Successful Dismissal of a Multi-Million Dollar False Claims Act Suit
In November 2014, the firm secured a decision from the U.S. Court of Appeals for the Third Circuit affirming summary judgment for our client, a Fortune 500 medical device manufacturer, in a significant False Claims Act (“FCA”) suit. The relator filed a qui tam action accusing our client of fraudulently omitting discounts that had been extended to other commercial customers in its bids to sell ultrasound, magnetic resonance imaging, and other medical equipment to the U.S. Department of Veterans Affairs. After transferring venue to the Eastern District of Pennsylvania and narrowing the case on a motion to dismiss, the firm prevailed on all claims at summary judgment. The relator appealed the decision to the Third Circuit, which held that “the District Court correctly concluded that [the relator] could show none of the required elements” of his FCA claim, and specifically, that “no reasonable juror could conclude that [our client] made knowingly false statements to the VA.”
Dismissal of Antitrust Lawsuit in Pharmaceutical Industry
In January 2013, the firm secured the dismissal of a multi-million dollar federal antitrust lawsuit against our client, a Fortune 500 pharmaceutical manufacturer. The U.S. Court of Appeals for the Third Circuit found that the plaintiff pharmaceutical manufacturer did not have the antitrust injury that is necessary for antitrust standing under Sections 1 and 2 of the Sherman Act.
Our client was the owner of the U.S. New Drug Application for a prescription medicine and was the seller of that medicine in the U.S. The plaintiff was a non-U.S. manufacturer of a competing prescription medicine that was sold under license in the U.S. The plaintiff's antitrust claims were based in part on a 2006 patent litigation settlement agreement between the firm's client and plaintiff's licensee.
On plaintiff's appeal to the Third Circuit of the antitrust claims based on the 2006 settlement, we successfully argued that an ex-U.S. pharmaceutical manufacturer that had licensed a U.S. company to apply for and own the New Drug Application for the foreign manufacturer's medicine was not a competitor of the firm's client for purposes of establishing an antitrust injury. In the highly regulated pharmaceutical industry, plaintiff's decision not to own the New Drug Application precluded it from being a lawful competitor until such time that it becomes the owner of the Application. In addition, the plaintiff's alleged injuries (lost sales of active ingredient to its licensee and royalties on its licensee's U.S. sales) were not the means by which the allegedly anticompetitive effects in the U.S. were achieved. Accordingly, no exception to the general "customer or competitor" rule for antitrust injury was available to plaintiff.
FCA Win for Pharmaceutical Client at Fourth Circuit
The firm represented a global pharmaceutical company in a False Claims Act (“FCA”) case in which an employee alleged that the company engaged in off-label marketing in connection with one of its products. In a January 2013 decision addressing the pleading demands for complaints filed under the FCA, the U.S. Courts of Appeals for the Fourth Circuit rejected the relator’s request to apply a more lenient pleading requirement in cases in which a relator is unable to show that actual false claims were submitted for government reimbursement. The Fourth Circuit held that the FCA requires allegations of specific false claims where a scheme merely alleges that such claims were possible. This decision is likely to have a significant impact on FCA cases pending in the Fourth Circuit, and will give FCA defendants nationwide a clear, well-reasoned decision to cite in support of motions to dismiss claims for failure to plead actual false claims with particularity. A full Patterson Belknap Alert on the FCA decision is available here.
Important E-Discovery Decision on Technology-Assisted Review
In April 2013, Patterson Belknap obtained a significant victory in a discovery dispute over the use of technology-assisted review — a machine-learning technology that can considerably reduce discovery costs. Application of this technology to electronic discovery is relatively recent, with limited legal guidance to date. This decision helps to define the contours of a defensible technology-assisted document review process.
This matter is a multi-district product liability litigation involving hip implants in the U.S. District Court for the Northern District of Indiana, in which Patterson Belknap is representing the defendant manufacturer. The discovery dispute arose, in part, because the parties disagreed on two key issues: (1) whether the defendant permissibly used search terms to reduce document volume prior to applying technology-assisted review, and (2) whether the defendant improperly trained the software unilaterally and not jointly with the plaintiffs. The plaintiffs argued that despite the discovery efforts already expended by the defendants in individual cases prior to consolidation, discovery should restart so that the technology-assisted review software could be applied to the entire document collection and trained jointly by the parties.
Patterson Belknap argued that its client conducted discovery in a reasonable, effective, and transparent manner and that restarting discovery would be unnecessary, prohibitively expensive, and inconsistent with the purpose of consolidating pre-trial discovery in a multi-district litigation. The Court ruled in favor of the defendant, after it found that the defendant’s process complied fully with the relevant Federal Rules of Civil Procedure, rejected the plaintiffs’ demand for joint training, and determined that cost-shifting was appropriate, such that plaintiffs would have to bear the multi-million dollar expense if they wished to proceed in their preferred manner. The Court’s order can be found here.
Successful Appeal of a $593 Million Jury Verdict
In April 2013, the U.S. Court of Appeals for the Federal Circuit reversed a $593 million jury verdict from the U.S. District Court for the Eastern District of Texas and found that our client, a Fortune 50 medical device manufacturer, did not infringe a doctor’s patent on heart devices. The Federal Circuit found that the district court erred in construing two claim terms and that under the correct construction our client was entitled to judgment of noninfringement as a matter of law. The U.S. Supreme Court then denied the doctor’s petition for a writ of certiorari in January 2014.
The opinion can be found here.
A press article on the case can be found here.
New Jersey High Court Win for Medical Device Client
In August 2012, firm partner Peter Harvey obtained a significant win for a medical device company when the New Jersey Supreme Court ruled that products liability claims against our client were either time-barred or pre-empted. The court held that a person exercising reasonable diligence should have discovered within the statute of limitations that the product at issue caused the claimed injury. The court also said Congress meant for federal law to preempt state products liability claims against medical devices approved by the U.S. Food and Drug Administration. The ruling was a major victory for the firm’s client in a suit brought under state consumer protection statute.
For more details, please read the article linked here.
Jury Win for Medical Device Manufacturer in Patent Trial
In June 2012, a Florida federal jury ruled in favor of our client, a Fortune 50 medical device manufacturer, finding that two lines of its contact lenses did not infringe a patent covering a type of soft contact lens that can be worn for extended periods of time. A U.S. District Judge entered final judgment following the jury’s verdict for our client. As an alternative basis for the judgment, the Judge found that our client was entitled to judgment as a matter of law based on the plaintiff's failure to prove infringement after a cross-examination in which our opponent’s expert admitted that he had not performed the scientific tests described in his expert report. Based on these admissions, we moved to strike the expert’s testimony. The Court took that motion under submission and allowed the jury to return a verdict.
After the verdict – and as a further basis for its judgment of noninfringement – the District Court granted our motion to strike the testimony of our opponent’s expert and concluded that, with its expert’s testimony stricken, our opponent lacked evidence needed to prove infringement. Our opponent then appealed, and on appeal, the Federal Circuit upheld the exclusion of the expert’s testimony and affirmed the judgment of noninfringement.
Largest Settlement of Patent Infringement Case in the U.S.
In January 2010, our client, the cardiac device unit of a Fortune 50 medical device manufacturer, was awarded $1.725 billion in the largest settlement of any patent infringement case in the United States. This settlement was part of a long-fought patent battle over a state-of-the-art coronary stent device which revolutionized interventional cardiology. For over a decade, the firm had been enforcing our client’s pioneering patent -- the original patent on the balloon expandable stent. The principal defendant in this case was a Fortune 500 medical device manufacturer, which in 2008 paid a judgment of over $700 million for damages caused by its first generation stent. In 2005, we proved the defendant’s latest stents, including its drug eluting stent, also infringed our client’s patents. We largely defeated the defendant’s countersuits -- four different patents.
Since the first case was filed in 1994, we won many trials and arbitrations on behalf of our client, leading to a number of large settlements. Individually, those other settlements are numbers 6, 7 and 10 on the top 10 list of largest patent settlements. Combined, the firm has obtained over $3.6 billion for our client -- four of the top 10 patent settlements ever -- which approximately equals the amount that our client has earned selling stents.
For more details, please read the article linked here.