FTC Amicus Brief Urges Federal District Court Not to Categorically Exempt Hatch Waxman Suits from Antitrust Scrutiny as Potential Sham Litigations

The Federal Trade Commission has filed an amicus brief in Takeda Pharmaceutical Co. v Zydus Pharmaceuticals (USA) Inc., which is a patent infringement case pending before the U.S. District Court for the District of New Jersey.

The 1984 Hatch-Waxman Act established a regulatory framework for promoting generic drug competition. The law permits the brand and generic drug companies to litigate the validity of patents prior to the generic drug entry.

Zydus filed an Abbreviated New Drug Application for FDA approval of a generic version of Takeda’s ulcer medication Prevacid SoluTab. As permitted by the Hatch-Waxman Act, Takeda filed a patent infringement lawsuit alleging that Zydus’s generic version of Prevacid SoluTab infringes four of Takeda’s patents. Zydus filed counterclaims alleging that Takeda’s infringement suit constitutes anticompetitive sham litigation. Takeda has moved to dismiss Zydus’s antitrust counterclaims, arguing in part that, because Takeda has a statutory right to file a patent infringement suit under the Hatch-Waxman Act, its suit cannot be a sham.

The amicus brief urges the court to reject Takeda’s suggestion that patent infringement suits brought under the Hatch-Waxman Act are exempt from antitrust scrutiny. The FTC argues that neither the language of the Hatch-Waxman Act, nor the case law, nor FDA regulations exempt Hatch-Waxman suits from antitrust scrutiny as potential shams.

The FTC vote approving the amicus brief filing was 5-0. It was filed before the U.S. District Court for the District of New Jersey on June 6, 2018. (FTC File No P163500; the staff contact is James H. Weingarten, Bureau of Competition, 202-326-3570.)

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