Opinion ID: 77043
Heading Depth: 3
Heading Rank: 2

Heading: Elan-SkyePharma Settlement Agreement

Text: 12 In contrast, we conclude that the district court erred in finding that Andrx had not sufficiently pled an antitrust violation in relation to the licensing agreement which Elan signed with SkyePharma to terminate patent infringement litigation. Under the Federal Rules of Civil Procedure, the plaintiff is required in the complaint to make a short and plain statement of the claim showing that the [plaintiff] is entitled to relief. FED. R. CIV. P. 8(a)(2). While courts had previously applied a heightened pleading requirement in antitrust cases, this view has subsequently been rejected in favor of applying Rule 8(a)'s notice pleading standard. Quality Foods de Centro America, S.A. v. Latin American Agribusiness Dev. Corp., S.A., 711 F.2d 989, 995 (11th Cir.1983); see Spanish Broad. Sys. of Fla., Inc. v. Clear Channel Communications, Inc., 376 F.3d 1065, 1077 (11th Cir.2004) (concluding that the liberal pleading regime outlined by Fed.R.Civ.P. 8(a)(2) applies to allegations of antitrust violations); Covad Communications Co. v. BellSouth Corp., 299 F.3d 1272, 1279 (11th Cir.2002) (describing the threshold requirements for properly pleading an antitrust violation as exceedingly low), vacated on other grounds by 540 U.S. 1147, 124 S.Ct. 1143, 157 L.Ed.2d 1040 (2004). Accordingly, absent some doctrine which immunizes the conduct alleged, such as the Noerr-Pennington doctrine, dismissals [on the pleadings] are particularly disfavored in fact-intensive antitrust cases. Covad Communications Co., 299 F.3d at 1279. Against this background, we examine whether Andrx's allegations sufficiently state a claim under § 1 and/or § 2 of the Sherman Anti-Trust Act. 13 As we noted previously, Section 1 of the Sherman Act provides that [e]very contract . . . in restraint of trade or commerce among the several States, or with foreign nations, is . . . illegal. 15 U.S.C. § 1. To prevail on a claim that a patent infringement settlement agreement violates § 1 of the Sherman Act, a plaintiff must prove (1) the scope of the exclusionary potential of the patent; (2) the extent to which the agreements exceed that scope; and (3) the resulting anticompetitive effects in the relevant market. Schering-Plough Corp. v. FTC, 402 F.3d 1056, 1066 (11th Cir.2005) (citing Valley Drug Co., 344 F.3d at 1312). With regard to the first element, the allegations in Andrx's complaint demonstrated that the '320 patent was necessary to the manufacture and sale of a controlled release naproxen medication, and that its owner could effectively exclude competitors from making other controlled release naproxen medications. See R1-3 ¶¶ 22-23, 33-35. With regard to the second element, Andrx alleged that the Elan-SkyePharma licensing agreement, coupled with SkyePharma's putative agreement to refrain from ever marketing a generic controlled release naproxen medication, effectively barr[ed] any generic competitors from entering the market. Id. ¶¶ 22-23. If true, this dynamic would exceed the scope of exclusion intended by the '320 patent. See 21 U.S.C. § 355(j) (outlining criteria for drug manufacturers to enter the market with a generic version of previously-approved patented products). With regard to the third element, Andrx described the relevant market as the [c]ontrolled release naproxen market. See R1-3 ¶ 17. Andrx alleged that Elan had sufficient market power to affect the controlled release naproxen market because it was the only supplier of naproxen in the United States. See id. ¶ 16. Finally, demonstrating the anticompetitive effects, Andrx alleged that Elan's licensing agreement with SkyePharma, and SkyePharma's putative agreement to refrain from marketing its generic drug, would prevent competition in the market for controlled release naproxen. Id. ¶¶ 22-23; see also id. ¶ 44 (stating that the conduct of Elan and SkyePharma foreclosed entry by competitors into the relevant market and precluded competition). Additionally, Andrx alleged that the agreement had the result of depriving the general public of a less expensive generic product. See id. ¶ 43. Thus, Andrx sufficiently pled facts for a § 1 claim that the Elan-SkyePharma settlement agreement constituted an antitrust violation. 14 Section 2 of the Sherman Act outlaws conduct which seeks to monopolize any part of the trade or commerce among the several States, or with foreign nations. 15 U.S.C. § 2. To state a claim for attempted monopolization, plaintiff must show specific intent on the part of the defendant to bring about a monopoly and a dangerous probability of success. Quality Foods de Centro America, S.A., 711 F.2d at 996. In its complaint, Andrx alleged that Elan had the specific intent to monopolize and preserve a monopoly in the controlled release naproxen market. R1-3 ¶ 49. In addition, as we already noted, Andrx alleged that Elan was the only supplier of naproxen in the United States, see id. ¶ 16, and therefore had achieved a probability of success, id. ¶ 56. Accordingly, we conclude that Andrx sufficiently pled a violation of § 2 of the Sherman Act. 15 In sum, then, while the allegations regarding Elan's infringement suits against Andrx were immunized under the Noerr-Pennington doctrine, Andrx did sufficiently state a claim under both § 1 and § 2 of the Sherman Anti-Trust Act that Elan's settlement agreement with SkyePharma, coupled with SkyePharma's putative agreement not to market, violated antitrust law. Accordingly, we remand this case for further proceedings as to those allegations. Our conclusion as to the sufficiency of the complaint does not preclude, however, Andrx's claims from being challenged at the summary judgment stage. See Quality Foods de Centro America, S.A., 711 F.2d at 999 (reversing a district court's dismissal of antitrust claims on the pleadings, but noting that the claims may very well wash out on summary judgment). Our determination recognizes that antitrust cases are fact-intensive, Covad Communications Co., 299 F.3d at 1279, and require appropriate market analysis, see Schering-Plough Corp., 402 F.3d at 1065-66, and therefore are typically inappropriate for a Rule 12 dismissal in the absence of an applicable immunity doctrine. Accordingly, with regard to Andrx's allegations that the Elan-SkyePharma settlement agreement and SkyePharma's alleged agreement to refrain from marketing a generic controlled release naproxen medication violated §§ 1 and 2 of the Sherman Anti-Trust Act, the case is remanded for further proceedings.