Opinion ID: 76321
Heading Depth: 2
Heading Rank: 4

Heading: The Order Granting Summary Judgment

Text: 17 The December 13, 2000, Order granting plaintiffs' motion for partial summary judgment concluded that the Agreements were per se violations of § 1 of the Sherman Act. The Order characterized the Agreements as geographic market allocation Agreements between horizontal competitors, essentially allocating the entire United States market for terazosin drugs to Abbott, who shared its monopoly profits with the other cartel members during the life of the Agreements. 18 The court found that on the eve of the Agreements, 19 both Geneva and Zenith were poised to market generic versions of Hytrin in the United States. Geneva received final FDA approval for its generic capsule in March subject to validation, and the 30-month stay on its generic tablet proposal was set to expire in October. Zenith declared that it was ready to market a generic tablet upon receipt of a favorable decision from the Federal Circuit and final FDA approval. 20 In re Terazosin Hydrochloride Antitrust Litig., 164 F.Supp.2d 1340, 1345-46 (S.D.Fla.2000). Despite being poised to enter the market, however, Geneva and Zenith forswore competing with Abbott in the United States market for terazosin hydrochloride drugs.... Id. at 1348-49. 21 The court identified four elements of the Agreement with Geneva that were anti-competitive: (1) Geneva's promise not to market its terazosin capsule until the Agreement terminated; (2) Geneva's promise not to market its terazosin tablet until the Agreement terminated; (3) Geneva's promise not to sell its rights in its capsule and tablet ANDAs until the Agreement terminated; and (4) Geneva's promise to aid Abbott in opposing any attempt by other ANDA applicants to enter the market before the Agreement terminated. The court identified three anti-competitive elements of the Agreement with Zenith: (1) Zenith's agreement to dismiss its delisting suit; (2) Zenith's promise not to aid any other entity's challenge to the validity of Abbott's terazosin patents; and (3) Zenith's promise not to market a generic terazosin product until the Agreement terminated. The essence of the Agreements, the court concluded, was to dissuade[ ] Geneva and Zenith from marketing the first generic terazosin hydrochloride drugs in the United States for an indefinite period [and] eliminat[e] the risk that either drug maker would sell or purchase the right to introduce such drugs in the interim.. . . Id. at 1349. 22 Despite holding the Agreements per se unlawful, the court nonetheless entertained, and rejected, the defendants' arguments that the Agreements were either pro-competitive or benign. 14 Defendants argued that the Agreements eliminated the substantial legal and financial risks that accompany market entry while patent disputes remain unresolved. This justification was rejected for three reasons. First, the Agreement with Geneva was unnecessary to avoid these risks, because Geneva's unilateral decision to forego entry would achieve the same result. Second, the Agreement with Geneva did not resolve the patent litigation; in fact, it tended to prolong that dispute to Abbott's advantage. Id. at 1350. The litigation was prolonged by the provisions extending the Agreement until the patent dispute was finally resolved, including Supreme Court review, and by Geneva's promise to aid Abbott in any motion seeking to extend the 30-month stay of FDA approval of Geneva's tablet ANDA. Finally, the court rejected the argument that the provision of the Agreement permitting Geneva to enter the market if Abbott elected to suspend its payments was pro-competitive. Although the court may have been willing to infer that this clause was a catalyst for competition if Geneva paid Abbott for it, [] the suggestion that Abbott handsomely paid Geneva to spur competition in its own lucrative domestic market for terazosin hydrochloride products is patently unreasonable. Id. at 1351. The court did not analyze any potentially efficiency-enhancing effects of the Agreement with Zenith, concluding that the Agreement would indefinitely postpone Zenith's entry into the United States market and would permit competition only once Abbott lost its exclusive market. Id. 23 Defendants argued that because the Agreement with Geneva was analogous to an interim patent settlement and the Agreement with Zenith terminated the litigation between Zenith and Abbott, the court should treat the Agreements as patent litigation settlements. The court rejected this argument as well, concluding that the Agreement with Geneva did not resolve Abbott's infringement suit and that the termination of litigation between Zenith and Abbott was part of a larger scheme to restrain the domestic sale of generic terazosin hydrochloride products. Id. at 1353. Even if the Agreements were patent litigation settlements, the court held, such settlements were not immune from per se analysis. Id.