Opinion ID: 77043
Heading Depth: 3
Heading Rank: 1

Heading: Patent Infringement Proceedings

Text: 9 While the Sherman Anti-Trust Act does proscribe activity in restraint of trade, its reach has been tempered when its invocation would impair the exercise of constitutional rights. Recognizing that the First Amendment guarantees the right to petition the Government for a redress of grievances, U.S. CONST. amend. I, and that this guarantee overrides the effect of a contrary federal statute, see Marbury v. Madison, 5 U.S. (1 Cranch) 137, 177-78, 2 L.Ed. 60 (1803), and not wanting to impute to Congress an intent to invade the First Amendment right to petition, Prof'l Real Estate Investors v. Columbia Pictures Indus., Inc., 508 U.S. 49, 56, 113 S.Ct. 1920, 1926, 123 L.Ed.2d 611 (1993) (internal quotations omitted), the Supreme Court has held that a defendant is immune from Sherman Act liability for concerted efforts to petition government to pass legislation which has the effect of restraining or monopolizing trade in favor of the defendant. See E. R.R. Presidents Conf. v. Noerr Motor Freight, Inc., 365 U.S. 127, 136, 81 S.Ct. 523, 529, 5 L.Ed.2d 464 (1961) (granting antitrust immunity for publicity campaign designed to spur the adoption of monopoly-facilitating legislation); United Mine Workers v. Pennington, 381 U.S. 657, 670, 85 S.Ct. 1585, 1593, 14 L.Ed.2d 626 (1965) (noting that Noerr shielded a defendant from antitrust liability for efforts to influence public officials . . . even though intended to eliminate competition). Subsequent precedent has extended Noerr-Pennington immunity to defendants who exercise their right to petition government by resorting to administrative and/or judicial proceedings. See Cal. Motor Transp. Co. v. Trucking Unlimited, 404 U.S. 508, 510, 92 S.Ct. 609, 611-12, 30 L.Ed.2d 642 (1972). Noerr-Pennington immunity thus shields a defendant from antitrust liability for resorting to litigation to obtain from a court an anticompetitive outcome. 10 An exception to the Noerr-Pennington doctrine exists, however, where the defendant engages in sham litigation. Prof'l Real Estate Investors, 508 U.S. at 56, 113 S.Ct. at 1926; see Noerr, 365 U.S. at 144, 81 S.Ct. at 533 (finding Sherman Act immunity inappropriate where the exercise of the right to petition was a mere sham to cover what is actually nothing more than an attempt to interfere directly with the business relationships of a competitor). To prevail on the argument that Noerr-Pennington immunity should be abrogated based on the sham litigation exception, a litigant must establish that: (1) the lawsuit [is] objectively baseless in the sense that no reasonable litigant could realistically expect success on the merits; and (2) the party bringing the allegedly baseless suit did so with a subjective motivation . . . to interfere directly with the business relationships of a competitor. Prof'l Real Estate Investors, 508 U.S. at 60-61, 113 S.Ct. at 1928. Construing the first prong of the sham litigation exception test, the Court noted that the existence of probable cause to bring a lawsuit is sufficient to thwart a claim that litigation was objectively baseless. See Prof'l Real Estate Investors, 508 U.S. at 62, 113 S.Ct. at 1929. Moreover, the Court noted that [a] winning lawsuit is by definition a reasonable effort at petitioning for redress and therefore not a sham. Prof'l Real Estate Investors, 508 U.S. at 60 n. 5, 113 S.Ct. at 1928 n. 5. 11 Based on this precedent, we agree with the district court that the Noerr-Pennington doctrine shields Elan from antitrust liability for filing two patent infringement suits against Andrx in relation to the manufacture and sale of controlled release naproxen. The United States Constitution expressly permits the government to grant exclusive monopolies in the form of patents, see U.S. CONST. art. I, § 8, cl. 8, and therefore the Sherman Act cannot be read to impede a litigant from seeking to defend constitutionally-permitted patent rights. See Prof'l Real Estate Investors, 508 U.S. at 56, 113 S.Ct. at 1926 (declining to impute an unconstitutional purpose to Sherman Anti-Trust Act). Moreover, as the Supreme Court has noted, engaging in litigation to seek an anticompetitive outcome from a court is First Amendment activity that is immune from antitrust liability. See Cal. Motor Transp. Co., 404 U.S. at 510, 92 S.Ct. at 611-12. Thus, we conclude Noerr-Pennington immunity was triggered by Elan's filing suit against Andrx. In addition, we conclude that the sham litigation exception is inapplicable. Andrx's main contention in its complaint that the patent litigation was a sham hinged on its claim that the on-sale bar found in 35 U.S.C. § 102 was triggered by Elan's naproxen advertisement in the publication SCRIP World Pharmaceutical News. Two courts have subsequently rejected that argument. See Elan Corp., PLC, 272 F.Supp.2d at 1340 (rejecting argument that the SCRIP advertisement triggered on-sale bar); Elan Corp., PLC, 366 F.3d at 1342 (rejecting the argument that the on-sale bar was triggered). Thus, while Elan may not have won its infringement lawsuit at this point, it certainly has made a winning argument against Andrx's contentions of patent invalidity. Cf. Prof'l Real Estate Investors, 508 U.S. at 60 n. 5, 113 S.Ct. at 1928 n. 5. Thus, it is manifest that Elan's patent infringement proceedings were not objectively baseless, and therefore not a sham. Accordingly, because the Noerr-Pennington doctrine applies, and the sham litigation exception is inapplicable, the district court properly found that Elan was immunized from antitrust liability for filing infringement proceedings against Andrx.