Court Opinion

ID: 9674211
Source: CourtListenerOpinion
Date Created: 2023-08-24 04:24:50.792632+00
Date Added: 2024-06-11T18:16:26.105164
License: Public Domain

PATIENCE DRAKE ROGGENSACK, J.
¶ 70. 0dissenting). The majority opinion concludes that the second amended complaint (the complaint) of the plaintiffs sufficiently alleges a violation of Wisconsin's antitrust law, Wis. Stat. § 133.03 (2005-06),1 to withstand a motion to dismiss. Majority op., ¶ 4. It does so based on the complaint's allegations that an agreement concerning ciprofloxacin hydrochloride between Bayer AG and Barr Laboratories, Inc. (the Bayer-Barr agreement)2 is a "price-fixing scheme" for ciprofloxacin hydrochloride that controlled the price for the drug "at any time since January 6, 1995." Id. The majority opinion concludes that, if proved, the price-fixing alleged is "illegal conduct" that "substantially affected the people of Wisconsin and had impacts in this state" thereby violating Wisconsin antitrust law. Id. However, it also recognizes that there are significant questions about the effect that Bayer's patent may have on the plaintiffs' claims. Id., ¶ 4 n.4. It suggests that those questions be addressed in the circuit court on remand. Id.
¶ 71. I dissent because I would resolve the effect of Bayer's patent on the plaintiffs' claims at this time. I would do so because Bayer was granted a federal patent *332for ciprofloxacin hydrochloride (the Cipro patent) that, in order to have subject matter jurisdiction for this antitrust action, Wisconsin courts must presume is valid. 28 U.S.C. § 1338(a). Presuming that Bayer's patent is valid, I conclude that the complaint does not allege facts that, if true, are sufficient to show illegal conduct or conduct that has an illegal effect. E. Bement & Sons v. Nat'l Harrow Co., 186 U.S. 70, 91 (1902). Only illegal conduct or conduct that has an illegal effect violates Wisconsin's antitrust law. Prentice v. Title Ins. Co. of Minn., 176 Wis. 2d 714, 725, 500 N.W.2d 658 (1993); State v. Allied Chem. & Dye Corp., 9 Wis. 2d 290, 296, 101 N.W.2d 133 (1960). Furthermore, because the conduct alleged in the complaint is not illegal or alleged to have had an illegal effect, it cannot "substantially affect" the people in Wisconsin and have "impacts" in Wisconsin contrary to Wis. Stat. § 133.03. Olstad v. Microsoft Corp., 2005 WI 121, ¶ 85, 284 Wis. 2d 224, 700 N.W.2d 139. Accordingly, I would affirm the circuit court's dismissal of the complaint for failure to state a claim pursuant to Wis. Stat. § 802'.06(2)(a)6, albeit on different grounds. Therefore, I respectfully dissent.
I. BACKGROUND3
¶ 72. The gravamen of the complaint is that the agreement between Bayer, who owns the patent for ciprofloxacin hydrochloride that it markets under the trade name, "Cipro," and Barr, who applied to the United States Food and Drug Administration (FDA) for *333permission to manufacture and market a generic form of Cipro, is a price-fixing agreement that effected a monopoly for Cipro in Wisconsin. The complaint alleges Bayer's monopoly is illegal and violates Wis. Stat. § 133.03(2).
¶ 73. As background for this theory, the plaintiffs allege that Bayer held the patent for the active ingredient of Cipro, ciprofloxacin hydrochloride, and that the Cipro patent was granted to Bayer on May 29, 1984, as Patent No. 4,670,444. Bayer also received FDA approval to market Cipro in October of 1987. Bayer's initial patent for Cipro expired in December of 2003.4
¶ 74. On October 27, 1991, Barr applied to the FDA to manufacture and market a generic form of Cipro. Barr used a shortened form of application for FDA approval that is known as an Abbreviated New Drug Application, or ANDA. As part of the ANDA process, Barr asserted that its generic drug was the bioequivalent of Cipro. This assertion permitted FDA consideration of Barr's generic Cipro without the years of testing that Bayer had to undergo in order to obtain FDA approval for Cipro. Therefore, by piggybacking on Bayer's lengthy FDA new drug testing requirements, Barr's ANDA applied for FDA approval for the same drug to which the FDA had given Bayer approval. In its ANDA, Barr also alleged that Bayer's patent was invalid, which is one of the allegations required in order for the FDA to give preliminary approval to a generic equivalent of a patented drug. See 21 U.S.C. § 355(j)(2)(A)(vii)(IV).
¶ 75. As is required by federal statute, Barr gave notice of its ANDA to Bayer. See 21 U.S.C. § 355(j)(2)(B)(iii). Within the statutory timeline of re*334ceiving Barr's notice (45 days), Bayer filed a patent infringement suit against Barr. A patent infringement suit is required by federal statutes as a precursor to maintaining patent priority over a pending ANDA for the generic equivalent of a patented drug. See 21 U.S.C. § 355(j)(5)(B)(iii).
¶ 76. The filing of Bayer's patent infringement suit stayed Barr's ANDA before the FDA for 30 months or until the conclusion of the patent infringement suit, whichever occurred first. See id. That 30-month stay would have ended on July 16, 1994. However, prior to settling Bayer's suit against Barr for patent infringement, Bayer and Barr executed a stipulation to extend the 30-month stay until a final judgment on the pending patent litigation was entered. The district court approved the stipulation and ordered that final consideration of Barr's ANDA before the FDA was stayed until the patent litigation concluded. Bayer AG v. Barr Labs., No. 92CV391 (S.D.N.Y. Dec. 9, 1992); see also 21 U.S.C. § 355(j)(5)(B)(iii).
¶ 77. On January 6, 1995, the FDA gave "tentative approval" to Barr to market its drug, which approval was subject to Bayer's patent being held invalid or expiring. FDA's public records show that FDA final approval to manufacture and market a generic form of Cipro was not given to Barr until June 9, 2004.5
¶ 78. The complaint does not allege that the conduct set out in the Bayer-Barr agreement falls outside of Bayer's rights under the Cipro patent. It also does not allege that Barr, or anyone else, has ever contended that Bayer obtained its Cipro patent through fraud on the United States Patent & Trademark Office (PTO). *335Rather, the complaint asserts that the Bayer-Barr agreement was entered into on January 8, 1997, and that it allocates "the entire United States market for Cipro to Bayer for at least six years" (January 2003) and that at Bayer's option Bayer could either: (1) supply Cipro for sale as a generic to Barr, who would operate as Bayer's licensee, or (2) supply all of the Cipro to purchasers itself and make specified payments to Barr.6
¶ 79. The Bayer-Barr agreement, together with a consent judgment, concluded Bayer's federal patent infringement suit. The consent judgment affirmed that Bayer owns the patent for Cipro; that it is valid and enforceable; and that Barr's generic form of Cipro infringed Bayer's patent. Bayer AG v. Barr Labs., No. 92CV391 (S.D.N.Y. Jan. 16, 1997). There has been no appeal or collateral attack on that judgment.
¶ 80. Subsequent to the conclusion of the patent infringement action, Bayer re-submitted its patent to the PTO for review. Bayer's patent for Cipro was upheld in that proceeding as well.
II. DISCUSSION
A. Standard of Review
¶ 81. A motion to dismiss challenges the legal sufficiency of the complaint to state a claim on which relief may be granted. Kaloti Enters., Inc. v. Kellogg Sales Co., 2005 WI 111, ¶ 11, 283 Wis. 2d 555, 699 N.W.2d 205. For purposes of the motion, we generally *336accept as true all factual allegations made in the complaint. Watts v. Watts, 137 Wis. 2d 506, 512, 405 N.W.2d 303 (1987). Judicial notice may also be taken of facts from the public records of government agencies, here the PTO and the FDA. See Perkins v. State, 61 Wis. 2d 341, 346, 212 N.W.2d 141 (1973) (concluding that a court may take judicial notice of facts easily accessible and capable of immediate and accurate determination); Wis. Power & Light Co. v. City of Beloit, 215 Wis. 439, 444, 254 N.W. 119 (1934) (taking judicial notice of the files of the public service commission); Hillier v. Lake View Mem'l Park, Inc., 208 Wis. 614, 622, 243 N.W. 406 (1932) (taking judicial notice of incorporation records in the office of secretary of state).7 However, on a motion to dismiss, courts do not accept "facts which the court will take judicial notice are not true, nor does the rule [of accepting facts pled in the complaint] apply to legally impossible facts." Cohen v. United States, 129 F.2d 733, 736 (8th Cir. 1942). We also are not required to accept factual statements that are not credible. See Ferraro v. Koelsch, 119 Wis. 2d 407, 410-11, 350 N.W.2d 735 (Ct. App. 1984). Furthermore, we are not required to accept legal conclusions pled in the complaint. John BBB Doe v. Archdiocese of Milwaukee, 211 Wis. 2d 312, 331, 565 N.W.2d 94 (1997).
¶ 82. We interpret the application of statutes independently of the court of appeals and the circuit court, but benefiting from the analyses of both prior decisions. Spiegelberg v. State, 2006 WT 75, ¶ 8, 291 Wis. 2d 601, 717 N.W.2d 641. And finally, whether a legal doctrine can shield defendants from liability un*337der Wisconsin's antitrust law that would otherwise be accorded to the complained of conduct is a question of law. Prentice, 176 Wis. 2d at 721.
B. Wisconsin Antitrust Claim
¶ 83. There have been approximately 30 cases filed throughout the United States, in state and federal courts, that make antitrust claims against Bayer and Barr based on the same Bayer-Barr agreement that is at issue here. Meyers v. Bayer AG, 143 F. Supp. 2d 1044, 1046 (E.D. Wis. 2001). Many of those cases have been consolidated in the Eastern District of New York under the scholarly attention of District Court Judge David Trager. See In re Ciprofloxacin Hydrochloride Antitrust Litig., 363 F. Supp. 2d 514 (E.D.N.Y. 2005).
¶ 84. The case now before us was filed in state court, removed to federal court and remanded to state court because the federal district court determined that mounting a patent defense to a state antitrust claim did not cause the matter "to arise under" federal law. Meyers, 143 F. Supp. 2d at 1051. The federal district court did not analyze whether a state claim had been stated without plaintiffs alleging that Bayer's Cipro patent was invalid. In addition, the district court did not address whether the conduct alleged in the complaint exceeded Bayer's rights under its Cipro patent.
1. General patent law principles
¶ 85. In order to adequately address the defendants' motion to dismiss the complaint, there are certain general principles of federal patent law that must be recognized. That recognition is necessary before a court can evaluate a complaint wherein a patent owner is sued, in order to sort out which allegations are factual *338allegations of a type that must be accepted for purposes of a motion to dismiss, which allegations contain facts not accepted as true, and which allegations are actually legal conclusions.
¶ 86. A civil state court claim against a patent owner, such as Bayer, that alleges conduct relating to the patented invention and requests damages, must assume that the patent is valid and it must allege conduct that falls outside of the rights accorded under the patent. This is so because if the complaint were to allege that the patent is invalid, there would be no subject matter jurisdiction in Wisconsin state courts to hear the claim. 28 U.S.C. § 1338(a);8 Schecher v. Purdue Pharma L.P., 317 F. Supp. 2d 1253, 1257 (D. Kan. 2004) ;9 see also Vill. of Trempealeau v. Mikrut, 2004 WI 79, ¶ 8 n.2, 273 Wis. 2d 76, 681 N.W.2d 190.10 And, if all the conduct that is alleged falls within the rights granted by the federal government to the patentee, the conduct is not illegal nor is its effect illegal. United States v. General Elec. Co., 272 U.S. 476, 489-90 (1926). *339It is important to continue to note that only illegal conduct or conduct that has an illegal effect violates Wis. Stat. § 133.03. Olstad, 284 Wis. 2d 224, ¶ 85; Prentice, 176 Wis. 2d at 721.
¶ 87. Antitrust law generally forbids agreements that restrict output and raise prices above that which would be achieved in normal market competition. See Phillip Areeda & Herbert Hovenkamp, Vol. X Antitrust Law: An Analysis of Antitrust Principles and Their Application, ¶ 1780a (2d ed. 2004). However, if a patent owner acts solely within the rights granted under the patent, the patent owner has a lawful monopoly and is "freed from competition of price, service, quality or otherwise." United States v. Line Material Co., 333 U.S. 287, 300 (1948).
¶ 88. As the United States Supreme Court has explained:
"A patent by its very nature is affected with a public interest. . . [It] is an exception to the general rule against monopolies and to the right to access to a free and open market."
Walker Process Equip., Inc. v. Food Mach. & Chem. Corp., 382 U.S. 172, 177 (1965) (quoting Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806, 816 (1945)). It is black letter law that a patent "is an exception to the general rule against monopolies." Ciprofloxacin, 363 F. Supp. 2d at 523 (quoting Precision, 324 U.S. at 816).
¶ 89. Therefore, agreeing to operate as a monopoly that fixes price for a patented invention is not illegal because monopoly rights exercised within the confines of the patent are granted by the federal government with the patent. As the United States Supreme Court has explained:
*340[T]he general rule is absolute freedom in the use or sale of rights under the patent laws of the United States. The very object of these laws is monopoly, and the rule is, with few exceptions, that any conditions which are not in their very nature illegal with regard to this kind of property, imposed by the patentee and agreed to by the licensee for the right to manufacture or use or sell the article, will be upheld by the courts. The fact that the conditions in the contracts keep up the monopoly or fix prices does not render them illegal.
Bement, 186 U.S. at 91 (emphasis added). In support of this monopoly, the federal law grants to a patent owner "the right to exclude others from making, using, offering for sale, or selling the invention throughout the United States or importing the invention into the United States." 35 U.S.C. § 154(a)(1). The "essence of a patent grant is the right to exclude others from profiting by the patented invention." Dawson Chem. Co. v. Rohm & Haas Co., 448 U.S. 176, 215 (1980). The rationale for granting such monopolies to patent owners is to encourage inventions. Brenner v. Manson, 383 U.S. 519, 534 (1966).11
¶ 90. The monopoly rights accorded to a patent owner also include the right to control the price charged for the patented invention by a licensee of the patent owner. General Elec., 272 U.S. at 489-90. In General *341Electric, the government alleged that General Electric was engaged in illegal price-fixing of lamps through an agreement with Westinghouse. Id. at 478. General Electric owned the patents necessary for the construction of certain tungsten filament lamps. Id. at 480-81. Westinghouse was one of General Electric's licensees to sell the lamps as part of a nationwide sales and distribution plan. Id. at 481-82. In considering the government's allegation that General Electric imposed a price-fixing condition on Westinghouse's sales, the Court concluded price-fixing on sales by a licensee was permissible so long as the price-fixing stopped with the licensee and did not continue to fix the prices charged by those who purchased from the licensee for subsequent sale. Id. at 485. The court explained:
[UJnder the patent law the patentee is given by statute a monopoly of making, using and selling the patented article. The extent of his monopoly in the articles sold and in the territory of the United States where sold is not limited in the grant of his patent, and the comprehensiveness of his control of the business in the sale of the patented article is not necessarily an indication of illegality of his method. As long as he makes no effort to fasten upon ownership of the articles he sells control of the prices at which his purchaser shall sell, it makes no difference how widespread his monopoly. It is only when he adopts a combination with others, by which he steps out of the scope of his patent rights and seeks to control and restrain those to whom he has sold his patented articles in their subsequent disposition of what is theirs, that he comes within the operation of the Anti-Trust Act.

Id.

¶ 91. Therefore, as we examine the complaint, we must: (1) presume Bayer's Cipro patent is valid because the plaintiffs claims are before a Wisconsin state *342court; and (2) assess whether any factual allegation relating to the Bayer-Barr agreement falls outside Bayer's right to maintain a monopoly on the price Bayer or its licensee charges for Cipro. With these general principles of patent law in mind, I turn to Wisconsin antitrust law.
2. State antitrust principles
¶ 92. Wisconsin's antitrust law is set out in ch. 133 of the Wisconsin Statutes. The operative provision at issue in the case before us is Wis. Stat. § 133.03. It provides in relevant part:
Unlawful contracts; conspiracies. (1) Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce is illegal. . . .
(2) Every person who monopolizes, or attempts to monopolize, or combines or conspires with any other person or persons to monopolize any part of trade or commerce is guilty.
¶ 93. Wisconsin antitrust law follows federal antitrust law in most respects. State v. Waste Mgmt. of Wis., Inc., 81 Wis. 2d 555, 568-69, 261 N.W.2d 147 (1978). For example, both federal and state laws prohibit conspiracies to restrain trade and monopolies of the market. 15 U.S.C. §§ 1, 4, 15; Wis. Stat. § 133.03. However, Wisconsin antitrust law differs from federal antitrust law in that Wisconsin law may permit the recovery of damages by "indirect purchasers"12 alleging *343unlawful anticompetitive conduct, Olstad, 284 Wis. 2d 224, ¶ 63, but federal law does not. Ill. Brick Co. v. Illinois, 431 U.S. 720, 730-31 (Ill. 1977).
¶ 94. The most recent Wisconsin Supreme Court decision interpreting Wis. Stat. § 133.03 is Olstad. There we addressed the certified question: "Does Wisconsin's antitrust act, Wis. Stat. § 133.03, apply to interstate commerce affecting Wisconsin commerce?" Olstad, 284 Wis. 2d 224, ¶ 10. Olstad claimed that Microsoft's share of the market for personal computer operating systems was so large that it prevented others from entering the market. Id., ¶¶ 2-3. Olstad alleged that Microsoft's anticompetitive conduct caused Wisconsin consumers to pay higher prices. Id., ¶ 7. The circuit court dismissed the action after concluding that § 133.03 did not apply to interstate conduct. Id., ¶ 9.
¶ 95. We concluded that "at least in some circumstances" Wis. Stat. § 133.03 does apply to interstate conduct. Id., ¶ 74. Our limited conclusion was based in large part on our prior holding in Allied Chemical & Dye, where we addressed whether Wisconsin could apply its antitrust law to the sales of calcium chloride made in Wisconsin through interstate commerce when those sales were subject to the federal antitrust law. Allied Chem. & Dye, 9 Wis. 2d at 292. We concluded that Wisconsin law could be applied in some circumstances, in part because there was no conflict between federal and state antitrust laws. Id. at 295.
¶ 96. In Olstad, we also set out a test to assist courts and the public ascertain when Wis. Stat. § 133.03 may reach interstate actions. As a very general framework, we explained that either: (1) "actionable conduct, such as the formation of a combination or conspiracy," must have occurred within Wisconsin, or (2) if the actionable conduct occurred predominantly or ex*344clusively outside of Wisconsin, the "illegal activity" must "substantially affect" the people of Wisconsin and have "impacts" in Wisconsin. Olstad, 284 Wis. 2d 224, ¶ 85. We advised that the test was to be interpreted in a restrictive fashion so that Wisconsin's antitrust law would be available on only a limited basis with regard to interstate conduct:
Operating with lesser standards would jeopardize the action, undermine the validity of our antitrust statute, and create the spectacle of Lilliputian harassment in Wisconsin courts. Questions of provincialism, favoritism, and undue burden on interstate commerce should he determined by resort to contemporary federal commerce clause jurisprudence.

Id.

¶ 97. It is important to noté that Olstad does not address any issue that may arise in the application of state antitrust law in the context of a federal patentee's actions, where federal law may effect whether state law will be applied. Furthermore, in Olstad, we also did not address whether an indirect purchaser's claim based on conduct that occurred solely outside of Wisconsin should be subject to Wisconsin's antitrust law because that question was not brought to us for decision.
¶ 98. However, we have in past decisions shown that Wisconsin antitrust law will not be applied to each and every occasion where the claim of a state law violation is made. In State v. Milwaukee Braves, Inc., 31 Wis. 2d 699, 144 N.W.2d 1 (1966), we carefully considered the lack of federal prosecution of interstate conduct and what impact that should have on our decision about the prosecution of an antitrust claim under Wisconsin law.
¶ 99. Milwaukee Braves involved a state antitrust action brought against the Braves and others by the *345State, due to major league baseball's decision to move the club to Atlanta, while refusing to permit another major league baseball team to locate in Milwaukee. Id. at 703-04. We acknowledged that a "substantial injury to business activity within Wisconsin" was caused by the exercise of major league baseball's monopoly power. Id. at 719. We explained that "organized baseball is interstate commerce and Congress may therefore regulate it." Id. at 720. However, we noted that major league baseball had not been subjected to prosecution under federal antitrust law. Id. at 721.
¶ 100. When considering how to determine whether that de facto exemption from federal antitrust law could cause a conflict with the application of state antitrust law in regard to the decision to move the Braves, we framed the question as: "whether there is a conflict between state and federal policy, so that the state policy must yield." Id. We concluded that federal choice must control and Wisconsin could not enforce its antitrust law based on the "concerted action" of moving the Braves from Milwaukee and refusing Milwaukee another major league baseball franchise. Id. at 732.
¶ 101. In Prentice, we once again addressed whether prosecution of alleged conduct, which if proved true, appeared to violate Wisconsin antitrust law, should proceed. Prentice was brought as a class action against "twelve title insurance companies and several of their employees." Prentice, 176 Wis. 2d at 720. It was claimed that the defendants engaged in a conspiracy to restrain trade, causing the consumer "plaintiffs to pay substantially higher prices for title insurance and related services than they would have had to pay in the absence of the alleged conspiracy." Id. At issue was *346"whether the filed rate doctrine shield[ed] the defendants from liability" under Wisconsin's antitrust law. Id. at 721.
¶ 102. In Prentice, we explained how a regulatory agency's approval of a rate "established the lawfulness" of a rate; and therefore, the "legal rights of the parties were measured solely by the filed rate." Id. at 722. We concluded that because the insurance companies filed the rates they would charge pursuant to the provisions of Wis. Stat. § 625.15(2) (1977-78) and the agency had approved those rates under the filed rate doctrine, the rates charged were lawful rates. Id. at 725. Therefore, the title insurance companies and their employees were not subject to prosecution under Wisconsin antitrust law. Id. This discussion demonstrates that while Wisconsin's antitrust law may initially appear to be applicable, there are occasions when it will not be applied because to do so would interfere with other federal or state laws or doctrines.
3. Plaintiffs' claims
¶ 103. I now turn to the plaintiffs' claims in the suit before us. The complaint acknowledges that Bayer is the holder of the patent for Cipro. It alleges that Barr's generic drug is the "bioequivalence" of Cipro.
¶ 104. Plaintiffs' allegation of the existence of Bayer's Cipro patent is significant because all patents are presumed to be valid. 35 U.S.C. § 282. Furthermore, Bayer's patent for Cipro has been adjudged valid and enforceable. Bayer AG v. Barr Labs., No. 92CV391 (S.D.N.Y. Jan. 16, 1997). And finally, if the plaintiffs were attacking the validity or enforceability of the patent through the allegations that are made in the complaint, there would be no subject matter jurisdic*347tion in Wisconsin courts to hear their claims. Schecher, 317 F. Supp. 2d at 1257.
¶ 105. Plaintiffs nonetheless allege that in the absence of the Bayer-Barr agreement, Barr would have begun marketing generic Cipro January 6, 1995.13 This can be true under only one condition for a claim made in state court — the monopoly set out in the Bayer-Barr agreement must fall outside of Bayer's right to maintain a monopoly for Cipro throughout the term of the patent. Ciprofloxacin, 363 F. Supp. 2d at 524. Stated otherwise, "the conduct at issue is illegal if it threatens competition in areas other than those protected by the patent and [if not, it] is otherwise legal." Id. (quoting United States v. Studiengesellschaft Kohle, m.b.H., 670 F.2d 1122, 1127 (D.C. Cir. 1981)). Therefore, while not every monopoly that an owner of a patent maintains is lawful, in order to withstand a motion to dismiss, a complaint against a patent owner must allege some conduct, which if proved true, falls outside of the conduct protected under the patent during the entire term of the patent.14
*348¶ 106. I accept the following allegations of plaintiffs as true for purposes of this motion: (1) The Bayer-Barr agreement consented to "fix, raise, maintain, and stabilize the price of Cipro." (2) The Bayer-Barr agreement "provides that Bayer has the option to either: (a) license and supply Bayer-manufactured Cipro to Barr [] for resale under a generic label; or (b) pay quarterly amounts to Barr from 1998 through at least 2003." (3) The Bayer-Barr agreement "set forth the prices that Bayer may charge to Barr [], if Bayer chooses to supply its Cipro to Barr [] for resale [and] requires Barr [] to share with Bayer in profits from the resale of generically labeled Cipro manufactured by Bayer [and] [] limits the ability of Barr [] to price Cipro licensed from Bayer independently."
¶ 107. None of these allegations is sufficient to state a claim under Wis. Stat. § 133.03 because none of the alleged conduct is illegal and the monopolistic effect of the conduct is not illegal. The price-fixing conduct and the monopoly that is alleged to have resulted come within the rights granted to Bayer by the federal government when it issued the Cipro patent. General Elec., 272 U.S. at 485; Bement, 186 U.S. at 91.
¶ 108. There are other allegations in the complaint that appear factual, but are either legal conclusions that I do not accept for purposes of a motion to dismiss, John BBB Doe, 211 Wis. 2d at 331, or they are facts for which I take judicial notice that they are not true or are not legally possible. Cohen, 129 F.2d at 736. For example, we need not accept the allegation, repeated in many forms in the complaint, that were it not for the Bayer-Barr agreement, Barr would have begun to manufacture and market generic Cipro in January of 1995.
*349¶ 109. According to the public records of the PTO, Bayer's original patent for Cipro did not expire until December 2003 and was extended through June 8, 2004. Furthermore, Barr had received only "tentative" FDA approval in January of 1995. The public records of the FDA show Barr did not have FDA approval to market generic Cipro until June 9, 2004. Therefore, unless Bayer's Cipro patent is invalid — a position that the plaintiffs cannot maintain in this lawsuit in state court — it would have been a violation of federal law for Barr to market generic Cipro before June 9, 2004. Therefore, in the context of a motion to dismiss, plaintiffs' repeated allegation in this regard does not cause their complaint to state a claim.
¶ 110. The majority permits plaintiffs' claims to proceed because plaintiffs allege:
a broad price-fixing scheme affecting "at minimum, thousands ... in Wisconsin" who purchased the bestselling antibiotic Cipro "at any time since January 6, 1995." We conclude Meyers' complaint, alleges illegal conduct that, if true, substantially affected the people of Wisconsin and had impacts in this state.
Majority op., ¶ 4. The quote above shows that the majority opinion errs because it does not consider the context in which the complaint is made, i.e., it is made against the lawful owner of the federal patent for Cipro. Bayer AG v. Barr Labs., No. 92CV391 (S.D.N.Y. Jan. 16, 1997) (concluding that Bayer owns the Cipro patent, which is valid and enforceable).15
*350¶ 111. The majority opinion gives credence to the complaint's assertion that "as a result of the Agreement, Bayer maintained its monopoly of the United States market for Cipro and generic equivalents of Cipro." Majority op., ¶ 13. The quoted phrase, "as a result of the Agreement" from the majority opinion incorporates a conclusion of law. It does not recite a fact because the Bayer-Barr agreement could have caused Bayer to have a monopoly for Cipro only if Bayer's Cipro patent were invalid. General Elec., 272 U.S. at 485; Bement, 186 U.S. at 91. Otherwise, the monopoly is a result of the patent. Throughout the majority opinion it assumes the alleged conduct is illegal. This is a conclusion of law inappropriate for a motion to dismiss, unless there are facts alleged, which if true, were sufficient to support that conclusion. No such facts have been alleged in the complaint. And, as I explained above, price-fixing and monopolies within the rights granted with the Cipro patent are legal. Bement, 186 U.S. at 91 (explaining that "[t]he fact that the conditions in the contracts keep up the monopoly or fix prices does not render them illegal").
¶ 112. Only illegal conduct or conduct that has an illegal effect violates Wisconsin's antitrust law. Prentice, 176 Wis. 2d at 721; Allied Chem., 9 Wis. 2d at 296. Therefore, it is not just that price-fixing occurred and that it had a monopolistic effect, the price-fixing to attain a monopoly for Cipro must be illegal or the effect of the conduct must be illegal. The allegations of both the conduct and its effect set out in the complaint are not illegal under controlling federal law. General Elec., 272 U.S. at 485.
*351¶ 113. Furthermore, under Wis. Stat. § 133.03, only illegal conduct or conduct that has an illegal effect can "substantially affect" the people of Wisconsin and have "impacts" that violate Wisconsin antitrust law. Olstad, 284 Wis. 2d 224, ¶ 85; Allied Chem., 9 Wis. 2d at 295. It is beyond question that not all price-fixing or monopolies are illegal. In the case before us, given the presumption that Bayer's Cipro patent is valid and enforceable, none of the conduct alleged is illegal, nor is the monopolistic effect of the conduct illegal. General Elec., 272 U.S. at 485; Bement, 186 U.S. at 91. Therefore, because of the nature of a patent, any adverse effects on the market that were caused by actions that fall within the scope of a patent owner's rights under the patent cannot be addressed by antitrust law. Ciprofloxacin, 363 F. Supp. 2d at 524; see also Prentice, 176 Wis. 2d at 721. Only conduct that threatens competition in areas other than those that are protected by the rights under a patent can be illegal under federal antitrust law. Ciprofloxacin, 363 F. Supp. 2d at 524. No such conduct has been alleged in the complaint before us. Therefore, defendant's motion to dismiss should be granted.
III. CONCLUSION
¶ 114. Because the conduct alleged in the complaint is not illegal or alleged to have had an illegal effect, it cannot "substantially affect" the people in Wisconsin and have "impacts" in Wisconsin contrary to Wis. Stat. § 133.03. Olstad, 284 Wis. 2d 224, ¶ 85. Therefore, I would affirm the circuit court's dismissal of the complaint for failure to state a claim pursuant to Wis. Stat. § 802.06(2)(a)6, albeit on different grounds. Accordingly, I respectfully dissent.
*352¶ 115. I am authorized to state that Justices JON E WILCOX and DAVID T. PROSSER join this dissent.

 All further references to the Wisconsin Statutes are to the 2005-06 version, unless otherwise noted.

 The Bayer-Barr agreement, about which the plaintiffs complain, is not in the record before us.

 The facts used in the background narration have been taken from the complaint and from the public records of the United States Food and Drug Administration (FDA) and the United States Patent and Trademark Office (PTO). We may take judicial notice of public records of governmental agencies. Perkins v. State, 61 Wis. 2d 341, 346, 212 N.W.2d 141 (1973).

 The public records of the PTO show that the PTO extended Bayer's patent for Cipro through June 8, 2004.

 We may take judicial notice of public records of governmental agencies. Perkins, 61 Wis. 2d at 346.

 Payments such as these are commonly referred to as "reverse" or "exit" payments. Anne-Marie C. Yvon, Settlements Between Brand and Generic Pharmaceutical Companies: A Reasonable Antitrust Analysis of Reverse Payments, 75 Fordham L. Rev. 1883, 1884 n.9 (2006).

 For a detailed exposition of judicial notice of facts by appellate courts see George R. Currie, Appellate Courts Use of Facts Outside of the Record by Resort to Judicial Notice and Independent Investigation, 1960 Wis. L. Rev. 39 (1960).

 28 U.S.C. § 1338(a) provides, "The districts courts shall have original jurisdiction of any civil action arising under any Act of Congress relating to patents .... Such jurisdiction shall be exclusive of the courts of the states."

 [Djistrict courts have exclusive original jurisdiction over actions "arising under" federal patent laws, i.e., in an action challenging the validity or enforceability of the patent. Schecher v. Purdue Pharma L.P., 317 F. Supp. 2d 1253, 1257 (D. Kan. 2004).

 Village of Trempealeau v. Mikrut, 2004 WI 79, 273 Wis. 2d 76, 681 N.W.2d 190, explains that as a general proposition, circuit courts have broad subject matter jurisdiction; however, "[f]ederal law'may confer exclusive jurisdiction over certain subject matters to the federal courts, precluding state court jurisdiction in those areas by operation of the Supremacy Clause." Id., ¶ 8 n.2.

 The freedom to take actions within the rights granted to a patent owner that would otherwise be unlawful has a limitation. If the patent was obtained "by knowing and willful fraud practiced by the defendant on the Patent Office or, if the defendant was not the original patent applicant, [but] he had been enforcing the patent with knowledge of the fraudulent manner in which it was obtained," the patent will provide no shield to claims of unlawful anticompetitive conduct. Walker Process Equip., Inc. v. Food Mach. & Chem. Corp., 382 U.S. 172, 179 (1965) (Harlan, J., concurring).

 The plaintiffs in the case before us are all "indirect purchasers" of Cipro because they did not purchase Cipro directly from Bayer or Barr. Ill. Brick Co. v. Illinois, 431 U.S. 720, 726 (Ill. 1977).

 This date predates FDA final approval to Barr, which according to the FDA's public records occurred on June 9, 2004.

 For example, while one who owns a patent can price-fix for the patented invention to those to whom it or its licensees sell, it cannot lawfully fix the price for the patented invention that will be charged by those to whom the patent owner or its licensees have sold. General Elec., 272 U.S. at 485. In addition, a licensee who has rights under a former provision in the Hatch-Waxman Act to act as the first generic producer for 180 days on the expiration of the patent (21 U.S.C. § 355(j)(5)(B)(iv)) cannot lawfully agree to delay the commencement of the 180-day period and in so doing, extend the patent beyond the term granted by the PTO. In re Cardizem CK Antitrust Litig., 332 F.3d 896, 907-08 (6th Cir. 2003).

 That the plaintiffs' claim is made against the patent owner for Cipro was argued to the circuit court. It was not briefed for us because the circuit court dismissed the complaint on other grounds and the court of appeals reviewed only the grounds employed by the circuit court. However, many ques*350tions about the effect of Bayer's Cipro patent on the plaintiffs' claims were asked of counsel for all parties at the oral argument before us.