PERRIGO COMPANY v. ABBVIE, INC.

NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW JERSEY

PERRIGO COMPANY, et al.,

Plaintiffs, Case No. 2:20-cv-17560 (BRM) (ESK)

v. OPINION TEMPORARILY FILED

UNDER SEAL

ABBVIE INC., et al.,

Defendants.

MARTINOTTI, DISTRICT JUDGE

Before this Court is Defendants AbbVie Inc. (“AV Inc.”), Abbott Laboratories (“Abbott”)

(together, “AbbVie”), Unimed Pharmaceuticals, LLC (“Unimed”), and Besins Healthcare, Inc.’s

(“Besins” and, with AbbVie and Unimed, “Defendants”) Motion for Judgment on the Pleadings.

(ECF No. 70.) Plaintiffs Perrigo Company (“Perrigo Co.”), Perrigo Israel Pharmaceuticals Ltd.

(“Perrigo Israel”), and Perrigo Company of South Carolina, Inc. (“Perrigo S.C.”) (collectively,

“Perrigo”) opposed (ECF No. 76), and Defendants replied (ECF No. 79). Having reviewed the

parties’ submissions filed in connection with the Motion and having held oral argument pursuant

to Federal Rule of Civil Procedure 78(a) on September 15, 2021 (see ECF Nos. 92, 93), for the

reasons set forth below and for good cause shown, Defendants’ Motion for Judgment on the

Pleadings is GRANTED.

I. BACKGROUND

A. Parties

Perrigo Co. is a Michigan corporation that manufactures and sells health care products in

the United States. (ECF No. 1 ¶ 4.) Perrigo Israel and Perrigo S.C. are Israeli and Michigan

corporations, respectively, and subsidiaries of Perrigo Co. (Id. ¶¶ 5–6.) Perrigo Israel “develops,

manufactures and markets generic pharmaceuticals” (id. ¶ 5), while Perrigo S.C. effectuates their

sale (id. ¶ 6).

Abbott is an Illinois corporation that “develops, manufacturers and markets a variety of

healthcare and pharmaceutical products in the United States.” (Id. ¶ 7.) “On January 1, 2013,

Abbott completed the spinoff of [AV Inc.], a [Delaware] corporation [with an Illinois principal

place of business] formed to hold Abbott’s branded pharmaceutical business . . . .” (Id. ¶¶ 7–8.)

Since this spinoff, AV Inc. “has been engaged in the manufacture, sale and distribution of branded

pharmaceutical products.” (Id. ¶ 8.) Unimed is a Delaware corporation with an Illinois principal

place of business and AbbVie subsidiary. (Id. ¶ 9.) Besins is a Delaware corporation with a

Virginia principal place of business that manufacturers AndroGel, the drug at issue in this matter,

for AbbVie under a licensing agreement. (Id. ¶ 10.)

B. Statutory Background

“[T]he regulatory scheme that governs the testing and approval of new drugs in the United

States” was established by the Hatch-Waxman Act (“Hatch-Waxman”), 21 U.S.C. § 355. In re

Wellbutrin XL Antitrust Litig. Indirect Purchaser Class, 868 F.3d 132, 143 (3d Cir. 2017). Under

Hatch-Waxman, a drug company can obtain Food and Drug Administration (“FDA”) approval in

one of three ways. “First, a drug manufacturer[] wishing to market a new prescription drug[] must

submit a New Drug Application” (“NDA”) to the FDA “and undergo a long, comprehensive, and

costly testing process, after which, if successful, the manufacturer will receive marketing

approval.” F.T.C. v. Actavis, Inc., 570 U.S. 136, 142 (2013) (citing 21 U.S.C. § 355(b)(1)). “In

addition to extensive testing and safety information concerning the drug, the manufacturer must

also submit the patent number and expiration date of any patent that claims the drug or a method

of using the drug with respect to which a claim of patent infringement could reasonably be

asserted.” Eisai Co. v. Mut. Pharm. Co., Civ. A. No. 06-3613, 2007 WL 4556958, at *1 (D.N.J.

Dec. 20, 2007) (citing U.S.C. § 355(b)(1)). If an applicant’s NDA is approved by the FDA, the

patent information filed in connection with the NDA is published in the FDA’s publication known

as the “Orange Book.” Id.

Second, to further its goal of “increas[ing] competition between generic and brand-name

drugs,” Hatch-Waxman “allows the manufacturers of generic drugs to obtain FDA approval

without having to endure the gauntlet of procedures associated with NDAs.” In re Wellbutrin, 868

F.3d at 143. Generic manufacturers may file an Abbreviated New Drug Application (“ANDA”)

“specifying that the generic has the ‘same active ingredients as,’ and is ‘biologically equivalent’

to, the already-approved brand-name drug.” Actavis, 570 U.S. at 142 (quoting Caraco Pharm.

Laboratories, Ltd. v. Novo Nordisk A/S, 566 U.S. 399, 405 (2012)). An ANDA allows a generic

manufacturer to “avoid[] the ‘costly and time-consuming studies’ needed to obtain approval ‘for a

pioneer drug,’” thereby furthering competition. Id. (quoting Eli Lilly & Co. v. Medtronic, Inc., 496

U.S. 661, 676 (1990)).

Third, a generic manufacturer may also submit a Section 505(b)(2) NDA, which “is

appropriate for a company seeking to modify another company’s brand-name drug.” F.T.C. v.

AbbVie Inc., 976 F.3d 327, 339 (3d Cir. 2020); see also 21 C.F.R. § 314.54(a) (providing that

examples of a brand-name drug modification may include “a new indication or new dosage form”).

A Section 505(b)(2) NDA “is like an ANDA because the company need not produce all safety and

efficacy data about the drug and because it must assure the FDA that its generic drug will not

infringe the brand’s patents,” but differs “because the company must produce some data, including

whatever ‘information [is] needed to support the modification(s).’” Id. (quoting 21 C.F.R.

§ 314.54(a)).

“In addition to streamlining the drug approval process, the Hatch-Waxman Act provides

specialized procedures for brand-name and generic drug manufacturers to resolve intellectual

property disputes.” In re Wellbutrin, 868 F.3d at 144. Brand-name manufacturers are required to

list in its NDA “the ‘number and the expiration date’ of any relevant patent.” Actavis, 570 U.S. at

143 (quoting 21 U.S.C. § 355(b)(1)). Generic manufacturers, on the other hand, must assure their

products will not infringe upon the brand-name’s patents, which is known as a “paragraph IV

notice.” AbbVie, 976 F.3d at 339; see also 21 U.S.C. § 355(j)(2)(A)(vii)(IV) (certifying “that such

patent is invalid or will not be infringed by the manufacture, use, or sale of the new drug for which

the application is submitted”). After receiving a paragraph IV notice, a brand-name manufacturer

has forty-five days to decide whether to sue the generic manufacturer for patent infringement. See

21 U.S.C. § 355(j)(5)(B)(iii). If it decides to sue within forty-five days, the brand-name

manufacturer “is rewarded with some breathing space before competition can begin: the FDA is

required to withhold approval of the generic drug for 30 months or until the infringement case is

resolved, whichever comes first.” In re Wellbutrin, 868 F.3d at 144 (citing 21 U.S.C.

§ 355(j)(5)(B)(iii)).

Finally, if a generic drug is approved by the FDA, an applicant may request a therapeutic

equivalent (“TE”) rating for the drug. AbbVie, 976 F.3d at 340. Generic products therapeutically

equivalent to the brand-name drug are assigned ‘A’ or ‘AB’ ratings, while those “for which

therapeutic equivalence cannot be determined are assigned a ‘B’ or ‘BX’ rating.” Id. (internal

quotation marks and citation omitted).

C. Factual Background

“AndroGel is a brand-name transdermal testosterone gel product approved by the FDA for

the treatment of hypogonadism, a clinical syndrome that results from failure of a man’s body to

produce adequate amounts of testosterone.” (ECF No. 1 ¶ 25.) “AndroGel comes in two strengths:

(1) 1%, which was the original formulation launched in June 2000; and (2) 1.62%, which was first

sold in May 2011.” (Id. ¶ 28.) AndroGel 1% was created by Unimed and subsidiaries of Besins’s

parent company, Solvay. (Id. ¶ 29.) In 2003, Unimed and Besins filed a patent application for

AndroGel 1% that claimed a penetration enhancer of isopropyl myristate. (Id. ¶ 34.) The patent

was subsequently issued on January 7, 2003 (id.) and included in the FDA’s Orange Book (the

“’894 Patent”) (id. ¶ 31).

Perrigo sought to enter the hypogonadism treatment market and, in December 2008,

submitted two ANDAs for a generic testosterone gel. (Id. ¶ 35.) Perrigo’s generic product,

however, “contained isostearic acid as its penetration enhancer rather than [the] isopropyl

myristate claimed in the” ’894 Patent. (Id.) In June 2009, Perrigo served Unimed and Besins with

paragraph IV notices asserting the generic product would not infringe upon the ’894 Patent because

of the different chemical makeup of the drugs’ respective penetration enhancers. (Id. ¶ 36.)

“Perrigo also stated in its notices that the prosecution history of the ’894 [P]atent would estop

Unimed and Besins from asserting patent infringement under the doctrine of equivalents.” (Id.) In

July 2009, Unimed, Besins, and Solvay determined they would not file patent infringement suits

against Perrigo. (Id. ¶ 38.)

On August 26, 2009, after becoming aware of cases involving accidental secondary

exposure to children, “the FDA directed that any application for a generic testosterone gel product

containing a penetration enhancer different from the referenced brand-name drug would be

required to be submitted as a [S]ection 505(b)(2) NDA rather than an ANDA.” (Id. ¶¶ 39–40.) In

February 2010, AbbVie acquired Solvay and Unimed, and with them, AndroGel 1%. (Id. ¶¶ 29,

41.) On April 9, 2010, AbbVie filed a citizen petition with the FDA,1 seeking, inter alia: (1) an

“assurance from the FDA that Perrigo would be required to resubmit its ANDAs referencing

AndroGel 1% as [S]ection 505(b)(2) NDAs”; and (2) a directive that Perrigo provide new

paragraph IV notices to the AndroGel 1% patent holders. (Id. ¶ 42.) On October 4, 2010, the FDA

granted AbbVie’s petition in relevant part, declaring: (1) “any application by a generic

manufacturer for a product referencing AndroGel 1% that contained a different penetration

enhancer must be submitted as a [S]ection 505(b)(2) NDA” and directing (2) any applicants to

submit new paragraph IV notices. (Id. ¶ 43.)

On January 13, 2011, Teva Pharmaceuticals USA, Inc. (“Teva”) filed a Section 505(b)(2)

NDA for a generic version of AndroGel 1% with an isopropyl palmitate penetration enhancer. (Id.

¶ 44.) On March 16, 2011, Teva submitted to Solvay, AbbVie, Unimed, and Besins a paragraph

IV notice asserting its generic drug did not infringe upon the ’894 Patent. (Id. ¶ 45.) Teva also

“laid out the prosecution history of the ’894 [P]atent and its position that, because the claims of

the ’894 [P]atent were narrowed to disclose only isopropyl myristate, the prosecution history

estops the patentees from asserting infringement under the doctrine of equivalents.” (Id. (internal

quotation marks omitted).) However, on April 29, 2011, within forty-five days of receiving Teva’s

paragraph IV notice, AbbVie, Unimed, and Besins commenced an action in the District of

Delaware alleging infringement of the ’894 Patent. (Id. ¶ 47.) “The suit against Teva triggered the

Hatch-Waxman automatic stay of FDA approval of the Teva product” and, “[c]onsequently, the

1 “Federal regulations provide that an interested person may petition the FDA to ‘issue, amend, or

revoke a regulation or order, or to take or refrain from taking any other form of administrative

actions.’” In re Wellbutrin XL Antitrust Litig., Civ. A. No. 08-2431, 2012 WL 1657734, at *2 (E.D.

Pa. May 11, 2012) (quoting 21 C.F.R. § 10.25). “Within 180 days of receiving the petition, the

FDA must furnish a response to the petitioner either approving, denying, or providing a tentative

response that indicates why the agency has been unable to reach a decision on the petition.” (Id.

FDA could not approve Teva’s generic testosterone drug for 30 months after March 16, 2011 or

until September 17, 2013 unless a district court ruling or a settlement resolved the lawsuit sooner.”

(Id.)

On July 4, 2011, Perrigo re-filed its application as a Section 505(b)(2) NDA. (Id. ¶ 52.) On

September 20, 2011, Perrigo sent AbbVie, Unimed, and Besins a new paragraph IV notice

asserting no patent infringement because its generic product did not contain the same amount of

isopropyl as the penetration enhancer claimed in the patent. (Id. ¶ 53.) However, on

October 31, 2011, AbbVie, Unimed, and Besins filed suit, this time in the District of New Jersey,

claiming infringement of the ’894 Patent (the “AndroGel 1% Litigation”). (Id. ¶ 55.) The AndroGel

1% Litigation again triggered a thirty-month stay under the Hatch-Waxman Act, thereby

precluding Perrigo from obtaining final FDA approval “until or about March 20, 2014” absent a

court ruling or settlement resolving the matter. (Id.)

On December 8, 2011, Perrigo and AbbVie “executed a binding term sheet[] which

included the dismissal of” the AndroGel 1% Litigation and $2 million dollars to Perrigo for

“reasonable litigation expenses” (the “Settlement Agreement”). (Id. ¶ 58.) Furthermore, the parties

agreed Perrigo could launch its product on January 1, 2015. (Id. ¶ 59.) On December 20, 2011,

Teva and AbbVie reached a final settlement in their litigation whereby “Teva received a license to

launch its product beginning December 27, 2014.” (Id. ¶ 57.)2

The FDA approved Teva and Perrigo’s Section 505(b)(2) NDAs on February 14, 2012 and

January 31, 2013, respectively. (Id. ¶¶ 62–63.) Teva, however, did not receive an AB rating for its

2 Perrigo’s settlement with AbbVie also “contained an acceleration clause and most favored

nations . . . protection whereby Perrigo would be permitted to launch if another generic came to

market or if Defendants entered an agreement with another generic providing an entry date more

favorable than the date applicable to Perrigo.” (Id. ¶ 59.) Therefore, “[a]s a result of the Teva

product from the FDA and, accordingly, “decided not to launch its generic AndroGel 1% product

on the date permitted in its settlement agreement, i.e., December 27, 2014 or thereafter.” (Id. ¶ 62.)

The FDA did not provide Perrigo with a TE rating in its approval letter. (Id. ¶ 63.) Later, “[a]s its

December 27, 2014 licensed entry date approached, Perrigo took a number of steps to follow up

with the FDA regarding its TE rating,” including sending “three letters to the FDA between

April 2013 and February 2014 requesting that the FDA issue an AB rating.” (Id. ¶ 64.) Perrigo,

however, “received no response other than being informed that the FDA needed more time to

evaluate the therapeutic equivalence of the product.” (Id.)

Perrigo subsequently filed a lawsuit against the FDA on March 21, 2014, in the District of

Columbia alleging unreasonable delay and requesting “a mandatory injunction compelling the

FDA to publish a TE rating for Perrigo’s NDA product as soon as possible.” (Id. ¶ 65.) In its

response, the FDA maintained Perrigo’s settlement with AbbVie “obviated the need for a prompt

decision” and assured the court a TE rating would be issued by July 31, 2014. (Id.) On

July 23, 2014, “[t]he FDA determined that Perrigo’s Section 505(b)(2) NDA product was

therapeutically equivalent to AndroGel 1% and issued it an AB rating.” (Id. ¶ 66.) On

December 27, 2014, Perrigo launched its generic version of AndroGel 1%. (Id. ¶ 67.)

D. Complaint and Procedural History

Perrigo filed the present action against Defendants on May 4, 2020, in the Eastern District

of Pennsylvania. (ECF No. 1.) On October 21, 2020, the Honorable Harvey Bartle III, U.S.D.J.

granted Defendants’ motion to transfer the matter to this Court. (ECF No. 34.)

Perrigo asserts “[t]he patent lawsuits brought against both Teva and [itself] in 2011 were

objectively baseless” because “[n]either the Teva product nor the Perrigo product contained the

penetration enhancer isopropyl myristate, the only penetration enhancer claimed in the ’894

[P]atent.” (ECF No. 1 ¶¶ 69–70 (noting that “Teva used isopropyl palmitate and Perrigo used

isostearic acid as a penetration enhancer in their generic versions of AndroGel 1%”).) Perrigo also

maintains the patent lawsuits against Teva and itself were “subjectively baseless” because they

were “filed . . . only for the purpose of delaying Teva’s and Perrigo’s entry into the market as

competitors with lower price generics, [and] not with any expectation of actually winning the either

case.” (Id. ¶ 72.) According to Perrigo, Defendants “were aware that the entry of generic versions

of AndroGel, with their much lower prices, would quickly and significantly erode” the hundreds

of millions of dollars in sales Defendants took in every year. (Id. ¶ 77.) Defendants, accordingly,

“were able to maintain monopoly power” over the topical testosterone replacement therapies

market. (Id. ¶ 79; see generally id. ¶¶ 79–87.)

Perrigo alleges Defendants violated Section 2 of the Sherman Act, 15 U.S.C. § 2. (Id.

¶¶ 95–100.) Perrigo maintains Defendants, “[t]hrough their sham [AndroGel 1% Litigation]

against Perrigo,” have “willfully maintained their monopoly power in the relevant market using

restrictive or exclusionary conduct,” and have “substantially harmed competition . . . by delaying

and/or minimizing the success of competition from a generic version of AndroGel 1%.” (Id.

¶¶ 97–98.) In other words, Perrigo contends, “[b]ut for Defendants’ anticompetitive conduct . . . ,

Perrigo would have received its AB rating in June 2013 rather than July 2014 and would have

launched its AB-rated product at that time rather than on December 27, 2014.” (Id. ¶ 68.)

On January 14, 2021, Defendants filed the present Motion for Judgment on the Pleadings.

(ECF No. 70.) On February 16, 2021, Perrigo opposed (ECF No. 76), and on March 8, 2021,

Defendants replied (ECF No. 79). On September 15, 2021, the Court heard oral argument on

Defendants’ Motion. (See ECF Nos. 92, 93.)

II. LEGAL STANDARD

“The difference between Rules 12(b)(6) and 12(c) is purely procedural as [Rule] 12(c)

requests for dismissal are governed by the same standards as [Rule] 12(b)(6) motions.” Glob. Naps,

Inc. v. Bell Atl.-N.J., Inc., 287 F. Supp. 2d 532, 539 (D.N.J. 2003) (citing Turbe v. Gov’t of the

V.I., 938 F.2d 427, 428 (3d Cir. 1991)). As with a Rule 12(b)(6) motion, in deciding a Rule 12(c)

motion, the court must “view[] the facts alleged in the pleadings and the inferences to be drawn

from those facts in the light most favorable to the” nonmovant. Barnard v. Lackawanna Cnty., 696

F. App’x 59, 61 (3d Cir. 2017) (internal quotation marks and citations omitted). A court may only

grant a motion for judgment on the pleadings if the moving party “clearly establishes that no

material issue of fact remains to be resolved and that [the movant] is entitled to judgment as a

matter of law.” Rosenau v. Unifund Corp., 539 F.3d 218, 221 (3d Cir. 2008) (quoting Jablonski v.

Pan Am. World Airways, Inc., 863 F.2d 289, 290–91 (3d Cir. 1988)).

III. DECISION

A. Accrual of Perrigo’s Claim

Defendants argue “Perrigo’s current sham claim is barred by the parties’ 2012 Settlement

Agreement, in which Perrigo released ‘any and all claims . . . accruing prior to the Effective Date

. . . arising out of, related to, or in connection with . . . the [AndroGel 1%] Litigation.’” (ECF

No. 70-1 at 8 (quoting ECF No. 70-6 § 7).) Defendants maintain “[t]he claim here ‘arises out of’

and ‘relates to’ the AndroGel 1% [Litigation] because the entire theory of the claim is that the

AndroGel 1% [Litigation] was a sham.” (Id.) Because, according to Defendants, a sham litigation

claim accrues upon the filing of the sham lawsuit (id. at 9 (citations omitted)), Perrigo released

such a claim when it settled the AndroGel 1% Litigation and, accordingly, may not now move

forward with the present lawsuit (id. at 14).

The Settlement Agreement contains the following release:

In settlement of the Litigation, and in consideration of the releases,

representations, warranties and covenants contained in this . . .

Agreement[,] . . . as of the Effective Date, the respective Parties and

parents, subsidiaries, Affiliates, related companies and

predecessors, successors and assigns . . . hereby fully, finally and

forever release, relinquish, acquit and discharge the other Parties . . .

from any and all claims, demands, damages, liabilities, obligations,

and causes of action accruing prior to the Effective Date . . . arising

out of, related to, or in connection with: (i) the Litigation . . . .

(ECF No. 70-6 § 7 (emphasis added).)3 The term “Effective Date” is the “date on which [the

Settlement Agreement] Term Sheet [was] executed by the latest-signing party.” (ECF No. 70-5

at 1–2.) The parties both concede this date was March 27, 2012. (See ECF No. 70-1 at 3; ECF

No. 76 at 1–2; see also ECF No. 70-6 at 14.) The term “Litigation” refers to the AndroGel 1%

Litigation, filed in the District of New Jersey by AbbVie, Unimed, and Besins against Perrigo in

2011 for the alleged infringement upon the ’894 Patent. (ECF No. 70-5 at 2.)

“In New Jersey, a signed release carries considerable weight.” Cooper v. Borough of

Wenonah, 977 F. Supp. 305, 311 (D.N.J. 1997).

It is the general rule that where a party affixes [its] signature to a

written instrument, such as a release, a conclusive presumption

arises that [it] read, understood and assented to its terms and [it] will

not be heard to complain that [it] did not comprehend the effect of

[its] act in the signing.

Id. at 311–12 (citations omitted). Here, both parties agree they freely entered into the Settlement

Agreement and its release. (See, e.g., ECF No. 1 ¶ 58 (“On December 8, 2011 the parties executed

a binding term sheet, which included the dismissal of claims.”); ECF No. 70-1 at 3 (“The parties

settled the case on December 8, 2011, initially memorializing that settlement with a binding term

sheet.”); see also ECF No. 70-6 at 13–14 (providing the signatures of AbbVie, Unimed, Besins,

3 “In deciding a motion for judgment on the pleadings, the court ‘considers only the [pleadings],

any attached exhibits, documents relied upon in the complaint, matters of public record, and any

indisputably authentic documents.’” Republic Franklin Ins. v. Travelers Cas. Ins. Co. of Am., Civ.

A. No. 17-4593, 2018 WL 1420495, at *2 (D.N.J. Mar. 22, 2018) (quoting Hlista v. Safeguard

Props., LLC, 649 F. App’x 217, 218 n.2 (3d Cir. 2016)). Because Perrigo’s Complaint relies upon

the parties’ Settlement Agreement in support of its sham litigation allegation (ECF No. 1

¶¶ 58–60, 67), and because the authenticity of the Settlement Agreement is not in dispute, the

Court considers the Settlement Agreement, attached to Defendants’ present motion (ECF

and Perrigo representatives to the Settlement Agreement).) Moreover, the parties do not appear to

dispute the present sham litigation claim relates to the AndroGel 1% Litigation in a way envisioned

by the Settlement Agreement and its release. (See generally ECF Nos. 70-1, 76, 79.) Therefore,

the validity and scope of the Settlement Agreement’s release is not at issue. Rather, the parties

disagree over whether Perrigo’s sham litigation claim accrued prior to March 27, 2012, thereby

triggering the release and precluding the present lawsuit.

1. Antitrust Injury

“In order to maintain an antitrust suit, a plaintiff must establish antitrust standing, which is

distinct from Article III standing.” In re Wellbutrin, 868 F.3d at 163. “To establish antitrust

standing, a plaintiff must show that it has suffered an antitrust injury—that is, an ‘injury of the

type the antitrust laws were intended to prevent and that flows from that which makes [the]

defendants’ acts unlawful.’” Id. at 164 (quoting Ethypharm S.A. France v. Abbott Laboratories,

707 F.3d 223, 233 (3d Cir. 2013)).

Defendants argue, inter alia, Perrigo had a “sufficient basis to allege antitrust injury as

soon as the alleged sham patent suit [was] filed.” (ECF No. 70-1 at 12.) According to Defendants,

the thirty-month stay pursuant to Hatch-Waxman precluding earlier FDA approval of Perrigo’s

generic product established an adequate antitrust injury. (Id. at 12–13.) Defendants cite to two

opinions from this District, Bristol-Myers Squibb Co. v. Ben Venue Laboratories, 90 F. Supp. 2d

540 (D.N.J. 2000) and Warner Lambert Co. v. Purepac Pharmaceutical Co., Civ. A. No. 98-2749,

2000 WL 34213890 (D.N.J. Dec. 22, 2000), in support of this position. (Id.)

In Bristol-Myers, the manufacturer of an anti-cancer drug filed patent infringement suits

against generics after they filed ANDAs. 90 F. Supp. 2d at 541, 544. The generics filed

counterclaims against the manufacturer “for monopolization and attempted monopolization in

violation of Section 2 of the Sherman Act.” Id. at 541. The manufacturer asserted the generics

failed to demonstrate the antitrust injury necessary to set forth their counterclaims because they

had not yet obtained FDA approval of their drugs and, therefore, “have not lost sales due to [the

manufacturer’s] conduct.” Id. at 543. According to the manufacturer, “the cause of [the generics’]

injuries [could not] be [the manufacturer’s] alleged misconduct—instead, the generics are barred

from the market by their independent failure to secure agency approval.” Id. at 544.

The court disagreed, finding the manufacturer’s “argument ignore[d] the reality of Hatch-

Waxman.” Id. at 545. The court held there was “no dispute that by suing the generic defendants

under the Hatch-Waxman Act, [the manufacturer] provoked the automatic moratorium of FDA

approval of the generics’ ANDAs.” Id. For the manufacturer “to insist that its generic competitors

ha[d] no standing because they [were] not in the market, when [the manufacturer] itself foreclosed

their access to it,” was, according to the court, without merit. Id. Moreover, the court noted, if it

were to accept the manufacturer’s position, “antitrust standing under the Hatch-Waxman Act

would be wholly contingent on the vagaries of the timing of [FDA] action” and would bind

claimants “to circumstances beyond their control.” Id. at 545–46. “Such an anomalous and

arbitrary result,” according to the court, “was not intended by the statute.” Id. at 545. Accordingly,

the court found to establish antitrust injury and invoke antitrust standing, “a Hatch-Waxman

defendant subject to the moratorium need not demonstrate that the FDA has first approved its

product.” Id. at 546.

Similarly, in Warner Lambert, the manufacturer of epilepsy and neurodegenerative disease

drugs filed an infringement lawsuit against a generic following its ANDA. 2000 WL 34213890,

at *4. The generic filed a sham litigation counterclaim, asserting the manufacturer “initiated the

patent infringement litigation for the sole purpose of forestalling [the generic’s] ability to enter the

[drug’s] market.” Id. at *5. The court, relying in part on Bristol-Myers, rejected the manufacturer’s

argument that the generic did not have standing to assert an antitrust injury. The court determined

antitrust injury under Hatch-Waxman must be “liberally construed,” id. at *8 (“Consequently, the

Supreme Court’s requirement for a special ‘causal connection’ and ‘directness’ of injury must be

liberally construed when dealing with regulatory conditions under the Hatch-Waxman Act.”), and

held the generic’s injury did “not merely result from the ‘structure of a regulated industry,’ but

from the decision of the pioneer manufacturer to bring suit.” Id. (quoting Bristol-Myers, 90 F.

Supp. 2d at 545).

Perrigo’s opposition did not address Bristol-Myers, Warner Lambert, or Defendants’

argument that its imposition of the Hatch-Waxman thirty-month moratorium constituted

actionable antitrust injury. (See generally ECF No. 76 at 13–15.) However, at oral argument,

Perrigo maintained Bristol-Myers, decided in 2000, is irrelevant. (ECF No. 93 at 27:19-25.)

Moreover, Perrigo cited to In re Wellbutrin, a recent Third Circuit opinion, in support of the

position that “to show antitrust injury, the plaintiff must allege injury that impacts the competitive

market. Merely showing injury to the plaintiff alone is not enough.”4 (Id. at 20:3-6.) The Court,

however, finds Perrigo’s argument misplaced and finds In re Wellbutrin to be distinguishable from

the present facts.

In In re Wellbutrin, the brand-name manufacturers, Biovail and GSK, of an antidepressant

drug filed patent infringement suits against two generic companies, Anchen and Abrika, triggering

Hatch-Waxman’s thirty-month stay. 868 F.3d at 145. Later, a class of direct and indirect

purchasers of the antidepressant brought a lawsuit against Biovail and GSK, alleging, inter alia,

the lawsuits against Anchen and Abrika amounted to sham litigations. Id. at 146. The purchasers

argued, without the thirty-month stay and subsequent delay in ANDA approvals, the “generics

would have launched their products sooner, resulting in increased competition and lower drug

4 Perrigo did not cite to In re Wellbutrin in its opposition brief. (See generally ECF No. 76.)

prices for pharmacies and consumers.” Id. at 147. Affirming the district court’s grant of summary

judgment in favor of GSK,5 the Third Circuit determined “[t]he sham litigation claim . . . fail[ed]

for the simple reason that an act of infringement plainly occurred.” Id. at 149; see also id. at 152.

Moreover, and importantly for the purposes of the present matter, the court held the purchasers

could not establish antitrust injury because, at the time of the allegedly sham litigation, any delay

in the generics’ entry into the market was due to Biovail, not GSK, the remaining defendant. Id. at

152. The court’s reasoning stemmed from the fact that, four months following the filing of the

patent infringement case, GSK withdrew from the case. Id. at 152 n.24. The court, accordingly,

held the purchasers “must show that at least some delay [could have been] attributed to GSK’s

actions in the case—that is, they must [have] show[n] that at least some delay can be attributed to

the first four months of the litigation.” Id. Because there was “no evidence in the record indicating

that any delay [could] be linked to that period of time,” id., the court determined “any delay

attributable to the litigation would have existed even without GSK’s involvement.” Id. at 152.

Finally, the court noted the generics’ entry into the market was also blocked by a patent entirely

separate from GSK and Biovail.6 Id. at 165. Here, the facts of In re Wellbutrin are not applicable.

According to pleadings, it was Defendants’ filing of the AndroGel 1% Litigation—not any

additional defendants, patents, or exclusivity periods—that prevented Perrigo’s entry into the

testosterone market. (See generally ECF No. 1.)

5 “Biovail was originally a defendant in the case but settled with [the purchasers] prior to the

appeal.” Id. at 142 n.2.

6 The court further rejected the purchasers’ sham litigation claims because Abrika’s entry into the

market was also prevented by the 180-day exclusivity period Anchen received under Hatch-

Waxman by filing its ANDA before the other generics. Id. at 152–53 (“To the contrary, it is

undisputed that the FDA could not have approved Abrika’s ANDA until the end of Anchen’s 180-

day first-filer exclusivity period, a period that would not even start until Anchen launched its

The Court also rejects Perrigo’s assertion that the Bristol-Myers decision, issued in 2000,

is irrelevant today. (See ECF No. 93 at 27:19-25.) In December 2018, over a year after In re

Wellbutrin was decided, Chief Judge Freda L. Wolfson cited to Bristol-Myers in a published

opinion when observing “various district courts within this Circuit have declined to hold that the

absence of FDA approval creates a barrier to establishing the element of causation in a patent

antitrust suit.” Takeda Pharm. Co. v. Zydus Pharms. (USA) Inc., 358 F. Supp. 3d 389, 398 (D.N.J.

2018) (collecting cases). The Court, therefore, finds Perrigo was not precluded from establishing

antitrust standing and injury because of the absence of an FDA decision on their generic product.

Moreover, the Court finds Perrigo could have demonstrated the antitrust injury necessary for its

present sham litigation claim upon the filing of the AndroGel 1% Litigation and implementation

of the subsequent thirty-month moratorium under Hatch-Waxman.7 See Warner Lambert, 2000

WL 34213890, at *8; Bristol-Myers, 90 F. Supp. 2d at 545–46.

2. Accrual Date and Speculative Damages Exception

Defendants also contend “[c]ourts have long recognized that the elements of a sham

litigation claim exist, and thus accrue, upon the filing of the sham lawsuit.” (ECF No. 70-1 at 9

(internal quotation marks and citations omitted).) Defendants maintain “when Perrigo released all

claims that had accrued arising from or related to the AndroGel 1% [Litigation] in the” Settlement

Agreement, “Perrigo released its current claim that the AndroGel 1% [Litigation] was a sham.

Perrigo may not now assert that released claim.” (Id. at 14.)

7 In addition to the thirty-month moratorium under Hatch-Waxman, Defendants argue Perrigo

could have demonstrated antitrust injury through “decid[ing] between three undesirable [litigation]

alternatives,” the costs it incurred in defense of the AndroGel 1% Litigation, or “threatened”

antitrust injury. (See generally ECF No. 70-1 at 11–13.) Because the Court has determined the

thirty-month moratorium was sufficient to demonstrate antitrust injury, it need not address these

In opposition, Perrigo asserts the Court cannot conclude, as a matter of law, that its sham

litigation claim accrued prior to March 27, 2012. (ECF No. 76 at 6.) Perrigo cites to an exception

to the general accrual date of a sham litigation claim, known as the speculative damages exception,

which “provides that ‘[w]here damages flowing from conduct which violate[s] the antitrust laws

are uncertain at the time that the defendant engages in the challenged conduct, the cause of action

for future damages accrues on the date when they are suffered.’” (Id. at 7 (quoting P & M Servs.,

Inc. v. Gubb, Civ. A. No. 07-12816, 2008 WL 4185903, at *6 (E.D. Mich. Sept. 8, 2008) (citing

Zenith Radio Corp. v. Hazeltine Rsch., Inc., 401 U.S. 321, 339 (1971))).) Accordingly, Perrigo

argues “the [s]peculative [d]amages [e]xception recognized in Zenith is fatal to Defendants’

reliance on the 2012 Settlement Agreement on this pleading motion.” (Id. at 13.)

Although the Third Circuit has not addressed the accrual question at hand, “several courts

considering the issue have held that sham litigation claims accrue when the case is filed.” Med.

Mut. of Ohio, Inc. v. Braintree Laboratories, Civ. A. No. 10-604, 2011 WL 2708818, at *4 (D.

Del. July 12, 2011) (collecting cases); see also Gubb, 2008 WL 4185903, at *5 (collecting cases)

(“In general, the operative overt act for purposes of the antitrust limitations statute is the filing of

the sham lawsuit.”). Therefore, if the Court’s inquiry ended here, it would find Perrigo’s sham

litigation claim accrued upon the filing of the AndroGel 1% Litigation on October 31, 2011, before

the Settlement Agreement’s Effective Date.

However, as Perrigo correctly notes (ECF No. 76 at 7), there are two exceptions to this

general accrual rule that toll the Sherman Act’s statute of limitations. Relevant here, the speculative

damages exception provides, “even if injury and a cause of action have accrued as of a certain

date, future damages that might arise from the conduct sued on are unrecoverable if the fact of

their accrual is speculative or their amount and nature unprovable.” Zenith, 401 U.S. at 339. “In

these instances, antitrust causes of action for future damages ‘will accrue only on the date [the

damages] are suffered; thereafter the plaintiff may sue to recover them at any time within four

years from the date they were inflicted.’” Meijer, Inc. v. 3M, Civ. A. No. 04-5871, 2005 WL

1660188, at *5 (E.D. Pa. July 13, 2005) (quoting Zenith, 401 U.S. at 339); see also Lender’s Serv.,

Inc. v. Dayton Bar Ass’n, 758 F. Supp. 429, 442 (S.D. Ohio 1991) (“However, where future

damages are too speculative to be proved, a cause of action accrues on the date they are suffered.”).

There is an important distinction, however, between “uncertain damages, which prevent

recovery” and therefore toll the statute of limitations, and “uncertain extent of damage, which does

not prevent recovery.” Pace Indus., Inc. v. Three Phoenix Co., 813 F.2d 234, 240 (9th Cir. 1987)

(citation omitted); see also Charlotte Telecasters, Inc. v. Jefferson-Pilot Corp., 546 F.2d 570, 573

(4th Cir. 1976). “The former denotes failure to establish an injury, while the latter denotes

imprecision with regard to the scope or extent of the injury.” Pace, 813 F.2d at 240. “The question

of whether there is a right to recovery is not to be confused with the difficulty in ascertaining the

scope or extent of the injury.” Id.

To demonstrate the speculative nature of their damages as of the Effective Date, Perrigo

cites to the uncertainty concerning: (1) “the issuance and timing of FDA approval of Perrigo’s

generic 1% AndroGel”; (2) “whether the FDA would issue any ‘TE’ rating and, if so, whether the

TE rating would be ‘AB’ or a lower rating such as ‘BX’”; (3) “how Perrigo might respond if it did

not receive the AB rating it requested”; and (4) “how Perrigo would have fared financially if it

decided to launch a product without an AB rating.” (ECF No. 76 at 8.) These factors, however,

relate to the scope of Perrigo’s damages, not whether Perrigo had, in fact, suffered an injury or

right to recovery. Perrigo’s Complaint alleges, at the time the AndroGel 1% Litigation

commenced, Defendants were aware their lawsuit was both objectively and subjectively baseless.

(ECF No. 1 ¶¶ 69, 72.) Perrigo first asserts Defendants were objectively aware because “[n]either

the Teva [generic] product nor the Perrigo [generic] product contained the penetration enhancer

isopropyl myristate, the only penetration enhancer claimed in the ’894 [P]atent.” (Id. ¶ 70.)

According to Perrigo, “AbbVie and Besins could not purposely surrender claims to all penetration

enhancers except one,” i.e., isopropyl myristate, “in order to obtain the patent in the first instance

and then claim infringement when a competitor used an enhancer they had deliberately

surrendered.” (Id. ¶ 71.) Perrigo, therefore, contends “[n]o reasonable person in Defendants’

position could have realistically expected to prevail on the merits of their patent infringement

claims against Teva and Perrigo.” (Id.) Moreover, Perrigo asserts Defendants were subjectively

aware their lawsuit was baseless because: (1) they had previously decided not to sue Perrigo for

patent infringement because the products contained different formulations (id. ¶ 73); (2) “[t]he

individuals who made the decision on AbbVie’s behalf to file [the] objectively baseless lawsuits

against Perrigo and Teva were four experienced patent attorneys” (id. ¶ 74); and (3) Defendants’

“decision-makers . . . were aware of the paragraph IV notices sent by Perrigo and Teva, which

made it clear that their respective products did not contain the single penetration enhancer claimed

in the ’894 [P]atent” (id. ¶ 75).

In Gubb, the district court held the speculative damages exception did not apply to a sham

litigation claim, in part, because, at the time the alleged sham lawsuit was filed, the plaintiff had

already asserted the patent in question was invalid. Gubb, 2008 WL 4185903, at *6. According to

the court, “[t]here [were] no facts that came to light at a later date which revealed the alleged

‘sham’ nature of the litigation.” Id. (emphasis added). Similarly, here, at the time of the AndroGel

1% Litigation, Perrigo had twice asserted its generic product did not infringe upon the ’894 Patent.

(ECF No. 1 ¶¶ 36, 53.) Moreover, in both of its paragraph IV notices to Defendants, Perrigo

maintained “the prosecution history of the ’894 [P]atent precluded any valid infringement claim

under the doctrine of equivalents.” (Id. ¶ 54; see also id. ¶ 36.) Coupled with Solvay and Unimed’s

previous 2009 press release stating “the companies had decided not to file a patent infringement

suit against Perrigo” because “the Perrigo [generic] product contains a different formulation than

the formulation protected by the AndroGel patent” (id. ¶ 38 (internal quotation marks omitted)),8

the Court is unable to discern how, at the time the AndroGel 1% Litigation commenced, Perrigo’s

damages were so uncertain as to preclude the establishment of an injury or right to recovery.

Moreover, despite the uncertainty surrounding if, when, and how the FDA would approve the

Perrigo product, and how this decision would affect Perrigo’s future decisions and financial

standing (see ECF No. 76 at 8), “[t]he fact that a plaintiff’s injuries ‘have a rippling effect into the

future only establishes’ [its] possible entitlement to future damages and does not eliminate the

requirement of bringing suit within four years of an overt act which causes injury.” Lender’s Serv.,

758 F. Supp. at 442 (quoting Peck v. Gen. Motors Corp., 894 F.2d 844, 849 (6th Cir. 1990)).

Accordingly, the Court finds, based upon the undisputed factual allegations of this matter,

the speculative damages exception set forth in Zenith does not apply to Perrigo’s sham litigation

claim. The claim, therefore, accrued at the time the AndroGel 1% Litigation commenced on

October 31, 2011. There is also no “genuine question as to whether [Perrigo] signed the

[Settlement Agreement and release] knowingly and voluntarily.” Geraghty v. Ins. Servs. Office,

Inc., Civ. A. No. 08-1203, 2009 WL 1025544, at *4 (D.N.J. Apr. 16, 2009) (citing, inter alia,

plaintiff’s “highly sophisticated education,” “large role in negotiation the terms,” and

representation by an expert attorney, as well as the clarity of the agreement); see also Cooper, 977

F. Supp. at 312 (“The record shows that [plaintiff] read, understood and consented to the terms of

the . . . Release, therefore the release is presumptively valid.”). Nor does Perrigo claim (see

generally ECF No. 76) an exception to the “presumptive conclusion” that the release is valid exists

because of “fraud, misrepresentation, overreaching by the releasee, incapacity of the releasor

8 “Besins also determined that it was ‘standing down’ from bringing an infringement suit but did

affecting [its] ability to understand the release, or any other equitable ground.” Cooper, F. Supp.

at 313 (citations omitted). Because the Court finds the release to be valid, and because it is

undisputed it released the parties from any and all claims related to the AndroGel 1% Litigation

that accrued prior to March 27, 2012 (ECF No. 70-6 § 7; id. at 14; see also ECF No. 70-1 at 3–4;

ECF No. 76 at 1), Perrigo is barred from now setting forth a claim that the same litigation was a

sham. See Raroha v. Earle Fin. Corp., 220 A.2d 107, 109 (N.J. 1966) (“It may be that plaintiff’s

injuries are now more serious than he believed them to be when he signed the release. However, . . .

it is the law of this State that the release is binding and that the releasor will be held to the terms

. . . he willingly and knowingly entered.”); see also Geraghty v. Ins. Servs. Office, Inc., 369 F.

App’x 402, 406 (3d Cir. 2010) (“Under New Jersey law, the phrase ‘any and all’ [in a release]

allows for no exception.” (internal quotation marks and citations omitted)).9

B. Unclean Hands

Perrigo also argues, even if the Settlement Agreement’s release is otherwise enforceable,

Defendants should be barred from enforcing the release pursuant to the doctrine of unclean hands.

(ECF No. 76 at 15.) Perrigo argues the doctrine of unclean hands applies “based on much of the

same evidence that led the courts in the FTC litigation to conclude that Defendants filed sham

patent infringement litigation against Perrigo in furtherance of their monopolistic conduct.” (Id.)10

9 Defendants also argue Perrigo released its present claim through a release within a 2015

settlement agreement related to AndroGel 1.62%, a more concentrated version of AndroGel 1%

covered by the ’894 Patent. (ECF No. 70-1 at 14.) Defendants argue “[t]here can be no question

the claim here had accrued by 2015,” “[n]or is there any legitimate question about whether Perrigo

released its AndroGel 1% sham claim in the 2015 settlement agreement.” (Id.) Because the Court

finds the 2012 Settlement Agreement dispositive it will not address Defendants’ arguments related

to the 2015 settlement agreement.

10 The FTC litigation refers to an action the Federal Trade Commission (“FTC”) brought against

The burden, however, on a party seeking to invoke the doctrine is “extremely high” and

requires the application of a clear and convincing evidentiary standard. Connelly Constr. Corp. v.

Travelers Cas. & Sur. Co. of Am., Civ. A. No. 16-555, 2018 WL 263316, at *12 (E.D. Pa.

Jan. 2, 2018), aff’d 788 F. App’x 122 (3d Cir. 2019) (citing Citizens Fin. Grp., Inc. v. Citizens Nat.

Bank of Evans City, 383 F.3d 110, 129 (3d Cir. 2004)). “Moreover, the allegedly improper conduct

must have occurred ‘in the very controversy’ at hand, and the party against whom the doctrine is

being employed must have ‘so conducted himself as to shock the moral sensibilities of the judge.’”

Id. (quoting Gaudiosi v. Mellon, 269 F.2d 873, 881 (3d Cir. 1959)). Here, Perrigo maintains it

“was not obliged to raise the issue of unclean hands in its complaint in anticipation of Defendants

asserting the 2012 release as an affirmative defense.” (ECF No. 76 at 15.) Perrigo, however, cites

no legal authority for this assertion. Furthermore, the doctrine requires a “close nexus between the

‘unclean hands’ and the specific issue in dispute,” Connelly, 2018 WL 263316, at *12; see also

Pharmacia Corp. v. GlaxoSmithKline Consumer Healthcare, L.P., 292 F. Supp. 2d 594, 610

(D.N.J. 2003), but Perrigo invokes the doctrine against the actual filing of the AndroGel 1%

Litigation, not Defendants’ conduct as it relates to the Settlement Agreement and release. See

Connelly, 2018 WL 263316, at *12 (“The ‘nexus’ requirement dictates that the allegedly improper

conduct must have taken place with respect to the execution of the waivers and change order

documents, rather than in the context of [defendant’s] relationship with [plaintiff] writ large.”).

The Court, therefore, finds Perrigo has failed to meet its burden of demonstrating

Defendants acted with unclean hands. Having determined the parties’ Settlement Agreement and

release barred Perrigo’s current sham litigation claim, Defendants’ Motion for Judgment on the

Pleadings is GRANTED and Perrigo’s Complaint is DISMISSED WITH PREJUDICE.11

IV. CONCLUSION

For the reasons set forth above, Defendants’ Motion for Judgment on the Pleadings (ECF

No. 70) is GRANTED. An appropriate order follows.

Date: September 30, 2021 /s/ Brian R. Martinotti

HON. BRIAN R. MARTINOTTI

UNITED STATES DISTRICT JUDGE

11 See, e.g., JRJ Hosp., Inc. v. Twin City Fire Ins., Civ. A. No. 20-13095, 2021 WL 3561356, at

*7 (D.N.J. Aug. 12, 2021) (granting defendant’s motion for judgment on the pleadings and

dismissing amended complaint with prejudice where “there [was] no additional discovery or

amended pleadings that [would have] change[d] the court’s reading of the plain language of the