Appendix — United States v. Glaxo Group Ltd.

Supreme Court brief1973

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Supreme Court of the Anited States

Ocroser Term, 1971

No. 71-666

Unitep States or AMERICA, APPELLANT,

Vv.

Giaxo Group LimITeED, aNnp IMPERIAL CHEMICAL

Inpustries, LIMITED

ON APPEAL FROM THE UNITED STATES DISTRICT

COURT FOR THE DISTRICT OF COLUMBIA

INDEX

Page

Relevant Docket Entries ................ 00 ee ee eee e ee eeee 1

NS ST EPP T TTT ET CTE eT OTT ETT eT TEST eee ee 4

Answer of Imperial Chemical Industries .................. 11

Answer of Glaxo Group Limited ...... ikaw keeeectebe sees 17

Amended Complaint .............. 02 eee cece cc ee eee eees 21

Affidavit of James H. Wallace, dated Oct. 30, 1968.......... 29

Exhibit 1, annexed to Wallace Afft. of Oct. 30, 1968—U.S.

Pek. Mo. SOOO BOE 2... ccc cece cc cccccsccccesccvcces 30

Exhibit 2 annexed to Wallace Afft. of Oct. 30, 1968—McNeil

(J&J) Package Insert for Grifulvin (Griseofulvin Regu-

ee eee er - 36a

Exhibit 15, annexed to Wallace Afft. of June 13, 1969—U‘S.

ths ee Omer ee ne 37

Defendant ICI’s Answers to Interrogatories Propounded by

Plaintiff July 16, 1968 [Answer by ICI Sept. 16, 1968]

(Nos. 1, 15, 36, 40, 41, 42, 43, 49, 50, 53, 55, 6365, 66, 67.

69, 70, 71, 74, 75, 82, 83, 84) 2... eee eee ee 44

16 OR ee agree

Defendant Glaxo Group Limited’s Answers to Interrogatories

Propounded by Plaintiff July 16, 1968 [Answer by Glaxo

Oct. 25, 1968; annexed to Wallace Afft. of Oct. 17, 1969]

(Nos. 36, 38, 39, 42, 43, 53, 55, 57,-63, 64, 65, 66, 71, 73, 74,

We le PE as ek ees cao ek ck a ka

Affidavit of James H. Wallace, dated Oct. 31, 1968 (Back-

ground of ICI-AMHO Agreement of Dee. By SUED ceseu vs

Affidavit of James H. Wallace, dated June 13, 1969 (Back-

ground of various Glaxo agreements)...................

Exhibit 11, annexed to Wallace Afft. of June 13, 1969—Glaxo-

ICI Agreement of June 21, 1957 ...... ee ree ore oes

Exhibit 12, annexed to Bohling Afft. of July-7, 1970—Memo

from W. H: Lycan to J&J file dated Nov. 28, 1958, concern-

ing meeting between Glaxo and J&J ..........0. cece eee

Exhibit 31, annexed to Wallace Afft. of Aug. 19, 1969—Memo

from W. H. Lycan to J&J file, dated Nov. 30, 1958, concern-

ing meeting among Glaxo, J&J, and Schering..?.........

Exhibit 1, annexed to Bohling Afft. of July 7, 1970—Internal

ICI memo from Cusa to Carey, dated Feb. 2, 1959........

Exhibit 2, annexed to Bohling Afft. of July 7, 1970—Internal

memo from Cusa to Carey, dated Feb. 13, 1959...........

Exhibit 3, annexed to Bohling Afft. of July 7, 1970—Letter

from Lindon (Glaxo) to Brown (Schering), dated Feb. 24,

1959, concerning Schering and J&J license agreements... .

Exhibit 4, annexed to Bohling Afft. of July 7, 1970—Letter

from Lindon (Glaxo) to Lycan (J&J), dated Feb. 24, 1959,

concerning Schering and J&J license agreements.........

Exhibit 14, annexed to Wallace Afft. of June 13, 1969—Letter

from Cusa (ICI) to Lindon (Glaxo), dated Mar. 5, 1969,

_ concerning Schering and J&J license agreements.........

Exhibit 5, annexed to Bohling Afft. of July 7, 1970—Letter

from Lindon (Glaxo) to Brown (Schering), dated Mar. 24,

1959, concerning Schering and J&J license agreements... .

Exhibit 6, annexed to Bohling Afft. of July 7, 1970—Letter

from Lindon (Glaxo) to Lycan (J&J), dated Mar. 24, 1959,

concerning Schering and J&J license agreements.........

Exhibit 7, annexed to Bohling Afft. of July 7, 1970—Letter

from Lindon (Glaxo) to Brown (Schering) dated Mar. 31,

1959, concerning Schering and J&J license agreements. ...

Exhibit 8, annexed to Bohling Afft. of July 7, 1970—Letter

from Lindon (Glaxo) to Lyean (J&J), dated Mar. 31, 1959,

concerning Schering and J&J license agreements

Exhibit 9, annexed to Bohling Afft. of July 7, 1970—Letter

from Lyean (J&J), dated June 23, 1959, concerning Scher-

ing and J&J license agreements ........................

Exhibit 22, annexed to Wallace Afft. of June 13, 1969—Glaxo-

J&J Agreement, dated Apr. 1, 1959 .....................

Exhibit 23, annexed to Wallace Afft. of June 13, 1969—Scher-

ing-Glaxo agreement, dated Apr. 1, 1959............:....

Exhibit 10, annexed to Bohling Afft. of July 7, 1970—_Internal

ICI memo from Methven to Bland, dated Jan. 14, 1960,

concerning Glaxo-ICI license agreement ................

Exhibit 11, annexed to Bohling Afft. of J uly 7, 1970—Internal

ICI memo from Bland to ICI Legal Dept., dated Jan. 21,

1960, concerning Glaxo-ICI license agreement ............

Exhibit 3, annexed to Wallace Afft. of Oct. 31, 1968—Agree»

ment between Glaxo and ICI, dated Apr. 26, 1960 err err

Appendix C annexed to ICI Nov. 8, 1968, Memorandum of

Points and Authorities—ICI-AMHO Agreement of Sept.

TB, BOGD nec ce nsccccccccccccccceccccocccececees

Exhibit 4, annexed to Wallace Afft. of Oct. 31, 1968—ICI-

AMHO agreement of Dec. 19, 1962 .....................

Affidavit of Paul N. Kokulis, dated Nov. 45 FONG ovo ecisaanws

Exhibit A, annexed to Kokulis Aff’t. of 1968—Letter to Com-

missioner of Patents, dated Nov. 7, 1968..... ei hhe es bea e

Affidavit of Thomas Walter Meredith Bland, dated November

29, 1968, annexed as Appendix II to Reply Memorandum of

Defendant ICI in Support of Its C-oss-Motion for-Sum-

mary Judgment Against Plaintiff on’ Grqunds of Mootness

and Failure to Establish Violation of the Sherman Act, filed

December 3, 1968 .......... 000.0 cece cece ce cececccee.

Affidavit of James H. Wallace, dated Oct. 17, 1969, concerning

micronization of griseofulvin for AMHO ................

Affidavit of Robert Mazon, Vice-President of Zenith Labora-

tories, dated May 27,1970 .....................00000..,

Exhibits annexed to Mazon Afft. of May 27, 1970

Exhibit A—Letter from Davis (AMHO) to Zenith dated

Mar. 31, 1969, concerning sale of griseofulvin........

Exhibit C—Letter from Bland (ICI) to Zenith, dated

dan. 15, 1969, concerning sale of griseofulvin........

Exhibit D—Letter from Zenith to Glaxo, dated Mar. 12,

1969, concerning patent license . 22.00.00... cece ee,

Exhibit E—Letter from Martin (Glaxo) to Zenith, dated

Apr. 17, 1969, concerning patent license ............

126

162

163

» ‘ &

Affidavit of Eugene C. Dooner, Jr., President of Dooner

Laboratories, dated June 5, 1970 .................20000-

Exhibits annexed to Dooner Afft. of June 5, 1970

Exhibit 1—Letter from Dooner to Glaxo, dated June 9,

1968, concerning patent license ....................

Exhibit 2—Letter from Glaxo to Dooner, dated July 30,

1968, concerning patent license ....................

Exhibit 3—Letter from Dooner to Glaxo dated Aug. 6,

1968, concerning patent license ....................

Exhibit 4—Letter from Dooner to Glaxo, dated Sept. 6,

1968, concerning patent license ....................

Exhibit 5—Letter from Dooner to Glaxo, dated Sept. 16,

1968, concerning sale of griseofulvin ................

Exhibit 6—Letter from Dooner to Glaxo, dated Oct. 2,

1968, concerning sale of griseofulvin................

Exhibit 7—Letter from Glaxo to Dooner, dated Dec. 19,

1968, concerning sale of griseofulvin ................

Exhibit 8—Letter from Dooner to Glaxo, dated Dee. 31,

1969, concerning patent license ....................

Exhibit 9—Letter from Glaxo to Dooner, dated Feb. 13,

1969, concerning patent license ....................

Exhibit 10—Letter from Glaxo to Dooner, dated May 4,

1970, concerning sale of griseofulvin ................

Exhibit 11—Letter from Dooner to McNey (MeNeil,

J&J), dated June 27, 1968, concerning sale of griseo-

ENGL orecckb hese ciees duende escsacvndbacsuderce

Exhibit 12—Letter from MceNey (MeNeil, J&J) to Dooner,

dated July 10, 1968, concerning sale of griseofulvin. .

Exhibit 13—Letter from Dooner to Schering, dated ‘on

27, 1968, concerning sale of griseofulvin ............

Exhibit 14—Letter from Schering to Dooner, dated July

3, 1968, concerning sale of griseofulvin..............

Exhibit 15—Letter from Dooner to Johnson (AMHO),

dated June 28, 1968, concerning sale of griseofulvin. .

Exhibit 16—Letter from Johnson (AMHO) to Dooner,

dated July 19, 1968, concerning sale of griseofulvin. . .

Exhibit 17—Letter from Dooner to Johnson (AMHO),

dated Aug. 8, 1968, concerning sale of griseofulvin...

Exhibit 18—Letter from Davis (AMHO) to Dooner,

dated Sept. 4, 1968, concerning sale of griseofulvin...

Exhibit 19—Letter from ICI to Dooner, dated: Sept. 25,

1968, concerning sale of griseofulvin ...............

a ELST ITED LV PT UMP IO IT ay, a

Exhibit 20—Letter from Dooner to ICI, dated Nov. 25,

1968, concerning patent license ....................

Exhibit 21—Letter from ICI to Dooner, dated Dee. 10,

1968, concerning patent license ....................

Exhibit 22—Letter from Dooner to ICI, dated Dec. 20,

1968, concerning sale of griseofulvin ...............

Exhibit 23—Letter from ICI to Dooner, dated Jan. 15,

1969, concerning sale of griseofulvin ...............

Exhibit 24—draft license agreement ..................

Exhibit 25—Letter from Dooner to ICI, dated Jan. 23,

1969, concerning proposed agreement on griseofulvin. .

Exhibit 26—Letter from ICI to Dooner, dated Feb. 13,

1969, concerning proposed agreement on griseofulvin. .

Exhibit 27—Iletter from Dooner to ICI, dated May 4,

1970, concerning sale of griseofulvin ...............

Exhibit 28—letter from Ankerfarm to Dooner, dated

Mar. 14, 1969, concerning sale of griseofulvin........

Exhibit 29—letter from Dooner to Ankerfarm, dated

Mar. 25, 1969, concerning sale of griseofulvin ........

Exhibit 30—letter from Ankerfarm to Dooner, dated

Apr. 2, 1969, concerning sale of griseofulvin .........

Exhibit 31—letter from Nippon Kayaku to Dooner, dated

Nov. 5, 1968, concerning sale of griseofulvin.........

Exhibit 32—letter from Dooner to Nippon Kauaku, dated

Nov. 26, 1968, concerning sale of griseofulvin ........

Exhibit 33—letter from Nippon Kayaku to Dooner, dated

Dec. 12, 1968, concerning sale of griseofulvin ........

Exhibit 34—letter from Dooner to Nippon Kayaku, dated

Dee. 20, 1968, concerning sale of griseofulvin.........

Exhibit 35—letter from Nippon Kayaku to Dooner, dated

Jan. 7, 1969, concerning sale of griseofulvin .........

Exhibit 36—letter from Koyo to Dooner, dated Jan. 13,

1969, concerning sale of griseofulvin .......:.......

Exhibit 37—letter from Dooner to Nippon Kayaku, dated

Jan. 16, 1969, concerning sale of griseofulvin........

Exhibit 38—letter from Nippon Kayaku to Dooner, dated

Jan. 30, 1969, concerning sale of griseofulvin ........

Exhibit 39—letter from Dooner to Nippon Kayaku, dated

Feb. 5, 1969, concerning sale of griseofulvin ...”.....

Exhibit 40—letter from Nippon Kayaku to Dooner, dated

Feb. 21, 1969, concerning sale of griseofulvin ..:.....

Exhibit 41—letter from Dooner to Nippon Kayaku, dated

Feb. 28, 1969, concerning sale of griseofulvin ........

TIE OR. ee Ie PE LH

Exhibit 42—letter from Nippon Kayaku to Dooner, dated

Mar. 12, 1969, concerning sale of griseofulvin ........

Affidavit of Harold Snyder, President of Bioeraft Labora-

SO NE Be 10, BONO oie wis icc da ieey ences

Exhibit B annexed to Snyder Afft. of June 17, 1970—adver-

ne OE UN IN os oa ois ncc Woven as edu

Affidavit of Harold Snyder, President of Bioeraft Labora-

ras IE EG, BPO 6 dct vn vc w bu eco sc n'cles'ves cdicis

Affidavit of Charles W. Whitmore, Owen Laboratories, dated

BO Be MN a ons c PRUE vo ovbc Kio w hn cesdvinvciccar

Answer of the United States, dated Aug. 3, 1970, to Glaxo’s

interrogatory on bulk sales restrictions»..................

Exhibit A, annexed to Government Answer—letter from

Glaxo to ICI, dated June 20, 1962, concerning ICI-

Pee ne NT II oa a oo io hci cdc c cca ccs

Appendix A to Affidavit of Thomas W. N. Bland, dated Nov.

26, 1968—estimated shares of griseofulvin market, 1965-

ng Re ne aia saree penn ae ey Oe Ae eR

Appendix B to Affidavit of Thomas W. N. Bland, dated Nov.

26, 1968—estimated shares of griseofulvin market, 1967 ..

Affidavit of Jefferson B. Hill, concerning griseofulvin prices,

one BOER Te PE BOL ne peter” 0: ao

Verified Statement of Waldemar A. Hahn, dated Dee. 9, 1970,

concerning bulk sales by American Home Products Corpo-

I i a os oe os Sa ad a oo ah eos

Affidavit of Donald R. Dunner, dated Dee. 14, 1970, concern-

ing bulk sales to Robins from Sehering .................

Affidavit of Richard J. Bennett, dated Dec. 15, 1970, concern-

ee ee NO os ooh Nick sc bce keveus

Affidavit of Thomas A. Schulz, dated Dee. 15, 1970, concern-

ing AMHO subpoena return .............cccecscecvcbes

Exhibits annexed to Schulz affidavit, concerning sale of griseo-

I Ae i wie Shs oh 5k Phew he has

Exhibit 1A—letter from Ayerst (AMHO) to Lederle,

costs afi, rnemrbhagen. bomact CELT CE PET T TOE errr

Exhibit 1B—letter from Lederle to Ayerst, dated Aug.

WN i ae nae ees Kase icons ss uebdekecedn

Exhibit 1C—letter from Ayerst to Lederle, dated Sept.

MU G0 F eG 5 ba cs 0h ben KS 96a eek oe baa kak

a EF | ee eee ae ea Senn cy Si ean

Exhibit 3—internal memo of AMHO by Davis, dated

Apr. 28, 1969

Page

214

215

219

220

224

230

235

236

237

238

239

241

242

245

vii

Exhibit 4A—internal memo of Ayerst from Forbes to

Davis, dated Mar. 18, 1970 ..... Ri aes kedes eedskeus

Exhibit 4B—letter from Chromalloy to Ayerst, dated

MT sr ies oh oka vo oak Ko

Exhibit 5A—letter from Davis (Ayerst) to Cole Pharma-

sect dies mah occ, ces, HET EEO EEO eT TE

Exhibit 5B—letter from Davis (Ayerst) to Cole Pharma-

teh Noose. ba 2 Goer Ee pa tere

Exhibit 5C—letter from Cole Pharmacal to Ayerst, dated

BS Be es bi etae ate eness cu vetsions

Exhibit 6—letter from Davis (Ayerst) to Phoenix Labo-

vevetorses tse, stots sstiatie cin cg POU POF ae

Exhibit 7—letter from Silverstein ( Ayerst) ‘to Owen

Laboratories, dated Feb. 13,1969 ...................

Exhibit 8—letter from Davis (Ayerst) to West-Ward,

NS We a os oe ks kc ck...

Exhibit 9—letter from Davis (Ayerst) to Chromalloy,

UE OS is oa oc re

Exhibit 10—letter from Davis (Ayerst) to Wolins, dated

ke, EEE ODED RTO a Os ae

Exhibit 11—letter from Silverstein (Ayerst) to Zenith,

RS SO 56 lo i eo ek ok kn

Final Judgment proposed by United States ...............

Notice of motion and motion by United States for partial sum-

mary judgment against ICI on restraint on alienation issue

pursuant to rule 56(d), Fed.R.Civ.P., dated Oct. 31, 1968..

Concise statement of undisputed facts and genuine issues,

- filed under local rule 9(h), dated Oct. 30, 1968 Pk pe

Concise statement of undisputed facts and genuine issues,

filed under local rule 9(h), Oct. | i

Memorandum of United States in reply to Jan. 16, 1968,

memorandum of ICI in opposition to plaintiff’s motion to

amend, ete. (Jurisdiction issue), dated Jan. 22, 1969...:..

Plaintiff’s rule 9(h) statement of undisputed facts material

mary judgment against Glaxo (Proposed Oct. 23, 1969, by

pia, We GE PS kk oc ee

Page

250

251

252

253

254

255

256

& ealoradiy ge plaids

At hee Rls

tia

Hie va + 3 DTI ARS Fg dtd 4°

LS DREN AD ne APL BM iil 9 SILLA ais:

GEOR PACE NRE RIES ES ES EPAPER PA Fee a RR

Vili

Page

Plaintiff's Prehearing Brief Concerning Proposed Final

Judgment, dated July 7, 1970 ............. 0... cece ee eee 281

Pre-Hearing Brief of Defendant ICI Concerning Proposed

Final Judgment, dated Dee. 3, 1970 .................0.. 314

Affidavit of Thomas Meredith Bland, dated November 25, 1970

Brief of Defendant Glaxo Concerning Final Judgments Pro-

posed by the Parties, dated Dee. 3, 1970 ................ 347

Reply Rehearing Brief of United States Concerning Final

Judgment, filed Dec. 17, 1970 ....... 0... ccc cece cc eeee 357

Supplemental Memorandum of Defendant ICI on Relief, filed

BOO 28, FOTe 5 55 os Pies ba nee tecksecextk heeadeusetets 379

Affidavit of Sigmund Timberg, dated Dee. 17, 1970, referring

to annexed Exhibits 1 to 19.2.2... 0.0.0.0. ccc eee 405

Exhibits annexed to Timberg Aff’t of Dec. 17, 1970......... 414

Exhibit 2—Letter of Chromalloy American to ICI, dated

June 17, 1970, concerning sale of griseofulvin. ....... 415

Exhibit 3—Letter from ICI to Chromalloy American,

dated July 10, 1970, concerning sale of griseofulvin... 417

Exhibit 4—Letter of Ayerst Laboratories to Chromalloy

American, dated July 17, 1970, coneerning sale of

eriseofulvin ....... 2.0... cece cece cece ew cence 419

Exhibit 5—Letter from Chromalloy American to Ayerst

Laboratories, dated Aug. 18, 1970, concerning sale of

@riseofulvin 2.0... ... 0c ccc cece cece eenecs 420

Exhibit 6—Letter from Burns Pharmaceuticals, Ine. to

Ayerst, dated Sept. 8, 1970, concerning sale of griseo-

POTWU -oset kbc snus we eevee s been enaceuensosacesekia 421

Exhibit 7—Letter of Ayerst Laboratories to Burns

Pharmaceuticals, dated Sept. 24, 1970, concerning sale

of griseofulvin ...........0. 0.00. cece cece eee cece

Exhibit 8—Ayerst Laboratories telegram, dated Aug. 10,

1970, concerning shipment of griseofulvin to West-

ae |, eee

Exhibit 9—Internal memo of Ayerst Laboratories, dated

July 27, 1970, concerning sale of griseofulvin to West-

WOOD, TG x5 6 oy oe so sd 0s 45 ck nachos cues danuuss

Exhibit 10—Purchase Order for griseofulvin by West-

Ward, Inc., dated July 21, 1970, addressed to Ayerst

Laboratories. 50 imine, sil ccc cece ces

Exhibit 11—Ayerst letter, dated Oct. 28, 1970, concern-

ing sale of griseofulvin to Sandoz-Wander, Ine.......

Exhibit 12—Purchase Order for griseofulvin by Sandoz-

Wander, Ine. dated Oct. 16, 1970, addressed to Ayerst

Laboratories .......... 0. cece cece eee ceuee

Exhibit 13—Internal memo of Ayerst Laboratories, dated

Oct. 15, 1970, concerning sale of griseofulvin to Sandoz

Pharmaceuticals .........0.0 000.00 cee ceeccecceueee

Exhibit 14—Letter from the S. E. Massengill Co. to

Ayerst Laboratories, dated Dee. 4, 1970, concerning

sale of griseofulvin ...........0.0.0.0000000000005e.

Exhibit 15—Letter from Ayerst Laboratories to SEMED

Pharmaceuticals (The S. E. Massengill Co.), dated

Oct. 18, 1970, concerning sale of griseofulvin........

Exhibit 16—Letter from Ayerst Laboratories to Henry

Schein, Inc., dated October 28, 1970, concerning sale

of griseofulvin ....... 2.0.00... cece cece cece.

Exhibit 17—Letter from Henry Schein, Ine. to Ayerst

Waboratories, dated Oct. 19, 1970, concerning sale of

griseofulvin 2.2.0.2... cece ccc ee cee,

Exhibit 18—Purchase Order from Henry Schein, Ine. for

griseofulvin, dated Oct. 16, 1970, addressed to Ayerst

Laboratories 2.2.22... cece c cece eee ee.

Exhibit 19—Letter from Ayerst Laboratories to Henry

Schein, Inc., dated Sept. 3, 1970, concerning sale of

griseofulvin

cree eee eee ene res erersensesnecenscccecseeoe

ee ee

eee ewer ereeercececererececcccccccce

ere weer ececeerecerercececcecccccece

coe ee eeereereeceererceccrcesccceccce

ie ee ee ee ee ee

Excerpt from Deposition of Eric L. Nelson, taken June 24,

1968, filed Sept. 13, 1968 ........00.......000000.......

Excerpts from Deposition 6f Marlin T. Leffler, taken Oct. 19,

1968, filed Dee. 5, 1968 . 2.2...

Excerpt from Deposition of Bruce K. Ross, taken Oet. 19,

1968, filed Dee. 5, 1968

we eee C eS eee reece eaesenerecseeseore

OSS SS POP OSEPOECCe CESS ee Re eee

Be Sete tae

Page

427

428

429

430

432

433

434

435

436

437

EPS ESINR EAP E RIO le HOG

Page

Orders and Opinions

*Order of District Court (Curran, J.) denying motion to

quash service—Apr. 30, 1968 ............. 0 ee eee J.S. 20

Order of Court of Appeals, denying application for per-

mission to appeal denial of motion to quash—June 25,

BOD oc swce kik OSS b ease ca weererswnnnscunanaeses 464

*Opinion of District Court (Gasch, J.) granting partial

judgment motions, ete—June 4, 1969............. J.S.21

*Order of District Court (Sirica, J.), granting summary

judgment motion, ete.—Nov. 20, 1969 ............. J.S. 58

*Order of District Court (McGuire, J.)—Apr. 30, 1970.J.S. 60

*Memorandum Opinion of District Court (Gasch, J.),

coneerning final judgment—June 17, 1971......... J.S. 61

*Final Judgment Order (Gasch, J.)—June 17, 1971...J.8. 70

*Declaration of District Court, (Gasch, J.), concerning

final judgment—Aug. 12, 1971................... JS. 75

Order of District Court (Gasch, J.), denying plaintiff’s

motion—July 24, 1969 2.0... eee eee 464

3 Order of the Supreme Court noting probable jurisdic-

i tion, dated February 22, 1972 .................... 465

Order filed March 21, 1972, amending final judgment... 466

;

: * Orders preceded by asterisks are not reprinted in Joint Appendix. Cita-

& tions are to appendix of Jurisdictional Statement.

7 alte

POR Rec 5° RADA Rey BE ETaL MERE A ‘ < P ant ~

BE BI Pst! < % 7x : < * , ; “3

3/4/68

3/28/68

4/22/68

4/29/68

4/30/68

5/2/68

6/25/68

9/23/68

10/14/68

10/15/68

10/30/68

10/31/68

11/8/68

11/12/68

RELEVANT DOCKET ENTRIES:

Complaint filed

Motion of defendant Glaxo to quash service of

process

Oral argument before Judge Curran to quash

service

Answer by defendant ICI

Order of Judge Curran denying motion to

quash service

Answer by defendant Glaxo

Order of court of appeals denying defendant

Glaxo’s application for permission to appeal

under 28 U.S.C. 1292(b)

Government motion for leave to amend com-

plaint

Glaxo opposition to motion to amend

ICI opposition to motion to amend

ICI motion for judgment under Rule 12(c) or

56 on patent validity issue

Government cross-motion under Rule 56 for

partial summary judgment that ICT patent is

invalid

Government motion under Rule 56 for partial

summary judgment against ICI (ICI-AMHO

agreement)

Government motion for assignment of case to

single judge for all purposes

Cross-motion of defendant ICI under Rule 56

for partial summary judgment (mootness)

Opposition by defendant ICI to motion for

single judge

Opposition by defendant Glaxo to motion for

single judge

(1)

12/2/68

1/23/69

6/4/69

6/13/69

7/24/69

8/6/69

10/20/69

11/20/69

12/3/69

2/5/70

4/30/70

Order of Judge Curran denying motion for

single judge

Oral argument before Judge Gasch on (i) sum-

mary judgment motion on restraint on aliena-

tion, (ii) cross-motion of ICI for summary

judgment on same issue that complaint should

be dismissed; (iii) ICI’s motion to dismiss or

for summary judgment on patent validity; and

(iv) motion by United States to amend the

complaint

Order of Judge Gasch on motions for sum-

mary judgment

Government motion under Rule 56 for partial

summary judgment against Glaxo

Order denying government cross-motion for

partial summary judgment that ICI patent is

invalid

Opposition by Defendant Glaxo to motion for

partial summary judgment and motion by de-

fendant Glaxo to quash service of process

Oral argument before Judge Sirica on motion

by United States for partial summary judg-

ment -

Order of Judge Sirica granting motion for

partial summary judgment and deny motion

to.quash service

Government motion under Rule 56 for partial

summary judgment against defendants

Opposition of defendant ICI to motion for

partial summary judgment

Opposition of defendant Glaxo to motion for

partial summary judgment

Oral argument before Judge McGuire on mo-

tion by United States for summary judgment

against ICI on restraint against alienation

issue

Order of Judge McGuire granting motion for

partial summary judgment

5/20/70

12/17/70

6/17/71

6/28/71

8/12/71

8/16/71

9/20/71

3/21/72

. yom ns

LNT OTR RE RD PEER? RY TEER OGY TPA ete INE 2 SR EE,

Government motion for entry of final judgment

Oral argument before Judge Gasch on motion

for final judgment

Final judgment entered by Judge Gasch

‘Motion by defendants to clarify judgment

Declaration by court as to judgment

Government notice of appeal

Order datéd March 9, 1972, amending final

judgment.

Unitrep States District Court

FOR THE District or CoLUMBIA

Unrrep States or AMERICA,

Department of Justice

Washington, D. C. 20530 :

PLAINTIFF,

Civil No. 558-68

cose ag mee + Filed : March 4,

ges s 1968

6-12 Clarges Street

London, W.1., England

ImMpertat Cuemicau Inpustries Limirep

Imperial Chemical House

Millbank, London, S.W.1, England

DEFENDANTS.

COMPLAINT FOR DECLARATORY AND

INJUNCTIVE RELIEF

The United States of America, plaintiff, brings this civil

action against the defendants, pursuant to Section 4 of the

Sherman Act (15 U.S.C. § 4), to restrain them from viola-

tion of Section 1 of the Sherman Act (15 U.S.C. §1); and

it alleges:

TI. THe Derenpants

1. The defendant Glaxo Group Limited (hereafter re-

ferred to as ‘‘Glaxo’’) is a corporation organized and exist-

ing under the laws of Great Britain, with its principal place

of business at Clarges House, 6-12 Clarges Street, London,

W.1., England. Glaxo had net sales of approximately $175

million in 1966, and total assets of approximately $180 mil-

lion, as of June 30, 1966. Prior to December 1961, Glaxo

was incorporated under the name ‘‘Glaxo Laboratories

Limited.’’

2. Glaxo is the owner of the following United States

patents (hereafter referred to as ‘‘the Glaxo patents’’):

No. 2,843,527 (‘‘Production of griseofulvin in low nitrogen

level medium,”’ issued July 15, 1958) ; No. 2,938,835 (‘‘Pro-

BREED PR EERE EID LID IE CLL LD LN LENE A IDEDE Ig SDL I SO BEE LEED weir ten ar) ae ae OND

ae mn of mutants of the genus Penicillum,’’ issued May

960); No. 2,986,496 (‘‘Production of antibiotics and

sapere products, ”? issued May 30, 1961); and

No. 3,008,876 (‘‘Compositions containing griseofulvin, ae

sued November 14, 1961).

3. The defendant Imperial Chemical Industries Limited

is a corporation organized and existing under the laws of

Great Britain, with its principal place of business at Im-

perial Chemical House, Millbank, London, S.W.1, England.

Imperial had a net income of approximately $140 million in

1965 and total assets of erprommately $4.2 billion, as of

December 31, 1966.

4. Imperial is the owner of United Alates Patent No.

2,900,304 (‘‘Griseofulvin uses and compositions,’’ issued

August 18, 1959) (hereafter referred to as ‘‘the Imperial

patent’’).

II. Jurisp1cT1Ion aNp VENUE

5. Glaxo and Imperial do not reside in the United States.

Neither defendant has designated in the United States

Patent Office any person on whom may be served process or

notice of proceedings affecting the Glaxo or Imperial pat-

ents or rights thereunder. This is a proceeding affecting

such patents and rights thereunder.

6. Pursuant to 35 U.S.C. 4 293 the United States District

Court for the District of Columbia has jurisdiction to take

any action respecting such patents and rights thereunder,

in the same manner as if Glaxo and Imperial were person-

ally within the jurisdiction of such court.

Ill. Tue Licensees

7. Johnson & Johnson, Inc. (hereafter referred to as

‘‘Johnson’’) is a corporation organized and existing under

the laws of New Jersey, with its principal place of business

at 501 George Street, New Brunswick, New Jersey 08903.

In 1966 Johnson had net sales of approximately $500 mil-

lion and total assets of approximately $325 million, as of

December 31, 1966.

8. Schering Corporation (hereafter referred to as

‘“‘Schering’’) is a corporation organized and existing under

the laws of New Jersey, with its principal place of business

at 60 Orange Street, Bloomfield, New Jersey. In 1966

ELEN SERS NI IIE EIRP TTC SRE RO AT

Schering had net sales of approximately $130 million and

total assets of approximately $125 million, as of December

31, 1966.

9. American Home Products Corporation (hereafter re-

ferred to as ‘‘American’’) is,a corporation organized and

existing under the laws of the State of Delaware, with its

principal place of business at 685 Third Avenue, New York,

New York 10017. In 1966 American had net sales of ap-

proximately $900 million and total assets of approximately

$560 million, as of December 31, 1966. American owns and

controls Ayerst Laboratories, Inc. (hereafter referred to

as ‘‘Ayerst’’), a corporation organized and existing under

the laws of the State of New York.

10. Johnson, Schering, and American (referred to here-

after at times as ‘‘the licensees’’), are licensed by the de-

fendants under the Glaxo and Imperial patents, and are the

only such licensees.

IV. Derinitions

11. As used in this complaint :

(a) ‘‘Griseofulvin’’ is the generic name for, and means,

the antibiotic compound with the formula 7-chloro-2’,4,6-

trimethoxy-6’-methylspiro [benezofuran-2 (3-H), 1’-[2]-

cyclohexane]-3, 4’-dione (empirical formula, C1; Hi: Cl Os) ;

(b) ‘‘Dosage form’’ means capsules, tablets, and other

forms of packaging pharmaceutical products for adminis-

tration to or use by the ultimate consumer;

tical products are manufactured prior to their being pack-

aged into dosage form.

V. Nature or TrapE AND CoMMERCE ©

12. Griseofulvin is an antibiotic, antifungal agent ad-

ministered orally to humans and animals for treatment of

external fungus infections such as tinea corporis, tinea

cruris, tinea capitis, tinea barbae, tinea urguium and tinea

pedis. Griseofulvin is the only effective drug for combating

certain fungus infections.

13. Each of the licensees buys griseofulvin in bulk form

from one of the defendants (Johnson and Schering from

Glaxo, and American from Imperial), which exports it to

such licensee, from Great Britain to the United States.

Each licensee mixes such bulk-form griseofulvin with inert

ingredients, packages or formulates such mixture into

tablets or capsule form, and then sells such griseofulvin, in

dosage form only, to purchasers located across state lines

from the point at which such packaging or formulation takes

place.

14. In 1966 Johnson’s sales of such dosage-form griseo-

fulvin products, as tablets sold under the trade names

“Grifulvin’’ and ‘‘Grifulvin V,’’ amounted to approxi-

mately $1.6 million.

15. In 1966 Schering’s sales of such dosage-form griseo-

fulvin products, as tablets sold under the trade names

‘“‘Fulvicin’? and ‘‘Fulvicin-U/F,’’ amounted to approxi-

mately $3.7 million.

16. In 1966 American’s sales of such dosage-form griseo-

fulvin products, as tablets or capsules sold under the trade

names ‘‘Grisactin’’ and ‘‘Grysio’’ and under the generic

name ‘‘griseofulvin,’? amounted to approximately $1.4

million.

VI. Tue Patents

17. The product griseofulvin has long been known, and

used in the treatment of fungus diseases of plants. The

Glaxo and Imperial patents do not claim or purport to

claim the product griseofulvin, as such.

18. The Glaxo patents claim methods relating to the

manufacture of griseofulvin and certain agricultural-use

compositions thereof. The licensees do not practice the

Glaxo patents.

19. The Imperial patent claims the method of curing ex-

ternal fungus infections in human beings by internally

administering to them ‘‘an effective umount’’ of griseo-

fulvin. The Imperial patent does not teach or disclose, how-

ever, what amount constitutes ‘‘an effective amount’’ of

griseofulvin for effectuating such cures. In such respect

the Imperial patent, contrary to the requirements of 35

U.S.C. § 112, fails to disclose to the public the manner to

practice the method in return for which the statutory

monopoly was granted; and such method claims are.

invalid.

20. The Imperial patent claims griseofulvin in tablet

form and in certain other dosage forms for oral use. In

such respect the Imperial patent, contrary to the require-_

ments of 35 U.S.C. $4 100 and 101, purports to monopolize

the old product griseofulvin in the obvious and conven-

tional forms in which it can be taken orally. Such a new

use of an old product, however, may be protected under the

patent statute only by'a method claim; and such product

claims in the Imperial patent are invalid.

VII. Viotations Cuarcep

._ 21. Beginning at least as early as 1959, and continuing

thereafter up to the date of filing of this complaint, the

defendants have combined with one another to pool the

Glaxo and Imperial patents and to license them in a manner

which unreasonably restrains the aforesaid trade and com-

merce in griseofulvin, in violation of Section 1 of the Sher-

man Act.

22. Pursuant to such combination, the defendants have

entered into and maintained contracts in unreasonable re-

straint of trade, in the form of licenses, under the Glaxo

and Imperial patents, which, as more fully described be-

low, expressly prohibit the licensees from selling unpat-

ented, bulk-form griseofulvin. Unless enjoined by this court

the defendants will continue such restraints in effect.

23. On April 1, 1959, Glaxo entered into substantially

identical license agreements with Johnson and with Scher-

ing, under the Glaxo and Imperial patents. Each agreement

grants a license to make, use, and sell griseofulvin. Each

agreement expressly provides that the licensee undertakes

not to sell griseofulvin in bulk form ‘‘to any independent

third party without Glaxo’s express consent in writing.’’

24. On December 19, 1962, Imperial entered into an agree-

ment with American, under which Imperial agreed to sell

griseofulvin in bulk form to American, and American

agreed to resell such griseofulvin only in dosage form.

Imperial further granted a license to American under the

Glaxo and Imperial patents to effectuate the foregoing

arrangement. American expressly agreed not to recall such

griseofulvin in bulk form without first securing the consent

of Imperial.

25. Pursuant to such agreements, the defendants sell

griseofulvin in bulk form to the licensees and the licensees

sell griseofulvin only in dosage form to purchasers thereof.

VIII. Errects

26. The effect of the aforesaid contracts has been and is:

(a) to prevent competition between the defendants and

the licensees in the sale of griseofulvin in bulk form;

; (b) to prevent competition among the licensees in the

sale of griseofulvin in bulk form;

from others resulting from the sale of bulk-form griseo-

fulvin by licensees to such others;

(d) to control and restrain the licensees in respect to the

manner in which, and the persons through whom, they

market griseofulvin ;

(e) to prevent access by third persons to sources of

griseofulvin in bulk form;

(f) to prevent third persons from packaging bulk-form

griseofulvin into dosage form and selling it for use by con-

sumers ;

(g) to place restrictions on, or to subject to conditions,

the resale of griseofulvin which the licensees purchase from

defendants ;

(h) to deprive the public, and in particular consumers of

drugs, of the benefits of free and open competition in

griseofulvin.

Request For RELIEF

Wuererore, plaintiff requests that the court adjudge:

(1) That the provisions in the licenses from Glaxo to

Johnson and Schering, and from Imperial to American,

which restrict such licensees from selling griseofulvin in

bulk form, are in unreasonable restraint of trade, in viola-

tion of Section 1 of the Sherman Act.

(2) That each defendant be permanently enjoined

against entering into or maintaining any agreement or un-

derstanding with any other persons, in any way limiting the

sale of griseofulvin in the United States in bulk form.

(3) That the Imperial patent be declared invalid, or al-

' ternatively, that Imperial be ordered to dedicate and dis-

claim the remaining term of such patent; and that the

defendants be ordered not to enforce such patent against

any person in any way.

(4) That the defendants be ordered to grant licenses

on reasonable terms, and at reasonable, non-discriminatory

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royalty rates, to all applicants therefor, on all other United

States patents they now own or control, which relate to the

manufacture, use, or sale of griseofulvin.

(5) That the plaintiff have such other and further relief

as the nature of the case may require and the Court may

deem just and proper.

(6) That the plaintiff recover the costs of this suit.

Ramsey Cuark

Attorney General

Donatp F., Turner

Assistant Attorney General

Bappia J. Rasuiw

Rosert B. HumMeE

LioneL KesTensaum,

Attorneys, Department of Justice

Davi G. Bress

United States Attorney

Ricuarp H. Srern

James H. Watwace

Attorneys, Department of Justice

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ANSWER BY IMPERIAL CHEMICAL INDUSTRIES

[Filed Apr. 29, 1968]

[Caption Omitted]

Defendant, Imperial Chemical Industries Limited (re-

ferred to hereinafter as ‘‘Imperial’’), answers the com-

plaint as follows:

Fist DErensE

1. Imperial is without knowledge or information sufficient

to form a belief as to the truth of the allegations of para-

graph 1 of the complaint.

2. Imperial admits the allegations of paragraph 2 of

the complaint, but avers further that Glaxo is the owner of

other United States patents relating to griseofulvin and its

production under which Imperial is licensed with rights to

sub-license.

3. Imperial admits the allegations of the first sentence

of paragraph 3 of the complaint. Imperial denies the alle-

gations of the second sentence of the paragraph and avers

that Imperial had a net income of approximately $165

million in 1965 and total assets of approximately $2.3

billion, as of December 31, 1966.

4. Imperial admits the allegations of paragraph 4 of the

complaint.

5. Imperial admits the allegations of the first two sen-

tences of paragraph 5 of this complaint insofar as they

relate to Imperial, but is without knowledge or information

sufficient to form a belief with respect to the truth of those

allegations as they relate to Glaxo. With respect to the

second sentence ,of paragraph 5, Imperial admits that

plaintiff alleges that this is a proceeding affecting such

patents and rights thereunder, but avers that this proceed-

ing is not properly brought under 35 U.S.C. Sec. 293 or

under any patent or other federal statute.

6. Imperial denies paragraph 6 of the complaint, and

refers the Court to the opening sentence of the com-

plaint, which describes this action as one brought pursuant

to Section 4 of the Sherman Act (15 U.S.C. Sec. 4) to

restrain violations of Section 1 of the Sherman Act (15

U.S.C. See. 1).

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PRE ANE Cs SNS . fe GS OP

7. Imperial is without knowledge or sufficient information

to form a belief as to the truth of the allegations ‘of para-

graph 7 of the complaint.

8. Imperial is without knowledge or information sufficient

to form a belief as to the truth of the allegations of

paragraph 8 of the complaint.

9. Imperial is without knowledge or information sufficient

to form a belief as to the truth of the allegations of para-

graph 9 of the complaint.

10. Imperial denies the allegations of paragraph 10 of

the complaint, and avers that Johnson and Schering are

licensed on a non-exclusive basis by defendant Glaxo under

the Glaxo patents and sub-licensed on a non-exclusive basis

by defendant Glaxo under the Imperial patent, that Amer.

ican is licensed on a non-exclusive basis by Imperial under

the Imperial patent and sub-licensed on a non-exclusive

basis by Imperial under the Glaxo patents. Imperial

further avers that no other person has requested a license

or sub-license from it under the Glaxo and Imperial patents,

11. With respect to paragraph 11 of the complaint:

(a) Imperial denies the allegations of paragraph 11(a)

of the complaint, and alleges that the correct formula for

“‘griseofulvin’”? is 7-chloro-2’, 4, 6-trimethoxy-6’-methylspiro

[benzofuran-2(3-H : 1’-[2]-cyelehexene]-3, 4’-dione (em-

Pirical formula, 0,;H,;Cl Os).

(b) Imperial admits that paragraph 11(b) of the com-

plaint defines the term “dosage form”’ in the manner set

forth therein, but avers that, as hereinafter used in this

answer, ‘‘dosage form’’ means capsules, tablets and other

pharmaceutical products in form suitable for direct internal

administration to or use by the patient. .

plaint defines the term “bulk form’? in the matter set forth

therein, but avers that, as hereinafter used in this answer,

*‘bulk form’’ means the form, of requisite pharmaceutical

purity and quality, in which pharmaceutical] compounds are

available prior to being processed into dosage form.

12. Imperial admits the allegations of the first sentence

of paragraph 12 of the complaint, and admits, to the extent

it understands, the allegation of the second sentence of the

paragraph.

13. Imperial is without knowledge or information

sufficient to form a belief as to the truth of the allegations

of paragraph 13 of the complaint insofar as such allegations

relate to Johnson, Schering and Glaxo, but admits these

allegations insofar as they relate to Imperial and, on in-

formation and belief, as to American, and further avers as

to American, on information and belief, that American

also engages in processing operations such as the fine grind-

ing of griseofulvin.

14. Imperial is without knowledge or information suffi-

cient to form a belief as to the truth of the allegations of

paragraph 14 of the complaint.

15. Imperial is without knowledge or information suff-

cient to form a belief as to the truth of the allegations of

paragraph 15 of the complaint.

16: Imperial is without knowledge or information suff-

cient to form a belief as to the truth of the allegations of

paragraph 16 of the complaint.

17. Imperial denies the allegations of the first sentence

of paragraph 17 of the complaint. With respect to the

allegation of the second sentence of paragraph 17 of the

complaint, Imperial points out that the complaint does not

define ‘‘the product griseofulvin as such’’ and that it is

therefore not able to answer said allegation, but refers

to the claims of patents held by Glaxo and Imperial.

18. With respect to the first sentence of paragraph 18,

Imperial alleges that the Glaxo patents speak for them-

selves and refers the Court to the claims thereof. With

respect to the second sentence of said paragraph, Imperial

is without knowledge or sufficient information to form a

belief concerning Schering and Johnson; admits, on know]l-

edge and belief, that American does not practice the Glaxo

patents mentioned in the complaint; but avers, on infor-

mation and belief, that the licensees practice at least one

Glaxo patent containing product claims on griseofulvin in

bulk and dosage forms.

19. With respect to the first sentence of paragraph 19,

Imperial alleges that the Imperial patent speaks for itself

and refers the Court to the claims thereof. Imperial denies

the other allegations of said paragraph, and further alleges

that the plaintiff cannot properly challenge the validity of

the Imperial patent in this proceeding.

20. With respect to the first sentence of paragraph 20 of

the complaint, Imperial alleges that the Imperial patent

speaks for itself and refers the Court to the claims thereof.

__—a RLS POA A eat Pee RE eae ae:

Imperial denies the other allegations of said paragraph, and

further alleges that the plaintiff cannot properly challenge

the validity of the Imperial patent in this proceeding.

21. Imperial denies the allegations of paragraph 21 of

the complaint, and avers that Glaxo and Imperial held

blocking patents on griseofulvin and that the arrangements

between Glaxo and Imperial were necessary to make griseo-

fulvin available to the public.

22. Imperial denies the allegations of paragraph 22 of

the complaint.

23. Imperial, on information and belief, admits the alle-

gations of the first two sentences of paragraph 23 of the

complaint. Imperial is without knowledge or information

sufficient to form a belief as to the allegation of the third

sentence of said paragraph.

24. Imperial denies the allegations of paragraph 24 of

the complaint, and avers that, by an agreement dated

December 19, 1962, Imperial agreed to sell griseofulvin in

bulk form to American, and American agreed to resell gris-

eofulvin in dosage form. Further relevant allegations con-

cerning said agreement,of December 19, 1962, as amended,

appear in paragraphs 28 to 33, inclusive, and paragraph 35

of the answer herein. Imperial further avers that it has

granted to American a non-exclusive license under the Im-

perial patent and non-exclusive sub-licenses under the Glaxo

patents.

25. Imperial denies the allegations of paragraph 25 of

the complaint.

26. Imperial denies the allegations of paragraph 26 of

the complaint.

Seconp DEFENSE

27. The complaint fails to state a claim against Imperial

upon which relief can be granted.

Tuirp DEFENSE

28. On December 19, 1962, Imperial entered into the

agreement with American referred to in paragraph 24 of the

answer (hereinafter referred to as the ‘American Distribu-

torship Agreement’’), under which Imperial agreed to sell

griseofulvin in bulk form to American and American agreed

to resell griseofulvin in dosage form.

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29. Paragraph 1 of the American Distributorship Agree-

ment Provides, in relevant part, that American ‘‘will place

firm orders with us [Imperial] from time to time for

griseofulvin in bulk containers and we [Imperial] shall

execute such orders to the best of our ability, subject to our

not being prevented for any reason of force majeure, and

having regard to your commitments in the United States,

to the quantities available from time to time, the require-

ments of other customers and the productive capacity of our

plant.’’

30. Paragraph 7 of the American Distributorship Agree-

ment provides that American ‘‘will not, without first ob-

taining our [Imperial’s] consent, resell or re-deliver in

bulk supplies of griseofulvin.”’

31. To the best of Imperial’s information and belief,

American does not engage in the business of reselling

pharmacutical products in bulk, but sells pharmaceutical

products only in dosage form.

32. Several months prior to the filing of the complaint

herein, paragraph 7 of the American Distributorship Agree-

ment, which required American to obtain Imperial’s con-

sent before selling griseofulvin in bulk, was cancelled by Im-

perial and American.

33. Contrary to the allegations of paragraphs 21 and 22

of the complaint, the license granted by Imperial to Amer-

ican does not unreasonably restrain the trade and com-

merce in griseofulvin in violation of Section 1 of the

Sherman Act, and in fact in no wise restricts such trade

and commerce. ;

34. By virtue of the facts alleged in paragraph 28 to 33

of this answer, inclusive, this case is moot and plaintiff

is not entitled to an adjudication of the matters charged

in the complaint or to any relief against Imperial.

FourtH DEFENSE

35. Imperial re-alleges, as part of its fourth defense, the

allegations of paragraphs 28 to 34 of this answer, inclusive.

In the light of said allegations, the complaint fails to state

a claim against Imperial upon which relief can be granted.

Wuenerore, defendant Imperial requests that the Court

deny the relief requested by plaintiff and award judgment in

favor of the defendants herein.

Sicmunp Tm™serc

Attorney for defendant

Imperial Chemical Industries

Limited

Of Counsel:

C. Wiiuarp Hayes

Joun W. Matiry

Paut N. Koxuuis

Lawrence A. Hymo

of Cushman, Darby and Cushman

Aprit 29, 1968

ANSWER OF DEFENDANT GLAXO GROUP

LIMITED [Filed May 2, 1968]

[Caption Omitted]

GLAXO GROUP LIMITED answers the complaint

herein as follows:

First DEFENSE

1. In answer to the allegations of Paragraph 1 of the

complaint this defendant denies that it is a corporation

organized and existing under the laws of Great Britain

and states that it is a corporation organized and existing

under the laws of England, denies that it had total assets

of approximately $180,000,000 as of June 30, 1966, and

states that the total capital employed in its business at

that time was approximately $135,000,000, and denies that

prior to December 1961 it was incorporated under the name

‘‘Glaxo Laboratories Limited’’ and states that prior to

January 1, 1962, it was incorporated under that name. This

defendant admits the remaining allegations of Paragraph 1.

2. This defendant admits the allegations of Paragraph 2

of the complaint.

3. This defendant denies that it has any knowledge or

information sufficient to form a belief as to the truth of the

allegations of Paragraph 3 of the complaint, except that

it admits that Imperial has a place of business at Imperial

Chemical House, Millbank, London, S.W. 1, England.

4. This defendant admits on information and belief the

allegations of Paragraph 4 of the complaint.

5. In answer to the allegations of Paragraph 5, this

defendant admits that it does not reside in the United

States and that it has not designated in the United States

Patent Office any person on whom may be served process or

notice of proceedings; denies that it has knowledge or

information sufficient to form a belief as to the truth of

the allegation that Imperial does not reside in the United

States and has not designated in the United States Patent

Office any person on whom may be served process or notice

of proceedings ; and denies each and every other allegation

of Paragraph 5.

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———n anedtea®

6. This defendant denies the allegations of Paragraph 6.

7. This defendant denies that it has any knowledge or

information sufficient to form a belief as to the truth of the

allegations of Paragraph 7 of the complaint, except that it

admits that Johnson has a place of business at 501 George

Street, New Brunswick, New Jersey.

8. This defendant denies that it has any knowledge or

information sufficient to form a belief as to the truth of the

allegations of Paragraph 8 of the complaint, except that

it admits that Schering has a place of business at 60

Orange Street, Bloomfield, New Jersey.

9. This defendant denies that it has any knowledge or

information sufficient to form a belief as to the truth of

the allegations of Paragraph 9 of the complaint.

10. This defendant denies the allegations of Paragraph

10 of the complaint, and by way of further answer states

that Johnson and Schering have been granted licenses

under the Glaxo patents and sublicenses under the Imperial

patent by defendant Glaxo and on information and belief

that American has been granted a license under the Im-

perial patent and a sublicense under the Glaxo patents by

defendant Imperial.

11. This defendant admits that the plaintiff in the com-

plaint has given to the terms ‘‘griseofulvin”’, ‘*dosage

form”’ and ‘‘bulk form’? the meanings stated in Paragraph

11 of the complaint but denies that the definition of “ griseo-

fulvin’’ is complete or accurate or that the definition of

‘‘bulk form”? is the correct definition of that term as used

in the pharmaceutical industry, and states that as used

in that industry ‘‘bulk form’’ means a substance having the

requisite qualities and properties for formulation into

dosage form.

12. This defendant admits the allegations of Paragraph

12 of the complaint.

13. This defendant denies that it has any knowledge or

information sufficient to form a belief as to the truth of the

allegations of Paragraph 13 of the complaint, except that

it admits that Johnson and Schering buy griseofulvin in

bulk form from Glaxo which exports it to Johnson and

Schering from Great Britain and that Johnson and Schering

each processes and packages or formulates griseofulvin into

tablet or capsule form and then sells the tablets or capsules.

14. This defendant denies that it has any knowledge or

information sufficient to form a belief as to the truth of the

allegations of Paragraph 14 of the complaint.

15. This defendant denies that it has any knowledge or

information sufficient to form a belief as to the truth of the

allegations of Paragraph 15 of the complaint.

16. This defendant denies that it has any knowledge or

information sufficient to form a belief as to the truth of the

allegations of Paragraph 16 of the complaint.

17. This defendant admits that griseofulvin in its broad-

est and most generic sense has long been known and that the

Glaxo and Imperial patents do not claim or purport to claim

griseofulvin in its broadest and most generic sense, but

denies each and every other allegation of Paragraph 17

of the complaint.

18. In answer to the allegations of the first sentence of

Paragraph 18 of the complaint, this defendant states that

the description of the Glaxo patents is generally accurate

but that the Glaxo patents speak for themselves. This

defendant admits the remaining allegations of Paragraph

18.

19. In answer to the allegations of the first sentence of

Paragraph 19 of the complaint, this defendant states that

the description of the Imperial patent is generally accurate

but that the Imperial patent speaks for itself. This defend-

ant denies each and every other allegation of Paragraph 19.

20. In answer to the allegations of the first sentence of

Paragraph 20 of the complaint, this defendant states that

the description of the Imperial patent is generally accurate

but that the Imperial patent speaks for itself. This defend-

ant denies each and every other allegation of Paragraph 20.

21. This defendant denies the allegations of Paragraph

21 of the complaint.

22. This defendant denies the allegations of Paragraph

22 of the complaint.

23. This defendant admits the allegations of Paragraph

23 of the complaint except that it denies that the agree-

ments referred to in the paragraph now contain any

restriction on the right of the licensees to sell griseofulvin

in bulk form.

24. This defendant denies that it has any knowledge or

information sufficient to form a belief as to the truth of the

allegations of Paragraph 24 of the complaint.

25. This defendant denies that it has any knowledge or

a |

information sufficient to form a belief as to the truth of the

allegations of Paragraph 25 of the complaint.

26. This defendant denies the allegations of Paragraph

26 of the complaint.

Seconp DEFENSE

This Court lacks jurisdiction over the person of this

defendant for the reason that the method utilized by plaintiff

to seek to serve this defendant with process was insufficient

and ineffective to subject this defendant to this Court’s

jurisdiction.

Wuererorg, this defendant demands that the complaint

against it be dismissed.

Hvucu B. Cox

Henry P. SarLer

Paut F. McArpie

Attorneys for Defendant

Glaxo Group Limited

eee Se ee ee

Se re ee

RAS Fn UEC

comahaminaaaniel

Se Riess

Unitep States Districr Court

FOR THE District or CoLUMBIA

Usirep States or AMERICA,

PLAINTIFF,

Vv.

Giaxo Group LimiTep,

IMPERIAL CHEMICAL INDUSTRIES

LIMITED,

Jounson & JoxuNson, INc.,

ScHERING CoRPorRaTION,

DEFENDANTS.

» Civil No. 558-68

AMENDED COMPLAINT FOR DECLARATORY AND

INJUNCTIVE RELIEF [Motion for leave to file denied

by order dated June 4, 1969, 302 F. Supp., 15-16]

The United States of America, plaintiff, brings this civil

action against the defendants, pursuant to Section 4 of the

Sherman Act (15 U.S.C. § 4), to restrain them from vio-

lation of Section 1 of the Sherman Act (15 U.S.C. 41);

and it alleges:

I. Tue Patentert DeFrenDANTS

1. The defendant Glaxo Group Limited (hereafter re-

ferred to as ‘‘Glaxo’’) is a corporation organized and

existing under the laws of Great Britain, with its principal

place of business at Clarges House, 6-12 Clarges Street,

London, W.1., England. Glaxo had net sales of approxi-

mately $175 million in 1966, and total assets of approxi-

mately $180 million, as of June 30, 1966. Prior to Decem-

ber 1961, Glaxo was incorporated under the name ‘‘Glaxo

Laboratories Limited.’’

2. Glaxo is the owner of the following United States

patents (hereafter referred to as ‘‘the Glaxo patents’’) :

No. 2,843,527 (‘‘Production of griseofulvin in low nitrogen

level medium,’’ issued July 15, 1958) ; No. 2,938,835 (‘‘Pro-

duction of mutants of the genus Penicillum,”’ issued May

31, 1960); No. 2,986,496 (‘‘Production of antibiotics and

antibiotic-containing products,’’? issued May 30, 1961);

No. 3,008,876 (‘‘Compositions containing griseofulvin,”’

issued November 14, 1961); and No. 3,330,727 (‘‘Griseo-

fulvin with high specific surface area,’’ issued July 11,

1967). |

3. The defendant Imperial Chemical Industries Limited

is a corporation organized and existing under the laws of

Great Britain, with its principal place of business at

Imperial Chemical House, Millbank, London, 8.W.1, Eng.

land. Imperial had a net income of approximately $140

million in 1965 and total assets of approximately $4.2

billion, as of December 31, 1966.

4. Imperial is the owner of United States Patent No.

2,900,304 (‘‘Griseofulvin uses and compositions,’’ issued

August 18, 1959) (hereafter referred to as ‘‘the Imperial

patent’’).

II. Jurispicrion anp Venve

5. Glaxo and Imperial do not reside in the United States,

Neither defendant has designated in the United States

Patent Office any person on whom may be served process

or notice of proceedings affecting the Glaxo or Imperial

patents or rights thereunder. This is a proceeding affect-

ing such patents and rights thereunder.

6. Pursuant to 35 U.S.C. § 293 the United States Dis-

trict Court for the District of Columbia has jurisdiction

to take any action respecting such patents and rights

thereunder, in the same manner as if Glaxo and Imperial

were personally within the jurisdiction of such court.

III. Tue Licensges anp Licensez DEFENDANTS

7. The defendant Johnson & Johnson, Inc. (hereafter re-

ferred to as ‘‘Johnson’’) is a corporation organized and _

existing under the laws of New Jersey, with its principal

place of business at 501 George Street, New Brunswick,

New Jersey 08903. In 1966 Johnson had net sales of

approximately $500 million and total assets of approxi- —

mately $325 million, as of December 31, 1966.

8. The defendant Schering Corporation (hereafter re-

ferred to as ‘‘Schering’’) is a corporation organized and

existing under the laws of New Jersey, with its principal

place of business at 60 Orange Street, Bloomfield, New

Jersey. In 1966 Schering had net sales of approximately

$130 million and total asscts of approximately $125 million,

as of December 31, 1966.

_ 9. American Home Products Corporation (hereafter re-

ferred to as ‘‘American’’), not named a defendant herein,

is a corporation organized and existing under the laws of

the State of Delaware, with its principal. place of business

at 685 Third Avenue, New York, New York 10017. In 1966

American had net sales of approximately $900 million and

total assets of approximately $560 million, as of December

31, 1966. American owns and controls Ayerst Laboratories,

Inc. (hereafter referred to as ‘‘Ayerst’’), a corporation

organized and existing under the laws of the State of New

York.

10. Johnson, Schering, and American (referred to here-

after at times as ‘‘the licensees’’), are licensed. by the

patentee defendants under the Glaxo and Imperial patents,

and are the only such licensees.

IV. Derrnirions

11. As used in this complaint :

(a) ‘‘Griseofulvin’’ is the generic name for, and means,

the antibiotic compound with the formula 7- chloro- 2',4,6-

trimethoxy-6’-methylspiro [benzofuron-2 (3-H), 1'-[2]-

cyclohexene ]-3, 4’-dione (empirical formula, Ci; Hi Cl Oz) ;

(b) ‘‘Dosage form’’ means capsules, tablets, and other

forms of packaging pharmaceutical products for admin-

istration to or use by the ultimate consumer;

ceutical products are manufactured prior to their being

-packaged into dosage form.

V. Nature or TraveE anp CoMMERCE

12. Griseofulvin is an antibiotic, antifungal agent admin-

istered orally to humans and animals for treatment of

external fungus infections such as tinea corporis, tinea

cruris, tinea capitis, tinea barbae, tinea urguium and tinea

pedis. Griseofulvin is the only effective drug for combating

certain fungus infections.

13. Each of the licensees buys griseofulvin in bulk form

from one of the patentee defendants (Johnson and Schering

from Glaxo, and American from Imperial), which exports

it to such licensee, from Great Britain to the United States.

Each licensee mixes such bulk-form griseofulvin with inert

ingredients, packages or formulates such mixture into

tablet or capsule form, and then sells such griseofulvin, in

dosage form only, to purchasers located across state lines

from the point at which such packaging or formulation

takes place.

14, In 1966 Johnson’s sales of such dosage-form griseo-

fulvin products, as tablets sold under the trade names

“Grifulvin”’ and ‘‘Grifulvin V,’’ amounted to approxi-

mately $1.6 million.

15. In 1966 Schering’s sales of such dosage-form griseo-

fulvin products, as tablets sold under the trade names

“‘Fulvicin’’ and ‘‘Fulvicin-U/F,’’ amounted to approxi-

mately $3.7 million.

16. In 1966 American’s sales of such dosage-form griseo-

fulvin products, as tablets or capsules sold under the trade

names ‘‘Grisactin’’ and ‘‘Grysio’’ and under the generic

name ‘‘griseofulvin,’’ amounted to approximately $1.4

million.

VI. Tre Partenrs

17. The product griseofulvin has long been known, and

used in the treatment of fungus diseases of plants. The

Glaxo and Imperial patents do not claim or purport to

claim the product griseofulvin, as such.

18. The Imperial patent claims the method of curing

external fungus infections in human beings by. internally

administering to them ‘‘an effec mount’’ of griseo-

fulvin. The Imperial patent does not teach or disclose,

however, what amount constitutes ‘‘an effective amount’”’

of griseofulvin for effectuating such cures. In such respect

~ the Imperial patent, contrary to the requirements of 35

U.S.C. § 112, fails to disclose to the public the manner to

practice the method in return for which the statutory

monopoly was granted; and such method claims are invalid.

19. The Imperial patent claims griseofulvin in tablet form

and in certain other dosage forms for oral use. In such

respect the Imperial patent, contrary to the requirements of

35 U.S.C. §§ 100 and 101, purports to monopolize the old

product griseofulvin in the obvious and conventional forms

in which it can be taken orally, Such a new use of an old

product, however, may be protected under the patent

statute only by a method claim; and such product claims in

the Imperial patent are invalid.

20. Glaxo patent No, 3,330,727 claims griseofulvin in the

OR SLIT MONE TIN

form of particles ‘‘having a specific surface area of at least

0.75 x 10* cm.’/g and tablets, capsules, and other pharma-

ceutical preparations containing such particles; the patent

also claims such griseofulvin particles having a specifie sur-

face area of at least 0.9 x 10‘ cm.’/g and at least 1.2 x 10*

em.’/g. Griseofulvin in the form of such particles was

known and used by others in this country, and was described

and disclosed in printed publications, prior to the alleged

invention thereof by the applicant for such patent; and

was described and disclosed in printed publications, and

was in public use and on sale in this country, more than a

year prior to the date of such application. Such patent is

invalid by reason of the provisions of 35 U.S.C. §4§ 102(a)

and 102(b), and for the reasons set forth in paragraph 19

of this complaint.

VII. First Viovation Crarcep

21. Beginning at least as early as 1959, and continuing

thereafter up to the date of filing of this complaint, the

defendants have combined with one another to pool the

Glaxo and Imperial patents and to license them in a man-

ner which unreasonably restrains the aforesaid trade and

commerce in griseofulvin, in violation of Section 1 of the

Sherman Act.

22. Pursuant to such combination, the defendants have

entered into and maintained contracts in unreasonable

restraints of trade, in the form of licenses, under the Glaxo

and Imperial patents, which, as more fully described below,

expressly prohibit the licensees from selling patented or

unpatented, bulk-form griseofulvin. Unless enjoined by

this court the defendants will continue such restraints in

effect.

23. On April 1, 1959, Glaxo entered into substantially

identical license agreements with Johnson and with Scher-

ing, under the Glaxo and Imperial patents. Each agreement

grants a license to make, use, and sell griseofulvin. Each

agreement expressly provides that the licensee undertakes

not to sell griseofulvin in bulk form ‘‘to any independent

third party without Glaxo’s express consent in writing.’’

24, On December 19, 1962, Imperial entered into an agree-

ment with American, under which Imperial agreed to sell

griseofulvin in bulk form to American, and American

agreed to resell such griseofulvin only in dosage form.

Imperial further granted a license to American under the

Glaxo and Imperial patents to effectuate the foregoing

arrangement. American expressly agreed not to resell]

such griseofulvin in bulk form without first securing the con-

sent of Imperial.

25. Pursuant to such agreements, the patentee defendants

sell griseofulvin in bulk form to the licensees and the’

licensees sell griseofulvin only in dosage form to pur-

chasers thereof.

VIII. Seconp Viouation CHARGED

26. Beginning at least as early as 1958, and continuing

thereafter up to the present date, the defendant Glaxo, in

violation of Section 1 of the Sherman Act, has combined

and conspired with its nonexclusive licensees Johnson and

Schering to boycott other persons and exclude them from

the manufacture and sale of griseofulvin in the United

States, in unreasonable restraint of the aforesaid trade

and commerce in griseofulvin. Such combination and con-

spiracy has comprised a continuing agreement, under-

taking, and understanding among Glaxo, Johnson, and

Schering that Glaxo would not grant a license under the

Glaxo patents to Merck & Co. or to others, to make, use, or

sell griseofulvin.

VIII. Errects

27. The effect of the aforesaid contracts has been and is:

(a) to prevent competition between the patentee defend-

ants and the licensees in the sale of griseofulvin in bulk

form;

(b) to prevent competition among the licensees in the

sale of griseofulvin in bulk form;

from others resulting from the sale of bulk-form griseo-

fulvin by licensees to such others ;

(d) to control and restrain the licensees in respect to the

manner in which, and the persons through whom, they

market griseofulvin ;

(e) to prevent access by third persons to sources of

griseofulvin in bulk form;

(f) to prevent third persons from packaging bulk-form

griseofulvin into dosage form and selling it for use by

consumers ;

BN A Oe ey PEGA VRE ERED ITE AAI ONG Se RIN, Ma aE NSE Sag IBN Neon NRE MN EME I ERY LIND TIT

(g) to place restrictions on, or to subject to conditions,

the resale of griseofulvin which the licensees purchase

from the patentee defendants ; ee

(h) to deprive third persons of the opportunity to secure,

and to deprive Glaxo of the opportunity to grant, licenses

under the Glaxo patents, without the prior approval of

Johnson and Schering; ;

(i) to exclude third persons from the manufacture and

sale of griseofulvin without the prior approval of Johnson

and Schering ;

(j) to deprive the public, and in particular consumers

of drugs, of the benefits of free and open competition in

griseofulvin.

Request For RELIEF

WHEREFORE, plaintiff requests that the court adjudge:

(1) That the provisions in the licenses from Glaxo to

Johnson and Schering, and from Imperial to American,

which restrict such licensees from selling griseofulvin in

, bulk form, are in unreasonable restraint of trade, in vio-

lation of Section 1 of the Sherman Act.

(2) That each defendant be permanently enjoined

against entering into or maintaining any agreement or

understanding with any other persons, in any way limiting

the sale of griseofulvin or of any other pharmaceutical

product in the United States in bulk form.

(3) That the Imperial patent be declared invalid, or

alternatively, that Imperial be ordered to dedicate and

disclaim the remaining term of such patent; that Glaxo

patent No. 3,330,727 be declared invalid, or alternatively

. that Glaxo be ordered to dedicate and disclaim the remain-

ing term of such patent; and that the defendants be ordered

not to enforce such patents against any person in any way.

(4) That the patentee defendants be ordered to grant

licenses on reasonable terms, and at reasonable, non-dis-

criminatory royalty rates, to all applicants therefor, on all

other United States patents they now own or have the right

to license, which relate to the manufacture, use, or sale of

griseofulvin; and that they make available to such licensees

the know-how relating to griseofulvin manufacture, in the

possession or control of defendant.

(5) That each patentee defendant, for a period of eight

ae CAAT ONIR TERR RRS ELE RE NAMA TIEN PHL EIRENE

ONAL PG ML Aho HAR Hg

years, be required to sell griseofulvin in bulk, on non-

discriminatory terms, to each applicant therefor.

(6) That Glaxo, Johnson, and Schering have violated

Section 1 of the Sherman Act by combining and conspiring

with one another to deny licenses under the Glaxo patents to

third parties.

(7) That defendants Glaxo, Johnson, and Schering be

enjoined from entering into or maintaining any agreement

or understanding with any person, in respect to any United

States patent, other than an agreement for a sole and ex-

clusive license under such patent, that any third party or

parties will not be licensed under such patent.

(8) That the plaintiff have such other and further relief

as the nature of the ease may require and the Court may

deem just and proper.

(9) That the plaintiff recover the costs of this suit.

Ramsey Ciark

Attorney General

Epwin M. Zimmerman

Assistant Attorney General

Bavpia J. Rasuip

Cuartes L. Wuirtincuiu

Attorneys, Department of Justice

Davip G. Bress »

United States Attorney

Ricuarp H. Stern

James H. Wauuace, Jr.

Attorneys, Department of Justice

eS et ees

AFFIDAVIT OF JAMES H. WALLACE, Dated Oct.

30, 1968

[Caption Omitted]

2. The attached exhibit GX-1 is a true copy of United

States Patent No. 2,900,304, referred to in the complaint

and in this motion as the ‘‘Imperial Patent.’’

3. The attached exhibits GX-2—GX-4 are true copies of

promotional literature and ‘‘package inserts’’ received by

the government from defendants’ griseofulvin licensees.

4, The attached exhibit GX-5 is a true copy of an article

entitled ‘‘Studies in the Biochemistry of Micro-Organisms”’

which appeared at pp. 240-248 of Vol. 33 of Journal of

Biochemistry (1939).

5. The attached exhibit GX-6 is a true copy of an article

entitled ‘‘Uptake of Antibiotic Metabolites of Soil Micro-

Organisms by Plants’’ which appeared at pp. 347-349 of

Vol. 167 of Nature (March 3, 1951).

6. Griseofulvin was disclosed in printed publications at

least as early as 1939, as shown by GX-5. Its use as an

antifungal agent in plants was disclosed in printed pub-

lications at least as early as 1951, as shown by GX-6.

PRES SS AEP RIA OIE. Lagoon ere wi EE = =

EXHIBIT 1, ANNEXED TO WALLACE AFFT. OF

OCT. 30, 1968—U.S. Pat. No. 2,900,304

Unitep States Patent OFFIce

. 2,900,304

Patented Aug. 18, 1959

2,900,304

GRISEOFULVIN USES AND COM POSITIONS

Alfred Ronald Martin, Manchester, England, assignor to

Imperial Chemical Industries Limited, London, England,

a corporation of Great Britain

No Drawing. Application September 3, 1957

Serial No. 681,472

Claims priority, application Great Britain

September 21, 1956

14. Claims. (Cl. 167—65)

This invention relates to fungicidal compositions and

more particularly it relates to fungicidal compositions

comprising griseofulvin for the treatment of fungus dis-

eases of man and animals.

Griseofulvin is a known antibiotic and it is known to

be useful in the treatment of certain fungus diseases of

plants. It has not hitherto been used in the treatment of

fungus diseases of man and animals.

Furthermore many important fungus diseases of man

and animals are skin diseases, for example ringworm and

athlete’s foot, and these are commonly treated by topical

application of medicaments in the form of ointments and

the like. Our co-pending U.S. application Serial No.

681,473, of even date herewith, relates to griseofulvin-

containing compositions suitable for such topical applica-

tion. We have also found however that fungus diseases

of man and animals may be treated by oral or parenteral

administration of suitable compositions comprising griseo-

fulvin. This is particularly surprising in respect of those

fungus diseases which are skin diseases.

According to this invention therefore we provide new

compositions suitable for the treatment of fungus diseases

of man and animals which comprise griseofulvin as ac-

tive fungicidal ingredient and pharmaceutical excipients

known for the production of formulations suitable for

oral or parenteral administration.

The griseofulvin is preferably present in the composi-

tions in such proportion by weight that the proportion by

weight of griseofulvin in the formulation to be admin-

istered lies between 0.1% and 50%.

Compositions suitable for oral administration are the

known pharmaceutical forms for such administration,

namely for example tablets, pills, syrups, and aqueous ‘

or oily suspensions and the excipients used in the pro-

duction of these formulations are the excipients well

known to the pharmacist’s art, as are also the means of

formulation.

Suitable compositions may be tablets wherein the

griseofulvin is mixed with an inert diluent for example

calcium carbonate or lactose in the presence of distintegrat-

ing agents for example maize starch and lubricating

agents for example magnesium stearate. Aqueous sus-

pensions for oral use may contain griseofulvin in aqueous

media in the presence of a suitable non-toxic suspending

agent for example sodium carboxymethyleellulose and

suitable dispersing agents. Suitable dispersing agents

may be for example lecithin or condensation products of

ethylene oxide with fatty acids for example polyoxy-

ethylene stearate or with fatty alcohols for example hep-

tadeca-ethyleneoxycetanol or with partial esters derived

from the fatty acids and hexitols for example polyoxy-

ethylene sorbitol hexa-oleate, or with partial esters derived

from the fatty acids and hexitol anhydrides, for example

hexitans derived from sorbitol, for example polyoxy-

ethylene sorbitan mono-oleate. Oily suspensions for oral

use may be formulated in a suitable vegetable oil for ex-

ample arachis oil which may contain suitable sweetening

agents and preservatives.

For the treatment of animals especially, by oral admin-

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istration, the griseofulvin may first be, incorporated into

food premixes and the said premixes then used for incor-

poration into animal foodstuffs. The said food premixes

may comprise griseofulvin in admixture with a diluent

or carrier for example tale or lactose and/or other suit-

able non-toxic and orally-acceptable ingredients.

Compositions suitable for parenteral administration

are the known pharmaceutical forms for such admin-

istration, for example sterile suspensions in aqueous and

oily media. The excipients used in these formulations

are the excipients well known to the pharmacist’s art, as

are also the means of formulation.

The sterile aqueous suspensions for parenteral admin-

istration may be formulated in the presence of parenterally-

acceptable suspending agents and dispersing agents. Suit-

able suspending agents may be for example sodium

carboxymethyleellulose, sodium alginate or polyvinyl pyr-

rolidone and suitable dispersing agents may be lecithin

or the ethylene oxide condensation products described

above for use as dispering agents in the preparation of

oral aqueous suspensions. Suitable injectable oily prep-

arations may be prepared by dispersing griseofulvin in an

oily medium for example a vegetable oil for example

arachis oil which is known to be non-toxic and parenterally-

acceptable.

The invention is illustrated but not limited by the fol-

lowing examples in which the parts are by weight.

Example 1

500 parts of griseofulvin are mixed with 70 parts of

calcium carbonate and 200 parts of a 10% maize starch

paste are added. The mixture is dried and is then passed

through a 16-mesh screen. 5 parts of magnesium stearate

are added and the granules are compressed to give tablets

suitable for administration.

Example 2

A mixture of 1.5 parts of polyglyceryl ricinoleate and

0.1 part of sodium carboxymethyleellulose is stirred with

90 parts of distilled water. 10 parts of griseofulvin are

then added and the mixture is ball-milled. The stable sus-

pension thus obtained is sterilised and is then suitable for

administration by injection.

Example 3

150 parts of griseofulvin in fine powder form are mixed

with 500 parts of lactose and 100 parts of maize starch

and the mixture is treated with sufficient 10% maize

starch paste to give a granular mass. This mixture is

passed through a 16-mesh sieve and then dried. 8 parts

of magnesium stearate are incorporated in the dried prod-

uct and the resulting granules are then compressed into

tablets suitable for administration.

Example 4

A mixture is formulated from 2 parts of griseofulvin

and 98 parts of tale and there is thus obtained a com-

_ _ position suitable for use as a premix for admixture with

animal foodstuffs.

Example 5

A mixture is formulated from 5 parts of griseofulvin

and 95 parts of lactose and there is thus obtained a com-

position suitable for use as a premix for admixture with

animal foodstuffs.

Example 6

100 parts of griseofulvin in fine powder form is added

to a finely ground mixture of 29 parts of icing sugar, 0.6

part of sodium saccharine and 0.05 part of propyl gallate

and the mixture is stirred until uniform. The compound

powder thus obtained is suspended in 870 parts of arachis

oil according to the art, 0.35 part of fruit flavour is added

and there is thus obtained an oily dispersion suitable for

oral use.

Example 7

A mixture of 10 parts of griseofulvin and 90 parts of

arachis oil is ball-milled until substantially all the par-

ticles are below 50 microns in diameter. The suspension

is then sterilised and is then suitable for administration

by injection.

Example 8

142 parts of griseofulvin, 0.5 part of heptadeca-ethyl-

eneoxycetanol and 900 parts of water are ball-milled for

one hour. 10 parts of medium viscosity sodium car-

boxymethyleellulose are then added and ball-milling is

continued for a further 4 hours until the bulk or mass

of the griseofulvin in suspension is 50-60 microns. There

is thus obtained a suspension suitable for dilution for

oral use for therapeutic purposes for example as a drench

for animals.

Example 9

A solution is prepared by dissolving 1.5 parts of methyl

p-hydroxybenzoate, 0.2 part of propyl p-hydroxybenzoate,

2.5 parts of refined soya bean lecithin and 8 parts of poly-

vinylpyrrolidone in 1000 parts of distilled water. The

- aqueous vehicle so obtained is sterilised by heating in an

autoclave. To the sterile aqueous vehicle so obtained

158 parts of sterile micropulverised griseofulvin are added.

The resulting mixture is ball-milled for 15 minutes and

there is thus obtained a suspension suitable for parenteral

administration for therapeutic purposes.

What I claim is:

1. The process for treating man and animals having an

external fungus disease which comprises internally admin-

istering to said man and animals an effective amount of

griseofulvin.

2. The process for treating man and animals having a

fungus skin disease which comprises internally adminis-

tering to said man and animals and effective amount of

griseofulvin.

3. A solid anti-fungal composition in shaped dosage

unit form for oral administration which comprises griseo-

fulvin as the active anti-fungal ingredient and a solid,

non-toxic, orally-ingestible pharmaceutical carrier, said

composition containing at least about 0.1% by weight of

griseofulvin.

4. Compositions as claimed in claim 3 wherein the

griseofulvin is present in such proportion by weight that

the proportion by weight of griseofulvin in the formula-

tion to be administered lies between 0.1% and 50%.

5. A solid anti-fungal composition in shaped dosage unit

form for oral administration which comprises griseofulvin

as the active anti-fungal ingredient, a solid non-toxic orally-

ingestible pharmaceutical carrier, a disintegrating agent

and a lubricating agent, said composition containing at

least about 0.1% by weight of griseofulvin.

6. A solid anti-fungal composition in tablet form for

oral administration which comprises griseofulvin as the

active anti-fungal ingredient; a solid non-toxic orally-in-

gestible pharmaceutical carrier selected from the group

consisting of calcium carbonate and lactose; maize starch

as a disintegrating agent and magnesium stearate as a

_ lubricating agent, said composition containing at least

about 0.1% by weight of griseofulvin.

7. An anti-fungal composition for internal administra-

tion comprising griseofulvin as the active anti-fungal in-

gredient and a non-toxic, orally-ingestible liquid carrier

including both a dispersing agent and a flavoring agent,

said composition containing at least about 0.1% by weight

of griseofulvin.

8. An anti-fungal composition for internal administra-

tion comprising griseofulvin as the active anti-fungal in-

gredient, suspended in a non-toxic, orally ingestible vege-

table oil, said composition containing at least about 0.1%

by weight of griseofulvin.

9. The composition of claim 8 wherein said oil is arachis

oil, said composition being sterile and pyrogen-free.

10. A composition comprising an animal feed having an

effective amount of griseofulvin admixed therein.

11. An anti-fungal composition for use as a premix for

admixture with an animal foodstuff, said composition

comprising griseofulvin as the active anti-fungal ingredi-

ent and a solid, non-toxic, orally-ingestible_pharmaceuti-

cal carrier selected from the group consisting of tale and

lactose, said composition including at least about 0.1% by

weight of griseofulvin. .

12. A liquid anti-fungal composition for internal admin-

istration comprising griseofulvin as the active anti-fungal

ingredient, suspended in an aqueous non-toxic, orally-in-

gestible medium including both a suspending agent selected

from the group consisting of sodium alginate, polyvinylpyr-

rolidone and sodium carboxymethyleellulose, and a dis-

persing agent selected from the group consisting of lecithin

and ethylene oxide condensation products with a member

of the group consisting of a fatty acid, a fatty alcohol, a

partial ester derived from a fatty acid and a hexitol, and a

partial ester derived from a fatty acid and a hexitol anhy-

nme NG ood

dride; said composition containing at least about 0.1% by

weight of griseofulvin.

13. An injectable anti-fungal composition according to

claim 12, same being sterile and pyrogen-free.

14. A sterile, pyrogen-free anti-fungal composition for

administration by injection comprising griseofulvin, as

the active anti-fungal ingredient, suspended in distilled

water containing polyglycery] ricinoleate and sodium car-

boxymethy] cellulose, said composition including at least

about 0.1% by weight griseofulvin.

References Cited in the file of this patent

UNITED STATES PATENTS

2,507,193 SI sw ssiignckeks May 9, 1950

2,671,748 oy NPE aera ee a Mar. 9, 1954

2,843,527 Rhodes ...... Rep Tere pare me July 15, 1958

FOREIGN PATENTS

714,189 reas Ns. eh oie Aug. 25, 1954

OTHER REFERENCES

Constant: J. Invest. Dermatol., vol. 7, 1946, p. 337.

Brian: Nature, vol. 167, 1951, pp. 347-349.

Smith: Antibiotics and Chemotherapy, vol. 4, No. 9, Sept.

1954, pp. 962, 970.

Ashton: Chem. and Ind., Sept. 17, 1955, p. 1183.

Campbell: International Symposium on Crop Protee-

tion, Ghent, Belgium, May 8, 1956, pp. 519-524.

Campbell: Proc. First International Conf. on Antibiotics

in Agr., Oct. 19-21, 1955, pp. 194-195. =

PRP LEIA ORMONDE SDI COI ET

- Ine or ¥ + oe

BX 0 Fv iietiient. |

EXHIBIT 2 ANNEXED TO WALLACE AFFIDAVIT

OF OCTOBER 30, 1968—MeNeil (J&J) Package Insert for

GRIFULVIN (Griseofulvin Regular Size)—Copr. 1965

* 7. * * *

GRIFULVIN (griseofulvin regular size) inhibits the

growth of those genera of fungi that commonly cause ring-

worm infections of the hair, skin, and nails, such as:

| Trichophyton rubrum

Trichophyton tonsurans

Trichophyton mentagrophytes

Trichophyton interdigitalis

Trichophyton verrucosum

Trichophyton sulphureum

Trichophyton schoenleini

Microsporum audouini

Microsporum canis

Microsporum gypseum

Epidermophyton floccosum

It is not effective in:

Bacterial infections

Candidiasis (Moniliasis)

Histoplasmosis

Actinomycosis

Sporotrichosis

Chromoblastomycosis

Coccidioidomycosis

North American Blastomycosis

Cryptococcosis (Torulosis)

Tinea versicolor

Nocardiosis

DURATION OF TREATMENT

Tinea Capitis : four to six weeks.

Following the daily oral administration of GRIVULVIN

(griseofulvin regular size) the infected portion of the hair

is gradually replaced by normal hair and, in approximately

three weeks, physical removal of the infected portions can

be. performed. In cases due to ectothrix organisms (e.g.

M. audouini, ‘M. canis), the infected hair fluoresces bright

36a

LEED ENA POOR AK a ENG a over

36b

green under a Wood’s light and is strikingly different from

the noninfected portion that grows out after the start of

griseofulvin therapy.

Blank has demonstrated that the degree of growth of

new hair can readily be determined by placing a hair

plucked from the head of a patient under treatment on an

agar plate seeded with a sensitive fungus such as Tricho-

phyton rubrum. The new portion of the hair contains active

griseofulvin which produces inhibition of the organism,

The old portion if the hair contains no antibiotic and there-

fore produces no inhibition.

Tinea Corporis: two to four weeks.

GRIFULVIN (griseofulvin regular size) is given daily

until the skin appears normal and no pathogenic fungi can

be cultured from the lesion. The length of therapy is

usually two to four weeks, but in those cases where there

is also infection of the nails, therapy must be continued —

until the nails are free of infection.

Tinea Pedis: Four to eight weeks.

The treatment is similar to that for tinea corporis, except

that the thickness of the keratin of the soles of the feet

necessitates a longer period of therapy before natural

processes achieve complete replacement of the diseased

tissues. Although the pathogenic fungi will be eliminated

by the daily use of GRIFULVIN (griseofulvin regular

size), it is important to recognize that local symptomatic

therapy may be indicated. The type of local therapy used

will depend on the degree of inflammation present and

whether there is a monilial involvement. In general, the

more inflammation present, the less vigorous should be

the local treatment.

Tinea Unguium (Onychomycosis): Depending on rate

of nail growth. Fingernails: at least four months; Toe-

nails: at least six months.

The daily oral use of GRIFULVIN (griseofulvin regular

size) will effect the deposition of a fungistatic level of the

antibiotic in the infected matrix, thus holding the organisms

in check pending removal of the keratinized portion of the

nail and its replacement by healthy tissue. Since the finger-

nails grow slowly, the usual period of therapy is at least

four months for complete eradication of the infection and

complete healing, while in the case of the toenails even a

longer period offftreatment may be necessary.

* * * - *

I YP SERIA TO SE BPR OY ALI TS PARTI LD ATI ARTY PAE TT LORY ARTY SIR TRY RN tO EI

= . a . Abies ADORE NI 6 en Bee eT ne |

‘ive . Pek Mh ‘

36c

Suggested Adult Dosage

A daily dose of 1 Gm. of GRIFULVIN (griseofulvin

regular size) given in divided doses, is adequate for most

conditions. In the more severe or extensive infections, up

to 2 Gm. a day may be used at the beginning of treatment,

reducing the dosage to 1 Gm. when the initial clinical re-

sponse has been obtained.

Suggested Children’s Dosage

A dose of GRIFULVIN (griseofulvin regular size) of

approximately 10 mg. per pound of body weight per day

is effective in most pediatric patients. On this basis, the

following dosage schedule for children will be useful:

Children weighing 30 to 50 pounds

250 mg. to 500 mg. daily.

Children weighing more than 50 pounds:

500 mg. to 1.0 Gm. daily.

Clinical experience with griseofulvin in children with

ringworm infections indicates that a single -daly dose is

effective. Clinical relapse will occur if the medication is

not continued until the infecting organism is eradicated.

* * * * *

EXHIBIT 3 ANNEXED TO WALLACE AFFIDAVIT

OF OCTOBER 30, 1968—AMHO Brochure on Griseofulvin

* * * * -

Griseofulvin has become a reliable treatment for super-

ficial fungus (ringworm) infections. But, when you’re

taking griseofulvin, don’t become impatient. Even this

drug cannot take full effect until infected skin, hair, or

nails have been ‘‘pushed out’’ and replaced with the new.

It’s also true that results depend upon the type of fungus

being treated. Ringworm of smooth, nonhairy skin, for

example, may take two to four weeks. Probably three to

five weeks are needed for ringworm of the scalp. Ring-

worm of the nails is most difficult of all. Three to six

months for fingernails. At least eight to twelve months

for toenails.

Of course, these are all average figures that vary greatly

with different individuals. Sometimes less time is needed.

Often, treatment may take much longer.

36d

EXHIBIT 4 ANNEXED TO WALLACE AFFIDAVIT

OF OCTOBER 30, 1968—MeNeil (J&J) Package Insert

for GRIFULVIN V (Griseofulvin microsize)—Copr. 1965

Suggested Adult Dosage

The higher blood levels produced by the microsize form

permit reduced dosage in some patients. A divided daily

dose of 500 mg. will give a satisfactory response in most

patients with tinea corporis, tinea cruris, and tinea capitis,

For those fungous infections more difficult to eradicate

such as tinea pedis and tinea unguium a divided daily dose

of 1.0 Gram is recommended. aes

Suggested Children’s Dosage

Approximately 5 mg. of the microsize form per pound

of body weight per day is an effective dose for most chil-

dren. On this basis the following dosage schedule for

children is suggested:

Children weighing 30 to 50 pounds—125 mg. to 250 mg.

daily.

Children weighing over 50 pounds—250 mg. to 500 mg.

daily.

Clinical experience with griseofulvin in children with

ringworm infections indicates that a single daily dose is

effective. Clinical relapse will occur if the medication is

not continued until the infecting organism is eradicated.

EXHIBIT 15, ANNEXED TO WALLACE AFFT. OF

JUNE 13, 1969—U.S. PAT. NO. 3,330,727

Unrrep States Patent Orrice

3,330,727

Patented July 11, 1967

3,330,727

GRISEOFULVIN WITH HIGH SPECIFIC

SURFACE AREA

Kenneth Arthur Lees, Northwood England, assignor to

Glaxo Laboratories Limited, Greenford, Middlesex,

England, a British company

‘No Drawing. Continuation of application Ser. No.

103,224, Apr. 17, 1961. This application July 15,

1964, Ser. No. 382,923

6 Claims. (Cl. 167—65)

This application is a continuation of copending applica-

tion Ser. No. 103,224, filed Apr. 17, 1961, now abandoned.

This invention is concerned with improvements in or

relating to the antibiotic griseofulvin.

Griseofulvin has recently found considerable use in the

treatment of various human and animal diseases. The sub-

stance is generally given by internal administration, par-

ticularly by mouth but may also be applied topically.

In the majority’of preparations the griseofulvin is pres-

ent in solid form and, for example, for oral administration,

the antibiotic may be incorporated in a tablet, capsule or

pill or be given in a suspension in some convenient liquid

base.

My researches have shown that the uptake of griseo-

fulvin into the blood stream following oral administration

of solid griseofulvin is dependent upon the physical nature

of the solid. I have thus found that by reducing the particle

size of the solid to smaller dimension than the material

hitherto used, the peak blood level following oral admin-

istration of a given dose is raised. The effect of raising

the extent of uptake into the blood of a given dose of griseo-

fulvin also has the important advantage that a detectable

concentration is maintained in the blood for a longer period.

oe Cie eae UE oe ete cn cnc en ee

Investigation has thus shown that improved uptake of

solid griseofulvin may be secured by preparing griseofulvin

in particulate form having a specific surface area of at least

0.7510" em.*/g.

Preferably also the solid griseofulvin should be in

crystalline or micro-crystalline form, as distinct from

amorphous form.

The invention accordingly comprises solid griseofulvin

in particulate form, preferably in crystalline or micro.

crystalline form, having a specific surface area of at least

0.75 x 10* em.?/g.

Whilst good results are obtained with solid griseofulvin

having a specific surface area of at least 0.75 X10‘ cm.?/g,,

even better results are obtained by a further-particle size

reduction below 0.9 10* em.’/g., and better still below

1.2 10* em.?/g.

A still further improvement in absorption has been

noted in some cases by reduction in particle size below

1.5 and in some cases 1.7 X 10° em.’/g.

The improved form of griseofulvin in accordance with

the invention may be formulated for oral administration

in any convenient form with the aid of suitable pharma-

ceutical carriers or excipients. Such preparations may be

in solid form, for example, tablets, capsules, pills, dragees

or other unitary form, or as powders or granules. For

the production of such preparations, conventional carriers

or excipients may be used as desired.

Orally administrable preparations may also be formv-

lated in liquid form as Suspensions or dispersions in a

suitable carrier, which may be of an aqueous or oily

nature. Such preparations may include other excipients

such as suspending agents e.g. colloids, wetting agents,

dispersing agents, sweetening agents or flavouring agents

as desired.

The production of griseofulvin in small particle size in

accordance with the invention may be achieved in various

ways. A method of obtaining such material by direct

crystallisation which has been found to be particularly

convenient is described in Shaw et al. application Ser. No.

103, 343, filed Apr. 17, 1961. Griseofulvin of small particle

size can also be obtained directly by the spray-drying of a

solution of griseofulvin in a suitable solvent, e.g. chloroform

or acetone, although the material so produced may be of an

amorphous nature instead of the desired crystalline or

PIELER LET TY OL LEENA RS:

REP Sw CG NY ALTE OEE S w eee

mgicrocrystalline form. The spray dried material may

comprise particles of the desired small particle size ad-

mixed with larger particles in which case classification of

the particles to give a fraction of the desired size is neces-

sary.

Alternatively, griseofulvin of large particle size obtained,

for example, by the milling of griseofulvin produced by

conventional techniques may be further size-reduced e.g.

by passage through a suitable colloid mill or vibratory

mill.

To illustrate the advantages of the improved form of

griseofulvin according to the invention, a number of experi-

ments were conducted in human volunteers to determine

the average uptake of griseofulvin upon oral administra-

tion of tablets containing the antibiotic in different particle

sizes.

For these experiments groups of six volunteers were

asked to swallow either two or four tablets of the griseo-

fulvin sample under test, each tablet containing 2.50 mg.

of antibiotic.

The various forms of griseofulvin were thus tested at

two dosages i.e. 0.5 g. and"f g. Blood samples were taken

by veni-puncture at 2, 4, 6, 8 and 26 hours and in some

groups 50 hours after dosing, and were assayed in duplicate

spectrophotofluorometrically. The results are shown in the

following table:

TABLE

Specific Surface Dose, Volun- Hours After Administration

Area g. teer 2 4 6 8 26 50

0.4X10¢em.2/ge .... 0.5 1 0.4 0.7 0.7 0.6 0.1

2 *C 0.5 0.5 0.3 0.2

3 0 0.6 0.6 0.4 0.3

4 *C 0.7 0.7 1.0 0.3

5 0 0 0.3 0.3 0.2

6 0.3 0.5 0.5 0.3 0.3

Average ‘ oa : - cee 0.50 0.55 0.48 0.23

0.8104 em.2/6 0.5 7 1.0 1.0 0.6 0.5 0.3

8 0.7 1.2 1.2 1.0 0.5

9 0.5 0.6 0.3 0.3 0

10 1.0 0.8 0.6 0.5 0

11 0.3 0.5 0.5 0.2 0

12 0.7 a2 11 0.8 0.6

Average ---- - . 0.7 0.88 0.71 0.56 0.23

0.4X104em.2/8 ---- 1 13 0.7 | 1.2 1.3 0.6

14 0.7 0.8 0.6 0.5 04

15 1.3 1.3 0.7 0.7 0 b

16 0.7 1.0 0.7 0.8 0.6

17 0.4 0.5 0.2 0.3 0

18 1.0 1.3 0.8 0.8 0

Average .----- eh A ae e eee ee 1.00 0.70 0.73 0.27

Cort te ea SE DESIR IELTS EITC RR OER ERE UR Cire ni Sor RRC RE I RA roaRenEN gs

TABLE—Continued

Specific Surface Dose, Volun- Hours After Administration

Area g. teer 2 4 6 8 26 50

0.8X10%em.3/g ... 1 19 0.8 1.5 0.4

vetintan,, ee LCE Pee Pee "sf 1.27 1.43 1.43 0.65 0.33

1.7X10¢em.8/g .... 0.5 25 0.6 11 1.1 1.0

mito, » MCE TT Tee 0.63 1.00 0.93 0.81 0.33

1.1X104em.2/g .... 0.5 31 1.1 0.9 0.7 1.0 0.6

ON i ae 0.63 0.65 0.65 0.67 0.40 wi

1.7X10*em.3/g .... 1 37 1.2 1.5 138 1.3 0.8 0.4

Average ....... re ne -o. 808 1.50 1.33 1.53 1.02 0.48

1.1X10¢em.2/g .... 1 43 0.9 1.1 1.0 0.8 0.6 0.2

ea hi eran andr Same nae Cen 1.12 1.33 1.23 1.07 0.68 0.20

*C = Contaminated blood sample tube.

I now give by way of example only a description of a

method of obtaining small particle size griseofulvin by the

use of a vibratory mill.

A quantity of griseofulvin from a normal production

batch with an approximate specific surface area of

0.4X10* cm.*/g. is mixed with distilled water to produce

a 40 percent slurry. The slurry is transferred té a suitable

grinding container, consisting e.g., of a polyethylene jar

or porcelain pot charged with grinding media to a level

just below the surface of the slurry. The grinding media

may consist of porcelain or marble balls, cylinders of }”

to 2” diameter prepared from sintered alumina or stain-

less steel balls or rods. The container holding the griseo-

fulvin slurry and grinding charge is clamped to a vibratory

grinding mill, with controlled amplitude of frequency of

vibration allowed to operate for a period of time depend-

ent on the specific surface area of the starting material

and the product required. This period can vary from sev-

eral hours to several days, and during the grinding period

it may be necessary to add further small quantities of dis-

tilled water to the slurry to reduce viscosity as the particle

size of the griseofulvin decreases. Samples are withdrawn

from the slurry at intervals, vacuum dried and specific

surface area determinations carried out, until the desired

particle size is obtained. The slurry is then removed from

the grinding mill diluted with distilled water and dis-

charged into a Buchner funnel or porcelain filter fitted

with a suitable filter paper. Vacuum is applied to remove

the water. Recycling of the filtrate is employed to obtain

maximum yield. Alternatively the slurry can be discharged

into a suitable centrifuge. The grinding media and con-

tainer are repeatedly rinsed with distilled water to obtain

maximum yield. The wet cake is then removed from the

filter or centrifuge and vacuum dried at room temperature

to constant weight. The dried griseofulvin is then broken

down by passing through a 40 mesh sieve.

Although a conventional rotary ball-mill may be used

' for wet milling the slurry, a greater charge and reduced

grinding time can be obtained by using a vibratory mill

with sintered alumina grinding media.

The following examples of suitable oral preparations

of small particle size griseofulvin are given by way of

illustration only :

In the formulation of the following preparations crystal-

line griseofulvin having a specific surface area of 1.56 10*

cm.*/g. is used, prepared by the process described in appli-

cation Ser. No. 103,343 aforesaid.

x Example 1

Tablets for oral use: Mg.

Griseofulvin (fine particle size) ................ 250

oi OE ee en Disc vasentbauces 47

Magnesium stearate

The fine particle size griseofulvin is blended with most

of the starch. The remaining starch is used in the form

of a 10 percent starch paste as the granulating medium.

The damp granules are passed through a No. 12 mesh

sieve, dried under vacuum at a temperature not exceed-

ing 25° C. and passed through a No. 16 mesh sieve. The

magnesium stearate is blended with the dried granules

which are then compressed at 300 mg. per tablet.

Example 2

Capsules: Mg.

Example 3

Aqueous suspension for oral use: Percent, w./v.

Griseofulvin (fine particle cet AEE ET POS 5

egestas ie 50

Omrnes CVG Gee 0.3

i MEM 6... 6.3... ee 0.2

Methyl parahydroxybenzoate ................. 0.15

We ov vee sos ok nck 1.0

me OO oe 15

RIE NE Mo nn 0.05

Water to produce 100.

Dissolve the preservatte in the available water, heated

to 90° C. Add the sugar, and disperse the methyl cellulose

in the hot solution by slowly sprinkling it onto the surface

of the liquid, stirred by vortex action. When the sugar is

dissolved, allow the mixture to stand overnight to cool

and pass through an homogeniser. Absorb the peppermint

oil into the griseofulvin powder and blend in the sweetening

agents and lecithin. Make a thick slurry of the powders

with some of the homogenised mixture and refine by passing

through a colloid mill. Dilute the refined slurry with the

remaining vehicle, make up to volume and mix well.

I claim:

1. A product consisting of erystalline griseofulvin in

particulate form, said griseofulvin having a specific surface

area of at least 0.75 x 10* cm.”/g.

2. Griseofulvin as claimed in claim 1 having a specific

surface area of at least 0.9 10* em.?/g. a

3. Griseofulvin as claimed in claim 1 having a specific

surface area of at least 1.2 10* em.’/g.

4. A pharmaceutical preparation comprising crystalline

griseofulvin in the form of particles having a specific sur-

face area of at least 0.75 10‘ cm.*/g. and a pharmaceutical

carrier, such preparation being adapted for oral admin-

istration.

5. A pharmaceutical tablet comprising crystalline gris-

eofulvin in the form of particles having a specific surface

area of at least 0.75 10* cm.’/g. and at least one tabletting

excipient.

6. A pharmaceutical capsule containing crystalline

griseofulvin in the form of particles having a specific sur-

face area of at least 0.75 x 10‘ em.?/g.

References Cited

FOREIGN PATENTS

795,039 5/1958 Great Britain.

OTHER REFERENCES

Aytoun: American Perfumer and Aromatics, vol. 74,

pages 26-28.

Lyman et al.: American Pharmacy (Fourth Edition,

1955), pages 87 and 98.

MacMillan: J. Chem. Soc., London (1952), page 3955.

Martin: Husa’s Pharmaceutical Dispensing, Fifth Edi-

tion (1959), pages 577-80 and 582.

Nelson: J. Amer. Pharm. Assoc., vol. 46 (1957) pages

607-14.

Remington: Practice of Pharmacy (Third Edition)

(1895), page 179.

HENRY R. JILES, Primary Examiner.

NICHOLAS RIZZO, Examiner.

ALEX MAZEL, Assistant Examiner.

gn ee B te, een erie chen Renae inter ee eee ee ee ie eee

nial BES FEEILEE OY BALE 5

DEFENDANT ICI’S ANSWERS TO

INTERROGATORIES PROPOUNDED BY PLAINTIFF

JULY 16, 1968

[ANSWERED BY ICI, SEPT. 16, 1968]

Interrogatory No. 1:

List every disease for which Defendant contends Griseo-

fulvin has therapeutic effects. (In answering this inter-

rogatory Defendant may omit listing such diseases as to

which it contends that Griseofulvin does not have a sub-

stantial such effect.)

Answer:

We do not know whether the matter inquired about is at

issue and therefore have no ‘‘contentions’’ at this time

with respect to it. According to labeling approved by the

Food & Drug Administration, Griseofulvin has therapeutic

effects for—

tinea corporis

tinea pedis

tinea cruris

tinea barbae

' tinea capitis

tinea unguium

(onychomycosis)

Interrogatory No. 15:

(a) Describe each step in the manufacturing processes

used by Defendant, or which Defendant knows

that others use, in order to convert Bulk Form

Griseofulvin into Finished Pharmaceutical Form

products; and

(b) State each way in which each such step significantly

differs from the steps involved in the conversion

of other Bulk Form drugs into Finished Phar-

maceutical Form.

Answer:

(a) Defendant Imperial Chemical Industries manu-

factures more than one Finished Pharmaceutical Form of

Griseofulvin, including several types of tablets and a

suspension. In the ease of tablets the steps used are from

among the following:

1, The active substance is mixed with excipients.

2. A mixture of active substance and excipients is

moistened and passed through a screen. Ribbons which

emerge are beaten into moist granules, which are dried

with hot air.

3. Dried granules are passed through a sieve.

4. Dried granules are mixed with additional excipient.

5. Dried granules are compressed into tablets.

6. Tablets are spray coated with a solution of coating

composition and the coated tablets are air dried.

7. Tablets are put into containers.

In the case of the suspension, the following steps are

included :

1. Excipients are dissolved and suspended in water to

form a mixture which is chilled.

2. Active substance is dispersed gradually in the liquid

with continuous mixing.

3. The mixture of active substance, water and excipients

is passed through a colloid mill.

4. The milled mixture is homogenized with addition of

more water and excipients. |

5. The mixture is filled into bottles.

(b) The mixing conditions and times, selection and

proportions of excipients and water, drying temperature

and times, tablet compression conditions, granulation con-

ditions, granule sizes, and the like are specifically selected

to produce products which are appropriately utilized bio-

logically and withstand ordinary handling and storage re-

quirements. These parameters are specific to the active

substance and finished pharmaceutical form in each case

and specifically differ from parameters selected for other

active substances. It would only be possible to itemize

differences when a comparison is made with another

specific finished pharmaceutical product, but it would be

impossible for defendant ICI to make comparison with all

such products. Therefore, ICI is unable to provide further

answer to this interrogatory.

Interrogatory No. 36:

State the formula for Griseofulvin.

LETTE PERG SLE LN LLL I BOE SET AONE GEES BLE LEE E LEE IEG

Answer:

The structural formula for Griseofulvin is

ie ie,

co 0. = oa

oe Cc co

CH - CHo

C1 |

Its empirical formula is C.;H::ClO. and its chemical name

is 7-chloro-2’, 4, 6-trimethoxy-6’-methylspiro [benzofuran-

2(3-H), 1’-[2]-cyclohexene]-3, 4’-dione. :

Interrogatory No. 40:

State the amount, by weight and total sales price (re-

ceived by Imperial), of Bulk Form Regular Size Griseo-

fulvin shipped by Imperial to (i) American, (ii) Johnson,

and (iii) Schering, separately, for the years 1965, 1966 and

1967.

Answer:

The weight and total sales price (received by Imperial),

of Bulk Form Regular Size Griseofulvin shipped by Im-

perial to (i) American for the years 1965, 1966 and 1967

were :—

1965 1966 1967

Weight-Kilos 4,856 3,343 3,852

Sales Price—U.S. $ *375,864 225,892 282,668

—£ 134,237

No sales were made by Imperial to either

(ii) Johnson or (iii) Schering.

Note-1) Figures relate to invoices/credit notes passed

through Imperial’s books of account during

each year.

2) * U.S. $ amount estimated at sterling equivalent

x 2.80.

POSE CLE GUL LLE VE SOME ATV LOE RA

Intérrogatory No. 41:

State the amount, by weight and total sales price (re-

ceived by Imperial), of Bulk Form Microsize Griseofulvin

shipped by Imperial to (i) American, (ii) Johnson, and

(iii) Schering, separately, for the years 1965, 1966 and

1967.

Answer:

No Bulk Form Microsize Griseofulvin was shipped by

' Imperial to (i) American, (ii) Johnson, or (iii) Schering

for the years 1965, 1966 and 1967. |

Interrogatory No. 42:

(a) State separately the amount of royalties paid un-

der the Griseofulvin Patent License to Defendant

by (i) American, (ii) Johnson, and (iii) Schering

separately, for each of the years 1965, 1966 and

1967 ;

(b) State the royalty rate for each such year for each

such Licensee ; and

Griseofulvin sales in each such year.

Answer:

(a) The amount of royalties paid under the Griseofulvin

Patent License to Imperial by American for each of the

years 1965, 1966 and 1967 was :—

1965 1966 1967

US. $ 53,258 70,749 58,332

No royalties were paid directly to Imperial by either

Johnson or Schering, but royalties were paid to Imperial

by Glaxo, part of which originated from Johnson and

Schering. :

(b) The royalty rate for each such year was 5%

and Schering’s sales. The dollar amount of American’s

Griseofulvin sales in each of such years was—

1965 1,065,165

1966 1,414,979

1967 1,166,644

PNET LR ALE ICH, SPER A ME OI DOA ODI ELL SORE LAE IAAI BLO ERA att IMS iaeatiinethiaemtinten oa)

Interrogatory No. 43:

State the selling price of Bulk Form Griseofulvin as

sold by (i) Glaxo and (ii) Imperial, for and during each

of the years 1965, 1966, and 1967.

Answer:

Imperial’s U.S. selling price for Bulk Form Regular Size

Griseofulvin for the years 1965 and 1966 was $78.40 per kilo

f.o.b. U. K. In 1967, the selling price for Bulk Form Regu.

lar Size Griseofulvin, of somewhat coarser grade than had

been supplied in the years preceding, was $77.95 per kilo

f.o.b. U. K. In addition, special prices have been quoted to

enable American to bid on Government contracts, involving

maximum credits ranging from $31.52 per kilo to $32.95 per

kilo. Imperial does not know Glaxo’s selling priees.

Interrogatory No. 49:

State whether Defendant contends that it has cancelled

the Bulk Sale Restriction in any Griseofulvin license since

June 1, 1967; if so, state the date of any such cancellation

and the parties involved.

Answer:

Imperial does not consider the bulk sale restriction at-

tacked by the Government in this proceeding as part of a

Griseofulvin license, but as part of the distributorship

agreement between it and American. Said bulk sale re-

striction in the distributorship agreement was cancelled

on or about October 23, 1967, when Mr. R. G. Hoare, Chair-

man of the Pharmaceuticals Division of Imperial, agreed

with Charles M. Johnson, President of Ayerst Laboratories

Division of American Home Products Corporation, to can-

cel the bulk sale restriction. A copy of the letter implement-

ing this agreement is attached hereto.

American Home Propucts Corporation

October 1, 1967

665 THIRD AVENUE

NEW YORK 17, N.Y.

Imperial Chemical Industries Limited

Pharmaceuticals Division

Alderley House, Alderley Park,

Macclesfield, Cheshire

Dear Sirs:

We refer to various letters exchanged between us relat-

ing to the distribution by our Company of various ICI

products. It has now been agreed that each of the said

letters as set forth in the Schedule immediately below shall

be amended by deletion of paragraph 7 contained in each

relating to the resale of the covered products in bulk.

Unless otherwise elsewhere amended, the said letters

shall remain in full force and effect.

- If you agree with the terms of this letter, will you please

sign and return the attached duplicate.

Schedule

Date Product

17th September 1959 ‘*Fluothane’”’

5th, November 1959 ‘*Dictycide’’

5th November 1959 ‘¢Primidone’’ B. P.

5th November 1959 ‘*¢ Avlosulfon’’

5th November 1959 Chlorhexidine and its Salts

17th December 1959 **Kemithal’’

17th December 1959 ‘*Paludrine’’

17th December 1959 ‘*Trilene’’

4th October 1962 Griseofulvin

6th April 1967 ‘* Atromid-S’’

Very truly yours,

American Home Products Corporation

[signatures illegible]

This is a copy of the Agreement referred to in paragraph

seven in the Affidavit of Reginald George Hoare sworn

before me this 16th day of May 1968.

PELE LEL YS LEE LO! GANGES ERE ET EE LEREEL UAT ELON PLS Ls NE ie la

Interrogatory No. 50:

With respect to each alleged cancellation of the Bulk

Sale Restriction set forth in response to the foregoing In-

terrogatory, state:

(i) All considerations passing between Defendant and

the Licensee in payment for such cancellation;

(ii) All acts by the Licensee made in reliance of such

cancellation ; ,

(iii) Any detriment to the Licensee or benefit to the

Licensor resulting from such acts;

(iv) All reasons of Defendant for such cancellation;

(v) The effect of such cancellation; and

(vi) The manner in which the Licensee was informed

of such cancellation.

Answer:

(i) No financial consideration passed between Imperial

and its distributor American with respect to such cancella-

tion.

(ii) This portion of the interrogatory should be ad-

dressed to American, since it refers to ‘‘all acts”’ by Ameri-

can. Imperial, having given American the freedom to make

bulk sales independently, is unaware of the extent to which

that freedom has been exercised.

(iii) Imperial considered it a benefit to have removed

from the distributorship agreement with American a pro-

vision the legality of which it had been advised was being

questioned.

(iv) The immediate reason of Imperial for cancelling the

bulk sale restriction in its distributorship agreement was

that Imperial had been aske€ to do so by American because

the Justice Department, in the course of an inquiry directed

to American, was questioning the legality of the provision.

(v) .The effect of the cancellation of the above bulk sale

restriction was to eliminate any restriction on the freedom

of American to resell in bulk form Griseofulvin supplied to

American by Imperial.

(vi) See answer to Interrogatory 49.

Interrogatory No. 53:

(a) State the date or approximate date on which De-

fendant was first made aware that the Government

was investigating (i) the Griseofulvin License be-

tween Glaxo and Schering, (ii) the Griseofulvin

License between Glaxo and Johnson, and (iii) the

Griseofulvin License between Imperial and Amer-

ican; and

(b) State the manner in which such knowledge was

communicated to Defendant.

Answer:

Imperial was not aware that the Government had been

investigating the Griseofulvin License between Glaxo and

Schering, and between Glaxo and Johnson, respectively,

until after the Government’s complaint was filed on March

4, 1968. Imperial was first made aware that the Government

was investigating the Griseofulvin License between it and

American through a letter from Mr. Maurice F. Silverstein

to Mr. T. W. M. Bland, Division Secretary of Imperial’s

Pharmaceuticals Division, dated September 7, 1967, and

received by Imperial September 11, 1967. No other infor-

‘mation concerning the Government’s investigation of the

Griseofalvin License between Imperial and American

reached Imperial prior to the time the Bulk Sale Restric-

tion was cancelled on or about October 23, 1967.

Interrogatory No. 55:

(a) State Defendant’s present policy with regard to

selecting the persons to whom it Will sell Bulk

Form Griseofulvin;

(b) State the names of all persons responsible for

forming such policy ; and

persons who would be responsible (i) for form-

ing such a policy if one is formed, and (ii) for de-

ciding the course to follow in respect to individual ,

cases.

Answer:

(a) Imperial’s present policy is to refer all inquiries it

receives from U. S. sourees for Bulk Form Griseofulvin to

American, its exclusive U. S. distributor for the sale of\

. a |

eneenensntnseeibiatia ee ns, a eee

Bulk Form Griseofulvin, and not in any way to ‘influence

or restrict American’s freedom to make such sales.

(b) The person responsible for forming Imperial’s policy

with regard to the above is Mr. Reginald G. Hoare, the

Chairman of Imperial’s Pharmaceuticals Division.

Interrogatory No. 63:

List by number and title all United States Griseofulvin

Patents which Defendant (i) owns, (ii) has a right to

license, or (iii) is licensed under.

Answer:

(i) U. S. Patent No. 2,900,304 Griseofulvin uses and

compositions

(ii) U. S. Patent Nos. 2,843,527 Production of Griseoful-

vin in low nitrogen level

medium

2,900,304 Griseofulvin uses and

compositions

2,938,835 Production of mutants

of the genus penicillium

2,986,496 Production of antibiotics

and antibiotic contain-

ing products

3,008,876 Compositions containing

Griseofulvin

3,038,839 Process for the produc.

tion of Griseofulvin

3,069,328 Production of Griseo-

) fulvin

| 3,069,329 Production of Griseo-

fulvin

3,095,360 Griseofulvin production

| 3,152,150 Production of Griseo-

fulvin

3,330,727 Griseofulvin with high

specific surface area

EEE REE OR LEI SE TEE

ars rea . SE MENON RAAT AW LIS | ORRIN RAR, PEON TPES Pa TE OORT i tetieattaiaiaieminietaiaeianiate

Imperial’ s right to license the foregoing patents is, ex-

cept in umusual circumstances, limited to American.

(iii) Same list as 63(ii), but omitting U. S. Patent No.

2,900,304.

Interrogatory No. 65:

(a) List each person from whom Defendant has a Li-

cense under Patents, United States or foreign,

relating to Griseofulvin ;

(b) Identify each such person by name, address, date

such License was entered into, and territories li-

censed ;

licensed ;

(d) For each such Patent and License state whether

the Defendant has an unlimited right to sublicense

on unrestricted terms; and

(e) If such right is not unlimited or unrestricted, ex-

plain such limits or restrictions.

Answer:

Note: —By stipulation between the parties, this interrog-

atory has been restricted to United States patents, and

accordingly some parts of the interrogatory no longer

apply.

(a) Glaxo Laboratories Limited.

(b) The address of Glaxo Laboratories Limited is 891-

995 Greenford Road, Greenford, Middlesex, England. The

date of the license is April 26, 1960.

been licensed have been listed in answer to Interrogatory

63 (iii).

(d) &(e) Under the April 26, 1960 Patent License Agree-

ment between Glaxo and Imperial, Imperial has no right,

except in unusual circumstances, to manufacture Griseo-

fulvin except in the United Kingdom, or to license others to

manufacture Griseofulvin anywhere in the world. Imperial

has the right to sublicense its Associates to make, use and

sell preparations containing Griseofulvin. American, Im-

perial’s exclusive distributor in the United States, is its

sole Associate in the United States, so that Imperial’s sub-

licensing rights are restricted to American.

SAEED? SRE ENE Ee ee

Interrogatory No. 66:

List each United States Patent owned by Glaxo or Im-

perial relating to Griseofulvin, practiced by (i) Glaxo, (ii)

Imperial, (iii) American, (iv) Johnson, and (v) Schering;

specifying the relevant patent number and claim numbers

for each such company.

Answer:

Imperial is not engaged in production or sale of Griseo-

fulvin within the United States and therefore does not prac-

tice any U. S. patent relating to Griseofulvin. Imperial is

not in a position to answer definitively concerning U. §.

patents that may be practiced by American, Johnson and

Schering, but believes that U. S. Patent No. 2,900,304

(owned by it) and U. S. Patent No. 3,330,727 (owned by

Glaxo) are practiced by American, Johnson and Schering.

Interrogatory No. 67:

(a) State the name and address of each person be-

lieved by Defendant to have expressed an interest

in purchasing, inquired as to availability of, or re-

quested Bulk Form Griseofulvin from Glaxo, Im-

perial, American, Johnson, and/or Schering; and

(b) State the date on which and manner in which each

such expression of interest, inquiry, or request

occurred.

Answer:

Name and Address Date Manner

Wayside Gardens, Ine. March, 1960 Inquiry to American

Mentor, Ohio

Washington State University September, 1960 Personal inquiry to

Puyallup, Wash. employee of Imperial

International Chemical January, 1963 Letter to Imperial

Corporation

New York, N. Y.

U. S. Summit Corporation July, 1963 Inquiry to American

120 Wall Street

New York, 5, N. Y.

McKesson and Robbins September, 1963 Telephone inquiry to

U.S. A. American

Name and Address Date Manner

Unimed, Inc. May, 1964 Inquiry to Imperial

Morristown, N. J. Chemical Industries

(New York) Limited

Philipp Bauer Co., Ine. November, 1964 Telephone inquiry to

17 East 45th St. Imperial Chemical

New York 17, N. Y. Industries (New York)

Limited

American Cyanamid Co. May, 1965 Inquiry to Glaxo Group

Lederle Laboratories Limited

Division

Pearl River, N. Y.

Nurani Farma May, 1965 Inquiry to Imperial per

Miami, Fla. Glaxo Group Limited

Pitman, Moore & Co. November, 1965 Inquiry to Glaxo Group

U.S. A. Limited

Allergan Pharmaceuticals February, 1968 Letter to Imperial

1000 South Grand Avenue

Santa Ana, Calif.

Mead, Johnson & Co. Late 1955 Inquiry to Imperial

Chipman Chemical Co. November, 1958 Inquiry to Imperial

Interrogatory No. 69:

Identify by patent number and claim number, the patent

claims, if any, which Defendant contends are ‘‘blocking’’

and which Glaxo and Imperial placed in the Griseofulvin

Patent Pool.

Answer:

Either Glaxo or ICI owns the following British patents

pertaining to manufacture of Griseofulvin and/or human

and animal thereapeutic formulations containing Griseo-

fulvin:

U. K. Patents

No. 784618

No. 788118

No. 795039

No. 791603

No. 810378

No. 810377

No. 899667

No. 899668

2 ERE Oe ae ee ow a

ERS PR ROS eR TRA BE Ne IEE NE FRAP: : BAN ea SS i 8 ANGLIA RIOT I

iene ie ae eee SORA OINY ALR BS Soo

U.K. Applications

7197/59

11097/59

11095/59

and the U. S. corresponding patents listed in the Answer to

Interrogatory 63(ii). All of the claims of these patents

have blocking effects of the kind indicated in the Answer to

Interrogatory 70.

Interrogatory No. 70:

State Defendant’s contentions as to whether and why it

was necessary to pool Griseofulvin Patents in order to

make Griseofulvin available to the public.

Answer:

In replying to this question, objection is taken to plain-

tiff’s inaccurate use of the words ‘Patent Pool’’ to cover

the contractual arrangement between Glaxo and Imperial

whereby each receives rights under the other’s Griseo-

fulvin patents (see Definitions, 1.17). Distinguishing the

substance of what Plaintiff is inquiring about from the

misleading way in which it has been put in this interroga-

tory :—

Speaking first to the U. K. market and consumer: In the

absence of a contractual arrangement between Imperial and

Glaxo whereby Imperial received rights under Glaxo’s Bulk

Form Griseofulvin (‘bulk Griseofulvin’’) U. K. patents,

Imperial could not manufacture the bulk Griseofulvin re-

quired to produce Finished Pharmaceutical Form Griseo-

fulvin (‘‘dosage form Griseofulvin’’), which it had discov-

ered to have important therapeutic effects. Similarly,

unless Glaxo obtained rights under Imperial’s U. K. patent

for dosage form Griseofulvin for oral administration, Glaxo

could not convert its bulk Griseofulvin into dosage form

Griseofulvin. Thus, without the contractual arrangement

between Imperial and Glaxo, Glaxo would have been blocked

from entering the U. K. market for dosage form Griseo-

fulvin and Imperial blocked from entering that market on

the basis of its own production of Griseofulvin, and_ the

public correspondingly deprived of the benefits of an im-

portant medical discovery. With the conclusion of the

agreement between Imperial and Glaxo, the British public

was assured of the benefits accruing from two competing

sources of dosage from Griseofulvin.

Coming now to the U.S. market and consumer: Imperial’s

contractual arrangement with Glaxo, enabling it to manu-

facture bulk Griseofulvin in the United Kingdom, resulted

in its having supplies of bulk Griseofulvin which it could

export to the United States for manufacture there into

dosage form Griseofulvin and distribution by its U. 8S. dis-

tributor, American. Without the contractual arrangement

and Imperial as a source of supply for bulk Griseofulvin,

American would have been blocked from entering the U. S.

market for dosage form Griseofulvin.

Without obtaining rights under Imperial’s U. S. patent

on dosage form Griseofulvin, no other U. S. concern could

enter the U.S. market for that product. Accordingly, for

Glaxo to be able to export bulk Griseofulvin to the United

States, it had to assure its U. S. purchasers that they would

acquire the rights to use Imperial’s U. S. dosage form

Griseofulvin patent. Hence, the execution of the con-

tractual agreement between Imperial and Glaxo confer-

ring on Glaxo the right to sublicense its purchasers under

Imperial’s U. S. patents was necessary to enable Schering

and Johnson to enter the U. S. market and make available

their production of dosage form Griseofulvin to the public.

Thus, the contractual arrangement between Imperial and

Glaxo for the licensing their respective U. K. and U. S.

patent rights made available to the American public and

pharmaceutical industry two sources of supply of bulk

Griseofulvin and three sources of supply of dosage form

Griseofulvin.

If Glaxo had not entered the dosage form Griseofulvin

market, it would have had no incentive to carry on further

research in the Griseofulvin area. Glaxo and its licensees

would have been precluded from entering the dosage form

Griseofulvin market in all countries of the world where

Imperial’s invention was patented (including the United

Kingdom and United States), unless Glaxo had entered into

a contractual arrangement with Imperial enabling it and its

licensees to obtain licenses under Imperial’s patent. Conse-

quently, the public of the United Kingdom, the United

States and other countries would have been deprived of

further discoveries made and patented by Glaxo, such as

OC ELCE ADE: LPL IIL hg APE WT ot MO

the valuable discovery that was the subject of Glaxo’s

Ultrafine Particle Griseofulvin patent.

Interrogatory No. 71:

List all Patents which Imperial has contributed to the

Griseofulvin Patent Pool other than United States Patent

No. 2,900,304 and corresponding foreign patents.

Answer:

In replying to this question, objection is taken to plain-

tiff’s inaccurate use of the words ‘patent pool’’ to cover

the contractual arrangement between Glaxo and Imperial

whereby either or both receive any rights under any of the

other’s Griseofulvin patents. This interrogatory has been

limited by stipulation to relate to U. S. patents only. There

is no other U. S. patent of Imperial which is subject to any

contractual arrangement whereby Glaxo receives any rights

under Imperial’s Griseofulvin patents.

Interrogatory No. 74:

State all reasons why Defendant has not sold Bulk Form

Griseofulvin to persons in the United States other than

American, Johnson, and Schering.

Answer:

Imperial has no selling organization in the United States

for the marketing of pharmaceutical products and has, for

many years, been bound by contract with American, whereby

American acts as the exclusive distributor within the United

States of pharmaceutical products developed by Imperial.

The fact that American is Imperial’s exclusive distributor

necessarily means that Imperial cannot sell Bulk Form

Griseofulvin to Johnson, Schering or any other U.S. firm.

Interrogatory No. 75: i

List all United States Patents known to Defendant which

relate to Griseofulvin.

Answer:

U. S. Patent Nos. 2,843,527

2,900,304

2,938,835

2,986,496

3,008,876

3,029,185

3,038,839

3,069,328

3,069,329

3,090,791

3,095,360

3,147,282

3,152,150

3,160,640

3,325,362

3,330,727

Interrogatory No. 82:

State whether Defendant has entered into any agreement

or understanding with any other person in regard to

whether or not Defendant will grant additional Licenses

under United States Griseofulvin Patents.

Answer:

In the agreement dated April 26, 1960, between Imperial

and Glaxo Laboratories for an exchange of licenses under

Griseofulvin patents, Imperial undertook not to grant any

licenses under its United States Griseofulvin patent, addi-

tional to that thereby granted to Glaxo, except to its Sub-

sidiaries and Associates. As already indicated under Inter-

rogatory 65, American, Imperial’s exclusive distributor in

the United States, is Imperial’s sole U. S. Associate.

Interrogatory No. 83:

State whether any Licensee under a United States Griseo-

fulvin License has ever requested Defendant not to, or

suggested to Defendant that it should not, grant an addi-

tional United States Griseofulvin License to a person at

such time not so licensed.

Answer:

Interrogatory No. 84:

State whether Defendant has entered into any agree.

ment or understanding with any other person in regard to

whether or not Defendant will sell Bulk Form Griseofulvin

to or for persons in the United States other than American,

Johnson, and Sehering.

Answer:

Because of American’s status as the sole importer and

distributor of Imperial’s Griseofulvin in the United States,

Imperial is precluded from supplying Bulk Form Griseo.

fulvin to persons in the United States other than American.

a “ Pah Ts AL Man soe" tae) |

DEFENDANT GLAXO GROUP LIMITED’S

ANSWERS TO INTERROGATORIES

PROPOUNDED BY PLAINTIFF JULY 16, 1968

[Answered by Glaxo, Oct. 25, 1968; Annexed to Wallace

Afft. of Oct. 17, 1969]

[Caption Omitted]

Interrogatory No. 36:

State the formula for Griseofulvin.

Answer:

An accepted systematic nomenclature based on the trivial

name ‘‘grisan’’ is 7-chloro-4,6,2’-trimethoxy-6’-methy]-gris-

2’'-en-3,4’-dione.

0.CHs 4 -CHt

Cc C==CH

Pe oe

CH30— i ‘on — CHa

1 CH

The empirical formula of griseofulvin is C,rHi:Cl Ov. The

structural formula is

Interrogatory No. 38:

State the amount, by weight and total sales price (re-

ceived by Glaxo), of Bulk Form Regular Size Griseofulvin

shipped by Glaxo to (i) American, (ii) Johnson, and (iii)

Schering, separately, for the years 1965, 1966 and 1967.

Answer: Fe

(i) None

(ii) 1965 4970 kilograms $256,151

1966 1395“ 73,444

1967 1510“ 90,902

(iii) 1965 3512 kilograms” $211,422

1966 2260“ 136,052

1967 3773“ 227,135

he ee i ee |

iL 1B ae SOFT NEA SIL EAN OS EP

Nore: All years are Glaxo fiscal years beginning on July

1 of year stated. Includes foreign as well as U. S. sales,

Interrogatory No. 39:

State the amount, by weight and total sales price (re-

ceived by Glaxo), of Bulk Form Microsize Griseofulvin

shipped by Glaxo to (i) American, (ii) Johnson, and (iii)

Schering, separately, for the years 1965, 1966, and 1967,

Answer:

(i) None ;

(ii) 1965 6550 kilograms $414,843

1966 9348 ‘ 521,920

1967 SaNq7—i‘éiéi“’S; 1,628,729

(iii) 1965 10315 kilograms $620,963

1966 16994 kilograms 937,976

1967 16840 kilograms 980,615

Nore: All years are Glaxo fiscal years beginning on July 1

of year stated. Includes foreign as well as U. S. sales.

Interrogatory No. 42:

(a) State separately the amount of royalties paid un-

der the Griseofulvin Patent License to Defendant

by (i) American, (ii) Johnson, and (iii) Schering

separately, for each of the years 1965, 1966 and

1967;

(b) State the royalty rate for each such year for each

such Licensee; and

Griseofulvin sales in each such year.

Answer:

(a) (i) None

(ii) 1965 $51,402.31

1966 58,741.70

1967 86,041.84

(iii) 1965 $109,536.94 -

1966 . 114,777.04

1967. 124,630.38

(b) 24%

MEM TIO EO IRAE GN I PH AE AES

Johnson &

Johnson 1965 $2,132,444.50

1966 2,439,378,80

1967 3,528,617.05

Schering 1965 $4,381,478.00

* 1966 4,591,080.00

1967 4,985,214.00

Note: All years are Glaxo fiscal years beginning on July 1

of year stated. Includes foreign as well as domestic sales.

Interrogatory No. 43:

State the selling price of Bulk Form Griseofulvin as sold

by (i) Glaxo and (ii) Imperial, for and during each of

the years 1965, 1966, and 1967. ;

Note: This,imterrogatory has been modified by stipula-

tion to-refer only to sales made to United States Companies

or otherwise known to be destined for sale in the United

States.

Answer:

(i) $60.20 per kilo on regular sales; $48.16 per kilo on

material used in fulfilling U.S. Government contracts.

(ii) Glaxo is without information sufficient to enable it

to respond to this interrogatory.

Interrogatory No. 53:

(a) State the date or approximate date on which De-

fendant was first made aware that the Government

_ Was investigating (i) the Griseofulvin License be-

tween Glaxo and Schering, (ii) the Griseofulvin

License between Glaxo and J ohnson, and (iii) the

Griseofulvin License between Imperial and Ameri-

can; and

(b) State the manner in which such knowledge was

communicated to Defendant.

Answer:

(a) (i) Orally by Schering personnel in or about

January 1968.

(ii) By letter from Johnson dated September 7,

1967.

(iii) On or about March 4, 1968 by a telephone call

and from a British newspaper man.

(b)

Interrogatory No. 35:

(a) State Defendant’s present policy with regard to

selecting the persons to whom it will sell Bulk

Form Griseofulvin ;

(b) State the names of all persons responsible for

forming such policy ; and

persons who would be responsible (i) for forming

such a policy if one is formed, and (ii) for deciding

: the course to follow in respect to individual cases.

Answer:

(a)

(b)

(ce) (i)

(ii)

Glaxo has no policy with regard to selecting

the persons to whom it will sell bulk form

griseofulvin.

None.

Glaxo has no intention of forming a policy.

The Board of Directors of Glaxo Group

Limited is collectively responsible for decid-

ing the course to follow in individual cases

but Mr. A. E. Bide an Executive Member of

the Board is the individual functionally re-

sponsible for advising the Board on all mat-

ters of this nature. He in turn is advised by a

large and varying number of members of the

Company’s staff. The procedure is to con-

sider each request for supplies of bulk form

griseofulvin individually and to grant or

withhold the License as Glaxo decides in the

exercise of its independent judgment to be in

the Company’s commercial interests at the _

time. -

Interrogatory No. 57:

(a) List all manufacturers of Bulk Form Griseofulvin

known to Defendant; and

EATER GEE AMEE MDF OEE AN ILE OHI PRS AS APNE SE A EMEA oom, fF

(b) Give the address of each.

Nore: This interrogatory has been objected to insofar as

it relates to licensees of Glaxo under foreign griseofulvin

patents.

Answer:

Glaxo does not know of any manufacturer of bulk griseo-

fulvin in the U.S.A. and does not know the identity of manu-

facturers elsewhere other than Imperial and Glaxo and its

licensees.

Interrogatory No. 63:

List by number and title all United States Griseofulvin

Patents ay Defendant (i) owns, (ii) has a right to li-

cense, OF iii) is licensed under.

Answer:

(i) U.S. Patent No. Title

2,843,527 Production of griseofulvin in

: low Nitrogen level medium.

2,938,835 Production of mutants of the

genus penicillium.

3,008,876 Compositions containing gris-

eofulvin.

2,986,496 Production of antibiotics and

antibiotic-containing products.

3,038,839 Process for the Production of

griseofulvin.

3,152,150 Production of griseofulvin.

3,095,360 Griseofulvin production.

3,069,328 Production of Griseofulvin.

3,069,329 Production of Griseofulvin.

3,330,727 Griseofulvin with high specific

surface area.

(ii) 2,900,304 Griseofulvin uses and composi-

° ‘ \

tions.

PR TEETER a OEE RCI FS EPP PAR ET. a

(iii) 2,900,304 Griseofulvin uses and composi-

tions.

3,325,362 Isogriseofulvin providing

higher griseofulvin blood

levels.

Interrogatory No. 64:

(a) List each person licensed by Defendant under

Patents, United States or foreign, relating to

Griseofulvin ;

(b) Identify each such person by name, address, date

such License was entered into, and territories li-

censed ;

the Patents so licensed ;

(d) For each such Patent and License state, whether

the Licensee has or has not an unlimited right to

sublicense on unrestricted terms; and

(e) If such right is not unlimited or unrestricted, de-

‘seribe all limits and/or restrictions.

Nore: This interrogatory has been modified by stipula-

tion to require only (a) the name and address of each

person licensed by Glaxo under United States or foreign

griseofulvin patents and (b) a statement as to whether

such person can or cannot sell bulk form griseofulvin to or

for persons in the United States.

Answer:

(a) Imperial Chemical Industries Limited,

Imperial Chemical House,

Millbank, London, S.W.1. England.

Johnson & Johnson, Inc.

New Brunswick, New Jersey.

~ Schering Corporation,

Bloomfield, New Jersey.

Lovens Kemiske Fabrik,

Ballerup Byvej,

Ballerup, Denmark.

Nyegaard and Co. A/S.

103 Sandekerven,

. Oslo, Norway.

Farbwerke Hoechst A.G. /

Frankfurt (M)—Hoechst,

Germany.

Takeda Pharmaceutical Industries Ltd.

27 Doshomachi Nichome Higashiku,

Osaka, Japan.

Laboratories Clin-Comar

20 Rue des Fosses,

St. Jacques,

Paris 5, France.

() Imperial, Johnson & Johnson and Schering may

sell bulk form griseofulvin in the United States.

The others may not.

SMI CEE LIRLT GO ELI LE LON LIE I A I —

Interogatory No. 65:

4) List each person from whom Defendant has a Li-

cense under Patents, United States or foreign, re-

lating to Griseofulvin ;

b) Identify each such person by name, address, date

such License was entered into, and territories

licensed ;

c) Identify by number and country the Patents so

licensed ; ‘

d) For each such Patent and License state whether —

the Defendant has an unlimited right to sublicense —

on unrestricted terms ; and :

e) If such right is not unlimited or unrestricted, ex- —

plain such limits or restrictions.

Nrg: This interrogatory has been modified to refer only

tO Pesent or future United States patents. ,

Aniyery; z

(a) and (b) Imperial Chemical Industries Limited,

Imperial Chemical House,

Millbank, London, 8.W.1. England.

License dated April 26th, 1960.

Johnson & Johnson, Inc.

New Brunswick, New Jersey.

License dated April 1, 1959.

U.S.A. Patent 3,325,362 (Johnson)

(d) Noas to each license.

(e) Right to sublicense subject to consent of Licensor.

Interrogatory No. 66:

List each United States Patent owned by Glaxo or Im-

perial relating to Griseofulvin, practised by (i) Glaxo, (ii)

Imperial, (iii) American, (iv) Johnson, and (v) Schering;

specifying the relevant patent number and claim numbers

for each such company.

Answer:

Glaxo is without information sufficient to enable it to re-

spond to this interrogatory as to Imperial or American.

Certain of the griseofulvin supplied by Glaxo to Johnson

and Schering in the United States is the subject of claims

Nos. 1, 2 and 3 in U.S. Patent 3,330,727. Glaxo believes that

the griseofulvin supplied by it to Johnson and Schering in

the United States is formulated into products which are

the subject of claims in U.S. Patents 2,900,304 and 3,330,727,

but is without knowledge sufficient to specify the particular

claims involved.

Interrogatory No. 71:

List all Patents which Imperial has contributed to the

Griseofulvin Patent Pool other than United States Patent

No. 2,900,304 and corresponding foreign patents.

Nore: This interrogatory has been modified by stipula-

tion to refer only to United States patents.

Answer:

None.

Interrogatory No. 73:

State all reasons why Defendant has not granted Griseo-

fulvin Patent Licenses to persons in the United States

other than American, Johnson, and Schering.

Answer:

Glaxo has not granted any griseofulvin patent license to

—

American. It has not granted griseofulvin patent licenses

Schering because Glaxo in the exercise of its independent

judgment has not considered it in its best commercial in-

terests to do so. See answer to interrogatory 54 ¢ (ii).

Interrogatory No. 74:

State all reasons why Defendant has not sold Bulk Form

Griseofulvin to persons in the United States other than

American, Johnson, and Schering.

Answer:

Glaxo has not sold any bulk form griseofulvin to Ameri-

can. It has not sold bulk form griseofulvin to persons in

the United States other than Johnson and Schering because

Glaxo in the exercise of its independent judgment has not

considered it in its best commercial interest to do so.. See

answer to Interrogatory 55 ¢ (ii).

Interrogatory No. 75:

List all United States Patents known to Defendant which

relate to Griseofulvin.

Answer:

The patents listed in response to Interrogatory 63.

Interrogatory No. 83:

State whether any Licensee under a United States Griseo-

fulvin License has ever requested Defendant not to, or sug-

gested to Defendant that it should not, grant an additional

United States Griseofulvin License to a person at such time

not so licensed.

Answer:

Yes.

Interrogatory No. 84:

State whether Defendant has entered into any agreement

or understanding with any other person in regard to

whether or not Defendant will sell Bulk Form Griseofulvin

to persons in the United States other than Johnson and

“y SLE RGSS REAR EAN atte Mase ae

to or for persons in the United States other than American,

Johnson, and Schering. .

Answer:

No.

Interrogatory No. 85:

State whether any Licensee under a United States Griseo-

fulvin License has ever requested Defendant not to, or sug-

gested to Defendant that it should not sell Bulk Form

Griseofulvin to or for a person in the United States other

than American, Johnson, and Schering.

Answer:

Glaxo is aware of no request or suggestion made in such

terms. It was suggested to it that it should not grant

additional griseofulvin licenses in certain fields. Had such

licenses been granted they might well have involved the

sale of bulk griseofulvin by Glaxo to the Licensee.

AFFIDAVIT OF JAMES H. WALLACE,

DATED OCT. 31, 1968

[Caption Omitted]

2. At least as early as January 14, 1957, E. D. Carry, an

official of ICI, proposed to H. W. Palmer, an official of

Glaxo, that the two firms should exchange patent rights re-

lating to griseofulvin and enter into other mutual arrange-

ments for the marketing of the product (see GX-1, attached

hereto). Also in 1957, representatives of the two firms met

and ‘‘agreed that we should have patent pool”’ (GX-2).

3. On April 26, 1960, the defendants ICI and Glaxo

formalized their patent pooling agreement (GX-3). Each

party undertook to grant patent licenses to the other (GX-

3, 11 2(a), 3(a)). ICI further undertook ‘‘not to sell and

to use its best endeavors to prevent’’ its licensees ‘‘from

selling any griseofulvin in bulk to any Independent Third

Party,’’ unless Glaxo gave its ‘‘express consent in writing’’

(GX-3, 7 4(e)).

4, Griseofulvin in bulk is the raw material from which

griseofulvin pills are made. That is, bulk form griseofulvin

is the drug chemical that ICI sells its licensees, in approxi-

mately 100-pound drums. (50 to 55 kilograms).° The bulk

product is then mixed with potato starch, corn starch, mag-

nesium stearate, and/or other therapeutically inactive prod-

ucts, and is put into the form of a pill, tablet, or other so-

called ‘‘dosage form,’’ for sale for ultimate consumption

by the patient.

5. On October 4, 1962, ICI sent a proposed letter agree-

ment (GX-4) to American Home Products Corp.

(““AMHO”’), providing for an exclusive sales agreement

on griseofulvin; AMHO agreed to the contract on Decem-

ber 19, 1962. ICI agreed to sell griseofulvin in bulk, and

pass title thereon, to AMHO (GX-4, 711). ICI granted

_AMHO a license under ‘‘any relevant United States patents

of ourselves and/or Glaxo . . . to manufacture process, re-

pack and sell dosage forms of griseofulvin from griseofulvin

supplied to you by us in bulk (GX-4, 110) ( emphasis sup-

plied). The agreement further provided (GX-4):

Re Sah sor alae ace eee a

SOLES,

ied sein ieaen eee Tae ee

7) you [AMHO] will not, without first obtaining our

[ICT’s] consent, resell or re-deliver in bulk supplies

of griseofulvin.

See also, to the same effect as the foregoing, {\f] 24, 28, 29,

and 30 of ICI’s Answer to the Complaint.

6. Since such date, ICI has sold substantial amounts of

bulk form griseofulvin to AMHO, which it shipped from

England to AMHO in the United States. In 1966, such

sales were approximately $225,000 (see ICI’s answer to

plaintiff’s July 16, 1968, Interrogatory No. 40).

7. Since such date, AMHO has sold substantial amounts

of such griseofulvin, in commerce, only in dosage form; in

1966, such sales by AMHO amounted to approximately

$1.4 million (see ICI’s answer to plaintiff’s July 16, 1968,

Interrogatory No. 42(e)).

8. On April 19, 1968, C. M. J ohnson, President of Ayerst

Laboratories Division of AMHO testified at his deposition

(pp. 5-6) as follows:

Q. Does your corporation sell Griseofulvin in any

form other than dosage form?

A. The question is do we?

Q. Yes.

A. We have not to date. ‘

Q .Where does your corporation purchase Griseo-

fulvin for processing into dosage form?

A. From the Pharmaceutical Division of ICI, Ltd.

Q. That is Imperial Chemical Industries?

A. Yes Sir.

9. Since such date and up to the date of the filing of this

complaint, AMHO and ICT have each declined to sell griseo-

fulvin in bulk to other persons in the United States.

LP LIES SE OB MIR TELE

AFFIDAVIT OF JAMES H. WALLACE,

DATED JUNE 13, 1969

[Caption Omitted]

« * * * .

2. Background, Formation, and Operation of the Glaxo-

ICI Griseofulvin Patent Pool.

a. Negotsation and Execution of the First Patent

Pool Agreement. At least as early as January 14, 1957,

E. D. Carry, an official of defendant Imperial Chemical

Industries, Ltd. (‘‘ICI’’), proposed to H. W. Palmer,

an official of Glaxo that the two firms should exchange

patent rights relating to griseofulvin and enter into -

other mutual arrangements for the marketing of the

product (see GX-1, attached te Wallace affidavit at-

tached to plaintiff’s October 31, 1968, motion for partial

summary judgment against ECI on the restraint on al-

ienation issie, hereafter referred to as the ‘‘10-31-68

Wallace affidavit’’). Later in 1957, representatives of

the two firms met and ‘‘agreed that we should have a

patent pool’’ (GX-2, attached to 10-31-68 Wallace affi-

davit). Glaxo and ICI then entered into a letter agree-

ment dated May 1, 1957 (attached hereto as GX-11).

It provides, among other things, for the exchange of

licenses under Glaxo’s and ICI’s respective United

Kingdom and corresponding foreign patents relating

to griseofulvin.

b. Glazo’s Negotiations with Prospective United

States Licensees and Consultation with ICI Relating

Thereto. Beginning at least as early as March 9, 1956,

Glaxo began negotiating with Merck & Co., Inc.

(‘‘Merck’’) respecting a griseofulvin license. See

March 9, 1956, letter from Antonie T. Knoppers, Vice

President and General Manager of the Merck-Sharp &

Dohme International division of Merck, to H. W.

Palmer of Glaxo (attached hereto as GX-12). Begin-

ning at least as early as January 2, 1958, Glaxo began

negotiating with Johnson & Johnson, Inc. (‘‘J&J’’) and

Schering Corporation (‘‘Schering’’) respecting li-

censes under Glaxo’s griseofulvin patent rights and the

eoeerer PRETEEN ELL SEED ET SEIN BO AN TESS 5 NRCP SE LOANS eats. |

2 mOOaDY .

purchase of bulk form griseofulvin for sale in the

United States. See January 2, 1958, letter from A. E.

Bide, then Secretary of defendant Glaxo, to J&J (at-

tached hereto as GX-13). Upon the urging of J&J and

Schering, Glaxo agreed not to grant a license to Merck ~

(See Wallace affidavit attached to Plaintiff’s August

26, 1968, Rule 34 Motion for the production of docu.

ments by Glaxo). During these negotiations ICI was

consulted about Glaxo’s proposed licenses with J&J

and Schering (March 5, 1959, letter from N. W. Cusa,

Division Techno-Commercial Manager, ICI, to D. N.

Lindon, Glaxo, attached hereto as GX-14). -Subse-

quently, Glaxo entered into license agreements on sub-

stantially the same terms with J&J and Schering, both

dated April 1, 1959. These licenses are described more

fully in { 3 of this affidavit.

¢c. The Second Pool Agreement. On April 26, 1960,

ICI and Glaxo entered into a second agreement relating

to the griseofulvin patent pool (GX-3 of the 10-31-68

Wallace affidavit). This agreement provided for each

party to grant to the other licenses under its griseo-

fulvin patent rights (GX-3, Tf (2a) (8a)). ICI further

agreed ‘‘not to sell and use its best endeavors to pre-

vents its’ licensees from selling ‘‘any griseofulvin in

bulk to any Independent Third Party’’ unless Glaxo

gave its ‘‘express consent in writing.’’? (GX-3, J 4(e)).

d. The Pooled Patents.. Several of Glaxo’s United

States patents relating to griseofulvin purport to cover

processes for the manufacture of griseofulvin, not the

product griseofulvin, per se. One of the United States

patents owned by Glaxo, No. 3,330,727 (attached hereto

as GX-15; hereafter referred to as the ‘‘727 patent’’)

purports to cover fine particles of griseofulvin (de-

scribed in the patent as particles griseofulvin having a

designated specific surface area) in both bulk form and

dosage form. The ICI patent, United States Patent

No. 2,900,304 (attached as GX-1 to the Wallace affidavit

of 10-30-68 attached to plaintiff’s 10-30-68 motion for

partial summary judgment that the ICI patent is in-

valid) purports to cover certain dosage forms of grise-

ofulvin irrespective of particle size, but not to griseo-

fulvin in bulk form. See GX-1 attached to the afore-

mentioned Wallace affidavit of 10-30-68.

tei ct LN A RTE TE OAT! TAIRA OME NIE AT AAGNOINE NIN DEAE PPT AMOI

e. Refusals to Grant Griseofulvin Patent Licenses

and Refusals to Sell Bulk Form Griseofulvin Except

to AMHO, JéJ, and Schering. During the operation

of this patent pool third parties have requested griseo-

fulvin patent licenses and the right to purchase bulk

form griseofulvin from both ICI and Glaxo. See ICI’s

answer to plaintiff’s interrogatories nos. 67 (attached

as GX-5-6 to 10-31-68 Wallace affidavit) and 68 (at-

tached hereto as GX-16-17) ; Glaxo’s answers to plain-

tiff’s interrogatory nos. 67 and 68 (attached hereto as

GX-18 and 19, respectively) (inquiry from Burroughs

Wellcome & Co.); GX-20 attached hereto (letter re-

quest from Rachelle Laboratories, Inc. to Glaxo) and

GX-21 attached hereto (letter request from Dooner

Laboratories to Glaxo). At least until the filing of the

complaint in this case, no such licenses were granted

other than those to AMHO, J&J and Schering, which

contained bulk sales restrictions. Likewise during the

operation of the pool and at least until the filing of the

complaint in this case, no bulk sales of griseofulvin in

commercial quantities were made by defendants for use

or sale in the United States other than from Glaxo to

J&J and Schering, and ICI to AMHO.

3. The Glaxo Licenses with JéJ and Schering.

By agreements dated April 1, 1959, Glaxo licensed J&J

(attached hereto as GX-22) and Schering (attached hereto

as GX-23) on substantially the same terms. These agree-

ments provide, among other things, that:

a. Glaxo licenses the Glaxo patents and the ICI

patents to the United States company in the United

States and other specified countries.

(GX-22, f 2(b) ; GX-23, J] 2(b)) ;

b. J&J and Schering each undertakes

‘‘{to] distribute griseofulvin and preparations

containing the same solely under its own corporate

name or those of its Affiliates.’’

(GX-22, {| 2(c) (i) ; GX-23, 1 2(e) (i)) ;

ce. J&J and Schering each undertakes to purchase

such griseofulvin as it does not manufacture itself or

have manufactured as authorized by the license from

Glaxo. (GX-22, J 3(a) ; GX-23, 3(a));

PREPS LLNS MOORS PRE LER EIN PT NY A CME INN TMG mg na cag hi SES. ee |

d. J&J and Schering each

‘undertakes not to sell or to permit its Affiliates

to sell any griseofulvin in bulk to any Independent

Third Party without Glaxo’s express consent in

writing.’’

(GX-22 1 3(c) ; @X-23, 1 3(c)).

4. Sales of Griseofulvin to and by the U.S. Licensees

a. Glazo’s Sales of Bulk Form Griseofubvin to

JéJ and Schering. Pursaant to the aforementioned

license agreements between Glaxo and J&J and Glaxo

and Schering, Glaxo has sold substantial quantities

of bulk form griseofulvin to J&J and Schering in

both the unpatented regular size and the fine-particle

size, which is purportedly covered by Glaxo’s 727

patent, as shown below in Table I for the years 1965

to 1967,

e. J&J’s and Schering’s Adherence to the Bulk Sale

Provision, J&J and Schering have each refused to

sell commercial quantities of griseofulvin in bulk form

despite requests by other drug companies to make such

purchase. (See, for example, the July 10, 1968, letter

from Harry W. McNey, President, McNeil Labora-

tories, Inc. (J&J’s subsidiary that markets griseo-

fulvin) to Eugene C. Dooner, Jr., President, Dooner

Laboratories, Inc., attached hereto as GX-27, and the |

July 3, 1968, letter from Donald R. Longman, Vice

President, Domestic Operations, Schering Corporation,

to Eugene C. Dooner, Jr., President, Dooner Labora-

tories, Inc., attached hereto as GX-28.)

5. The Purported Waivers of the Bulk Sates Provisions.

M. R. Camp, Secretary, Glaxo Group Ltd., wrote J&J a

letter dated April 29, 1968 purporting to waive the bulk

sales restriction of the Glaxo-J&J griseofulvin license

quoted in 1/3 d of this affidavit. On April 25, 1968, Irving

H. Jurow, General Counsel, Schering, testified at his

deposition in this case that he had received a letter from

Giaxo on that date purporting to waive the bulk sales

restriction of the Glaxo-Schering griseofulvin license. These

purported waivers occurred after the plaintiff had com-

pleted its precomplaint antitrust investigation which Glaxo

was aware of at least as early as September 7, 1967

(Glaxo’s answer to plaintiff’s interrogatory no. 53 (attached

hereto as GX-29)), filed its complaint, and Glaxo’s challenge

to service of process was overruled by the Chief Judge of

this Court on April 22, 1968.

EXHIBIT 11, ANNEXED TO WALLACE AFFT. OF

JUNE 13, 1969—GLAXO-ICI AGREEMENT OF JUNE

21, 1957

1st May, 1957

Imperial Chemical Industries Limited,

Henagan House,

Blackley,

Manchester, 9.

Dear Sirs,

re: Griseofulvin

We have found in discussions with you that our two

companies have common interests in the investigation of

the uses of the antibiotic griseofulvin in the treatment of

animal diseases and the commercial exploitation of the

results of these investigations to the best interests of our

two companies and the public. As it would seem useful to do

so, this letter sets out to provide a formal record of the

relationship between our two companies on this subject.

I.C.I. is the owner of United Kingdom Provisional Patent

Applications Nos. 28904/56 and 28905/56, both of which

were filed on 21st September, 1956, Glaxo is the owner of

United Kingdom Provisional Patent Applications Nos.

18082/55 (filed 22nd June, 1955) 458/56 (filed 5th January,

1956) and 17554/56 (filed 6th June, 1956).

Glaxo and I.C.I. have agreed to exchange royalty-free

non-exclusive rights under all United Kingdom patents

issuing on the applications referred to in the preceding

paragraph and under all patents equivalent or correspond-

ing to them (including continuations-in-part, patents of

addition, reissues, extensions and the like) issuing in coun-

tries foreign to the United Kingdom to make use and sell for

the prevention or treatment of animal diseases only, com-

positions containing griseofulvin which are embraced by

the description and/or claims contained in any of the

patents referred to in this letter. Those rights (unless

Glaxo and I.C.I. shall at any time otherwise agree) shall

be conveyed for the life of the patents previously referred

to or for so long as Glaxo is able and willing to supply to

LC.L. its total requirements of griseofulvin or of material

containing griseofulvin whichever is the shorter period.

LC.I. will purchase its total requirements of griseofulvin

or of material containing griseofulvin from Glaxo for so

long as Glaxo is able and willing to supply these require-

ments at a reasonable price. The rights will be sub-

licensable only to subsidiaries and associates of I.C.I. and

Glaxo which I.C.I. and Glaxo effectively control at any

time by ownership of a majority of the voting rights or

by other means.

If, as we hope, you find the foregoing adequately ex-

presses the arrangements we have discussed, we would be

grateful if you would confirm this by signing and dating

the enclosed duplicate original copy of this letter in the

space provided below and returning the copy to us.

Yours faithfully,

For and on behalf of Graxo,Laporatories LiMiTED

A. E. Bide signed over 6d. stamp

Company Secretary

A. E. Bre

Accepted by

ImperrAL CHEMICAL INDUSTRIES LTD.

(Signed)

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