Opinion ID: 1190929
Heading Depth: 1
Heading Rank: 3

Heading: Plaintiffs' Antitrust Lawsuit

Text: In 2000, direct and indirect purchasers of Cipro filed over thirty antitrust lawsuits against Bayer under federal and state law. These cases were consolidated by the Multi-District Litigation Panel in the Eastern District of New York. See In re Ciprofloxacin Hydrochloride Antitrust Litig., 166 F.Supp.2d 740, 745 (E.D.N.Y.2001) ( Cipro I ). Plaintiffs allege that defendants' settlement exceeded the scope of Bayer's patent rights because Bayer effectively paid its potential competitors hundreds of millions of dollars not to challenge its patent. Plaintiffs also allege that the agreements were unlawful because Barr was permitted to reclaim the 180-day market exclusivity period if a subsequent challenger was successful in having the patent invalidated, and because the generic manufacturers agreed not to file any ANDA-IV certifications for products that relate to Cipro. But for the challenged agreements, plaintiffs assert that (1) Barr would have entered the market pending resolution of the patent litigation; (2) Barr would have prevailed in the litigation and entered the market; or (3) Bayer would have granted Barr a license to market a generic version of Cipro to avoid a trial on the patent's validity. On cross-motions for summary judgment, the district court granted summary judgment for the defendants. In re Ciprofloxacin Hydrochloride Antitrust Litig., 363 F.Supp.2d 514, 548 (E.D.N.Y. 2005) ( Cipro III ). The court stated: The ultimate question  and this is the crux of the matter  is not whether Bayer and Barr had the power to adversely affect competition for ciprofloxacin as a whole, but whether any adverse effects on competition stemming from the Agreements were outside the exclusionary zone of the '444 Patent. It goes without saying that patents have adverse effects on competition. However, any adverse effects within the scope of a patent cannot be redressed by antitrust law. Id. at 523-24 (citations omitted). In eschewing a  post hoc determination of the potential validity of the underlying patent, the court reasoned that such an approach would undermine the presumption of validity of patents in all cases, as it could not logically be limited to drug patents, and would work a revolution in patent law. Id. at 529. The district court also found that the agreements did not allow Barr to manipulate the exclusivity period to obstruct subsequent challengers of the patent. Id. at 540-41; see also Cipro II, 261 F.Supp.2d at 243-47. The court summarized as follows: [I]n the absence of any evidence that the Agreements created a bottleneck on challenges to the '444 Patent, or that they otherwise restrained competition beyond the scope of the claims of the '444 Patent, the Agreements have not had any anti-competitive effects on the market for ciprofloxacin beyond that which are permitted under the '444 Patent. The fact that Bayer paid what in absolute numbers is a handsome sum to Barr to settle its lawsuit does not necessarily reflect a lack of confidence in the '444 Patent, but rather the economic realities of what was at risk. There is simply no precedent for plaintiffs' argument that the parties to a settlement are required to preserve the public's interest in lower prices. Such a rule would only result in parties being less likely to reach settlements, aside from undermining well-settled principles of patent law. Finally, to even attempt to quantify the public's interest in a patent settlement between private parties would require devaluing patents across the board, a result that would contravene the presumption of validity afforded by Congress and impact the very way patent licenses are handled in countless daily transactions. Cipro III, 363 F.Supp.2d at 540-41. Plaintiffs timely appealed. This Court retained jurisdiction over the direct purchaser plaintiffs' appeals, but transferred the indirect purchaser plaintiffs' appeal to the Federal Circuit. [10]