¶ 109). Plaintiffs allege
Warner-Lambert tasked its senior management with finding
"something that could be mischaracterized as
surprising." (Id. at ¶¶ 110-14).
Warner-Lambert included a table in the '995 Patent
application to demonstrate the surprising results that the
R-trans enantiomer was one hundred times more active than the
S-trans enantiomer and ten times more active than the racemic
mixture. (Id. at ¶ 128). However, Plaintiffs
claim that one skilled in the art would know "one
enantiomer is the 'active' isomer, while the other is
'inactive,' and thus the active enantiomer is about
twice as active as the racemic mixture." (Id.
at ¶ 121). Further, the Complaint states Warner-Lambert
would have known, through testing and experimentation, that
the R enantiomer was likely to be the active isomer.
(Id. at ¶ 122). Plaintiffs allege that
Warner-Lambert failed to calculate the average result from
its various tests and, instead, "cherry-picked from
among the results [of the tests] in order to generate a table
that supported its claim of 'surprising
activity.'" (Id. at ¶ 135). As a
result, the data Warner-Lambert provided in its application
was allegedly both false and misleading, since the R-trans
enantiomer is approximately twice as active as the racemic
mixture, not ten times. (Id. at ¶ 133).
originally rejected the '995 Patent application, since
the invention was already covered and anticipated by the
claims in the previously procured '893 Patent.
(Id. at ¶ 153). Under patent law, a patent
application can be rejected "if the differences between
the subject matters sought to be patented and the prior art
[are] such that the subject matter as a whole would have been
obvious at the time of the invention was made to a person
having ordinary skill in the art to which said subject matter
pertains." (Id. at ¶ 154). In response to
the PTO's rejection, Warner-Lambert then requested to
amend its application to provide a declaration by Dr. Bruce
Roth, who participated in developing Lipitor, in support of
the newfound information regarding the R-trans
enantiomer's activity. (Id. at ¶¶
159-60). In his declaration, Roth asserted that the available
data "shows the activity of [the R-trans enantiomer] is
surprising and unexpected because if the [S-trans
enantiomer] is accepted as inactive, the activity of [the
R-trans enantiomer] would be expected to be only twice that
of the racemic mixture" and not the ten times that
occurred. (Id. at ¶¶ 165-66).
Warner-Lambert argued the surprising nature of this
information overcomes the obvious inclusion under the
'893 Patent and, thus, warrants the issuance of the
'995 Patent. (Id. at ¶ 161). Plaintiffs
contend the data presented to the PTO, including the Roth
Declaration were knowingly false and misleading and used to
fraudulently convince the PTO to procure the new patent.
(Id. at ¶¶ 133, 165, 170-74). Persuaded by
the data submitted, the PTO eventually issued the '995
Enantiomer Patent on December 28, 1993. (Id. at
result of its two approved patents, Warner-Lambert submitted
a new drug application to the FDA for Lipitor, which was
approved on December 17, 1996. (Id. at ¶ 201).
Warner-Lambert then listed both the '893 Original Lipitor
Patent and the '995 Enantiomer Patent in the Orange Book,
which expired on May 30, 2006 and December 28, 2010,
respectively. (Id. at ¶¶ 203-04).
Thereafter, it applied for an extension of the '893
Original Lipitor Patent to account for the difference in time
between the issuance of the patent covering the active
ingredient in the new drug and the FDA's approval of that
drug. (Id. at ¶¶ 206-08). As a result, the
PTO postponed '893 Patent's expiration until March
24, 2010. (Id. at ¶ 213).
Sham Litigation and Citizen Petition Allegations
next contend Defendants engaged in sham litigation against
Ranbaxy. On August 19, 2002, Ranbaxy filed an Abbreviated New
Drug Application (ANDA) to sell a generic version of Lipitor.
(Id. at ¶¶ 221-22). While Ranbaxy verified
their generic version would not violate any of the Lipitor
patents, Pfizer, who had acquired Warner-Lambert by this
time, filed a patent infringement lawsuit against Ranbaxy on
February 21, 2003 for allegedly infringing on the '893
and '995 Patents. (Id. at ¶¶ 223-24).
In the pre-trial proceedings, Pfizer attempted to amend its
complaint to include process patent infringement claims;
however, their motion was denied since these patents could
not be listed in the Orange Book and, therefore, were not a
basis for the suit.(Id. at ¶¶ 226-27). On
appeal from the District of Delaware, the Federal Circuit
ruled in Pfizer's favor, finding that Ranbaxy's
product infringed on the '893 Patent. However, it also
dismissed Pfizer's '995 Patent infringement claim
since it had an improper dependent claim structure.
(Id. at ¶ 232). As a result, Ranbaxy had to
wait until the expiration of the '893 Patent in March
2010, before selling its generic version. (Id. at
¶¶ 232, 234).
contend since the '995 Patent was fraudulently obtained,
the patent infringement litigation against Ranbaxy was a
baseless sham, that was intended to interfere with the
introduction of Ranbaxy's generic drug into the market.
(Id. at ¶ 230).
also allege that Pfizer filed a baseless citizen petition
with the FDA, in further attempt to delay the entry of
generic versions of Lipitor. (Id. at ¶ 235).
According to the Complaint, Ranbaxy's ANDA could have
received FDA approval in August 2005, thereby creating
generic competition. (Id. at ¶¶ 236-38).
However, a month beforehand, July 2005, Pfizer sent a letter
to the FDA, in an attempt to further delay the entry to
generic versions of Lipitor. (Id. at ¶ 239).
Four months later, November 7, 2005, Pfizer re-filed this
letter, as a citizen petition, alleging that the generic
brand's use of "amorphous atorvastatin calcium"
could be "susceptible to higher levels of
impurities" than Pfizer's crystalline version; as
such, Pfizer averred that Ranbaxy's application needed to
be carefully scrutinized and reviewed with considerable
skepticism. (Id. at ¶¶ 241-42). However,
Plaintiffs claim Pfizer had also used amorphous versions in
their testing and development of Lipitor and, therefore, knew
that it could be, and had been, safely made. (Id. at
¶¶ 242-46). As such these purported safety concerns
were unfounded. (Id.). Further, Pfizer knew from its
earlier litigation with Ranbaxy that Ranbaxy's generic
drug was amorphous, rather than crystalline. (Id.).
According to Plaintiffs, the FDA's previous decisions
expressly indicated that special or additional scrutiny would
not be applied when reviewing an AND A, when a different form
was used; instead, the stability of a drug, not its
substance, would be the key focus in measuring the drug's
quality. (Id. at ¶ 251). As such, given
Pfizer's knowledge that amorphous versions posed no
safety risks, as well as the FDA's approach to treating
AND A claims, Plaintiffs claim the petition was a baseless
attempt to delay generic competition. (Id. at
Reverse Settlement Allegations
Plaintiffs challenge the validity of a reverse settlement
agreement made between Pfizer and Ranbaxy, after Pfizer
attempted to obtain reissuance of the '995 Patent.
(Id. at ¶ 323). To correct the invalidation of
the '995 Patent, Pfizer applied for its reissuance in
2007 and conceded that the data included in its original
application, concerning the R-trans enantiomer's
effectiveness, contained significant errors. (Id. at
¶¶ 274-76). Therefore, it would no longer rely on
this information in its reissuance proceedings. (Id.
at ¶ 283). Without this information, Ranbaxy filed a
protest with the PTO, contending that the content of the
'995 Patent was "anticipated, obvious, [and]
constituted double-patenting." (Id. at
¶¶ 279, 284). As a result, the PTO issued a
non-final rejection of Pfizer's reissuance application,
since it "had before it no scientific basis to conclude
the enantiomer claims were anything other than obvious over
the '893 Patent." (Id. at ¶ 285, 293).
Given Pfizer's failure to receive approval for the
'995 Patent, there was a strong possibility that generic
brand drugs would enter the market upon expiration of the
'893 Patent in March 2010. (Id. at ¶¶
Pfizer struggled to obtain a reissuance of the '995
Patent in 2008, it was later discovered that Ranbaxy may have
infringed on another patented drug, Accupril, and, therefore,
Pfizer had a potential patent infringement claim worth
millions of dollars in damages. (Id. at ¶¶
311-12). According to the Complaint, upon learning of this
information "Pfizer needed a stage to disguise a reverse
payment to Ranbaxy in order to buy Ranbaxy's agreement to
delay launching of its generic version of Lipitor. If there
were a pending court case against Ranbaxy involving Lipitor,
Pfizer could settle with Ranbaxy through a reverse payment
and (unlawfully) extend its Lipitor market exclusivity";
however, when Pfizer learned of Ranbaxy's potential
Accupril infringement, there was no active litigation
pending. (Id. at ¶ 313).
of its reasoning, it is undisputed that Pfizer filed a
complaint against Ranbaxy in March 2008 for infringing on
Process Patents of the '740 and '511 Patents.
(Id. at ¶¶ 314-315). However, as mentioned
above, a court had already ruled that these patents were not
exclusionary and, therefore, provided no basis for relief.
(Id. at ¶¶ 308, 316). This being said,
less than three months after the suit was filed, the parties
entered into a reverse settlement agreement, whereby Ranbaxy
would refrain from manufacturing or selling generic Lipitor
until November 30, 2011. (Id. at ¶¶ 315,
323-26). According to the Complaint, Pfizer and Ranbaxy
disguised this agreement as a way to settle the process
patent litigation when, in actuality, it was a "pretext
for its true anticompetitive goals and accomplishments."
(Id. at ¶¶ 323-24). Under the terms of the
agreement, Ranbaxy paid Pfizer $1 million and Pfizer
dismissed its multi-million dollar patent infringement claims
based on Ranbaxy's generic version of Accupril.
(Id. at ¶ 327). In addition, Ranbaxy was
permitted the right to market its generic version of Lipitor
in some foreign markets. (Id.). Further, Ranbaxy did
not waive its market exclusivity right to be the first to
file an ANDA for Lipitor; thereby preventing other generic
competition from entering the market until after November 30,
2011. (Id. at ¶¶ 363-65). In return,
Ranbaxy also ceased challenging Pfizer's reissuance of
the '995 Patent. (Id. at ¶ 366). As a
result, the PTO eventually granted reissuance of the '995
Patent, relying in part on Lipitor's commercial success
to prove the patent could not have been obvious and,
therefore, was not covered by the '893 Original Lipitor
Patent. (Id. at ¶ 414).
contend the accumulation of Pfizer's conduct demonstrates
an anticompetitive scheme to prevent generic brands from
interfering with Lipitor's market share and, as a result,
Pfizer's profitability. (Id. at ¶ 446). Had
Pfizer not fraudulently procured the '995 Patent,
Plaintiffs claim there would have been no basis for its
reissuance. (Id.). In addition, Ranbaxy only stopped
protesting the '995 patent after it entered a reverse
settlement agreement with Pfizer. (Id.). If not for
these circumstances, the EPPs contend that generic versions
of Lipitor would have been able to enter into the market much
earlier. (Id. at ¶ 447).
bring this case on behalf of themselves and all End-Payor
class members to recover damages, calculated by the increased
price they had to pay due to Pfizer's conduct in delaying
the market entry of generic Lipitor. (Id. at ¶
486). The class contains individuals or entities who
purchased or paid for Lipitor and/or its generic version for
consumption by themselves, their families, or members,
employees, insureds, participants, or beneficiaries in
Arizona, California, Florida, Hawaii, Illinois, Iowa, Kansas,
Maine, Maryland, Massachusetts, Michigan, Minnesota,
Mississippi, Montana, Nebraska, Nevada, New Hampshire, New
Mexico, New York, North Carolina, North Dakota, Oregon, Rhode
Island, South Dakota, Tennessee, Utah, West Virginia,
Wisconsin, and the District of Columbia. (Id. at
¶ 487). The Class sues for overage damages occurred from
March 24, 2010 until the effects of Defendants' conduct
Complaint outlines four different claims for relief in the
class action. The first is for monopolization under state law
against Pfizer. (Id. at ¶ 497). The conduct
giving rise to this claim is the fraudulent obtainment of the
'995 Patent, its listing in the Orange Book, its sham
litigation and citizen petition, the reissuance of the
patent, and the unlawful reverse settlement agreement with
Ranbaxy. (Id. at ¶ 500). The same factual
allegations and theories asserted in Count I are again
alleged in Count II against all Defendants. (Id. at
¶ 511). In Count III, Plaintiffs allege conspiracy to
restrain of trade against all Defendants. (Id. at
¶¶ 527, 530). Finally, Plaintiffs allege a claim
unfair or deceptive trade practices against all Defendants.
(Id. at ¶ 546). Plaintiffs contend that as a
result of Pfizer's anticompetitive acts or practices,
Plaintiffs and the Class were deprived of the opportunity to
obtain a less expensive, generic equivalent to Lipitor.
(Id. at ¶ 547). As such, Plaintiffs seek
compensation from Defendants in the form of damages.
Rule of Civil Procedure 12(c) permits a party to dismiss a
suit "[a]fter the pleadings are closed ... but early
enough not to delay trial." Fed.R.Civ.P. 12(c). "A
Rule 12(c) motion for judgment on the pleadings is treated
like a motion to dismiss under Rule 12(b)(6)."
Syncsort Inc. v. Sequential Software, Inc., 50
F.Supp.2d 318, 324 (D.N.J. 1999). Under either rule, the
Court must accept all well-pleaded factual allegations in the
complaint as true and draw all reasonable inferences in favor
of the nonmoving party. Id. For a complaint to
survive dismissal, it "must contain sufficient factual
matter, accepted as true, to 'state a claim to relief
that is plausible on its face."' Wireless Media
Innovations, LLC v. Maker Terminals, LLC, 100 F.Supp.3d
405, 407 (D.N.J. 2015) (quoting Ashcroft v. Iqbal,
556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)).
As such, "[a] complaint should not be dismissed unless
it appears beyond doubt that 'the facts alleged in the
complaint, even if true, fail to support the
claim.'" Syncsort Inc., 50 F.Supp.2d at
presently challenge EPPs' Complaint on four separate
bases. First, Defendants contend that EPPs' Complaint
should be dismissed in its entirety based on federal
preemption principles. Second, Defendants argue that certain
states require pre-filing notices that Plaintiffs failed to
comply with and proscribe class actions under their
respective consumer protection statutes. Third, Defendants
aver that EPPs' state antitrust claims fail because they
lack standing and fail to plead a concerted act. Finally,
Defendants challenge EPPs' consumer protection claims for
failing to comply with various state consumer protection law
requirements. The Court addresses each challenge in turn.
Federal Law Preemption
first seek dismissal of all of Plaintiffs' state law
claims, since their state law claims are preempted by federal
law. Plaintiffs respond, contending that because their claims
are based on antitrust and consumer fraud theories,
preemption is inapplicable.
patent law preempts state law claims to the extent that state
law 'stands as an obstacle to the accomplishment and
execution of the full purposes and objectives of
Congress' in enacting the patent laws."
Wawryzynski v. H.J. Heinz Co., 574 F.App'x 99,
102 (3d Cir. 2014) (quoting Aronson v. Quick Point Pencil
Co., 440 U.S. 257, 262 (1979)). Notably, "district
courts shall have original jurisdiction of any civil action
arising under any Act of Congress relating to patents, plant
variety protection, copyrights and trademarks. No. State
court shall have jurisdiction over any claim for relief
arising under any Act of Congress relating to patents, plant
variety protection, or copyrights." 28 U.S.C. §
1338(a). "Under § 1338(a), then, jurisdiction
extends 'only to those cases in which a well-pleaded
complaint establishes either that federal patent law creates
the cause of action or that the plaintiffs right to relief
necessarily depends on resolution of a substantial question
of federal patent law, in that patent law is a necessary
element of one of the well-pleaded claims.'" In
re Lipitor Antitrust Litig, 855 F.3d 126, 143 (3d Cir.
2017) (quoting Christianson v. Colt Industr. Operating
Corp., 486 U.S. 800, 809 (1986)). As such, the Court is
tasked with determining whether the plaintiffs claims
"arise under" patent law. Id. at 144.
"[I]f on the face of a well-pleaded complaint there are
reasons completely unrelated to the provisions and purposes
of the patent laws why the plaintiff may or may not be
entitled to the relief it seeks," then the claims do not
"arise under" patent law. Id. (internal
quotation marks and citations omitted).
present three theories supporting their position that
Plaintiffs' state law claims are preempted. First,
because Plaintiffs' claims are based on the purportedly
fraudulent procurement and enforcement of the '995
patent, they must demonstrate that the patent is invalid or
unenforceable, which is preempted under federal patent law.
Second, to the extent that Plaintiffs' antitrust claims
are based on the reverse settlement agreement, they are
preempted since they must demonstrate the validity of the
generic patents, which necessarily implicates patent law.
Finally, Defendants contend that Plaintiffs'
"sham" citizen petition claim is preempted, since
it must demonstrate the validity of the generic patents,
which, again, implicates patent law.
Fraudulent Patent Procurement and Enforcement
first to Defendants' federal patent preemption argument,
Defendants argue that Plaintiffs' state law claims
require them to plead and prove that the patent is invalid or
unenforceable under federal patent law. According to
Defendants, the allegations in Plaintiffs' complaint that
trigger federal patent law include: (1) the fraudulent
procurement of the '995 patent (2) the fraudulent patent
listing of the '995 Patent in the FDA's Orange Book;
and (3) the "sham" litigation against Ranbaxy,
seeking to enforce the '995 Patent, in addition to its
two process patents. Defendants, citing little or no
supporting case law, contend that these allegations require
first knowing whether the patent at issue is invalid or
unenforceable. If the patent was valid, then the obtainment
and enforcement of same would be lawful. As such, Defendants
argue that because federal patent law is necessary to support
these theories, they are preempted by federal law.
Defendants' arguments are in direct contravention with
the Third Circuit's recent holding in Lipitor,
855 F.3d at 126. In Lipitor, the Third Circuit
explicitly held that the present matter does not "arise
under" federal patent law. The Third Circuit held that
although a resolution of a substantial question of federal
patent law is necessary for a fraudulent patent claim, that
alone is not sufficient to establish that the Federal Circuit
has jurisdiction. Id. at 143. The court explained
that unless every theory of the claim requires resolution of
a substantial question of federal law, it does not
"arise under" federal patent law and, therefore,
the Third Circuit has jurisdiction. Id. The court
interpreted "arises under" to mean that every
theory of the claim requires the resolution of a substantial
question of federal law, if it does not, federal patent law
will not preempt. Id. Here, even if the allegations
in the Complaint present substantial questions of patent law,
because the antitrust allegations and sham citizen petition
do not, this case does not arise under federal patent law for
purposes of federal patent preemption. Id. (quoting
Christianson, 486 U.S. at 812).
federal patent law does not preempt a state law claim in
which a patent law issue is implicated if "the state law
cause of action [i.] includes additional elements not found
in the federal patent law cause of action and [ii.] is not an
impermissible attempt to offer patent-like protection to
subject matter addressed by federal law." Dow Chem.
Co. v. Exxon Corp., 139 F.3d 1470, 1473 (Fed. Cir.
1998). In Dow, the defendant was issued a patent
that disclosed certain wire and cable devices manufactured
using a particular insulating polymer. Id. at 1471.
At about the same time, the plaintiff introduced its own line
of polymer products and filed a complaint contending that its
polymer did not infringe on the defendants' patent since
the defendants' patent was invalid and unenforceable.
Id. at 1471-72. In addition, the plaintiff asserted
a state-law unfair competition claim, alleging that that the
defendant obtained its patent through inequitable conduct
before the PTO. Id.
patent preemption inapplicable, the Federal Circuit explained
that there are three objectives for patent law: (1) to
provide an incentive to invent; (2) to promote the full
disclosure of inventions; and (3) to ensure "that which
is in the public domain cannot be removed therefrom by action
of the states." Id. at 1474 (quoting
Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470,
480-81 (1974)). With these objectives in mind, the
Dow court held that when the state law cause of
action includes additional elements not found in the federal
patent law and state law is not an obstacle to the objectives
of federal patent law, it is not preempted even if patent law
is implicated. Id. at 1473. As such, the Federal
Circuit held that because the state law unfair competition
claim included additional elements not found in federal
patent law and did not otherwise conflict with the objectives
of federal patent law, its claims were not preempted.
Id. at 1478-79.
as in Dow, the EPPs state antitrust and consumer
protection claims require proof of elements not found in a
patent cause of action. As discussed earlier, the purpose for
patent protection is to provide an incentive to invent, to
promote the full disclosure of inventions and to ensure
"that which is in the public domain cannot be removed
therefrom by action of the states." Antitrust and
consumer protection law protect consumers from being
overcharged for products, which is a wholly different goal
than patent law.
also consistent with the Court's decision in In re
Thalomid and Revlimid Antitrust Litig., No. 14-6997,
2015 U.S. Dist. LEXIS 177541 (D.N.J. Oct. 29, 2015), where
the court held that even if a state court must adjudicate a
question of federal patent law, it is not preempted if it
includes additional elements not part of a federal cause of
action. Id. at *61-63. In Thalomid, the
plaintiffs, who were indirect purchasers, alleged that the
defendants created an antitrust scheme by obtaining patents
through fraud on the PTO and bringing sham lawsuits to delay
generic brands from entering the market. Id. at
*4-5. As is the case here, the defendants argued that the
plaintiffs' antitrust claims should be preempted by
federal patent law since they alleged that they obtained the
patents through unjust conduct with the PTO. Id. at
*61-62. Relying on Dow, the court held that even if
a question of federal patent law must be adjudicated, the
state law claim is not preempted, as long as it contains
additional elements not part of a federal patent cause of
action. Id. Finding the allegations were also
premised on bad faith in the marketplace (an element not
required in patent law) the Court reasoned that federal
patent preemption was not warranted.
similar to Thalomid, the EPPs allege that the
patents were obtained through fraud on the PTO, Pfizer
improperly listed the '995 patent in the Orange Book, the
generic drug was delayed entry because of sham litigation, a
baseless Citizens Petition was filed, and a reverse payment
settlement agreement was negotiated to prolong a monopoly. As