Avoiding Antitrust Issues - - BioPharm International


Avoiding Antitrust Issues

BioPharm International
Volume 1, Issue 8

As stated by the Federal Circuit, "Walker Process antitrust liability is based on the knowing assertion of a patent procured by fraud on the PTO, very specific conduct that is clearly reprehensible." 17(p1071) Consequently, such potential liability can be avoided by not making fraudulent misrepresentations or omissions to the United States Patent Office. In Bristol-Myers Squibb Co., the FTC charged Bristol-Myers Squibb with procuring two Taxol (anti-cancer drug) patents "through inequitable conduct." The FTC observed in part, "When pursuing a patent, an applicant has a duty of candor and good faith in dealing with the PTO. This duty includes a requirement to disclose all information, of which the applicant is aware, that a reasonable examiner would find material in determining patent ability. The failure to satisfy this duty is inequitable conduct that renders the patent unenforceable."19

In other rare circumstances, obtaining an extensive portfolio of competitive patents through purchase or assignment "may violate the Sherman Act where the assignment [or purchase] constitutes unlawful monopolization or is part of an agreement by competitors to restrain trade."7(p1036) So the ABA has pointed out, citing United States v Singer Manufacturing Co. ("in the context of a broader monopolistic scheme, the transfer of a patent from a Swiss manufacturer to its US licensee to facilitate bringing enforcement actions against Japanese competitors violated Sherman Section 1"),20 and citing Kobe, Inc. v Dempsey Pump Co. ("the acquisition, nonuse and enforcement of 'every important patent' in the field with a purpose to exclude competition, together with other anticompetitive acts, constituted a violation of Section 2 of the Sherman Act").21

Sham Pharmaceutical Patent Litigation

Potential antitrust liability may attach for filing "objectively baseless" sham litigation to enforce a patent. For example, in Nobelpharma AB v Implant Innovations, Inc, the Federal Circuit, citing Professional Real Estate Investors Inc. v Columbia Pictures Indus, Inc. (PRE)22 and Eastern RR Presidents Conference v Noerr Motor Freight, Inc. (Noerr),23 explained, "An antitrust claim can also be based on a PRE allegation that a suit is baseless; in order to prove that a suit was within Noerr's 'sham' exception to immunity, an antitrust plaintiff must prove that the suit was both objectively baseless and subjectively motivated by a desire to impose collateral, anti-competitive injury rather than to obtain a justifiable legal remedy."17(p1071-1072) In the consent order issued against Bristol-Myers Squibb (BMS) on April 14, 2003 (cited earlier), the FTC charged that BMS had filed sham patent litigation relating to its anti-cancer drug Platinol and its anti-anxiety drug BuSpar in order to delay the market entry of potential generic competitors. The FTC alleged, "The intent and effect of BMS's multiple patent infringement lawsuits was to prevent generic buspirone manufacturers from marketing their products for as long as possible, through wrongful trigger of the 30-month stay."19(60) Once again, however, the standard of proof required for making such a claim is high, so potential liability can be avoided through careful diligence and good-faith conduct.

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