# Appendix — United States v. Glaxo Group Ltd. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386414_0095%3A01 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1973 - **Citation:** 410 U.S. 52 ## Text 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 73 80 85 87 88 89 91 92 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 iv » ‘ & 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 vi 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 250 251 252 252 253 254 254 255 256 & 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....... ix 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 a 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 4 : F ; = = : * 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 ‘ #. Sg EER ERTL IE MAE ET EA se . > RP DARE O RENE SE SRAI Oe ONES 82 They were not obligated to offer the opportunity to sell, and the implication was that this would be withheld. It was left that Glaxo would talk with Merck and with Schering and that, following this conversation, agreement would be reached with us concerning relationships with other licensees and for the selection of a supplier in the U. §. In the meantime, and augmenting supplies in the U. $8., “Glaxo will ship from England or possibly from other pro- ducing plants in Australia or elsewhere. Johnson & Johnson needs for experimental and clinical amounts of ‘‘Griseofulvin’’ were discussed. Quantities dis- cussed were based on Dr. Hildick-Smith’s memorandum to W. H. Lycan under date of November 17. Glaxo agreed to supply 21 K. in the next six months, or more if needed. They will promptly inventory everything in hand and prepare for additional production. First shipments will be made in the next week or ten days. They did make it clear that the interests of Schering or other selected licensee in the United States would have to be considered. Glaxo agreed that J&J could be identified with the work on ‘‘Griseofulvin’’ from the outset. They will write Dr. Blank advising him of this and authorizing full com- munication with J&J. They agreed that requests for clinical supplies and information will be referred to Johnson & Johnson. This, of course, was subject to adding a second licensee, if such a licensee is added before publication starts. It was finally left that Mr. A. E. Bide will prepare a draft of an agreement for J&J as soon as final details with LC.I. are completed. Glaxo thought this might require a matter of 10 days or two weeks. In the meantime, we were assured of a license and the full cooperation of Glaxo. They will send as complete reports as are presently available and will keep Johnson & Johnson informed in full on their European work. W. H. Lycayn TE EN iat EPL CEE AP ER EXHIBIT 31, ANNEXED TO WALLACE AFFT. OF 142 Serial or Application Country Number Patent Number Holland 205788 207148 . 213456 208228 236143 India 56844 57273 ‘ 57645 _ Israel 9428 9560 9625 Italy 96/422 98/260 5/395 99/408 Japan - 31-7765 12880/56 31-32730 31-16246 New Zealand : 116120 116429 116688 122717 Norway 93918 93919 r 91111 Pakistan 106848 107560 oe 106851 South Africa 891/56 1459/56 : 1853/56 Sweden 164660 4326/56 5870/56 LEM CERO SET STA ST Wa 143 Serial or > Application Country Number Patent Number U.S. A. 2843527- c 582927 % 631993 592270 662985 SCHEDULE C hereinbefore referred to: Assia Chemical Laboratories Limited TEL AVIV Israel. chide dai cain, alata Sat EE ee ee APPENDIX C ANNEXED TO ICI NOV. 8, 1968, MEM. ORANDUM OF POINTS AND AUTHORITIES—ICI. AMHO AGREEMENT OF SEPT. 12, 1958 IMPERIAL CHemicaL Inpustries LIMITED PHARMACEUTICALS DIVISION FULSHAW HALL, WILMSLOW, CHESHIRE 12th September, 1958, American Home Products Corp., 22, East 40th Street, New York, 16, u. wm me Dear Sirs, Following discussions which have taken place between our two companies, it is agreed :— (1) You are appointed as the sole importer, processor and distributor of such of our pharmaceutical products for human and veterinary use as may be agreed from time to time in the United States of America, Hawaii, Alaska and Puerto Rico and in such other territories as may be agreed between us from time to time. It is understood that this appointment may be extended to such of your subsidiary companies as may be agreed between us from time to time. (2) This appointment shall remain in force until 31st December 1965 and we will review with you not later than 31st December 1960 whether or not it should be further extended to the end of 1970. (3) In addition to those of our products which you already handle we will offer you for sale in your territory any new product that we may develop and that we con- sider appropriate for sale in your territory, subject to its being agreed between us that such a product can suitably be handled by yourselves having regard to all the circumstances surrounding that product. It is understood that, once such an offer is made, you will advise us within a reasonable period of time if you intend, or not, to market the product concerned. (4) Should it be agreed between us for any reason that you will not handle one of our products, we shall 144 ROMS LS PL SEN STS 145 forthwith be at liberty to offer such a product to any other firm in your territory. Once it is agreed that you shall be responsible for any of our products, your rights under Clause (1) in its sale in your territory will continue during the period of your appointment, as our sole importer, processor and distributor except that either party shall always be at liberty, on giving reasonable notice, to withdraw any product from this arrangement if either party is dissatisfied as to its quality or profitability or if either party is of the opinion that it has become obsolete. Should your appointment as our sole importer, proc- essor and distributor terminate, we shall have the right to sell ¢irectly or through some third party in your territory any of our products notwithstanding any continuing rights you may have to handle such a product, Provided that your appointment is not ter- minated by I.C.1. under Clauses (13) or (14) we will on such termination :— (i) grant to you a non-exclusive licence in your territory at a royalty to be agreed under any relevant patents to make, have made, use and appointment immediately prior to termination and (ii) be willing to supply your requirements of any of those products for your territory at prices and on conditions to be agreed for a period of five years from the termination of your ap- pointment or for the period until we cease to manufacture that product or products whichever shall be the shorter. (7) (i) We will assign to A.H.P. for the period of their appointment our U.S. trade marks for the prod- ucts which fall within the scope of this appoint- ment. Shou’d A.H.P.’s appointment terminate, their rights in any trade marks assigned to them under this appointment will continue unless, (a) A.H.P. themselves terminate the agreement for any reason except those envisaged in Clause (13) below, or (b) LC.I. terminate the agreement under Clauses (13) or (14), below, sell such products as were the subject of this. REA RRR RS SRR TER PMR EL EB S| (8) (9) 146 In either of which cases A.H.P. will before the termination of the agreement executed an as- signment which shall become operative on the day when the agreement terminates, re-assign- ing to us all our trade marks that have been assigned to them together with the good will attached to and symbolised by such trade marks, (ii) A.H.P. shall in any case re-assign to I.C.I. any trade mark assigned to A.H.P. by LC.I. by virtue of this Agreement together with the good will attached to and symbolised by the said trade mark if at any time (whether during the cur- rency of this Agreement or afterwards) A.H.P. shall cease to use that trade mark. (iii) During the currency of the agreement, A.H.P. will take such action as is necessary to maintain the trade marks assigned to them by us and their registrations valid and effective. (iv) During the currency of the agreement A.H.P. will not, without our prior consent, use or regis- ter any trade marks assigned to them by us on or for any products which do not fall within the scope of this appointment nor will they register or use any trade marks confusingly similar to such trade marks for goods within the scope of this agreement or for any substitutes therefor or for similar goods. It is understood that circumstances may arise in which it is preferable for you to obtain your supplies of the products from other manufacturing sources and we will allow you to make such purchases in cases where L.C.I. agrees that it would be in our mutual interest. It is recognised that it will be to our mutual advan- tage to co-operate, from the earliest practicable stage, in the exchange of formulation, therapeutic process- ing and packing knowledge relating to our products which it is proposed should eventually be processed and packed in your territory and it is therefore agreed that we shall disclose to you, in confidence, details of such knowledge acquired by us in the development of such products and specific to such products and that you will similarly disclose to us such knowledge ac- quired by you in the development of these products for sale in your territory. (10) (11) (12) (13) (14) If 147 You will use your best endeavours (no less than those used in respect of the promotion of your other prod- ucts consistent with market potential) to promote business in the products concerned. In order to secure the most rapid development and use in your territory of new discoveries, requiring F.D.A. approval for sale, you will co-operate fully with us in the promotion and progressing of clinical trials which it is mutually agreed should be estab- lished in the U.S.A. It is recognised that the respec- tive responsibilities, terms and other conditions for the establishment of such trials will require separate discussion and agreement in each case as it arises. The conditions to be applied to our sales to you of the products concerned shall be agreed between us from time to time. Any such agreement will be in the form of a letter, each product to be the subject of a separate letter which will at the same time cover any other details not already provided for by the present letter, including rates of royalty which may _arise, any particular labelling requirements and any warranties concerning patents and trade marks, as may be appropriate. As soon as possible after your acceptance of this letter we will agree on the future terms and conditions applicable to our sales to you of our products that you at present handle. Either of us shall be at liberty to terminate your appointment as sole importer, processor and distribu- tor if the other withholds for more than two months after notice monies due that are not in dispute or commits or permits any substantial breach of the terms of this arrangement. Each of us will give notice to the other of any such withholding or breach and the other will have two months after receipt of the notice within which to correct such withholding or breach. This arrangement is personal to the two parties and shall not be assigned by either of them without the consent of the other. The arrangement shall also be terminable forthwith by either party in the event of any substantial change in the ownership or control of the pharmaceutical business of the other party. you agree to the above, we should be grateful if you SA Be 6 ISTE OH guar percents gor 148 would sign both copies of this letter in the space provided - below and return one copy to us. Yours faithfully, Imperial Chemical Industries Limited Pharmaceuticals Division EK. D. Carey, Managing Director. Agreed on behalf of American Home Products Corpora. tion. Signed Date Dec. 17, 1958 SEE Ie ttl Dh 2 NGAI, AVA, REIL OE Pty mer EXHIBIT 4, ANNEXED TO WALLACE AFFT. OF OCT. 31, 1968—ICI-AMHO AGREEMENT OF DEC. 19, 1962 IMPERIAL CHEMICAL INDUsTRIES LIMITED PHARMACEUTICALS DIVISION FULSHAW HALL, WILMSLOW, CHESHIRE 4th October, 1962. American Home Products Corporation, 92, East 40th Street, New York, 16, New York, U.S.A. Dears Sirs, GRISEOFULVIN We refer to our letter of 12th September, 1958, appoint- ing you our sole importer, processor and distributor of certain of our pharmaceutical products for human and veterinary purposes in the United States of America, Hawaii and Puerto Rico (which in this letter we shall refer to as the United States). We are now writing to offer you our product griseofulvin for sale in the United States sub- ject to the general conditions outlined in our letter of 12th September, 1958 (or any extension thereof) and subject also to the following conditions :— 1) You will place firm orders with us from time to time for griseofulvin in bulk containers and we 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 requirements of other customers and the productive capacity of our plant. Title to all goods ordered shall pass to you on being placed aboard a steamer or other carrier at a British port. Your orders will be for the goods f.o.b. United Kingdom port and terms of payment will be net 90 days from the dateof issue of the invoice. 2) The price we shall apply to sales of griseofulvin in bulk containers will be $78.40 per kilo f.o.b. U.K. or such other price as shall be agreed in writing between us from time to time. 149 FER LE ETP Oe IS NE WERE TITS ARETE RGAE EI NET 100 3) The cost of publicity will be borne by you and we shall supply you with any information and data which you may reasonably require for use in the preparation of printed matter and publicity material. 4) You will supply us from time to time with reports of your progress in selling griseofulvin and the state of the market as it affects your sales. 5) You will label griseofulvin in accordance with our colour scheme and each label will indicate clearly that the product is distributed in the U.S.A. by arrangement with Imperial Chemical Industries Limited. 6) You will at all times strictly adhere to the formulae and methods developed or approved by us in manufactur. ing, processing and repacking griseofulvin and will not employ formulae and methods not first approved of by us, 7) You will not, without first obtaining our. consent, resell or re-deliver in bulk supplies of griseofulvin. 8) The rights granted to you by this letter do not in- clude rights to sell griseofulvin to customers outside the United States or to sell it to customers within the United States for export from the United States. You may, how. ever, sell griseofulvin to the U.S. Government for use by that Government outside the United States. 9) You will give no warranty or guarantee in connection with griseofulvin unless this has been authorised by us in writing. 10) We will grant you a non-exclusive license or sub- licence under any relevant United States patents of our- selves and/or Glaxo Laboratories Limited of Greenford, Middlesex, England. to manufacture, process, re-pack and sell dosage forms of griseofulvin from griseofulvin sup- plied to you by us in bulk under Paragraph (1) above. 11) a) You will pay us at our offices at Fulshaw Hall, Wilmslow, England, in U.S. dollars a royalty equal to 5% or such other percentage as may be agreed in writing be- tween us from ime itn of the aggregate net invoiced sales value of griseofulvin sold by you. The agreed royalty is payable by you in consideration of the patent rights granted to you under paragraph (10) above and of Clause 9 of the letter of appointment dated 12th September, 1958; unless the grant to you of those patent rights is earlier withdrawn such a royalty payment shall remain in effect 151 either for the duration of your appointment under the letter dated 12th September 1958 (or any extension thereof) or unti! the expiry of the last to expire of the United States patents referred to in paragraph (10) above whichever is the longer period. The term ‘‘aggregate net invoiced sales yalue’’ shall mean the sum of the sales prices invoiced in the period less: i) returns and allowances, ii) cash and trade discounts, iii) delivery charges pre-paid or allowed to customers, iv) excise or other taxes assessed against the manu- facture use or sale of the products. b) Payment of royalty shall be made quarterly within 90 days of the end of each calendar quarter and shall be in respect of all sales of griseofulvin made by you during the previous calendar quarter. Within 60 days of the end of each such calendar quarter you shall send to us a statement showing the aggregate Tiét invoiced sales value of all griseo- fulvin so sold by you during the said previous calendar quarter. If you agree to the above, we should be grateful if you would sign both copies of this letter in the space provided below and return one copy to us. Yours faithfully, IMPERIAL CHEMICAL INDUSTRIES LIMITED PHARMACEUTICALS DIVISION, T.W.M. Buianp, Division Secretary Agreed on behalf of American Home Products Corpora- tion : [illegible] Date 12/19/62 Signed =. af ‘ a $2 5 ong Pe Myx Sa RE oR Mra RR RES AFFIDAVIT BY PAUL N. KOKULIS, DATED NOV. 7, 1968 Paul N. Kokulis, being duly sworn, deposes and says the following : (1) That I am a partner in the firm of Cushman, Darby & Cushman, 730-15th Street, N.W., Washington, D.C., patent counsel for Imperial Chemical Industries Limited (ICI); (2) That upon instructions from ICI, I have asked the Commissioner of Patents to publish notice of the avail. ability of U.S. Patent 2,900,304, issued August 18, 1959, entitled ‘“‘GRISEOFULVIN USES AND COMPOSI. TIONS,”’’ assigned to ICI, for license at reasonable terms and conditions in accord with the usual practice for making patents available; (3) That a copy of my letter to the Commissioner of Patents pursuant to (2) above is attached hereto as Exhibit A. EXHIBIT A, ANNEXED TO KOKULIS AFFT. OF NOV. 7, 1968: CusHMan, Darsy & CusHMAN ATTORNEYS AT LAW AMERICAN SECURITY BUILDING 730 Fifteenth Street, N.W. © Washington, D.C. 20005 November Seven 1968 Hon. Commissioner of Patents Washington, D.C. Subject: Publication of Notice of Patent Available for Licensing Sir: Imperial Chemical Industries Limited, the assignee of the entire right, title and interest in U.S. Patent 2,900,304, issued August 18, 1959 and entitled ‘‘GRISEOFULVIN USES AND COMPOSITIONS,”’ is prepared to grant non- exclusive licenses under said patent at reasonable terms 152 153 and conditions. Accordingly, it is requested that appro- priate notice of the availability of this patent for license be published in the Official Gazette. The following notice is proposed : ‘‘Imperial Chemical Industries Limited is prepared to grant non-exclusive licenses under U.S. Patent 2,- 900,304, issued August 18, 1959 and entitled ‘‘GRISEO- FULVIN USES AND COMPOSITIONS”? at reason- able terms and conditions. Request for license under the patent may be addressed to: The Patent Agent, Imperial Chemical Industries Limited, Thames House North, Millbank, London S.W. 1, England.’’ The required fee is attached hereto. Respectfully submitted, CusHMaNn, Darsy & CusHMAN EPI LS ca PAR an AFFIDAVIT OF THOMAS WALTER MEREDITH BLAND, DATED NOVEMBER 29, 1968, ANNEXED AS APPENDIX II TO REPLY MEMORANDUM Op DEFENDANT ICI IN SUPPORT OF ITS CROS8s. MOTION FOR SUMMARY JUDGMENT AGAINST PLAINTIFF ON GROUNDS OF MOOTNESS AND FAILURE TO ESTABLISH VIOLATION OF THE SHERMAN ACT, FILED DECEMBER 3, 1968 [Caption Omitted] I, THOMAS WALTER MEREDITH BLAND, being duly sworn, depose and state that :— (1) I am, and for the past twenty-two years have been, the Secretary of the Pharmaceuticals Division of Imperial Chemical Industries Limited (hereinafter described as ‘*ICI’’), the offices of which Division are located in Maceles. field, Cheshire, England. In my capacity as Secretary of said Division, I exercise general supervision over the docu. ments and files of the Division, and am familiar with the agreements, memoranda and other«documents of the Divi- sion and with the activities of the officials and employees of the Division. (2) During the period since the completion of the Dis. tributorship Agreement on Griseofulvin with American Home Products Corporation (hereinafter described as ‘¢AMHO’’) until the Clause relating to the resale of Bulk Form Griseofulvin was removed, no approaches were made to ICI by companies (other than AMHO) in the United States expressing an interest in purchasing, enquir- ing as to the availability of, or requesting Bulk Form Griseofulvin other than those which ltave been given in the answers to Interrogatory No. 67. From an examination of those approaches it is apparent that, apart from a request from Unimed (which was for a small quantity for research purposes), there was no refusal by ICI to supply Griseo- fulvin in bulk for processing or resale inthe United States. (3) For convenience I summarize below and comment upon the approaches which were made during the period in question and are listed in answers to Interrogatory No. 67: (a) International Chemical Corporation (1963) This was a request for a quotation for Bulk Form 154 MPAA EH ES 1 PERI Oe He 155 Griseofulvin to be supplied to customers in South America. The enquiry was addressed to ICI (New York) Inc. who referred it to ICI. ICI possess exclu- sive distributors in South America and were therefore themselves unable to supply. Accordingly the request was refused. (b) U.S. Summit Corporation (1963) This was a request for a quotation for Griseofulvin to be supplied to Japan. The approach was made to AMHO who referred it to ICI. ICI had an exclusive distributor in Japan and were therefore unable to make the sale and refused the request. (c) McKesson Robbins (1963) This was a request for Griseofulvin to be supplied to Colombia. The request was made to AMHO who sug- gested ‘that the customer should approach ICI but ICI heard nothing further. (d) Unimed (1964) This was a request for a small consignment of Bulk Griseofulvin not to be used in commerce but for re- search purposes. The request was made to ICI (New York) Inc. who referred it to ICI. The request was _refused. (e) Philipp Bauar (1964) This was a request for Griseofulvin to be supplied in Europe, the Far Hast and Mexico. The approach was made to ICI (New York) Ine. who referred it to ICI. ICI already possessed exclusive distributors in each of ~ these countries and were therefore unable to make the ‘sales and refused the request. (f) American Cyanamid Company (1965) This. was a request to Glaxo for supplies of Bulk Griseofulvin for use in a topical formulation that American Cyanamid was developing. As far as ICI knows Glaxo made supplies available for development purposes but it seems that no commercial exploitation has taken place. (g) Nurani Farma (1965) This was an enquiry for Griseofulvin to be supplied SESE eee aed AFFIDAVIT OF ROBERT MAZON, DATED MAY 27, 1970 1. I am Vice-President for Manufacturing of Zenith Laboratories, Inc. (‘‘Zenith’’), a manufacturer of phar. maceutical products located in Northvale, New Jersey. | make this affidavit at the request of the United States De partment of Justice for its use in a suit by it against Glako Group Limited (‘‘Glaxo’’) and Imperial Chemical Indus. tries Limited (‘‘ICI’’), which is pending in the United States District Court for the District of Columbia. 2. I have been in the pharmaceutical business for more than 20 years, 17 years of which in various capacities with American Cyanamid Company and the last 3 years with Zenith. I have personal knowledge of the matters set forth herein, and personally participate on a daily basis in the management of the business of Zenith. 3. Zenith is the leading generic manufacturer of phar- maceutical products in the United Statés. It operates from a modern specially constructed drug facility, and produces and markets products of the highest quality subject to the same standards of the U. S. Food & Drug Administration as the larger brand name companies, such as the Ayerst Laboratories Division of American Home Products Corp. Zenith depends on its ability to offer quality pharmaceutical products at the lowest possible price in competing with such brand name companies. 4. Zenith manufacturers the principal antibiotic products presently sold in the United States, including tetracycline, oxytetracycline, penicillins, ampicillin and chloramphenicol. With respect to each of these products, Zenith purchases the bulk raw material from others and performs the fune- tion in its plant of encapsulating or tableting, bottling and packaging this raw material into finished pharmaceutical products. _ 5. Zenith presently purchases the antibiotic griseofulvin microsize in finished capsules from American Home Prod- ucts Corp., Ayerst Laboratories Division (‘‘ Ayerst’’) pur- suant to Ayerst’s letter dated March 31, 1969, a copy of which is attached hereto as Exhibit ‘‘A.’’ 6. Zenith also has a license agreement dated January 23, 1969 with ICI to manufacture and sell bulk griseofulvin 158 159 (not microsize) under ICI’s U. S. Patent No. 2,900,304, a copy of which agreement is attached hereto as Exhibit “B.’? Ayerst is ICI’s sole distributor for this product in the United States (Exhibit ‘‘C’’), and Ayerst has offered it to Zenith (Exhibit ‘‘A’’). 7. Glaxo has refused to sell Zenith bulk griseofulvin in microsize form or to license Zenith under its U. S. Patent No. 3,330,727 covering this product. A copy of Zenith’s letter dated March 12, 1969, and Glaxo’s response dated April 17, 1969 denying a license on this product are attached hereto as Exhibits ‘‘D’’ and ‘‘K.”’ 8. I have repeatedly asked Ayerst about obtaining a supply of bulk griseofulvin in microsize form but to no avail, although Zenith obtains the griseofulvin microsize capsules from Ayerst. Since our business is encapsulating or tableting, bottling and packaging pharmaceuticals, we cannot miake a sufficient mark-up on the sale of Ayerst’s griseofulvin capsules to make them a profitable item, and we have sold very few of these capsules. 9. With respect to the bulk griseofulvin not in microsize form covered by Zenith’s license with ICI, there is not a sufficient market for this product in the United States to warrant our offering the item. ° 10. With respect to ICI’s license to Zenith to manu- facture its own bulk griseofulvin, Zenith is not in the busi- ness of manufacturing bulk chemicals, and therefore such a license to Zenith is useless. 11. In order to compete effectively with the brand name companies like Ayerst, Zenith must be able to offer its products at a lower price. However, Zenith must pay Ayerst $25.15 per 100 capsules (125 mg.), and yet compete with Ayerst. Zenith’s price thus results in few sales, and Zenith manufacturing facilities for griseofulvin capsules are unused. 12. Zenith believes that it is at a great disadvantage com- petitively in not being able to purchase bulk griseofulvin in microsize and to manufacture and market these capsules in the United States. If this product were available to Zenith, we believe that Zenith could make substantial sales of the griseofulvin microsize capsules that it would manu- facture at a reasonable profit. /s/ ROBERT MAZON — S ei et Ma BI es YT) SEY oe EXHIBIT A, ANNEXED TO MAZON AFFIDAVIT OF MAY 27, 1970 Ayverst LABORATORIES DIVISION OF AMERICAN HOMB PRODUCTS CORPORATION 685 Third Avenue, New York, N.Y. 10017 {notation on letter] RM Called Ayerst 4-10-69—Mr. Davis wag out of town left message with his sec. retary that you are interested in this quote and would follow through as soon as you return from Italy. March 31, 1969 Mr. Robert Mazon Vice President Zenith Laboratories, Inc. 150 South Dean Street Englewood, New Jersey Dear Mr. Mazon: We received on March 20 your letter dated March 7, which was mailed on March 19. In the meantime, we have been examining our capabilities of supplying you with the amounts of bulk griseofulvin and microsize capsules you requested. Simce we have several other pending commitments and a limited capacity, our ability to supply you is contingent upon the availability of raw material from our supplier. Therefore, the prices quoted below are subject to withdrawal at any time with- out prejudice to us. BULK GRISEOFULVIN Quantities of 50 kilos—$123.00 per kilo 100 kilos—$120.00 per kilo 250 kilos—$117.00 per kilo All prices are f.o.b. Rouses Point, New York, and the terms are net 10 days. It should also be specified that the quantity discount is applicable only when one shipment is made. 160 161 So that you may have the material you requested to conduct your clinical study, we would be able to supply you with quantities smaller than 50 kilos at the 50 kilo price. Also, listed below are the prices for griseofulvin microsize capsules. : GRISEOFULVIN MICROSIZE CAPSULES 125 mg. potency at $25.15 per 1000 capsules 250 mg. potency at $46.30 per 1000 capsules The minimum quantity order is 500,000 capsules of each potency, prices quoted are f.o.b. Rouses Point, New York, terms are net 10 days following the date of the invoice. Orders for any form of griseofulvin must be submitted to us at least 90 days prior to date of expected shipment. When your order is shipped you will receive the necessary cer- tification documents. Very truly yours, Wuuum L. Davis EXHIBIT C, ANNEXED TO MAZON AFFIDAVIT OF MAY 27, 1970 IMPERIAL CHEMICAL INDUSTRIES LIMITED PHARMACEUTICALS DIVISION ALDERLEY HOUSE, ALDERLEY PARK, MACCLESFIELD, CHESHIRE Mr. Robert Mazon, Vice President, Zenith Laboratories Inc., 150, South Dean Street, Englewood, New Jersey 07631, U.S.A. 15th January 1969, Dear Mr. Mazon, Griseofulvin—U.S. Patent 2,900,304 Thank you for your letter of 18th December 1968, | enclose two copies of a draft license agreement. If you have any comments on this you will no doubt let me know, On the other hand, if the form is acceptable to you, you could execute the two copies and return them to me and I would let you have back one copy executed by ICI. I should perhaps add that as ‘we have appointed the Ayerst Laboratories Division of American Home Products Corporation sole importers and distributors of our griseo- fulvin in the U.S.A. we should not be in a position to supply you direct. If, therefore, you do not propose yourselves to undertake manufacture, you will have to obtain your sup- plies either from Ayerst or some other supplier. Yours truly, T.W.M. Buanp, Division Secretary. 162 as EXHIBIT D, ANNEXED TO MAZON AFFIDAVIT OF MAY 27, 1970 March 12, 1969 Glaxo Laboratories Limited Greeenford, Middlesex, England Gentlemen : We are interested in marketing Griseofulvin in the United - States and accordingly would request a license under your Patent No. 3,330,727 relating to a Griseofulvin having a high specific surface area. - We are presently licensed by Imperial Chemical Industries Limited under their Griseofulvin U.S. Patent No. 2,900,304. Your prompt attention to our request would be most ap- preciated. Thank you. Very truly yours, ZENITH LABORATORIES, INC. Rosert Mazon Vice President a ete EXHIBIT E, ANNEXED TO MAZON AFFIDAVIT OF MAY 27, 1970 Guaxo Group LimITED CLARGES HOUSE, 6-12 CLARGES STREET, LONDON, WIY 7PH Mr. Robert Mazon, Vice President, Zenith Laboratories Inc. 150 South Dean Street, Englewood, New Jersey 07631, U.S.A. 17th April, 1969, Dear Mr. Mazon, I regret the delay in replying to your letter of March 12th concerning your request for a licence under USP 3,330,727, After careful consideration of the commercial aspects of our existing arrangements for the distribution of griseo- fulvin in the U.S.A. we are satisfied that these are entirely satisfactory. Therefore, with regret, I have to inform you that we do not consider it to be in our commercial interests to grant you a licence at the present time. Yours truly, GLAXO GROUP LIMITED H. W. Martin, Manager, Industrial Property & Contracts Dept. 164 AFFIDAVIT OF EUGENE C. DOONER, JR., DATED JUNE 5, 1970. [Caption Omitted] 1. Iam the President of Dooner Laboratories, Inc., Ward Hill, Haverhill, Massachusetts. I have been in the phar- maceutical business for about 22 years. I began as a sales- man in 1949 for McNeil Laboratories, Inc., a subsidiary of Johnson & Johnson and became McNeil’s Government Sales Representative in 1949; after which I was appointed its Field Hospital Manager in 1961; its Hospital Sales Man- ager in 1963; and its Director of Hospital Sales in 1965. I left McNeil in August 1967 to establish Dooner Labora- tories, Inc. 2. Dooner Laboratories, Inc. is a small pharmaceutical firm incorporated under the laws of Massachusetts in Au- gust 1967. The firm occupies a new modern building of 15,000 square feet on three and one-half acres of land at the above address in Haverhill, Massachusetts. The firm is engaged in the development, and distribution of pharma- ceuticals. The firm purchases some of its products in finished dosage form. These products are received from contract manufacturers in bulk containers and repackaged into trade packages for distribution and sale. We have completely new and modern packaging facilities for cap- sules, tablets and liquids. Our quality control laboratories are neat, spacious, and contain the latest analytical equip- ment. Dooner Laboratories, Inc., meets Food and Drug Administration inspection requirements and operates with- in the required guidelines of this agency. 3. Our company’s products are sold through its own sales force of nine salesmen, six of whom devote their full time _ tosales. The company’s salesmen call on doctors, pharma- cists, hospitals and other health-care institutions in their territories, to promote the company’s products. The com- pany also relies heavily on direct mailings of samples and literature to doctors and hospitals, and displays its prod- ucts at medical conventions. The company markets its products through drug wholesalers who in turn sell the products to retail drugstores and hospitals. Our marketing and sales personnel possess the background and experience required to market pharmaceutical products. 165 4. The following exhibits attached to this affidavit are true copies of letters received or prepared by me in the 166 carrying out of our company’s business. They have been retained in the company’s files until I caused them to be taken from the files in order to make the attached xerox copies. Such letters were prepared by or received by me on or about the dates indicated thereon. Ex- hibit Date Sender bat pk bk fed et PWNEHOWOODONA UR Whe June 9,1968 Dooner July 30,1968 Martin, Glaxo Aug. 6, 1968 Dooner Sept. 6, 1968 Dooner Sept. 16, 1968 Dooner Oct. 2,1968 Dooner Dec. 19, 1968 Martin, Glaxo Dec. 31, 1968 Dooner Feb. 13,1969 Martin, Glaxo May 4,1970 Dooner June 27, 1968 Dooner July 10,1968 McNey June 27, 1968 Dooner July 3,1968 Longman, Schering June 28, 1968 Dooner July 19, 1968 Johnson, Ayerst Aug. 8,1968 Dooner Sept. 4,1968 Davis, Ayerst Sept. 25, 1968 Hockney, ICI Nov. 25, 1968 Dooner Dec. 10,1968 Bland, ICI Deg. 20, 1968 Dooner Jan. 15,1969 Bland, ICI Recipient Temple, Glaxo Dooner Martin, Glaxo Martin, Glaxo Martin, Glaxo Martin, Glaxo Dooner Martin, Glaxo Dooner Glaxo MeNey, MeNeil Dooner Longman, Schering Dooner Johnson, Ayerst Dooner Johnson, Ayerst Dooner Dooner Patent Agent, ICI Dooner ICI Dooner _Draft License Agreement Between ICI and Dooner, undated, 2 pp.; Dooner’s additions on p. 2. Jan. 23,1969 Dooner Feb. 13,1969 Bland, ICI May 4,1970 Dooner Mar. 14, 1969 Ankerfarm Mar. 25, 1969 Dooner Apr.2,1969 Ankerfarm Nov. 5, 1968 Shibata, Nippon Dooner Bland, ICI Dooner ICI Dooner Ankerfarm Dooner 167 -¢(See Exhibits 28-30). Since the F.D.A. required that plants manufacturing antibiotics be certified, I could not legally market Ankerfarm’s griseo- fulvin in the United States. 12. My experience with the Japanese firm was similar. They replied to my first letter negatively, because of risk of patent litigation, by letter of November 5, 1968 (Exhibit 31). In my next letter of November 26, 1968, I offered indemnification from patent liability, if they would sell to me (Exhibit 32). After a further exchange of correspon- dence (Exhibits 33-37) they offered to sell to me, but it turned out that their facilities for manufacturing the anti- biotic were not certified by the United States F.D.A. I offered to pay the expense of F.D.A. certification, but they declined to accept this proposal (Exhibits 39-42). 13. I am still interested in acquiring griseofulvin for the purpose of selling it in the United States. As I pointed out in one of my letters to Glaxo (Exhibit 8) above, I be- \/ > 170 lieve that an additional supplier of this drug in the United States would expand the market. In addition, with added competition, price reductions might well be evident. The established marketers of this product in the United States may believe that they have saturated the market, but I do not believe that this is so. I believe that effective, com- petitively priced marketing of this drug would expand the total United States market for it; and I am still extremely interested in doing this, if I can secure the drug at a rea- sonable price. 14. It is necessary for me to secure the drug at a rea- sonable price, because I am not in a position to manufacture griseofulvin for my own use, by the fermentation process used to make the bulk drug. My company and I do not have the financial resources necessary to set up a fermentation plant for an antibiotic. I think that the cost of a small scale fermentation plant for a product of this type would run from half a million dollars to a million dollars, and I cannot afford to commit that kind of capital outlay. In addition, I am not an organic chemist, and would have to hire technical personnel to run such an operation. 15. Therefore, I can market griseofulvin effectively and competitively if I can buy it in bulk at a reasonable and non- discriminatory price, so that I am on the same basis as my competitors who are doing the same thing (Ayerst, McNeil, Schering) ; I cannot market the product effectively unless I can buy the product in bulk form on equal terms as indi-' cated. But I have been unsuccessful in securing a fair and | legal source of bulk griseofulvin, despite diligent efforts to date. 16. Unless bulk griseofulvin becomes available to my company on a reasonable basis, without discrimination in terms, I do not believe that my company will be able to enter the business to offer the public the benefits of our competi- tion and, in particular, the price reductions that might well take place. /s/ Eugene C. Dooner, Jr. &) AULA EPI GLI ATI YE TILLER IML EY SEEING EXHIBIT 1, ANNEXED TO DOONER AFFIDAVIT OF JUNE 5, 1970 June 9, 1968 Mr. M. R. Temple, _ Export Sales Manager Glaxo Limited 47 Park Street Loudon W.1 England Dear Mr. Temple: Qur company is interested in obtaining a licensing agree- ment with Glaxo Limited for the marketing of Griseofulvin in the United States. Dooner Laboratories, Inc. is a new firm and within a matter of weeks will occupy one of the most modern pharmaceutical plants in New England. We are anxious to hear from you and can assure you that your product will be marketed with the proper dignity of an ethical pharmaceutical. Yours very truly, DOONER LABORATORIES, INC. Evcene C. Dooner, Jr. President 171 EXHIBIT 2, ANNEXED TO DOONER AFFIDAVIT oF JUNE 5, 1970 Guaxo Group Liuirep CLARGES HOUSE, 6-12 CLARGES STREET, LONDON, w.1 Mr. Eugene C. Dooner Jr.,: President, Dooner Laboratories Inc. P.O. Box 909, Haverhill, Massachusetts 01830, U.S.A. 30th July, 1968, Dear Mr. Dooner, I have received your letter of 9th June addressed to Mr. M. R. Temple, asking for a licence to market Griseo. fulvin. The whole matter of our Griseofulvin rights and licences thereunder are under review, and we will be glad to revert to the subject when the situation is clarified. Yours sincerely, H. W. Martin, Industrial Property & Contracts Manager. 172 EXHIBIT 8, ANNEXED TO DOONER AFFIDAVIT OF JUNE 5, 1970 August 6, 1968 Mr. H. W. Martin, Industrial Property & Contracts Manager Glaxo Group Limited Clarges House 6-12 Clarges Street ‘London, W. 1, England Dear Mr. Martin: Thank you kindly for your reply to our request for licensing Griseofulvin. We are aware that there is some type of litigation going on between your firm and the United States Justice Dept. ; therefore, we do understand your request to delay such a decision. We only ask and appreciate any encouraging in- formation that you may be able to send us in the affirmative for such a license. Ican assure you that our firm will withstand rigid examina- tion and that we can expand the Griseofulvin market. Thank you for your kind attention to this matter. Sincerely yours, DOONER LABORATORIES, INC. Evucene C. Doongr, Jr. President wena Bay PSR dlrs RE ares LL OIECROI SCA Sitios PLE SLOTS PON EIEN ERE ENB IIIS NER INP BAD LE LAT RES genoa '\ EXHIBIT 4, ANNEXED TO DOONER, AFFIDAVIT of \ JUNE 5, 1970 September 6, 1968 Mr. H. W. Martin, Industrial Property & Contracts Manager Glaxo Group Limited Clarges House 6-12 Clarges Street London, W. 1, England Dear Mr. Martin: As further evidence of our decision to obtain a license for Griseofulvin in the United States I think that your serions consideration of my proposal at this time would be mutually beneficial. Obviously we would expand the market but, most of all your willingness to grant a license to Dooner Laboratories, Ine. would be looked upon quite favorably by the United States Justice Dept. and other prominent government agencies who would have an interest in the future of small businesses, We thank you in advance for your consideration. — Sincerely yours, DOONER LABORATORIES, INC, Evucene C. Dooner, Jr. President 174 Re SR DS SEER RE Nah OE EY Pat NM Ot ae ate EXHIBIT 5, ANNEXED TO DOONER AFFIDAVIT OF JUNE 5, 1970 September 16, 1968 Mr. H. W. Martin, Industrial Property & Contracts Manager Glaxo Group Limited 6-12 Clarges Street London, W. 1, England Dear Mr. Martin: ' One.of the three United States licensees marketing Griseo- fulvit has agreed to sell Dooner Laboratories the bulk chemical. A copy of the agreement will be sent to you on request. However, the price quoted is a bit higher than the price on a direct basis from Glaxo or ICI. In view of this Price T am investigating optional sources at more reasonable prices. Prior to going to Italy, Japan and possibly Russia for this chemical would you be kind enough to review my earlier requests to purchase this chemical from Glaxo. Your consideration is appreciated. Sincerely yours, DOONER LABORATORIES, INC. Evcene C. Dooner, Jr. President sahsdenethe timathatiiinadin tiene mente tok ee EXHIBIT 6, ANNEXED TO DOONER AFFIDAVIT OF JUNE 5, 1970 October 2, 1968 Mr. H. W. Martin Industrial Property & ‘ Contracts Manager Glaxo Group Limited 6-12 Clarges Street London, W. 1, England Dear Mr. Martin: ts I have attempted to purchase bulk griseofulvin from both McNeil Laboratories and Schering. Both companies replied in the negative stating that their business is primarily selling fabricated products. This firm still has an interest in obtaining marketing rights direct from Glaxo and at the present time without making any commitments would you consider selling us five kilos of micro crystalline griseofulvin, so that we can institute appropriate Food and Drug Administration studies. Your consideration of this request is appreciated. Sincerely yours, DOONER LABORATORIES, INC. Evcene C. Doone, Jr. President 176 — rx IE SST PRS RELI HELLS POS OTF A OA IR ERR AIRE OR EELS oS é 2 ete recon eee EXHIBIT 7, ANNEXED TO DOONER AFFIDAVIT OF JUNE 5, 1970 Guaxo Group LIMITED CLARGES HOUSE, 6-12 CLARGES STREET, LONDON, w. 1 Eugene C. Dooner, Esq., Dooner Laboratories Inc. P.O. Box 909, Haverhill, Massachusetts 01830, U.S.A. 19th December, 1968. Dear Mr. Dooner, P First may I apologise for not replying to your last letter concerning your interest to purchase bulk supplies of Griseofulvin. After careful consideration of the commercial aspects of our supplies of Griseofulvin, we are quite convinced that our existing distribution arrangements in the U.S.A. are entirely satisfactory. Therefore, with regret, I have to inform you that we would not wish to enter into supply transactions of bulk Griseofulvin at the present time. Although your previous correspondence makes reference to the fact that we are involved in litigation in the U.S.A. concerning Griseofulvin, I can assure you that we have not been influenced in any way by this in coming to a decision which is based solely on commercial considerations. Yours sincerely, H. W. Martin, Industrial Property & Contracts Manager. 177 PO alan + EXHIBIT 8, ANNEXED TO DOONER AFFIDAVIT op : JUNE 5, 1970 December 31, 1968 Mr. H. W. Martin, Industrial Property & Contracts Manager, Glaxo Group Limited, Clarges House, 6-12 Clarges Street, London, W. 1, England Dear Mr. Martin: Thank you for your reply concerning the request for Dooner Laboratories, Inc. to acquire a license from your firm to market Griseofulvin. Dooner Laboratories, Inc. is a new, aggressive pharma. ceutical firm with modern manufacturing and production facilities. Our new premises were occupied on September 5, 1968. I know the Griseofulvin market well and can assure you that this firm (if given such a license) will expand the U.S. market. Mr. Behrakis, a Vice President of Dooner Laboratories will be in Europe sometime in the near future and I was wondering if he might request a personal interview with you to discuss the matter further. Please advise. Sincerely yours, DOONER LABORATORIES, INC. Kucene (. Doonen, Jn. President EXHIBIT 9, ANNEXED TO DOONER AFFIDAVIT OF JUNE 5, 1970 Giaxo Group Laurrep cLarces House, 6-12 CLARGES STREET, LONDON, w. 1 Mr. E. C. Dooner, Jr. Dooner Laboratories Inc. P.0. Box 909, Haverhill, Massachusetts 01830, | US.A. 13th February, 1969. Dear Mr. Dooner, I have to acknowledge your letter of 31st December 1968, and apologise for the delay in replying which has been occasioned by a somewhat protracted overseas visit. With regard to your request that we should meet your Mr. Behrakis during his forthcoming visit to Europe, I would say that in earlier correspondence I have indicated the outcome of our consideration of your request for a license under our griseofulvin patents. However, if you feel that any useful purpose would be served, we should be quite willing to see Mr. Behrakis here in London. Yours sincerely, H. W. Martix, Industrial Property & Contracts Manager. 179 EXHIBIT 10, ANNEXED TO DOONER AFFIDAVIT OF JUNE 5, 1970 May 4, 1970 6-12 Clarges Street London, W. 1, England Gentlemen : On several occasions this firm has made attempts to obtain Griseofulvin. The only positive reply was from Ayerst Laboratories and the price quoted was considered too high. This letter is written to you once again’as a request to purchase the chemical at the same price as you sell to other accounts in the United States. Your kind consideration of the request is deeply ap. preciated. Your very truly, DOONER LABORATORIES, INC. Evoene C. Doower, Jr. President FAFA DRL Oe EEE LOE CRLLEA LOGO NAG LOE AB OL EXHIBIT 11, ANNEXED TO DOONER AFFIDAVIT OF JUNE 5, 1970 June 27, 1968 Mr. Harry McNey, President McNeil Laboratories, Inc. Port Washington, Pa. 19304 Dear Harry : Since Glaxo Laboratories no longer restricts their li- censees from reselling bulk griseofulvin our firm would like to purchase this item from McNeil Laboratories, Inc. We are interested in the micro crystalline and regular particle size. Would you kindly quote prices and terms. , Your very truly, DOONER LABORATORIES, INC. Evcene C. Dooner, Jr. President _ —— - Fe OTE LOLOL OEY NYAS L DOG NEES EE Hi IMC Gene D WN AR ER Be cae sieges seek y a nine pena i: — EXHIBIT 12, ANNEXED TO DOONER AFFIDAVIT oF JUNE 5, 1970 McNew Lasorarorigs, Inc. CAMP HILL ROAD, FORT WASHINGTON, PA. 19034 July 10, 1968 Mr. Eugene C. Dooner, Jr. President, Dooner Laboratories, Inc. P. O. Box 909 Haverhill, Massachusetts 01830 Dear Gene: In reply to your letter of June 27, 1968, requesting prices for bulk griseofulvin, we wish to state that we are a mann- facturer and seller of pharmaceutical preparations in fin. ished dosage forms and are not engaged in the business of selling chemicals in bulk. Very truly yours, McNEIL LABORATORIES, INC. Harry W. McNey President EXHIBIT 13, ANNEXED TO DOONER AFFIDAVIT OF JUNE 5, 1970 June 27, 1968 Dr. D. R. Longman, V. P. and General Mgr. Schering Corp. 60 Orange Street Bloomfield, N. J. 07003 Dear Doctor Longman : Since Glaxo Laboratories no longer restricts their licen- sees from reselling bulk griseofulvin our firm would like to purchase this item from Schering Corp. We are interested in the micro crystalline and regular particle size. Would you kindly quote prices and terms. Yours very truly, DOONER LABORATORIES, INC. Evucene C. Dooner, JR. President ; SEDO es CRY TRE igs PE Bothy = Ne ot LN ES SILER GNSS SPOS NE SINS LEGS. LT SALE ALTE AN i dM tone me EXHIBIT 14, ANNEXED TO DOONER AFFIDAVIT oF ) JUNE 5, 1970 ScHERING SCHERING CORPORATION, BLOOMFIELD, N.J. 07003 July 3, 1968 7 Mr. Eugene C. Dooner, Jr. President Dooner Laboratories Inc. P. O. Box 909 Haverhill, Massachusetts 01830 Dear Mr. Dooner: This is in response to your letter of June 27 concerning bulk griseofulvin. Since our purchases of griseofulvin substance are solely for the production of our own line of pharmaceutical products, we are not in a position to quote prices to you on this item. Sincerely yours, Donato R. Lonemay Vice President Domestic Operations 184 EYOTA TANI TE Ry RE GT LR TI REPT Ee SPY MN PAL SERRE SNE RINE Re I RNOLD TEER i RS, EINES, OSE HOE TINS UR, BO walt tat ALS EXHIBIT 15, ANNEXED TO DOONER AFFIDAVIT OF JUNE 5, 1970 June 28, 1968 Mr. Charles Johnson, President Ayerst Laboratories 685 Third Avenue New York, New York 10017 Dear Mr. Johnson: Since Imperial Chemical Industries no longer restricts their licensees from reselling bulk griseofulvin our firm would like to purchase this item from Ayerst Laboratories. We are interested in the micro sized and regular particle size. Would you kindly quote prices and terms. Yours very truly, DOONER LABORATORIES, INC. Evucene C. Dooner, Jr. President PAPER DIDI SEPM SLU ae OOM PE EE EXHIBIT 16, ANNEXED TO DOONER AFFIDAVIT OF JUNE 5, 1970 Ayerst LABORATORIES DIVISION OF AMERICAN HOME PRODUCTS CORPORATION 685 Third Avenue, New York, N.Y. 10017 July 19, 1968 Mr. Eugene C. Dooner, Jr. President Dooner Laboratories Inc. P. O. Box 909 Haverhill, Massachusetts 01830 = Dear Mr. Dooner: Thank you for your letter of June 28th, inquiring as to the prices and terms we would quote for bulk griseofulvin, We would be interested in selling griseofulvin in bulk, and we would ask that you supply us with the following informa- tion: 1. Has your facility been registered with the Food and Drug Administration, and, if so, please supply the registration number ; 2. Have you a New Drug Application approved by, the Food and Drug Administration covering the sale by you of griseofulvin ; and 3. Would you supply us with some idea of the amount of bulk griseofulvin you will require. Since your firm is not known to me, may I request that you supply appropriate trade references. Very truly yours, C. M. Jounsoy 186 EXHIBIT 17, ANNEXED TO DOONER AFFIDAVIT OF JUNE 5, 1970 August 8, 1968 Mr. C. M. Johnson, President Averst Laboratories 685 Third Avenue Yew York, New York 10017 Dear Mr. Johnson: [appreciate your willingness to sell Griseofulvin to Dooner Laboratories, Inc. and in answer to your questions: 1. Our FDA Registration No. is 12-16241. 2. We are applying for a Form 6 application which will allow us to market the finish product provided we supply the Food & Drug Administration with appropriate blood studies. 3. Quantities desired would he 250 kilos per order. Our firm is new and has been in existence one year. We have new and modern facilities in Haverhill, Massachusetts. The plant has complete facilities for manufacturing and quality control, The chemistry labs contain the very latest in laboratory equipment and our research facilities will be limited only by our imagination and budgets. I believe any drug wholesaler in Massachusetts will identify us or you may try the National Pharmaceutical Council in Washington, D.C. Your price quotation for the raw material in this quantity would be appreciated. Thank vou for your courtesies and consideration of our request. Yours very truly, ! DOONER LABORATORIES, INC. Evcene C. DooSer, Jr. President 187 Sw rete * EXHIBIT 18, ANNEXED TO DOONER AFFIDAVIT OF JUNE 5, 1970 AYERST LABORATORIES DIVISION OF AMERICAN HOME PRODUCTS CORPORATION 685 Third Avenue, New York, N.Y. 10017 September 4, 1968 Mr. Eugene U. Dooner, Jr., President Dooner Laboratories Ine. P.O. Box 909 Haverhill, Massachusetts 01830 Dear Mr. Dooner: Your letter of August 8 has been referred to me for reply and in response thereto I am pleased to quote you a price of $117.70 per kilogram of Griseofulvin (regular size), f.o.b, Rouses Point, New York, net 30 days. We are prepared to ship the 250 kilograms specified in your letter within sixty days following acceptance of this order. Should you decide to place further orders with us, we would require at least 90 days for shipment. We look forward to hearing from you. Very truly yours, Wituram L. Dave 188 EXHIBIT 19, ANNEXED TO DOONER AFFIDAVIT OF JUNE 5, 1970 ImpeRIAL CHEMICAL INDUSTRIES LIMITED PHARMACEUTICALS DIVISION ALDERLEY HOUSE, ALDERLEY PARK, MACCLESFIELD, CHESHIRE Dooner Laboratory Inc., Box No. 909, Haverhill, Massachusetts, US. A. 25th September 1968 Dear Sirs, GRISEOFULVIN Our colleagues in ICI America Inc. have told us of your approach to them with regard to supplies of griseofulvin in bulk. May we please take this opportunity of advising you that the distribution of this product in the U.S.A. is undertaken on our behalf by Ayerst Laboratories Ine. in whom are vested sole distributor rights. You will understand, therefore, that we should be grateful if you would kindly address to them any enquiry you may have. Yours faithfully, G. H. Hockney American Manager 189 rein EPI LEIE LE POLLY ERIE LOE LION MS ED DN SH te SLY Ae me a . a 7 “om EXHIBIT 20, ANNEXED TO DOONER AFFIDAVIT 0F JUNE 5, 1970 November 25, 1968 The Patent Agent Imperial Chemical Industries Limited Thames House North Millbank London S. W. 1, England Gentlemen: Dooner Laboratories, Ine. has recently learned of your de. sire to license additional companies to sell Griseofulvin in the United States and its possessions. We are interested in obtaining such a license and would appreciate hearing from you in this regard. Yours very truly, DOONER LABORATORIES, INC. KvucEene C. Dooner, Jr. President 190 EXHIBIT 21, ANNEXED TO DOONER AFFIDAVIT OF JUNE 5, 1970. ImperraL CuemicaL Inpustries LIMITED PHARMACEUTICALS DIVISION ALDERLEY HOUSE, ALDERLEY PARK, MACCLESFIELD, CHESHIRE Dooner Laboratories Inc., P.O. Box 909, Haverhill, Massachusetts 01830, U.S.A. 10th December 1968 Dear Sirs, Griseofulvin: U.S. Patent 2,900,304 Your letter of 25th November 1968 has been passed to us by our Patent Agent in London. We are prepared to grant non-exclusively a full and un- restricted licence under the above numbered U.S. Patent to all suitable applicants. The royalty will be 5% of the aggregate net invoiced sales value of griseofulvin sold by the licensee under the licence during the life of the patent. Will you please let us know if you wish to obtain a licence on these terms and confirm that your firm and premises are approved under Federal Food and Drug Regulations. We will thereupon send you a form of license. Yours faithfully, Imperial Chemical Industries Limited, T.W.M. Briann, Pharmaceuticals Division Secretary. 191 oe) = EXHIBIT 22, ANNEXED TO DOONER AFFIDAVIT oF JUNE 5, 1970. December 20, 1968 Imperial Chemical Industries Limited Pharmaceuticals Division . Alderley House, Alderley Park Macclesfield, Cheshire England Gentlemen: Thanks for your reply regarding a U.S. licensing arrange- ment for griseofulvin. Our firm is very much interested but would like a few more particulars regarding price and delivery time. We would also like to know if you plan to extend additional discounts for material that is used to fill government contracts? Our firm and premises are approved by the Food and Drug Administration. Our registration number is 12-16241. Thanks again for your assistance and we shall anxiously await your reply. Very truly yours, DOONER LABORATORIES, INC. Evcene C. Doonzr, Jn. President EXHIBIT 23, ANNEXED TO DOONER AFFIDAVIT OF JUNE 5, 1970. ImpermaL CuemicaL Inpustries Lim1tTep PHARMACEUTICALS DIVISION ALDERLEY HOUSE, ALDERLEY PARK, MACCLESFIELD, CHESHIRE Eugene C. Dooner Jr. Esq., President, Dooner Laboratories Inc., P.O. Box 909, Haverhill, . Massachusetts 01830, U.S.A. | 15th January, 1969. Dear Mr. Dooner, Griseofulvin—U.S. Patent 2,900,304 Thank you for your letter of 20th December 1968. I enclose two copies of a draft licence agreement. If you have any comments on this you will no doubt let me know. On the other hand, if the form is acceptable to you, you could execute the two copies and return them to me and I would let you have back one copy executed by ICI. . I should perhaps add that as we have appointed the Ayerst Laboratories Division of American Home Products Corporation sole importers and distributors of our griseo- fulvin in the U.S.A. we should not be in a position to supply you direct. If, therefore, you do not propose yourselves to undertake manufacture, you will have to obtain your supplies either from Ayerst or some other supplier. Yours truly, T.W.M. Buanp, Dwision Secretary. 193 TG VE GNI I NEE OVAL SBE CLP GLO” OL OET i he Sp Cae tae EXHIBIT 24, ANNEXED TO DOONER AFFIDAVIT oF JUNE 5, 1970. THIS LICENCE AGREEMENT is made the day of 1969 BETWEEN IMPERIAL CHEMICAL IN. DUSTRIES LIMITED (hereinafter called “*ICI’’) of Im. perial Chemical House Millbank London S.W.1. England, a corporation registered in England and DOONER LAB. ORATORIES INC. (hereinafter called ‘the Licensee”’) of P.O. Box 909 Haverhill Massachusetts U.S.A., a corpora. tion registered in Massachusetts and WJ TNESSETH that 1. ICI hereby grants the Licensee a non-exclusive licence under United States Patent No. 2,900,304 to manufacture process repack and sell dosage forms of griseofulvin. The licence shall continue during the life of the said patent. 2. In consideration of the grant of this licence Licensee shall pay to ICI a royalty of five per cent of the aggregate net invoiced sales value of griseofulvin manufactured pro- cessed or repacked and sold by Licensee under and during the @urrency of this licence. 3. The term ‘‘aggregate net invoiced sales value”’ shall mean the sum of the sales prices invoiced in the period less (a) returns and allowances; | (b) cash and trade discounts; (c) delivery charges prepaid or allowed to customers; (d) excise or other taxes assessed against the manu- facture use or sale of the product. 4. Payment of royalty shall be made in United States Dollars to ICI at Alderley House Alderley Park Maccles- field Cheshire England. Payment shall be made quarterly within ninety days of the end of each calendar quarter and shall be in. respect of all sales of griseofulvin made by Licensee during the previous calendar quarter. \ 3. Licensee shall keep adequate records of all griseo- fulvin sold by Licensee and will when remitting royalties submit a statement showing all such sales during the period to which the royalties relate the aggregate net invoiced sales value thereof and the amount of royalties payable thereon. If no royalties are payable in respect of any particular quarter a statement to that effect shall be sub- mitted in lieu of the foregoing statement. 6. Licensee will as and when requested by ICI make available its records for inspection at any time within 194 195 normal business hours by an independent auditor for the purpose of verifying the statements to be provided by the Licensee hereunder. Such auditor shall be appointed by ICI but shall be one to whom the Licensee shall have no reasonable objection and he shall report to ICI only on the amount of royalties due. EXECUTED by IMPERIAL CHEMICAL INDUSTRIES LIMITED EXECUTED by DOONER LABORATORIES INC. 7. L.C.I. will hold Dooner harmless and defend Dooner if Dooner, acting under I.C.I. patent (U.S. patent 2,900,304) infringes any patent or process rights of another. L.C.I. to warrant patent is valid and in force. 8, A price schedule is to be defined which can be relied upon whether raw material is purchased direct from I.C.I. or American Home Products (Ayerst Laboratories Divi- sion). 9, The ‘‘Favored Nation Clause’’ is to apply whereby LCI. at no time will sell to competitors, including Ayerst Laboratories Division of American Home Products at a better price than that offered to Dooner Laboratories, In- corporated. WE LA LE DL BN hc APIDOS EN EXHIBIT 25, ANNEXED TO DOON ER AFFIDAVIT op JUNE 5, 1970. January 23, 1969 Mr. T.W.M. Bland Imperial Chemical Industries, Ltd. Alderley House Alderley Park, Macclesfield, Cheshire England Dear Mr. Bland: I appreciate the license agreement for United States dis. tribution rights to griseofulvin. Since Ayerst Laboratories is a competitor and has quoted _ me an unfavorable price for the raw material I have taken the liberty of adding several protective clauses to the agree. ment. I’m sure you will agree that these requests are quite normal and if you approve of the changes we would like to execute a favorable license at the earliest opportunity. Please advise. Sincerely yours, Evoene C. Doonsr, Jr, ARIE MB re e003 id eet A ORLA AS ENA PRO LA LN PALE EAE AIBC I EDOM ne PO, eA EXHIBIT 26, ANNEXED TO DOONER AFFIDAVIT OF , JUNE 5, 1970. ImpeRraL CuemicaL Inpusraies Limirep PHARMACEUTICALS DIVISION ALDERLEY HOUSE, ALDERLEY PARK, MACCLESFIELD, CHESHIRE Eugene C. Dooner, Jr., Esq., President, Dooner Laboratories Inc., P.O. Box No. 909, Haverhill, Massachusetts 01830, U.S.A. 13th February, 1969. Dear Mr. Dooner, GRISEOGFULVIN—U.S. PATENT 2,900,304 Thank you for your letter of 23rd January. { am afraid that we are unable to agree to the three additional clauses that you propose. In-place of your proposed Clause 7 we should, however, be willing to insert the following clause: “If any claim of U.S. Patent 2,900,304 shall be held invalid the Licensee shall no longer be obligated to pay royalties on account of such a claim.”’ Because, as I informed you in my letter of 15th January, we are unable to supply you direct, your proposed Clauses 8 and 9 are inapplicable. In any case, we could not accept Clause 8 in that we have no control or knowledge of the price which may be quoted by American Home Products for any sales in bulk of griseofulvin. Yours truly, T.W.M. Buanp, Division Secretary. 197 OOO EE TENE OLS LIE LEAL LN LESSEE AE DMN ISRO ES oer EXHIBIT 27, ANNEXED TO DOONER AFFIDAVIT OF JUNE 5, 1970. May 4, 1970 Imperial Chemical Industries Limited Pharmaceuticals Division Alderley Park Macclesfield, Cheshire England Gentlemen: On several occasions this firm has made attempts to obtain Griseofulvin. The only positive reply was from Ayerst Laboratries and the price quoted was considered too high. This letter is written to you once again as a request to purchase the chemical at the same price as you sell to other accounts in the United States. Your kind consideration of this request is deeply appre. ciated. Yours very truly, DOONER LABORATORIES IN C. Evucene C. Dooner, Jr. President TONS CRD he Sa aa Rib Basie Seer BN FSR IE SURAT DRONE ait ee En eee | se & ps EXHIBIT 28, ANNEXED TO DOONER AFFIDAVIT OF JUNE 5, 1970 ANKERFARM §.,p.A. VIALE LOMBARDIA, 5-20092 CINISELLO B. (MILANO) Messrs. DOONER LABS. Ince. P. 0. Box 909 Haverhill (Mass. 01830) U.S.A. 14th March, 1969. Gentlemen : We acknowledge receipt of your letter dated 14 February, from which we noted with regret that the sample of Griseo- fulvin micro-crystalline particle quality, previously sent to you has gone astray in the mail. We have pleasure in enclosing herewith another sample of Griseofulvin micro-crystalline for your evaluation, together with the relative certificate of analysis. We did not understand whether the material is destined for the U.S. home market or for re-exportation. fh this respect please note that for this product we are not in the position to give F.D.A. certification. Looking forward to reading you, we remain, very truly yours, ANKERFARM Sales Department 199 BS PR RS harhys ee ee ae — PIS Te ERR EXHIBIT 29, ANNEXED TO DOONER AFFIDAVIT oF JUNE 5, 1970. March 25, 1969 Ankerfarm §.P.A. Viale Lombardia, 5 20092 Cinisello B. ( Milano) Attention Sales Department: Gentlemen: Thank you kindly for your sample of micronized griseo. fulvin and your letter of March 14, 1969. Our interest in this product is for the United States home market and we are disappointed to learn that the product cannot be certified by F.D.A. Is there a possibility that this descision can be reversed and that you can apply for F.D.A. certification? Please advise. Yours very truly, Evucene C. Doone, Jr. President EXHIBIT 30, ANNEXED TO DOONER AFFIDAVIT OF JUNE 5, 1970. Awnxenrarm S.p.A. VIALE LOMBARDIA, 5-20092 CINISELLO B. (MILANO) April 2, 1969. AB:ac Messrs. DOONER Laboratories Ward Hill Haverhill, Mass. U.S.A. Dear Sirs, We regret to inform you that the Griseofulvin we can supply is not under F.D.A. approval and we do not plan, for the moment, to apply for such certification. We shall remain at your disposal in case you will market the product outside the U.S.A. With kindest regards, Yours faithfully ANKERFARM Sales Department 201 x Soret eta SEGARA S| PELE OAR LOA BOUIN I gh CMe POETRY, EXHIBIT 31, ANNEXED TO DOONER AFFIDAVIT oF JUNE 5, 1970. Nippon Kayakv Co., Lr. NEW KAIJYO BLDG. 6, 1-cHOME, MARUNOUCHI, CHIYODA-KU, TOKYO, JAPAN P.O. Box 262 Tokyo Central Manufacturers-Exporters Tokyo, Nov. 5, 1968 Messrs. Dooner Laboratories Inc.. P.O. Box 909 Haverhill, Massachusetts 01830 U.S.A. Gentlemen: We have received your letter of October 18 inquiring for our griseofulvin. We are sorry to say that Glaxo Laboratories of England has already taken its Patent all over the world. So we refrain from quoting you this product. Regretting our negative answer in this matter. Yours truly, NIPPON KAYAKU CO., LTD. M. Surpata Chief, Export Section Pharmaceuticals Division PRS NA? SS RAR AS RE Re TR EEA RC RPT, RAS BRL ARE oe 2 gE Me a Pe eo ee ~ | & ; 4 x $ EXHIBIT 32, ANNEXED TO DOONER AFFIDAVIT OF JUNE 5, 1970. November 26, 1968 Mr. M. Shibata, Chief Export Section, Pharmaceuticals Division Nippon Kayaku Co., Ltd. New Kaijyo Bldg. 6, 1-Chome, Marunouchi Chiyoda-Ku, Tokyo, Japan Dear Mr. Shibata: Thank you kindly for your reply to our letter requesting the purchase of griseofulvin. If Dooner Laboratories is willing to offer protection from patent indemnity would you be agreeable to selling us this product? Sincerely Yours, DOONER LABORATORIES, INC. i Evucene C. Dooner, Jr. President 203 OPE ES En MES oA Pei LR DO ie GE IE i IC AOE EXHIBIT 33, ANNEXED TO DOONER AFFIDAVIT oF JUNE 5, 1970. Nippon Kayakv Co., Lrp. NEW KAIJYO BLDG. 6, 1-cHOME, MARUNOUCHI, CHIYODA-KU, TOKYO, JAPAN P.O. Box 262 Tokyo Central Manufacturers-Exporters Tokyo, December 12, 1968 Messrs. Dooner Laboratories Inc. P.O. Box 909 Haverhill, Massachusetts 01830 U.S.A. Dears Sirs, Your letter of November 26 has been received by us. We shall quote you griseofulvin only under the condition that you take and manage the risk of possible patent troubles by yourselves. Hoping to hear from you further, we remain Yours truly, NIPPON KAYARKU CO.,, LTD, [illegible ] Chief, Export Section Pharmaceuticals Division eh RN Sat DISD GREEN IGE DD AEN GOED LILLIE DPE INI BEBE AAE ADOT LEB EXHIBIT 34, ANNEXED TO DOONER AFFIDAVIT OF JUNE 5, 1970. December 20, 1968 Nippon Kayaku Co., Ltd. New Kaijyo Bldg. 6, 1-Chome, Marunouchi, P.O. Box 262 Tokyo Central, Chiyoda-Ku, Tokyo, Japan Attention: Chief, Export Section, Pharmaceuticals Gentlemen : Dooner Laboratories, Inc. is prepared to accept the liabili- ties in any patent infringement regarding the purchase of griseofulvin from your firm. We are primarily interested in the micro sized particle. In any event, we will be interested in quotes on the regular size particle and/or the micro sized particle. Yours very truly, DOONER LABORATORIES, INC. Evcene C. Dooner, JR. President EAD MS HONE AA EI LORIN SIA E SIO DER Bal 0” Vo IN ERE AES TR a tm EXHIBIT 35, ANNEXED TO DOONER AFFIDAVIT op JUNE 5, 1970. Nippon Kayakv Co., Lrp. NEW KAIJYO BLDG. 6, 1-cHOME, MARUNOUCHI, CHIYODA-KU, TOKYO, JAPAN P.O. Box 262 Tokyo Central Manufacturers-Exporters . Tokyo, January 7, 1969 Messrs. Dooner Laboratories Inc. P.O. Box 909 Haverhill, Massachusetts 01830 U.S.A. Dear Sirs, Thank you for your letter of December 2. We should like to quote you Griseofulvin through our agent, Koyo Mercantile Company, Ltd. of Tokyo. As to particle, we wish to supply only microsized one. You will soon receive some information from the said firm. Hoping to hear from you further, we remain, Yours truly, NIPPON KAYAKU CO., LTD, M. Surpata Chief, Export Section Pharmaceuticals Division EXHIBIT 36, ANNEXED TO DOONER AFFIDAVIT OF JUNE 5, 1970. Koyo Mercantite Company, Lp. IMPORTERS, EXPORTERS AND MANUFACTURER’S REPRESENTATIVE Sanshin Bldg. No. 3-1, 2-Chome, Iwamoto-Cho, Chiyoda-Ku, Tokyo, (Japan) January 13, 1969 Dooner Laboratories, Inc. P.O. Box 909 Haverhill, Massachusetts 01830 US.A. Attn: Mr. Eugene C. Dooner, Jr. President Gentlemen : Re: GRISEOFULVIN The letters exchanged between you and Nippon Kayaku Co. on the captioned item have been referred to us for reply, since we are representing Nippon Kayaku for the sale of pharmaceutical products to America. We are very pleased to note that you are prepared to accept the liabilities in any patent infringement regarding your purchase of the material from us. Under such a condition, and also under the condition that we sell the product with- out Nippon Kayaku’s label and without indicating the manufacturer’s name, we are pleased to offer the product as under: Price: US$85.00/kg CIF by air freight Packing: 10 kilos per tin Terms: Letter of Credit to be opened in our favor. The specification will meet the B.P. specification and the particle size is the micro sized one. We are interested in knowing what a quantity you have in mind to purchase. 207 208 Thanking you and looking forward to the pleasure of hear. ing from you soon again, we are Sincerely, KOYO MERCANTILE CO., LTD, O. Karepe . Managing Director tess PRES Jt Bg ene BE FLARE IOW ms EXHIBIT 37, ANNEXED TO DOONER AFFIDAVIT OF JUNE 5, 1970. Dooner LaxporaTories Inc. p.o. Box 909 HAVERHILL, MASSACHUSETTS 01830 January 16, 1969 Mr. M. Shibata New Kaijyo Bldg. 6, 1-Chome, Marunouchi, Chiyoda-Ku, Tokyo, Japan P.O. Box 262 Tokyo Central Gentlemen : To assist our company in accelerating the marketing of griseofulvin it would be helpful to us to receive the follow- ing information. Have the facilities where this antibiotic is manufactured been approved by the United States Food and Drug Ad- ministration ? Please advise. Yours very truly, Evcene C. Dooner, JR. 209 BY Sig A, tak ae ‘rw ” , wean iG: fll, EXHIBIT 38, ANNEXED TO DOON ER AFFIDAVIT op JUNE 5, 1970. Nippon Kayaku Co., Lap. NEW KAIJYO BLDG. 6, 1-cHoME, MARUNOUCHI, CHIYODA-KU, TOKYO, JAPAN P.O. Box 262 Tokyo Central Manufacturers-Exporters Tokyo, Jan. 30, 1969 Messrs. Dooner Laboratories Ine. Haverhill, Massachusetts (1830 P.O. Box 909 U.S.A. Gentlemen: Re: Griseofulvin Your letter of January 16 has been received by us. We are pleased to advise you that our facilities where the above antibiotic ‘is manufactured have not been ap- proved by the United States Food and Drug Administration, We remain Yours truly, NIPPON KAYAKU CO., LTD, [illegible] Chief, Export Section Pharmaceuticals Division EXHIBIT 39, ANNEXED TO DOONER AFFIDAVIT OF JUNE 5, 1970. February 5, 1969 Nippon Kayaku Co., Ltd. New Kaijyo Bldg. 6, 1-Chome, Marunouchi, P.O. Box 262 Tokyo Central Chiyoda-Ku, Tokyo, Japan Gentlemen : In regards to your letter of January 30, 1969. Would the plant where this material is manufactured agree to an inspection by the U.S. Food and Drug Administration? Please advise. Yours very truly, Kucene C, Dooner, Jr. President 211 wou ll ad MXHIBIT 40, ANNEXED TO DOONER AFFIDAVIT op . . * JUNE 5, 1970. Nippon Kayaxu Co., Lp. NEW KAIJYO BLDG. 6, 1-cHoME, MARUNOUCHI, CHIYODA-KU, TOKYO, JAPAN P.O. Box 262 Tokyo Central Manufacturers-Exporters Tokyo, February 21, 1969 Messrs. Dooner Laboratories, Inc. Ward Hill, Haverhill, Massachusetts 01830 U.S.A. Gentlemen: Re: Griseofulvin We have received your letter of February 5. Generally speaking, it seems to be very expensive to have an inspection by F.D.A. It is said that the company to undergo an inspection must pay traveling expenses or hotel charge of inspectors. So we wish to study this problem only on condition that we are not charge any\such cost, We remain Yours truly, NIPPON KAYAKU CO., LTD, [illegible] Chief, Export Section Pharmaceuticals Division 212 aad PEARS LPNS RATA MORES ATARI RAN EXHIBIT 41, ANNEXED TO DOONER AFFIDAVIT OF JUNE 5, 1970. February 28, 1969 Nippon Kayaku Co., Ltd. New Kaijyo Bldg. 6, 1-Chome, Marunouchi, Chiyoda-Ku Tokyo, Japan P.O. Box 262 Tokyo Central Gentlemen : We realize that the cost of a plant inspection on foreign soil by, the United States Food & Drug Administration must be borne by the person or persons requesting such an inspection. Dooner Laboratories would be willing to absorb these costs providing Nippon KayakweCo., Ltd. will reimburse these costs over a reasonable period of time. The rebate can be deducted from the price of the raw material. Such rebates to amount to no more than 15% of the cost of the FDA inspection per shipment of griseofulvin. Should you agree to the above conditions and the findings of the FDA inspection are negative or for other reasons Dooner Laboratories elects not to purchase said chemical (griseofulvin) from Nippon Kayaku Co., Ltd. then all such obligations shall cease. - Dooner Laboratories will have absorbed the entire cost and we will not request any payments from Nippon Kayaku Co., Ltd. Yours very truly, Evcene C. Dooner, JR. President 213 EXHIBIT 42, ANNEXED TO DOONER AFFIDAVIT 0p JUNE 5, 1970. Nippon Kayakv Co., Lr. NEW KAIJYO BLDG. 6, 1-cHOME, MARUNOUCHI, CHIYODA-KU, TOKYO, JAPAN P.O. Box 262 Tokyo Central Manufacturers-Exporters Tokyo, March 12, 1969 Messrs. Dooner Laboratories, Ine. . Ward Hill, Haverhill Massachusetts 01830 U.S.A. Gentlemen: With thanks, we have received your letter of February 28, and noted the contents. In conclusion, we are sorry to say that we can not accept your proposal. It is sure the problem of the F.D.A. inspec. tion is big abstraction. Regretting our negative answer, we remain Yours truly, NIPPON KAYAKU (CO.,, LTD, [illegible] Chief, Export Section Pharmaceuticals Division AFFIDAVIT OF HAROLD SNYDER, DATED JUNE 17, 1970. [CAPTION OMITTED] 1. I am the President of Biocraft Laboratories, Inc., 92 Route 46, East Paterson, New Jersey 07407. I have been in the pharmaceutical business for about sixteen years. In about 1950 I began Avorking for United States Testing Company, Hoboken, New Jersey, as a chemist and bacteri- ologist. In 1954 I left United States Testing Company to take a job as a chemist and bacteriologist for a small pharmaceutical manufacturing company. Within about five years I progressed to a management position with the company, and since that time I have been employed or self- employed in a management capacity with various phar- maceutical companies. In 1964 I started my own manufac- turing company, Biocraft, which my wife and I wholly own. 9. Biocraft is engaged primarily in the business of buying antibiotics in bulk, converting them into dosage form, and selling the packaged product to other pharmaceutical com- panies which distribute the finished packaged product. Biocraft presently has approximately 26 employees. Its total sales in 1969 were approximately $2.6 million. Its total assets are approximately $1.1 million. Biocraft is fully certified by the Food and Drug Administration and is regularly inspected by it. Biocraft fully meets the high standards of the Food and Drug Administration, and it has an excellent record of quality control. 3. Biocraft is listed with the Food and Drug Administra- tion as a manufacturer. Its business consists of converting bulk pharmaceuticals into dosage form, packaging and labeling same, and selling the finished product to others as previously indicated. Biocraft has a number of major national drug firms as customers, for whom it manufactur- ers antibiotic-containing drugs. (‘‘Manufacture,’’ in this sense and as used in the previous paragraph, does not mean production of the raw material; it means converting the bulk chemical into finished dosage form, labeling, and pack- aging same.) We advertise regularly in the ‘‘Journal of Pediatrics’, ‘‘Pediatrics’’, ‘‘The Internist’, ‘‘Drug Topies’’, ‘‘Physicians Book Compendium”’ and the ‘‘New England Journal of Medicine’’. Attached: to this affidavit 215 PERT ELAN OE TT OIE Le NR EAL RRS LIN NI REN) OE EN § f 216 as Exhibits A and B are copies of two of our recent adver. tisements, showing the names ef some of the drug companies which purchase generic penicillin V from us and distribute it under their own names. 4. Biocraft is a generic manufacturer. That means that it does not engage in expensive advertising and promotional activities for trademarked or trade name drugs, as do the giants of the industry. For example, our current advertising budget is in the neighborhood of 1% of sales, as contrasted with a percentage of many times that for the major com. panies in the industry. Some typical figures for advertising expenditures last year, for major brand companies, were 21% of sales for Sterling Drug, 18% for Miles Laboratories, 16% for Bristol, and 12% for Warner-Lambert and Ameri- can Home Products (Ayerst and Wyeth). A generic drug company sells in competition with brand name companies by offering a substantially lower price. The mechanics of distribution of generic drugs, in my case, works as follows: I make a product, such as penicillin G, where my cost of materials is $.90 per 100, and I sell it to distributors in quantities of 1,000,000 for about $1.24 per 100. This is a mark-up of somewhat below 40%. This figure, of course, does not include overhead, labor, or other plant costs. The distributor to whom I sell the 100 tablets for the $1.24 rate, sells it to a drug store for about $2.00. A ‘*major brand’’ product would be sold to the druggist at prices ranging from about $2.75 to about $8.00. 5d. Another example is penicillin VK, which I sell to distributors in quantities of 100,000 for $3.60 per 100, which, in turn, are sold by the distributors at approximately $5.75 per 100, less 10% when they purchase ten or more bottles. The major brands, by contrast, gell for $8.95 per 100. The reason that I sell at a substantially lower price than do the major brands is that it is necessary for me to do so in order to meet the propaganda of the major drug companies -. .- that their product is superior to generics. I sell “Brand X”’ in competition with a major brand name, where my Brand X is chemically identical, perhaps even superior, to the highly advertised competition, but because I am selling Brand X I have to sell it at a considerably lower price in order to get anywhere in the marketplace. 6. The examples given above apply to penicillin, an anti- biotic drug, which in my view, is similar from a marketing . standpoint to griseof ulvin. I became interested in the mar- keting possibilities of griseofulvin in April 1969, after reading in the ‘‘Pink Sheet’’ (a drug industry trade pub- lication) that Imperial Chemical Industries was prepared to grant licenses for griseofulvin as a result of some govern- ment litigation involving the patents. Although the $10 million annual market for this product is not a very large one, it seemed to me that my company could capture 10% of that market; and an additional $1 million in sales would not be insignificant to us. Therefore, the product seemed to offer interesting possibilities for a competitively-oriented firm like mine. 7. Consequently, I wrote a letter to Imperial Chemical Industries in England, requesting a license to manufacture griseofulvin in dosage form ( attached to this affidavit as Exhibit C). They responded by letter of May 5, 1969, offering me a license at a royalty rate of 5% of net sales (letter attached as Exhibit D). 8. I considered, but rejected, the idea of fermenting griseofulvin and thus manufacturing it from the very be- ginning. I rejected this approach because the $10 million a year market for the product, considered together with the percentage of it that I could capture and the cost of installing the necessary fermentation facilities, did not justify the necessary investment. I, therefore, decided that the only way I could market the product would be to buy it in bulk form, in the manner I have previously described for penicillin products. I, therefore, telephoned Mr. May- nard, ICI’s patent agent in England, in order to buy ‘‘gris- eofulvin’’. He referred me to Mr. Mollob of Ayerst in Rouse’s Point, New York, whom I then telephoned. Mr. Mollob advised me to speak to Mr. Goetchus, Ayerst’s Director of Product Coordination, whom I .subsequently contacted for a price quotation. 9. In response to my request for a price quotation, Mr. Goetchus advised that Ayerst was prepared to sell to Bio- craft the finished capsule form of griseofulvin at a price of, I recall to be, $50 per 1000 in quantities of 500,000. I telephoned Mr. Goetchus and advised that the quotation was out of line with the current drug store selling price of about $28 per bottle of 250, At this time the established sellers of the product, Schering, McNeil and Ayerst, were quoting drug stores a price in the neighborhood of about EE ER BAI I SG LS ANT ETI Re Shei 1S ee tat eR es aan Tio og, Tae meg e 7 NaS ; SLES PE TOR EON es eee mn, 218 $28 per 250 (250mg tablets) or $112 per 1000. Mr. Goetchns responded that that was his company’s price, and that he would not quote a lower one. 10. The price quotation given in the previous paragraph, $50 per 1000 of 250mg. capsules, given the pricing and dis. tribution structure I have previously described in this affidavit, requires Biocraft to sell to a distributor at a Price of about $80 per 1000. A 5% royalty under the ICT license would have to be added onto this, making the price to the distributor approximately $84 per 1000. The price of Schering and the other established firms is about $112 per 1000. This leaves a $28 spread between the $84 price | could charge to distributors and the $112 price that the brand-name firms charge to drug stores. The $28 spread amounts to a differential of approximately 25% of the brand-name price, which is much too low to induce the dis- tributor to distribute my producty The kind of differential necessary for me to market my product competitively (except for certain antibiotics in great demand, such as ampicillin) is atdifferential which permits my product to be distributed for two-thirds the price of the brand-name product. 11. I understand that the going market price for bulk form (microsize) griseofulvin is in the neighborhood of $60 per kilogram. The trouble is that the only companies that can buy it at this price are Ayerst, McNeil and Schering —not Biocraft. If I were on the same basis as these com. panies, I would be able to market microsize griseofulvin at the same price Ayerst is willing to sell it to me—or even less. This would mean that I would have a real chance to sell the product to the distributor because I then could offer the kind of price differential below the brand-name product that is necessary to distribute the generic product. This result would be that consumers in the United States would have the benefit of my generically labeled product, which is every bit as good as the brand-name product— but the price to the consumer would be much lower. /s/ Harold Snyder CARAT iA WR NES ANODONTIA EAE AS EXHIBIT B, ANNEXED TO SNYDER AFFT. OF JUNE 17, 1970. EXH/6/T B, ANNEYED To SNYDER AFFY. oF “NENT, 1970 BE READY! 4 Ways a busy Physician Will Write Dr. bo necoush De. bmochin Dr. hmocsn trade a Fonczcn ol mbechme mizin tne Imozher thdecan ves vabun al iy at ots on se fa as tae as ara Generic Penicillin VK Potassium Phenoxymethy Availabl ine on S| , BU ee. and 150 cc. ae ri a ping 5 ce. dose contain- ing 125 mg. (200,000 units) or 250 mg. (400,000 units) and tablets containing 125 mg. (200,000 units) 250 mg. (400,000) units and 500 mg. (800,000 units). Me nufectured by BIOCKAFT LABORATORIES, INC., East Paterson, N.J. 07407 for: csturomyta: B & B Laboratories, Beverly Medical, HR. Cenci agg eg ae Deyhe >, ieducal & Surgical Suri Penta Products, Rabin Winters Div., Robinson Laboratory, Inc., United Phermeceutica treal, KENTL : Midway Medi pany, xp: Barre Drug Company, Carroll Chemical Co, Cumberland Pharmacal, Reyman x Co, M : Croyden Browne, miciticas: Se Drug wae Tae Diacin Chemical Co. i ‘ayne atones, Pee Janse): Rondex Lahorat oe Phusmeaneien NEw york: Bichne Kole ~ratories. Inc., Columbia Medical Company, Consolidated M. . Darby rug Co, Halsey Drug Company, Interstate Exchange, Jenkins sn aboratoriew eh Pharmacal, Schein» Surgical, rege Aopen Tce womap ones |. Inc., Vite- Southern State Pharmaceu- fore Products, Winsale Drug Compan tical Co, Wayne est Neca Coane a Toledo Pharmaceutical, w ra Company, ; Wenner Laboratories, Inc. ft ethwertised = Drug Tomson AFFIDAVIT OF HAROLD SNYDER, DATED DECEMBER 14, 1970 [Caption Omitted] 1. I am the President of Biocraft Laboratories, Inc,, 99 Route 46, East Paterson, New J ersey 07407. I have preyj. ously furnished an affidavit (dated June 17, 1970) which was filed in this case. I have examined the preheari brief of defendant ICI and the attached affidavits recently filed in this case. At pages 21-24 of the brief, counsel for ICI states that the data in my previous affidavit is ‘‘inge. curate.’’ It appears to me that ICI has completely miscop. strued my statements and has left the Court with & wholly erroneous impression concerning the business involved, My purpose in furnishing this affidavit is to assist the Court, to the extent that I am able to do So, in understand. ing the facts involved. 2. The figures and computations on pages 22-23 are based on a misconception of Biocraft’s business. Biocraft is not a distributor or wholesaler. It is a generic manufacturer, As such, it sells products in finished dosage form to dis. tributors (under the distributor’s labels) who, in tu resell to retail druggists. In its computations, ICI has com. pletely left the distributor step out of its calculations and has operated on the mistaken idea that Biocraft sells di- rectly to the retail druggist. As a result, when ICI says that ‘‘supplies of microsized griseofulvin, both bulk and dosage form, are available at commercially viable prices, within the framework of the existing ICI-Ayerst exclusive distributorship relation,’’ they are completely mistaken. 3. ICI bases its statement that microsize griseofulvin is available in bulk form at a *‘commercially viable price” on the statements in the Ayerst affidavit that Ayerst has quoted the product at $135 per kilogram. If I were to pur- chase microsize griseofulvin from Ayerst at $135 per kilo- gram, the price for a bottle of 100 capsules, of 250 mg. each, would work out as follows: Cost of materials (250 mg., including 3% loss) $3.48 Cost of capsules .20 220 a i he aa at 221 Balance of material (bottles, caps, certifications, cotton, excipients, labels, package insert, etc.) 15 Total Cost $3.83 per 100 capsules Using a 40% gross margin factor (which would include costs of labor, plant overhead, return on investment, financ- ing, etc.), this would result in a price to the distributor of $6.38. The latter is the price the distributor would pay me. He would normally add his own markup onto this, in order to sell to the retail druggist at a profit. At the same time, however, in order to induce the retail druggist to carry a generic product of this type, he would have to quote the druggist a price no more than two-thirds of the price of the equivalent brand-name product. In the case of griseo- fulvin, the price for a bottle of 100 capsules, 250 mg. each, is about $12.00 (Ayerst price in current Drug Topics, $12.14). Thus, the competitive price for generic griseo- fulvin would have to be $8.00 or less per bottle of 100, while the distributor would be paying me $6.38. The $1.62 spread, which represents a 20% margin for the distributor, is much too low to make it worth the distributor’s while to carry my generic product, versus the brand-name product of Ayerst, Schering, or Johnson & Johnson. This $1.62 is hardly sufficient to cover the costs of freight, overhead, etc. On the other hand, if the distributor tried to charge the druggist more than $8.00 in order to increase his margin over $1.62, it would be much more difficult to sell any ap- preciable amount of the product. This is illustrated by Zenith’s sales (as stated by ICI) of less than 500,000 cap- sules a year. According to the current Drug Topics, - Zenith’s price to the druggist per hundred capsules is $9.85. This represents less than 1% of the griseofulvin market. In short, the iron laws of business make $135 per kilogram much too high a price to be considered ‘‘com- mercially viable,’’ as ICI claims. 4. Similarly, according to ICI’s calculations on the basis of the present Ayerst dosage form price, it is stated that “Biocraft is in a position to sell the capsules to a distribu- tor at $76.30 per 1000, which would give the distributor a 32% spread of the retail price—a rather close approxima- PAROLE LA IRN OETA AGO OLN NE EN AML ae Mes ATS 222 ° tion to the 334% taken out of the air by Biocraft.’’ Accept. ing ICI’s calculations, once again, ICI is missing the whole point. The $76.30 per thousand price does give a spread of about 32%. This ‘‘spread’’ has to cover both the 33%% differential between the prices of the brand-name and generic products and the distributor’s own margin. This means that if the distributor sold to the retail druggist at a minus 1%% profit, then he could induce the retailer to carry my product. The cold facts of the selling of generic drugs are that the retail druggist must have the 33% % for himself, and the distributor must have a margin in addition to this. Even on the basis of ICI’s new calculations of the price structure in the market, it is impossible for me to buy griseofulvin in capsule form from ICI’s distributor and resell the griseofulvin except at a loss. 5. ICI says that Biocraft makes a ‘‘bland assertion that it can obtain 10% of the market’ by charging lower prices than the present licensees of the defendants in this case, Ayerst, Schering, and Johnson & J ohnson, the brand-name sellers. ICI pooh-poohs this statement and calls it a “‘rosy prediction.’’ According to the figures in the ICI affidavit, attached to its brief, Glaxo sells bulk griseofulvin (micro- size) at about $60 per kilogram; ICI at $78. At, those prices per kilogram, Biocraft would be able to deliver griseofulvin capsules to the distributor at about $3.09 per 100 250 mg. capsules ($60 kilo price for bulk) or $3.85 per 100 250 mg. capsules ($78 kilo price for bulk). At that price level, the distributor could sell to the retail druggist at considerably less than two-thirds of the defendants’ licensees’ current $12 per 100 capsules of 250 mg. price and still make a hand- some profit. Based on my experience with penicillin and other antibiotic drugs, price reductions of this’ type would enable Biocraft to capture a dramatic share of the market. I would say that my former estimate of capturing a 10% market share was extremely conservative, and I probably could do much better unless the defendants chose to de- crease their own profits by deflating their prices and by meeting mine. In either event, the members of the public would be the beneficiaries. In reading over the papers in this. case, it seems to me that the defendants are trying to give the Court the impres- sion that Biocraft or other generic sellers of drugs want the Court to go into the business of fixing prices for the in- iy , niet > ore £508 ” stent Pits tints +5 Pome » Ce a mm | Mi Rt hg ¥ ' 4 223 dustry for determining margins of profit as between us and the brand-name sellers. Nothing could be further from the truth. Speaking for Biocraft, at least, I assure the Court that we do not want anything of the kind. All we want is to be treated without discrimination. We don’t want the Court to determine what price ICI will charge Ayerst or what Ayerst will charge us or anybody else. What we re- quest is that, as buyers, we be treated on a fair, equal, and non-discriminatory basis—rather than that the defendants follow the principle that big companies deserve a lower . price than small ones, such as ourselves. /s/ Harotp Snyper EDR IE LOTION LOS VEO EOE AANA Figen ART ff gil AFFIDAVIT OF CHARLES W. WHITMORE, DATED DECEMBER 14, 1970 [Caption Omitted] 1. I am associated with and am an employee of Owen Laboratories, Inc. (“‘Owen’’), Belt Line Road at Inwood Road, Dallas, Texas, and am a minority shareholder therein. I began serving as a consultant for Owen on a irregular basis about five years ago and have been employed by Owen since February 1, 1968, as a medical consultant, My principal duties involve consulting for Owen on a broad range of business and professional matters, including Food and Drug Administration and other regulatory mat- ters, marketing, product selection and professional derma. tological matters. 2. I received a degree of Doctor of Medicine from the University of Virginia in 1947, and, after serving four years with the Public Health Service, returned there for three years as a resident physician in dermatology. In 1954 I was certified by the American Board of Dermatology and have been a practicing dermatologist since then. In my practice at 2544 Langhorne Road, Lynchburg, Virginia, I have treated more than 30,000 persons. 3. I am also an attorney, having received my law degree from George Washington University in 1951, and am a member of the Virginia Bar. 4.. Owen is a small independent dermatological pharma- ceutical firm. It was originally incorporated under the laws of Texas in 1946 as Eastern Pharmaceutical Company, and its present name was adopted in J anuary 1963. Owen en- gages primarily in the business of developing and market- ing pharmaceuticals and converting basic bulk chemicals to finished dosage form dermatological pharmaceuticals. Owen presently has between 90 and 100 employees, and occupies modern new facilities of 60,000 square feet. Its sales for the fiscal year ended June 30, 1970, were approximately $3 million. Owen is regularly inspected and fully certified by the Food and Drug Administration and has an excellent record of quality control. It employs one pharmacist, two chemists, and one bacteriologist for this purpose, as well as for research. 5. Owen markets all of its dermatological products under its own tradenames, rather than generically. Owen adver- % 225 tises dermatological pharmaceuticals in ‘‘Drug Topics,”’ “Archives of Dermatology,’’ and ‘‘Journal of Investiga- tive Dermatology,’’ and displays and promotes at derma- tological medical conventions. The company distributes its products primarily through drug wholesalers, who in turn sell the products to retail drugstores. 6. Owen actively and aggressively markets its dermato- logical pharmaceutical products and our sales are increas- ing at an annual rate of 25%. Owen’s average market share of dermatological products that it markets, where there are competitive products, is 20%. Owen concen- trates its dermatological pharmaceutical marketing effort on the some 3,000 practicing dermatologists in the United States. In this connection, Owen ‘employs 15 detail men who each regularly visit approximately 200 dermatologists; Owen does not solicit sales from general practitioners. We feel we have an advantage over both the large pharmaceuti- cal sellers (such as Ayerst, Schering, and McNeil) and the generic houses, because of our close association with and reputation among practicing dermatologists. Approxi- mately 98% of the practice of a dermatologist is out-patient, prescription work. In our opinion, the dermatologist is the key prescriber in this market. The large drug houses, I believe, do not specialize enough to become closely associ- ated with the needs of the dermatologist. The generic houses cannot, I believe, afford such specialiged personnel as Owen’s. Owen is, therefore, in a unique position to sell a dermatological product, such as griseofulvin. 7. Owen is continuously looking for prestige prescrip- tion dermateélogical pharmaceuticals to enhance its repu- tation as a scientifically oriented dermatological house. Griseofulvin is such a product, ideal for this purpose. Griseofulvin is useful primarily in the treatment of derma- tological diseases and is the only systemic agent available for the treatment of the most common types of skin fungus infections. Since topical preparations, the only other prod- ucts available for the treatment of such diseases, cannot ° penetrate the areas of the nails and hair griseofulvin is the only agent which can be used successfully for the treatment of the common fungus infections in these areas. Griseoful- vin is, therefore, a unique product with a sizeable market which will not, I believe, diminish in the foreseeable future. 8. Therefore, when in 1968 I read in a drug industry pub- SR haa CaP Nor neal sieteiietnaeeaiiiaiminhntiien tate tehsss oe hadkatee a vee 226 lication about the government’s suit against Glaxo and ICI, relating to griseofulvin, I became interested in obtain. ing griseofulvin for Owen. Owen felt that with its usual aggressive marketing, and unique relationship with derma. tologists, it could rapidly achieve a 10 to 20% penetration of the griseofulvin market, as we customarily do on similar products. : 9. With these expectations I called Mr. Timberg, counsel for ICI, and asked him about the availability of griseo. fulvin. He referred me to Thomas Bland, an officer of ICT in England. I telephoned Mr. Bland and expressed Owen's interest in obtaining griseofulvin. As a result, on March 20, 1969, ICI granted Owen a license under ICI’s dosage patent at a 5% royalty, but advised Owen that griseofulvin would be available to us only from ICI’s American distributor, Ayerst. 10. I then telephoned Maurice Silverstein, who was then in the Legal Department of Ayerst, and subsequently met with him. At that meeting, I asked him to sell griseofulvin to Owen. Owen does not buy any other of its dermatological products in finished dosage form, and was interested in obtaining the bulk powder or finished dos [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386414_0095%3A01. Public record. Not legal advice.