681 F. Supp. 3d 275 (D.N.J. 2023)

From Casetext: Smarter Legal Research

Indivior Inc. v. Alvogen Pine Brook LLC

United States District Court, D. New Jersey

Jun 26, 2023

681 F. Supp. 3d 275 (D.N.J. 2023)

Opinion

Civ. No. 17-7106 (KM) (CLW) Civ. No. 18-5285 (KM) (CLW)

2023-06-26

INDIVIOR INC., Indivior UK Limited, and Aquestive Therapeutics, Inc., Plaintiffs, v. ALVOGEN PINE BROOK LLC, Defendant. Alvogen Pine Brook LLC and Alvogen, Inc., Counterclaim-Plaintiffs, v. Indivior Inc., Indivior UK Limited, and Aquestive Therapeutics, Inc., Counterclaim-Defendants.

Charles Michael Lizza, Sarah Ann Sullivan, William C. Baton, Saul Ewing LLP, Newark, NJ, Philip Scott May, Groombridge, Wu, Baughman & Stone LLP, Washington, DC, for Plaintiffs Indivior Inc., Indivior UK Limited in No. 17-7106. Charles Michael Lizza, William C. Baton, Saul Ewing LLP, Newark, NJ, Philip Scott May, Groombridge, Wu, Baughman & Stone LLP, Washington, DC, for Counterclaim-Defendant Defendant Indivior Inc. in No. 17-7106. Charles Michael Lizza, Sarah Ann Sullivan, William C. Baton, Saul Ewing LLP, Newark, NJ, Philip Scott May, Groombridge, Wu, Baughman & Stone LLP, Washington, DC, for Counterclaim-Defendant Indivior UK Limited in No. 17-7106. Jamie L. Lucia, Steptoe & Johnson LLP, San Francisco, CA, Sarah Ann Sullivan, William C. Baton, Saul Ewing LLP, Newark, NJ, for Plaintiff Aquestive Therapeutics, Inc. in No. 17-7106. Arnold B. Calmann, Saiber LLC, Florham Park, NJ, for Counterclaim-Plaintiffs Alvogen, Inc., Alvogen Pine Brook LLC in No. 17-7106. Arnold B. Calmann, Katherine Ann Escanlar, Saiber LLC, Florham Park, NJ, for Defendant Alvogen Pine Brook, Inc. in No. 17-7106. Jamie L. Lucia, Steptoe & Johnson LLP, San Francisco, CA, William C. Baton, Saul Ewing LLP, Newark, NJ, for Counterclaim-Defendant Aquestive Therapeutics, Inc. in No. 17-7106. Charles Michael Lizza, David Leigh Moses, William C. Baton, Saul Ewing Arnstein & Lehr LLP, Newark, NJ, for Plaintiffs/Counterclaim-Defendants in No. 18-5285. Arnold B. Calmann, Katherine Ann Escanlar, Saiber LLC, Newark, NJ, for Defendant/Counterclaim-Plaintiff Alvogen Pine Brook LLC in No. 18-5285.

KEVIN MCNULTY, United States District Judge

OPINION

KEVIN MCNULTY, United States District Judge:

These consolidated patent infringement cases are brought by Indivior Inc., Indivior UK Limited (collectively, "Indivior"), and Aquestive Therapeutics, Inc. ("Aquestive," and all together, "Plaintiffs") against Alvogen Pine Brook LLC. In response, Alvogen Pine Brook LLC, together with Alvogen, Inc. (collectively, unless otherwise specified, "Alvogen"), has asserted counterclaims for violations of, and conspiracy to violate, federal and state antitrust laws.

The lone remaining patent-in-suit is U.S. Patent No. 9,687,454 ("the '454 Patent"), issued to Indivior on June 27, 2017. The '454 Patent is one of several patents that collectively describe formulations of Suboxone film, a "rapidly dissolving film that adheres to the underside of a patient's tongue" or cheek that is used to treat opioid dependency. Suboxone film works to decrease a patient's need for opioids while also deterring abuse. Alvogen manufactures and develops generic competitors to Suboxone film.

Suboxone film is Plaintiffs' brand name for a co-formulated buprenorphine/naloxone sublingual film.

Now before the Court are three motions for summary judgment: 1) Alvogen Pine Brook LLC's motion for summary judgment on Indivior's remaining infringement claim (DE 404), 2) Plaintiffs' joint motion for summary judgment on Alvogen's counterclaims (DE 406), and 3) Aquestive's separate motion for summary judgment on Counts II and IV of Alvogen's counterclaims (DE 410). For the reasons expressed below, Alvogen Pine Brook LLC's motion for summary judgment will be DENIED, Plaintiffs' joint motion for summary judgment will be GRANTED in part and DENIED in part, and Aquestive's separate motion for summary judgment will be DENIED.

Certain citations to the record are abbreviated as follows:

"DE" = Docket entry number in the 7106 Action or other specified case

"7106 Action" = Civil Action No. 2:17-cv-7106-KM-CLW

"7111 Action" = Civil Action No. 2:17-cv-7111-KM-CLW

"5285 Action" = Civil Action No. 2:18-cv-5285-KM-CLW

"5288 Action" = Civil Action No. 2:18-cv-5288-KM-CLW

"'305 Patent" = United States Patent No. 9,931,305

"'454 Patent" = United States Patent No. 9,687,454

"'514 Patent" = United States Patent No. 8,603,514

"'832 Patent" = United States Patent No. 8,475,832

"Counterclaims" = Second Amended Answer with Affirmative Defenses and Counterclaims (DE 342)

"Alvogen Mot." = Brief in Support of Alvogen's Motion for Summary Judgment of Invalidity of Claim 6 of U.S. Patent No. 9, 687, 454 (DE 404-1)

"Alvogen St." = Alvogen's Statement of Material Facts Not in Dispute Pursuant to Local Civil Rule 56.1 (DE 405-2)

"Pls. Mot." = Memorandum of Law in Support of Plaintiffs' Motion for Summary Judgment on Defendants' Counterclaims (DE 407)

"Pls. St." = Statement of Undisputed Material Facts In Support Of Plaintiffs' Motion For Summary Judgment On Defendants' Counterclaims (DE 408)

"Aquestive Mot." = Memorandum of Law in Support of Aquestive Therapuetics, Inc.'s Motion for Summary Judgment (DE 411)

"Alvogen Opp." = Alvogen's Brief in Opposition to Plaintiffs' Motion For Summary Judgment On Defendants' Counterclaims (DE 419)

"Alvogen Resp." = Alvogen's Response to Plaintiffs' Statement Of Alleged Undisputed Facts in Support of Plaintiffs' Motion for Summary Judgment on Defendants' Counterclaims (DE 419-1)

"Alvogen Supp. St." = Alvogen's Statement of Additional Material Facts Pursuant To Local Civil Rule 56.1 (DE 419-1)

"Alvogen Opp. 2" = Alvogen's Brief in Opposition to Aquestive's Motion for Summary Judgment on Defendants' Counterclaims (DE 422)

Alvogen Supp St. 2 = Alvogen's Statement of Additional Material Facts Pursuant to Local Civil Rule 56.1 (DE 422-1)

"Indivior Opp." = Indivior's Brief in Opposition to Alvogen's Motion for Summary Judgment (DE 426)

"Indivior Resp." = Indivior's Response to Defendant's Statement of Undisputed Facts in Support of its Motion for Summary Judgment of Invalidity of Claim 6 of U.S. Patent No. 9, 687, 454 (DE 426-1)

"Aquestive Reply" = Reply Memorandum of Law in Support of Aquestive Therapeutics, Inc.'s Motion for Summary Judgment (DE 428)

"Aquestive Resp." = Aquestive's Reply to Alvogen's Response to Aquestive's Statement of Undisputed Facts in Support of Summary Judgment (DE 429)

"Pls. Reply" = Reply Memorandum Of Law In Support Of Plaintiffs' Motion For Summary Judgment On Defendants' Counterclaims (DE 430)

"Pls. Supp. Resp." = Plaintiffs' Reply to Alvogen's Response to Plaintiffs' Statement of Undisputed Material Facts and to Alvogen's Supplemental Statement of Alleged Undisputed Facts (DE 431)

"Alvogen Reply" = Reply in Support of Alvogen's Motion for Summary Judgment of Invalidity of Claim 6 of U.S. Patent No. 9,687,454 (DE 432)

I. BACKGROUND

This matter has been extensively litigated for a number of years. To set the stage for my analysis of the pending motions, I will provide a brief overview of several patent infringement cases Plaintiffs have brought against Alvogen and others in connection with the Suboxone film product. I will then present the facts of record, noting pertinent disputes as appropriate, and the procedural history pertaining to each side's motions for summary judgment.

A. Suboxone Film Litigation Overview

To be clear, this overview outlines but a fraction of the extensive litigation surrounding Indivior's Suboxone film product that has taken place over the past decade or so. I present here only the portions of the history that gave rise to the current infringement action. Later, in Section I.C, infra, I provide additional background regarding the litigation of the '305 Patent, which—though that patent is no longer in dispute—is pertinent to my discussion of Alvogen's antitrust counterclaims.

In 2014, Indivior's predecessor, Reckitt Benckiser, brought suit in the District of Delaware against a number of parties, including Alvogen and Dr. Reddy's Laboratories S.A. ("DRL"), alleging infringement of several patents, including the '832 Patent and the '514 Patent (the "Delaware Litigation"). After two bench trials, the Delaware district court held that Indivior had failed to meet its burden of showing that Alvogen's and DRL's generic products infringed the claims of the '514 Patent for Suboxone film and found the '832 Patent invalid for obviousness and indefiniteness. Reckitt Benckiser Pharm. Inc. v. Watson Labs., Inc., No. CV 13-1674-RGA, 2016 WL 3186659, at *27 (D. Del. June 3, 2016); Reckitt Benckiser Pharm. Inc. v. Dr. Reddy's Labs. S.A., Nos. 14-1573, 14-1574, 2017 WL 3837312 (D. Del. Aug. 31, 2017); Reckitt Benckiser Pharm. Inc. v. Dr. Reddy's Labs. S.A., No. CV 14-1451-RGA, 2017 WL 3782782 (D. Del. Aug. 31, 2017); Indivior Inc. v. Mylan Techs. Inc., 298 F. Supp. 3d 775 (D. Del. 2018). Indivior then appealed to the Federal Circuit.

Plaintiffs responded to the Delaware rulings by applying for two additional patents. First, the '454 Patent issued to Indivior on June 27, 2017. Second, the '305 Patent issued to Aquestive on April 3, 2018. On September 14, 2017, Plaintiffs filed the 7106 and 7111 Actions, alleging infringement of the '454 Patent. On April 3, 2018, Plaintiffs also filed the 5285 and 5288 Actions against Alvogen and DRL claiming infringement of the new '305 Patent. Ultimately, all these actions were consolidated.

The '832 Patent and the '454 Patent have the same specifications, but the '454 Patent is directed to a bioequivalent film version of Suboxone tablets.

On February 7, 2018, Plaintiffs amended their complaint in the 7106 Action to assert an additional infringement claim with respect to U.S. Patent No. 9,855,221. (DE 23.) However, this claim was later dismissed pursuant to a stipulation by the parties on February 26, 2019. (DE 121.)

On July 12, 2019, the Federal Circuit issued its opinion on the appeals taken in the Delaware Litigation. In this opinion, which I have deemed Indivior II (see MTD Op. at 5), the Federal Circuit largely upheld the Delaware district court's findings. Indivior Inc. v. Dr. Reddy's Labs., S.A., 930 F.3d 1325, 1339 (Fed. Cir. 2019) ("Indivior II"). In analyzing the '514 Patent in Indivior II, the Federal Circuit made clear that, for these purposes, the claims of the '305 Patent are indistinct from those of the '514 Patent.

On November 5, 2019, I entered an Opinion construing certain key terms contained in the '454 Patent and the '305 Patent following a Markman hearing. (7106 Action at DE 215; 7111 Action at DE 294.) On January 9, 2020, based on the Court's construction of these key terms, the parties stipulated that Alvogen and DRL do not infringe the claims of the '305 Patent that Plaintiffs asserted against them. I so-ordered that stipulation subject to the parties' reservation of rights on appeal (7106 Action at DE 240; 7111 Action at DE 323), leaving only Indivior's '454 Patent infringement claim unresolved.

B. Indivior's Remaining Infringement Claim

The '454 Patent contains 14 claims related to "sublingual or buccal film compositions" for treating opioid dependence in a user:

1. An oral, self-supporting, A mucoadhesive film comprising:

(a) about 40 wt % to about 60 wt % of a water-soluble polymeric matrix;

(b) about 2 mg to about 16 mg of buprenorphine or a pharmaceutically acceptable salt thereof;

(c) about 0.5 mg to about 4 mg of naloxone or a pharmaceutically acceptable salt thereof; and

(d) an acidic buffer;

wherein the film is mucoadhesive to the sublingual mucosa or the buccal mucosa;

wherein the weight ratio of (b):(c) is about 4:1;

wherein the weight ratio of (d):(b) is from 2:1 to 1:5; and

where in application of the film on the sublingual mucosa or the buccal mucosa results in differing absorption between buprenorphine and naloxone, with a buprenorphine C_max from about 0.624 ng/ml to about 5.638 ng/ml and a buprenorphine AUC from about 5.431 hr*ng/ml to about 56.238 hr*ng/ml; and a naloxone C_max from about 41.04 pg/ml to about 323.75 pg/ml and a naloxone AUC from about 102.88 hr*pg/ml to about 812.00 hr*pg/ml.

2. The film of claim 1, wherein the weight ratio of (d):(b) is from about 1:1 to 1:5.

3. The film of claim 1, wherein the weight ratio of (d):(b) is from about 1.4:1 to about 1:3.

4. The film of claim 3, wherein the acidic buffer is citric acid.

5. The film of claim 1, wherein the weight ratio of (b):(a) is from about 1:3 to about 1:11.5.

6. The film of claim 5, wherein the weight ratio of (b):(a) is about 1:3.

7. The film of claim 1, wherein the film comprises about 48.2 wt % to about 58.6 wt % of the water soluble polymeric matrix.

8. The film of claim 7, wherein the film comprises about 48.2 wt % of the water soluble polymeric matrix.

9. The film of claim 1, wherein the water-soluble polymeric matrix comprises a polyethylene oxide polymer alone or in combination with a hydrophilic cellulosic polymer.

10. The film of claim 9, wherein the hydrophilic cellulosic polymer is hydroxypropyl cellulose, hydroxypropylmethyl cellulose, or a combination thereof.

11. The film of claim 10, wherein the hydrophilic cellulosic polymer is hydroxypropylmethyl cellulose.

12. The film of claim 1, wherein the weight ratio of (d):(b) is from about 1:1 to 1:5; wherein the weight ratio of (b):(a) is from about 1:3 to about 1:11.5; and wherein the film comprises about 48.2 wt % to about 58.6 wt % of the water soluble polymeric matrix.

13. A method for treating opioid dependence in a patient in need thereof comprising sublingually or buccally administering the mucoadhesive film of claim 1 to a sublingual or buccal mucosal tissue

of the patient to treat the opioid dependence.

14. The film of claim 1, wherein the weight ratio of (d):(b) is from 2:1 to 1:1.

('454 Patent claims 1-14.)

In this action, Indivior has asserted claims 1-3, 6, 7, 9, 13, and 14 of the '454 Patent against Alvogen Pine Brook LLC. (Alvogen St. ¶ 3; Indivior Resp. ¶ 3.)

On November 13, 2018, DRL filed a petition for inter partes review in the U.S. Patent Office, challenging the validity of claims 1-5 and 7-14 of the '454 Patent (the "DRL IPR"). (Alvogen St. ¶ 4; Indivior Resp. ¶ 4.) On June 2, 2020, the Patent Trial and Appeals Board ("PTAB") issued a Final Written Decision in the DRL IPR finding that claims 1-5, 7, and 9-14 of the '454 Patent were unpatentable as anticipated by prior art. Dr. Reddy's Laboratories S.A. v. Indivior UK Ltd., No. IPR2019-00329, 2020 WL 2891968 (P.T.A.B. June 2, 2020). In its decision, the PTAB found that U.S. Patent Application No. 12/537,571 (the "'571 Application"), the source of the '454 Patent's claimed priority, fails to provide written-description support for the claim limitations "about 40 wt % to about 60 wt % of a water-soluble polymeric matrix" (claim 1), "about 48.2 wt % to about 58.6 wt % of the water soluble polymeric matrix" (claims 7 and 12), and "wherein the weight ratio of (b):(a) is from about 1:3 to about 1:11.5" (claims 5 and 12). Id. at *34. The PTAB also found that claims 2-5, 9-11, 13, and 14 lack written-description support because of their dependency from claim 1. Id. at *34 (citing Lockwood v. Am. Airlines, Inc., 107 F.3d 1565, 1572 (Fed. Cir. 1997)). The PTAB made the additional finding that DRL did not show by a preponderance of the evidence that the '571 Application fails to provide written description support for claim 8, which depends from claim 7 and, by extension, also depends from claim 1. Id. at *34; see also '454 Patent at claims 7 and 8, supra. On November 24, 2021, in a decision here deemed Indivior III, the Federal Circuit affirmed the PTAB's determination that claims 1-5, 7, and 9-14 were unpatentable as anticipated by the prior art. Indivior UK Ltd. v. Dr. Reddy's Lab'ys S.A., 18 F.4th 1323, 1330 (Fed. Cir. 2021) ("Indivior III").

Claim 6 of the '454 Patent, which was not challenged during the DRL IPR proceedings, is the only claim of the '454 Patent now asserted by Indivior against Alvogen Pine Brook LLC that has not previously been found invalid by the PTAB.

C. Alvogen's Antitrust Counterclaims

While the Delaware Litigation was proceeding, dozens of states filed antitrust lawsuits against Indivior's former parent entity concerning its Suboxone products, alleging that it "violated federal and state antitrust laws by excluding generic competition for [Suboxone]," in part by "disparaging the tablet form of Suboxone after developing a patent-protected sublingual film formulation of Suboxone." In re: Suboxone (Buprenorphine Hydrochloride & Naloxone) Antitrust Litig., 949 F. Supp. 2d 1365, 1366 (U.S. Jud. Pan. Mult. Lit. 2013).

On April 9, 2019, the Department of Justice ("DOJ") announced that Indivior and its former parent entity had been indicted for "engaging in an illicit nationwide scheme to increase prescriptions of Suboxone Film." U.S. v. Indivior Inc. et al., No. 19-cr-16 (W.D. Va. Apr. 9, 2019).

On July 11, 2019, the U.S. Federal Trade Commission ("FTC") also filed a complaint against Indivior and its former parent entity, citing anticompetitive conduct. F.T.C. v. Reckitt Benckiser Group PLC et al., No. 19-28 (W.D. Va. July 11, 2019). Consistent with the various civil and criminal actions already pending against Indivior, the FTC alleged that, in order to thwart generic competition for its previous-generation Suboxone tablets, Indivior falsely represented that its new Suboxone film formulation was safer than the existing tablet formulation because children are less likely to be accidentally exposed to the film product. Id. at DE 1.

On August 8, 2019, citing new information it had learned from the DOJ and FTC's complaints against Indivior, Alvogen Pine Brook LLC moved in this Court to amend its answer in this consolidated action and assert antitrust counterclaims against Plaintiffs. The Court granted that motion to amend. (DE 174, 217, 321.) On October 30, 2020, this Court granted Alvogen leave to amend again (DE 338), and it filed what is now the operative pleading in this action (DE 342). Alvogen currently asserts the following four counterclaims:

In the same order, which was proposed with Plaintiffs' consent, the Court also permitted Alvogen Pine Brook LLC to add Alvogen, Inc. as a counterclaim-plaintiff. (DE 338.)

Count I: Monopolization and Attempted Monopolization in Violation of Section 2 of the Sherman Act (against Indivior only);

Count II: Conspiracy to Monopolize in Violation of Section 2 of the Sherman Act (against Indivior and Aquestive);

Count III: Monopolization and Attempted Monopolization in Violation of Section 2 of New Jersey Antitrust Act (against Indivior only); and

Count IV: Conspiracy to Monopolize in Violation of New Jersey Antitrust Act (against Indivior and Aquestive).

(DE 342.)

Alvogen alleges that "Plaintiffs have engaged in a prolonged and overarching anticompetitive scheme to protect Indivior's monopoly power for . . . Suboxone Film." (Counterclaims ¶ 48.) According to Alvogen, Plaintiffs' purported anticompetitive conspiracy was multi-pronged, comprising the "filing [of] baseless sham patent infringement litigations against generic competitors to prevent generic competition," as well as, among other tactics, entering into a "series of anticompetitive exclusionary agreements" with third-party payors, pharmacy benefit managers ("PBMs"), and others. (Id. ¶¶ 48-49.) Below, I set forth facts surrounding 1) Plaintiffs' assertion of the '305 Patent against Alvogen; 2) rebate contracts and other Suboxone-related agreements entered into by Indivior; and 3) Indivior and Aquestive's partnership in developing, manufacturing, and marketing Suboxone film. Those facts form the basis of Alvogen's sham litigation, foreclosure, and conspiracy claims, respectively.

Alvogen also claims Indivior "fraudulently fabricat[ed] safety concerns to mislead physicians and patients" (Counterclaims ¶ 48), as was previously alleged by the DOJ, FTC, and various state attorneys general.

1. The '305 Patent Litigation

The sham litigation prong of Alvogen's monopolization claim has two parts, both of which center around the litigation of the '305 Patent:

Alvogen has stipulated that it will not argue in opposition to summary judgment or at trial that Indivior's assertion of the '454 Patent was baseless. (Pls. St. ¶ 10; Alvogen Resp. ¶ 10.)

First, Alvogen claims that Indivior's assertion of the '305 Patent against Alvogen was baseless at the outset of the infringement action (Counterclaims ¶ 174) because one month earlier, the District of Delaware had ruled that Alvogen's generic products fell within the specification disclaimer of the '514 Patent, i.e. the parent to the '305 Patent, which issued with the same specification. See Indivior Inc. v. Mylan Techs. Inc., 298 F. Supp. 3d 775, 779 (D. Del. 2018) (finding that "Alvogen does not infringe any asserted claim" of the '514 patent).

Second, Alvogen claims that Indivior's motion for a temporary restraining order ("TRO") in the '305 Patent infringement action was itself baseless because Indivior could not have expected to show a likelihood of success on the merits given prior rulings by the Federal Circuit in a related appeal involving Plaintiffs and DRL. (Counterclaims ¶ 174.) In June 2018, upon learning of DRL's plans to launch its generic product "at risk" of infringing the '305 Patent, Indivior moved to enjoin DRL from bringing its version of Suboxone film to market. (7111 Action at DE 70, 71.) On July 13, 2018, I granted the motion for a preliminary injunction, judging that Indivior, in the '305 continuation patent, had successfully "claimed around" the problem that produced the Delaware rulings. (Id. at DE 121). DRL then appealed to the Federal Circuit, which disagreed. On November 20, 2018, a panel of the Federal Circuit, over a dissent, reversed and remanded in a decision I have deemed Indivior I (MTD Op. at 4), finding that Indivior was still unlikely to succeed on the merits of its infringement claim. Indivior Inc. v. Dr. Reddy's Labs., S.A., 752 F. App'x 1024 (Fed. Cir. 2018) ("Indivior I"). Meanwhile, on January 22, 2019, Indivior moved in this Court for temporary restraints and a preliminary injunction to prevent Alvogen from launching its generic product prior to the Federal Circuit's issuance of its mandate in Indivior I. (7106 Action at DE 83.) During oral argument, I enjoined Alvogen from launching in order to preserve the status quo pending the issuance of the mandate. (Id. at DE 88.)

Alvogen also claims that Indivior's TRO motion was objectively baseless for the additional reason that "Plaintiffs made material omissions and misrepresentations to this Court in their requests for injunctive relief against Alvogen." (Counterclaims ¶ 53.) According to Alvogen, these misrepresentations included 1) Indivior's argument that "if an injunction/TRO did not issue, Plaintiffs would suffer irreparable loss, including Indivior's loss of market share" (id. at ¶ 181); 2) Indivior's representation that "if an injunction/TRO did not issue, the public would be harmed as a result of being deprived of Indivior's efforts to educate and support physicians and the public regarding Suboxone Film treatment" (id. at ¶ 182); and 3) Indivior's misleading claim that Suboxone Film "succeeded in the market despite generic buprenorphine competition" (omitting that this success was a result of "Indivior's fraudulent schemes") (id. at ¶ 183).

Indivior, for its part, denies making false statements to this Court during the TRO proceedings and denies that the statements Alvogen characterizes as misleading were material to the Court's decision to grant the TRO in any event. (Pls. Mot. at 21-22.)

On February 4, 2019, the Federal Circuit denied rehearing in Indivior I. On February 19, 2019, the Federal Circuit issued its mandate vacating the DRL preliminary injunction. The same day, I vacated the injunctive restraints. (7106 Action at DE 119.) Alvogen and DRL then proceeded to bring to market their generic versions of Suboxone film.

2. Indivior's Suboxone Contracts

Alvogen claims that Indivior substantially foreclosed generic entry by entering into a number of anticompetitive contracts, most notably 1) rebate contracts with third-party payors and PBMs, and 2) an agreement with Sandoz, Inc. ("Sandoz") permitting Sandoz to market an authorized generic version of Suboxone film. (Counterclaims ¶¶ 195-233.)

(a) Rebate Contracts

Alvogen has directed the Court to three commonly-used provisions in Indivior's rebate contracts which, according to Alvogen, demonstrate that Indivior entered into a "series of anticompetitive exclusionary agreements" with third-party payors, PBMs, and others. (Counterclaims ¶¶ 48-49; Pls. St. ¶ 87, Alvogen Resp. ¶ 87.) These provisions include [Redacted] (Pls. St. ¶ 87, Alvogen Resp. ¶ 87.) One of Alvogen's experts describes these provisions as follows: First, [Redacted] Id. Second, [Redacted] Id. Third, [Redacted] [Redacted]

The parties agree that maximum allowable cost ("MAC") refers to "the maximum price a prescription drug benefit plan will pay for a drug. The MAC reimbursement is the amount that the health plan sponsor or Medicaid program will pay to a pharmacy for all clinically equivalent products. For example, Suboxone Film and generic buprenorphine/naloxone sublingual film would be set at the same MAC, i.e., the same reimbursement amount to the pharmacy. Because generics are generally priced lower than branded drugs, and the MAC is generally set at the acquisition cost of the generic product, a branded drug would only be reimbursed at the lower, generic product price once the products were added to the MAC list." (Pls. St. ¶ 88, Alvogen Resp. ¶ 88 (quoting Alvogen's opening expert report).)

Alvogen contends that by executing dozens of contracts with payors containing these provisions, Indivior erected a "rebate wall" that "prohibited payors from treating generic films more favorably than Suboxone Film." (Opp. at 4.) According to Alvogen, Indivior "intentionally structured its rebates so that, if payors refused to comply with these prohibitions, they would face a substantial, punitive price increase on Suboxone Film." (Id.) During discovery, Alvogen submitted expert reports purporting to show that [Redacted]" so "payors had essentially no choice but to accept Indivior's terms and [Redacted]—even though generic films were substantially less expensive than Suboxone Film." (Id.) As a result, says Alvogen, "generic films obtained a substantially smaller share of the market" than they would have but for Indivior's alleged anticompetitive conduct, and consumers—along with the healthcare system as a whole—were therefore forced to pay higher prices. (Id. at 4-5.)

(b) The AG Agreement

As further evidence of Indivior's foreclosure efforts, Alvogen points to Indivior's contract with Sandoz. [Redacted], Indivior and Sandoz executed an Authorized Generic Distribution and Supply Agreement (the "AG Agreement"), pursuant to which Indivior would sell a generic version of its branded product (the authorized generic, or "AG") to Sandoz, and Sandoz would distribute and sell the AG in the United States. (Pls. St. ¶¶ 96-97, Alvogen Resp. ¶¶ 96-97.) [Redacted] (Alvogen Supp. St. ¶¶ 384-385; Pls. Supp. Resp. ¶¶ 384-385.) Indivior was entitled to [Redacted] of the profits from sales of the Sandoz AG. (Alvogen Supp. St. ¶ 386; Pls. Supp. Resp. ¶ 386.)

Notably, Alvogen alleges that Indivior "forbade Sandoz from beginning to distribute the AG product until February 20, 2019—the date when Alvogen and other generic competitors were expected to enter the market" following the vacatur of this Court's TRO. (Counterclaims ¶ 230.)

According to Alvogen, [Redacted] (Counterclaims ¶ 225.)

3. The Indivior-Aquestive Partnership

Indivior's business relationship with Aquestive dates back at least to 2006, when Aquestive and Indivior's predecessor entities entered into the first of several agreements relating to the development, manufacture, and sale of Suboxone film. These agreements included 1) a 2006 Development Agreement, [Redacted]; 2) a 2008 Commercial Exploitation Agreement, [Redacted]; and 3) a 2017 Agreement, [Redacted] (Alvogen Supp. 2 ¶¶ 1, 8-17, 18-20; Aquestive Resp. ¶¶ 1, 8-17, 18-20.)

I refer to these predecessor entities here by their current monikers, "Aquestive" and "Indivior," for the sake of clarity.

Equally pertinent to Alvogen's conspiracy claims is Aquestive's active participation since 2013 in the series of lawsuits Indivior has brought against generic manufacturers of co-formulated sublingual film, including Alvogen and DRL. (Alvogen Opp. 2 at 5.)

See Section I.A and Section I.C.1, supra.

D. The Pending Motions

On October 26, 2021, Alvogen Pine Brook LLC, Indivior, and Aquestive filed the three now-pending motions for summary judgment: 1) Alvogen Pine Brook LLC filed a motion for summary judgment on Indivior's remaining infringement claim (DE 404); 2) Indivior, joined in part by Aquestive, filed a motion for summary judgment on Alvogen's counterclaims (DE 406); and 3) Aquestive filed a separate motion for summary judgment on Counts II and IV of Alvogen's counterclaims (DE 410). On December 7, 2021, Alvogen filed briefs in opposition to Indivior and Aquestive's joint motion for summary judgment and Aquestive's separate motion for summary judgment. (DE 419, 422.) Also on December 7, 2021, Indivior filed a brief in opposition to Alvogen Pine Brook LLC's motion for summary judgment. (DE 426.) On January 12, 2022, Indivior and Aquestive filed a joint reply brief (DE 430), Aquestive filed an additional standalone reply brief (DE 428), and Alvogen Pine Prook LLC filed a reply brief (DE 432). On August 29, 2022, the Court heard oral argument on all three motions.

II. LEGAL STANDARD

Summary judgment is appropriate where "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A fact is material if it "might affect the outcome of the suit under the governing law" and a dispute about a material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Disputes over irrelevant or unnecessary facts will not preclude the Court from granting a motion for summary judgment. See id.

A party moving for summary judgment has the initial burden of showing the basis for its motion and must demonstrate that there is an absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). "A party asserting that a fact [is not] genuinely disputed must support the assertion by . . . citing to particular parts of materials in the record, including depositions, documents . . . , affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials." Fed. R. Civ. P. 56(c)(1)(A). After the moving party adequately supports its motion, the burden shifts to the nonmoving party to "go beyond the pleadings and by her own affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate specific facts showing that there is a genuine issue for trial." Celotex, 477 U.S. at 324, 106 S.Ct. 2548 (internal quotation marks omitted). To withstand a properly supported motion for summary judgment, the nonmoving party must identify specific facts and affirmative evidence that contradict the moving party. Anderson, 477 U.S. at 250, 106 S.Ct. 2505. "[I]f the non-movant's evidence is merely 'colorable' or is 'not significantly probative,' the court may grant summary judgment." Messa v. Omaha Prop. & Cas. Ins. Co., 122 F.Supp.2d 523, 528 (D.N.J. 2000) (quoting Anderson, 477 U.S. at 249-50, 106 S.Ct. 2505). "If reasonable minds could differ as to the import of the evidence," however, summary judgment is not appropriate. Anderson, 477 U.S. at 250-51, 106 S.Ct. 2505.

"In considering a motion for summary judgment, a district court may not make credibility determinations or engage in any weighing of the evidence; instead, the nonmoving party's evidence 'is to be believed and all justifiable inferences are to be drawn in his favor.' " Marino v. Indus. Crating Co., 358 F. 3d 241, 247 (3d Cir. 2004) (quoting Anderson, 477 U.S. at 255, 106 S.Ct. 2505). In that respect, the Court's role in deciding a motion for summary judgment is simply "to determine whether there is a genuine issue for trial." Anderson, 477 U.S. at 249, 106 S.Ct. 2505. Ultimately, there is "no genuine issue as to any material fact" if a party "fails to make a showing sufficient to establish the existence of an element essential to that party's case." Celotex, 477 U.S. at 322, 106 S.Ct. 2548.

When, as here, the parties file cross-motions for summary judgment, the governing standard "does not change." Auto-Owners Ins. Co. v. Stevens & Ricci, Inc., 835 F.3d 388, 401 (3d Cir. 2016) (citing Appelmans v. City of Phila., 826 F.2d 214, 216 (3d Cir. 1987)). The court must consider the motions independently, in accordance with the principles outlined above. Goldwell of N.J., Inc. v. KPSS, Inc., 622 F. Supp. 2d 168, 184 (D.N.J. 2009); Williams v. Philadelphia Housing Auth., 834 F. Supp. 794, 797 (E.D. Pa. 1993), aff'd, 27 F.3d 560 (3d Cir. 1994). That one of the cross-motions is denied does not imply that the other must be granted. For each motion, "the court construes facts and draws inferences in favor of the party against whom the motion under consideration is made" but does not "weigh the evidence or make credibility determinations" because "these tasks are left for the fact-finder." Pichler v. UNITE, 542 F.3d 380, 386 (3d Cir. 2008) (internal quotation and citations omitted).

III. ANALYSIS

I now proceed to my analysis of the parties' dueling motions for summary judgment. Alvogen Pine Brook LLC has moved for summary judgment on Indivior's remaining infringement claim (DE 404), and Plaintiffs have moved for summary judgment on Alvogen's antitrust counterclaims (DE 406, 410). I address each side's arguments in turn.

A. Alvogen Pine Brook LLC's Motion for Summary Judgment on Indivior's Infringement Claim

Alvogen Pine Brook LLC argues that it is entitled to summary judgment finding claim 6 of the '454 Patent to be invalid for failure to satisfy the written-description requirement of 5 U.S.C. § 112, based on principles of issue preclusion. (Alvogen Mot. at 1.) Because the issue presented here, i.e. whether claim 6 of the '454 Patent has sufficient written-description support, was not decided previously, issue preclusion does not apply, and Alvogen Pine Brook LLC's motion for summary judgment will be denied.

Under 35 U.S.C. § 112, "[t]he specification [of a patent] shall contain a written description of the invention, and the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art . . . to make and use the same, and shall set forth the best mode contemplated by the inventor or joint inventor of carrying out the invention." This is known as the "written description requirement." See, e.g., Ariad Pharm., Inc. v. Eli Lilly & Co., 598 F.3d 1336, 1351 (Fed. Cir. 2010) ("Since its inception, this court has consistently held that § 112, first paragraph, contains a written description requirement separate from enablement, and we have articulated a 'fairly uniform standard,' which we now affirm."). The test for sufficiency of this provision is "whether the disclosure of the application relied upon reasonably conveys to those skilled in the art that the inventor had possession of the claimed subject matter as of the filing date." Id. (citing Vas-Cathlnc. v. Mahurkar, 935 F.2d 1555, 1562-63 (Fed. Cir. 1991)).

Issue preclusion, also known as collateral estoppel, "precludes a plaintiff from relitigating identical issues merely by switching adversaries . . ." Aspex Eyewear, Inc. v. Zenni Optical Inc., 713 F.3d 1377, 1380 (Fed. Cir. 2013) (internal citation and quotation marks omitted). The parties correctly note that issue preclusion analysis is governed generally by regional circuit law, but for "any aspects that may have special or unique application to patent cases, Federal Circuit precedent is applicable." Id. The Third Circuit has held generally that issue preclusion has five essential prerequisites: "(1) the identical issue was decided in a prior adjudication; (2) the issue was actually litigated; (3) there was a final judgment on the merits; (4) the determination was essential to the earlier judgment; and (5) the party against whom the doctrine is asserted was a party or in privity with a party to the earlier proceeding." Fitzgerald v. Shore Mem'l Hosp., 92 F. Supp. 3d 214, 225-26 (D.N.J. 2015) (citing Seborowski v. Pittsburgh Press Co., 188 F.3d 163, 169 (3d Cir. 1999)). Of primary concern here is the first factor: whether the current dispute presents an issue that is identical to one that was decided previously.

Decisions rendered by the PTAB are considered final and given preclusive effect once they have been affirmed by the Federal Circuit. XY, LLC v. Trans Ova Genetics, 890 F.3d 1282, 1294 (Fed. Cir. 2018) (finding that the Federal Circuit's "affirmance render[ed] final" a PTAB judgment of invalidity); see also Indivior III at 1330 (Fed. Cir. 2021) (affirming the PTAB's decision in the DRL IPR). As the parties acknowledge in their papers, issue preclusion can extend to unadjudicated patent claims "[i]f the differences between the unadjudicated patent claims and adjudicated patent claims do not materially alter the question of invalidity." Ohio Willow Wood Co. v. Alps South, LLC, 735 F.3d 1333, 1342 (Fed. Cir. 2013).

In that connection, Alvogen Pine Brook LLC makes a three-step argument. First, it points to the DRL IPR—and in particular to the PTAB's finding that the '571 Application fails to provide written description support for the limitation "about 40 wt % to about 60 wt % of a water-soluble polymeric matrix" ("the 40%-60% polymer limitation"). Second, it observes that the same limitation, now found invalid, appears in claim 1 of the '454 Patent. Third, it contends that because claim 6 depends from claim 1, "the issue of whether the 40%-60% polymer limitation in claim 6 is supported by the specification of the '454 [P]atent has been already litigated." (Alvogen Mot. at 1-2.) This argument falls short, as Alvogen Pine Brook LLC both mischaracterizes the relevant issue and misstates the significance of the PTAB's findings with respect to claim 1.

That PTAB finding regarding the '571 Application is entitled to preclusive effect, says Alvogen Pine Brook LLC, because the Federal Circuit has affirmed it, rendering it final. (Id. at 5 (citing NetAirus Techs., LLC v. Apple Inc., Case No. LA CV 13-03780 JAK (Ex), 2016 WL 5898640, at *3 (C.D. Cal. Mar. 23, 2016).)

As a threshold matter, the issue presented here is whether claim 6 as a whole meets the written description requirement, not "whether the 40%-60% polymer limitation in claim 6 is supported by the specification." (Alvogen Mot. at 2.) That is so because the written description requirement applies to patent claims in their entirety, not to specific limitations contained therein. See Novozymes A/S v. DuPont Nutrition Biosciences APS, 723 F.3d 1336, 1349 (Fed. Cir. 2013) (stating that each claim must be analyzed "as an integrated whole rather than as a collection of independent limitations"). As a result, issue preclusion is inapplicable here. Claim 1 was challenged during the DRL IPR, but claim 6 was not, and claim 6 contains an additional limitation not present in claim 1. The PTAB therefore did not have occasion to consider the validity of claim 6 as a whole: i.e. whether the 40%-60% polymer limitation (which does appear in claim 1), when combined with the additional limitation "where the weight ratio of (b):(a) is about 1:3" (the "buprenorphine-to-polymer weight ratio") (which does not appear in claim 1) has written-description support.

In November 2018, DRL filed another petition for inter partes review against the '454 Patent, challenging the validity of claims 1-3 and 5-14 as obvious over several prior art references. This review, however—which would have included a challenge to claim 6—was never instituted, as the PTAB found that the examiner had already considered "the same or substantially the same prior art or arguments" during prosecution. (Indivior Opp. at 3.)

Indeed, Alvogen Pine Brook LLC's argument is undermined by the very PTAB decision on which it relies. The PTAB's decision, affirmed by the Federal Circuit, found that claim 8—which, like claim 6, depends from claim 1—did meet the written description requirement, even though claim 1 did not. Indivior III at 1330. If Alvogen Pine Brook LLC's view were correct—that is, if a dependent claim containing, inter alia, the limitation from claim 1 necessarily fails—then the ruling upholding claim 8 would be inexplicable. Without more, then, barring Indivior from asserting claim 6 solely because it depends from claim 1, which the PTAB found to lack written-description support, would be improper.

So the claims are not the same. Now it is also true, of course, that issue preclusion can render an unadjudicated patent claim invalid when the "differences between the unadjudicated patent claim[ ] and adjudicated patent claims do not materially alter the question of invalidity." Ohio Willow Wood Co., 735 F.3d at 1342. It is not at all clear, however, that the differences between claim 1 and claim 6 are immaterial here. As the Federal Circuit stated in Indivior III when it affirmed the PTAB's decision in the DRL IPR, "[w]hat is needed to satisfy written description in patent law is highly fact-dependent." Indivior III at 1328. It is also true that, unlike the additional limitation in claim 8, claim 6's additional limitation on the buprenorphine-to-polymer weight ratio adds to but does not explicitly modify the invalidated 40%-60% polymer limitation contained in claim 1. (Alvogen Mot. at 3, 7-8.) However, the buprenorphine-to-polymer weight ratio does significantly narrow claim 6 overall, restricting the overall polymer weight to a range of 6 mg to 48 mg, and constraining the levels of the remaining critical ingredients accordingly. Whether that restriction cures the deficiencies the PTAB identified with respect to claim 1 is a question of fact, and not one the Court is equipped to resolve on a collateral-estoppel basis at the summary judgment stage. See Arunachalam v. Presidio Bank, 801 F. App'x 750, 753 (Fed. Cir. 2020) (applying collateral estoppel only after finding that patent claims at issue "are all dependent on previously invalidated independent claims and do not cure the deficiencies in the prior cases").

This range reflects the 3:1 buprenorphine-to-polymer weight ratio as applied to the 2 mg to 16 mg buprenorphine range claimed in sub-part (b) of claim 1.

For completeness, I will discuss the general rule that issue preclusion does not apply where, as here, the first and second proceedings apply different burdens of proof, and particularly where the burden in the first proceeding was lower than in the second. Sanofi-Aventis U.S. LLC v. Mylan GmbH, No. CV 17-9105 (SRC), 2019 WL 4861428, at *1 (D.N.J. Oct. 2, 2019). The Supreme Court has held that "issues are not identical if the second action involves application of a different legal standard, even though the factual setting of both suits may be the same." B&B Hardware, Inc. v. Hargis Indus., 575 U.S. 138, 135 S. Ct. 1293, 1306, 191 L.Ed.2d 222 (quoting 18 C. Wright, A. Miller, & E. Cooper, Federal Practice & Procedure § 4417, p. 449 (2d ed. 2002)). As Indivior points out, the presumption of patent validity did not apply before the PTAB, and in that proceeding, the petitioner's burden was to demonstrate obviousness by a preponderance of the evidence. (Indivior Opp. at 14-15 (citing 35 U.S.C. 282(a), 316(e)).) By contrast, in the district court proceeding, Alvogen Pine Brook LLC must meet the higher burden of proving invalidity by clear and convincing evidence. See Sanofi-Aventis, 2019 WL 4861428, at *1 (citing Microsoft Corp. v. i4i Ltd. P'ship, 564 U.S. 91, 97, 131 S.Ct. 2238, 180 L.Ed.2d 131 (2011)). Under the traditional rule, the difference between these legal standards would render issue preclusion inapplicable.

That simple picture is complicated somewhat by XY, LLC v. Trans Ova Genetics, 890 F.3d 1282 (Fed. Cir. 2018). In XY, the Federal Circuit set a limit, holding that an affirmed PTAB decision of invalidity "has an immediate issue preclusive effect on any pending or co-pending actions involving the patent." Id. at 1294. That Court reasoned that "a patentee, having been afforded the opportunity to exhaust his remedy of appeal from a holding of invalidity, has had his 'day in court,' and a defendant should not have to continue defending a suit for infringement of an adjudged invalid patent." Id. (citations and quotations omitted). Thus it applied collateral estoppel as between two co-pending Federal Circuit appeals, one from the PTAB and one from the district court, both involving the issue of the validity of the "same claims." Id. at 1294.

There are other confounding factors in XY. In that case, the issues in the two proceedings were identical, and the estoppel issue was presented as involving the effect of one Federal Circuit affirmance of an invalidity ruling upon a co-pending Federal Circuit appeal. And, as the majority observed in a related connection, neither party had disputed the applicability of collateral estoppel, instead arguing only as to the scope of its effect. Id. at 1295.

I set aside any difficulties in harmonizing XY with the traditional rule, however, because there is no attempt here to bring about an unseemly state of affairs in which the same claim, on parallel, co-pending appeals to the Federal Circuit, could be ruled both valid and invalid. Alvogen Pine Brook LLC, in this subsequent proceeding, does not seek to enforce a prior PTAB ruling that claim 6 is invalid. Instead, Alvogen Pine Brook LLC endeavors to go one step further and import the PTAB's findings with respect to other claims into this district court proceeding in order to collaterally attack the validity of claim 6.1 decline to extend the Federal Circuit's holding in XY so far. To my mind, this case falls within the rule of B&B Hardware, not the apparent exception of XY. Issue preclusion does not dictate the validity of claim 6 here.

Because the validity of claim 6 of the '454 Patent is not substantively identical to an already-adjudicated issue, Fitzgerald, 92 F. Supp. 3d at 225-26, and alternatively because the two proceedings had disparate burdens of proof, issue preclusion does not apply here. Alvogen Pine Brook LLC's motion for summary judgment on collateral estoppel grounds is denied.

B. Plaintiffs' Motions for Summary Judgment on Alvogen's Antitrust Counterclaims

Alvogen has asserted federal and state counterclaims of monopolization and attempted monopolization against Indivior (Counts I and III), as well as federal and state counterclaims of conspiracy to monopolize against both Indivior and Aquestive (Counts II and IV). Indivior now moves for summary judgment on all of Alvogen's counterclaims, while Aquestive moves for summary judgment on Alvogen's conspiracy claims. I analyze the monopolization claims first, then the attempted monopolization claims, and, finally, the conspiracy claims. As I explain infra, I will grant partial summary judgment to Indivior as to the sham litigation aspect of Alvogen's monopolization and attempted monopolization counterclaims (Counts I and III), I will deny Indivior's motion for summary judgment in all other respects, and I will deny Aquestive's separate motion for summary judgment in its entirety.

New Jersey's Antitrust Act is essentially a replica of the federal Sherman Antitrust Act, see, e.g., N.J. Stat. § 56:9-1, et seq, and must be interpreted in accordance with federal antitrust principles. "This act shall be construed in harmony with ruling judicial interpretations of comparable Federal antitrust statutes and to effectuate, insofar as practicable, a uniformity in the laws of those states which enact it." N.J. Stat. Ann. § 56:9-18. My analysis of Alvogen's federal antitrust claims therefore applies to the state antitrust claims as well.

1. Monopolization

Section 2 of the Sherman Act "makes it unlawful to monopolize, attempt to monopolize, or conspire to monopolize, interstate or international commerce." Broadcom Corp. v. Qualcomm Inc., 501 F.3d 297, 306 (3d Cir. 2007) (citing 15 U.S.C. § 2). "The offense of monopoly under § 2 of the Sherman Act has two elements: (1) the possession of monopoly power in the relevant market and (2) the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident." Queen City Pizza v. Domino's Pizza, 124 F.3d 430, 437 (3d Cir. 1997) (quoting Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585, 596 n. 19, 105 S.Ct. 2847, 86 L.Ed.2d 467 (1985)). Monopoly power is the power to control prices or exclude competition. United States v. E. I. du Pont de Nemours & Co., 351 U.S. 377, 389, 76 S.Ct. 994, 100 L.Ed. 1264 (1956). "A monopolist willfully acquires or maintains monopoly power when it competes on some basis other than the merits." Le-Page's Inc. v. 3M, 324 F.3d 141, 147 (3d Cir. 2003) (en banc) (citing Aspen Skiing, 472 U.S. at 605 n. 32, 105 S.Ct. 2847). Therefore, "the possession of monopoly power will not be found unlawful unless it is accompanied by an element of anticompetitive conduct." Verizon Commc'ns v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398, 407, 124 S.Ct. 872, 157 L.Ed.2d 823 (2004).

In order to establish an actionable antitrust violation under Section 2, a plaintiff "must show both that [the defendant] engaged in anticompetitive conduct and that [the plaintiff] suffered antitrust injury as a result." Eisai, Inc. v. Sanofi Aventis U.S., LLC, 821 F.3d 394, 402 (3d Cir. 2016); ZF Meritor, LLC v. Eaton Corp., 696 F.3d 254, 269 n.9 (3d Cir. 2012). The initial focus is on anticompetitive conduct, because if anticompetitive conduct is not found, there can be no finding of antitrust injury. See Atl. Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 339, 110 S.Ct. 1884, 109 L.Ed.2d 333 (1990) ("Antitrust injury does not arise . . . until a private party is adversely affected by an anticompetitive aspect of the defendant's conduct.").

Alvogen alleges that Indivior engaged in two kinds of anticompetitive conduct. First, Alvogen claims that Indivior's assertion of the '305 Patent against Alvogen was a sham solely intended to thwart Alvogen's entry into the market for Suboxone film. (Alvogen Opp. at 5-19.) Second, Alvogen claims Indivior entered into a series of anticompetitive contracts similarly aimed at excluding Alvogen from the market and stifling its ability to compete. (Id. at 19-29.) I address each of those Section 2 claims in turn.

(a) Sham Litigation

A patentee can satisfy element 1 of a Section 2 claim under the Sherman Act—predatory or anticompetitive conduct—by proving "(1) that the asserted patent was obtained through knowing and willful fraud within the meaning of Walker Process Equipment, Inc. v. Food Machinery & Chemical Corp., 382 U.S. 172, 177, 86 S.Ct. 347, 15 L.Ed.2d 247 (1965), or (2) that the infringement suit was 'a mere sham to cover what is actually nothing more than an attempt to interfere directly with the business relationships of a competitor. Eastern R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 144, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961).' " Nobelpharma AB v. Implant Innovations, Inc., 141 F.3d 1059, 1069 (Fed. Cir. 1998) (additional internal citations omitted). The second, "sham litigation" theory is the one Alvogen adopts here, alleging that Plaintiffs' assertion of the '305 Patent and, relatedly, its motion for a TRO during that infringement action, were baseless. I find that Alvogen's sham litigation claim is barred by the Noerr-Pennington doctrine, and accordingly, I will grant partial summary judgment to Indivior on Counts I and III of Alvogen's counterclaims.

Any antitrust claim based on a party's pursuit of litigation must surmount the high bar of the Noerr-Pennington doctrine. "Rooted in the First Amendment and fears about the threat of chilling political speech," the Noerr-Pennington doctrine provides immunity from antitrust liability for parties who petition the government for redress. In re Lipitor Antitrust Litig., 868 F.3d 281, 264 (3d Cir. 2017) (quoting AD. Bedell Wholesale Co. v. Philip Morris Inc., 263 F.3d 239, 250 (3d Cir. 2001)). The doctrine extends to "actions which might otherwise violate the Sherman Act because '[t]he federal antitrust laws do not regulate conduct of private individuals in seeking anticompetitive action from the government." Id. More broadly, "[g]overnment advocacy is protected by Noerr-Pennington immunity; seeking governmental approval of a private agreement is not." Id. The scope of Noerr-Pennington immunity depends on the source, context, and nature of the competitive restraint at issue. Id. Noerr-Pennington has been extended to provide immunity to private efforts to influence courts and agencies, whether federal or state, Bristol-Myers Squibb Co. v. IVAX Corp., 77 F. Supp. 2d 606, 611 (D.N.J. 2000), and has been held to shield plaintiffs from liability for pursuing state common law claims such as tortious interference with contract and tortious interference with prospective economic gain. Santana Products, Inc. v. Bobrick Washroom Equipment, Inc., 401 F.3d 123, 140 (3d Cir. 2005) (declining to decide whether a marketing campaign is petitioning activity that could be immunized by the doctrine).

The titular cases are Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961) and United Mine Workers of America v. Pennington, 381 U.S. 657, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965).

That said, Noerr-Pennington is not an absolute shield that covers all litigation and petitioning activity. Hanover 3201 Realty, LLC v. Village Supermarkets, Inc., 806 F.3d 162, 178 (3d Cir. 2015). The immunity ends where the litigation "is a mere sham to cover what is actually nothing more than an attempt to interfere directly with the business relationships of a competitor and the application of the Sherman Act would be justified." Id. (quoting Noerr Motor Freight, Inc., 365 U.S. at 144, 81 S.Ct. 523). In determining whether litigation sinks to the level of a mere sham, the Third Circuit has adopted the approach of the Second, Fourth, and Ninth Circuits when applying California Motor Transportation Co. v. Trucking Unlimited, 404 U.S. 508, 92 S.Ct. 609, 30 L.Ed.2d 642 (1972) and Professional Real Estate Investors, Inc. v. Columbia Pictures Industries, Inc., 508 U.S. 49, 113 S.Ct. 1920, 123 L.Ed.2d 611 (1993). See Hanover 3201 Realty, LLC., 806 F.3d at 180. First, the court must determine whether there has been a single filing or a series of filings. Id. If there has been just a single filing, there must be "a showing of objective baselessness before looking into the subjective motivations" of the party alleged to have engaged in anti-competitive behavior. Id. (noting that Professional Real Estate's "exacting two-step test" puts a heavy thumb on the scale in favor of the party which has had a claim made against it). On the other hand, when faced with a "series or pattern of lawsuits," a more flexible approach is warranted. Id. In that scenario, even if some of the petitions turn out to have objective merit, the claimant is not automatically immunized from liability. Id.

The Court may decide the issue of objective baselessness as a matter of law where, as here, "there is no dispute over the predicate facts of the underlying legal proceeding," PRE, 508 U.S. at 63-64, 113 S.Ct. 1920, but "rather only a dispute over whether those facts are sufficient to establish probable cause for the objective baselessness inquiry." Takeda Pharm. Co. Ltd. v. Zydus Pharms. (USA) Inc., No. CV 18-1994 (FLW), 2021 WL 3144897, at *13 (D.N.J. July 26, 2021), aff'd, No. 21-2608, 2022 WL 17546949 (3d Cir. Dec. 9, 2022) (citing In re Wellbutrin XL Antitrust Litigation Indirect Purchaser Class, 868 F.3d 132, 151 (3rd Cir. 2017)); see also Highmark, Inc. v. Allcare Health Mgmt. Sys., Inc., 701 F.3d 1351, 1353 (Fed. Cir. 2012) ("Under PRE, the reasonableness of a legal position . . . is itself a question of law.").

I begin by finding that the single-filing test applies here, i.e., the "exacting two-step test" that requires the Court to find "a showing of objective baselessness" before considering Indivior's "subjective motivations." Hanover 3201 Realty, LLC., 806 F.3d at 180. Though Alvogen originally alleged that Indivior initiated numerous sham infringement actions (Counterclaims ¶ 48), Alvogen has since narrowed its claim significantly, agreeing not to argue that Indivior's assertion of the '495 Patent was objectively baseless (Pls. St. ¶ 10; Alvogen Resp. ¶ 10), and limiting the basis of its claim to Indivior's assertion of the '305 Patent (Alvogen Opp. at 5-19). Indeed, Alvogen focuses almost exclusively on Indivior's TRO motion in that action as "the key conduct underlying Alvogen's sham litigation claim." (Id. at 5.) Given that narrowing, I do not find it appropriate to take the more flexible approach courts employ when considering a "series or pattern of lawsuits." Hanover 3201 Realty, LLC., 806 F.3d at 180. I will apply the single-filing test instead.

Alvogen rightly points out that in a previous opinion on a motion to dismiss in this case, I held that "[t]his is not a case of a single filing" and that Alvogen's "antitrust allegations assert that Plaintiffs' [infringement actions] were objectively baseless and part of a larger strategic effort to . . . delay FDA authorization for generic competitors." (Alvogen Opp. at 5 (quoting MTD Op. at 9).) But because Alvogen has since clarified and narrowed its sham litigation claim to focus only on Indivior's assertion of the '305 Patent, my previous characterization of Alvogen's claim as alleging more than a single baseless infringement action no longer holds. At any rate, I find that even if I employed the more flexible approach that is required in cases of serial petitioning, the outcome would be the same. Though Alvogen alleges that Plaintiffs' patent infringement actions were part of a broader anticompetitive scheme to stifle generic competition, Alvogen proffers no subjective evidence to suggest that Plaintiffs initiated any of the infringement actions "without regard to merit and with the purpose of using the governmental process (as opposed to the outcome of that process) to harm a market rival and restrain trade." Hanover 3201 Realty, LLC., 806 F.3d at 180 (defining the serial petitioning standard).

I consider, then, whether Alvogen can show that Indivior's assertion of the '305 Patent was objectively baseless. Alvogen dedicates a considerable portion of its briefing to rehashing arguments that were asserted during the already-resolved litigation regarding Alvogen and others' infringement of the '305 Patent. To summarize, Alvogen focuses on the District of Delaware's finding that Alvogen's products do not infringe the '514 Patent (the parent to the '305 Patent, which shares the same specification) because they fall within the '514 Patent's specification disclaimer. That ruling, says Alvogen, precluded Plaintiffs from disputing in subsequent actions "(1) that an identical patent specification disclaims films that are dried 'solely employing conventional air drying from the top,' or (2) that Alvogen's Products fall within that disclaimer." (Alvogen Opp. at 8-9.) According to Alvogen, Indivior's assertion of the '305 Patent while aware of the purportedly preclusive effect of this "well-established case law" makes the infringement action objectively baseless. (Id. at 8-9, 19.) Frankly, there is no need for the Court to revisit these arguments. This Court's previous analysis of these very issues, and the Federal Circuit's treatment of the same on appeal, demonstrate that Indivior's assertion of the '305 Patent was not without merit. Here, as in Duke Univ., Allergan, Inc. v. Akorn, Inc., the action "cannot be said to have been objectively baseless as Plaintiffs prevailed at the district court level before the decision was ultimately reversed on an appeal by a divided Federal Circuit." No. 318CV14035BRMTJB, 2019 WL 4410284, at *7 (D.N.J. Sept. 16, 2019). Plaintiffs' success at the district court level, combined with the fact that a dissenting judge on the Federal Circuit panel agreed with this Court's decision, "destroys any notion that no reasonable litigant could realistically expect success." Id. In fact, as Indivior points out, even Judge Andrews, the Delaware district court judge who found the specification disclaimer on which Alvogen now relies, rejected DRL's identical argument that Plaintiffs' assertion of the '305 Patent in this Court was baseless, commenting that the infringement claim was a close call "that could have gone either way." (Pls. Mot. at 15). This only further demonstrates that the '305 Patent infringement action was " 'hard-fought and close,' and therefore cannot constitute sham litigation." Duke Univ., 2019 WL 4410284, at *7 (quoting AstraZeneca AB v. Mylan Labs., Inc., 2010 WL 2079722, at *4 (S.D.N.Y. May 19, 2010)). No reasonable jury could conclude that Plaintiffs lacked any reasonable basis to bring suit for infringement of the '305 Patent. I therefore grant Indivior's motion for summary judgment to Indivior on Alvogen's sham litigation claims.

Alvogen's independent argument that Plaintiffs' TRO motion to forestall generic entry into the market was objectively baseless similarly fails. The TRO in question occurred in January 2019, after the Federal Circuit panel handed down its decision in Indivior I, but before the mandate had issued or the deadline to apply for rehearing had expired. I granted relief for that brief period to preserve the status quo and forestall a piecemeal or stop-and-go entry of generics into the market. (The Court's reasons are perhaps stated in the transcript, DE 100 at pp. 88-99.) Alvogen contends that Plaintiffs' infringement theories at the TRO stage also "clearly contradicted well-established case law," i.e., the Federal Circuit's decision in Indivior I, and "[b]ecause likelihood of success is a required element to obtain injunctive relief . . . Plaintiffs' TRO Motion was objectively baseless." (Alvogen Opp. at 8.) Moreover, according to Alvogen, "Plaintiffs made misrepresentations during the TRO proceedings that the factfinder could reasonably find preclude Noerr-Pennington immunity." (Id.) I incorporate here the reasons given immediately above that counseled against a finding of objective baselessness. In addition, I find that the relevant TRO motion, filed two years after institution of the action, does not sacrifice the benefit of Noerr-Pennington immunity, because the relevant inquiry is most pertinently whether a lawsuit is objectively baseless at the time it is initiated. Wellbutrin XL, 868 F.3d at 148 ("The essential question is . . . whether the suit was a sham at the time it was filed."); see also Trs. of Univ. of Pa. v. St. Jude Children's Research Hosp., 940 F. Supp. 2d 233, 241 (E.D. Pa. 2013) ("St. Jude's request for injunctive relief was part of the lawsuit, so the University's argument—that the allegedly 'baseless and unfounded demand' is a separate activity not protected under Noerr-Pennington—does not persuade."). Indeed, "the whole case has to be a sham for the sham exception to apply." Avaya Inc., RP v. Telecom Labs., Inc., 838 F.3d 354, 413 (3d Cir. 2016) (emphasis added). Here, my finding that Plaintiffs' assertion of the '305 Patent at the outset of the infringement action was not objectively baseless ends the inquiry with respect to Plaintiffs' TRO motion as well.

To be sure, the Court takes seriously Alvogen's allegation that "Plaintiffs made multiple material misrepresentations during the TRO proceedings." (Alvogen Opp. at 14.) Nevertheless, these alleged misrepresentations—assuming that is what they were—do not support a finding that Plaintiffs' TRO motion was objectively baseless. In the Third Circuit, a plaintiff loses Noerr-Pennington immunity when it makes misrepresentations that pertain to the "very core" of the case." Cheminor Drugs, Ltd. v. Ethyl Corp., 168 F.3d 119, 123-24 (3d Cir. 1999). However, in announcing this rule, the Third Circuit held that if the Court's decision "was not dependent upon the misrepresented information, the misrepresented information was not material and did not go to the core of [the] petition." Id. The Court can say with certainty that Plaintiffs' alleged misrepresentations were not material to the decision to grant a temporary stay in response to Plaintiffs' TRO motion. As I expressed during oral argument, it was necessary to impose temporary restraints to preserve the status quo in the brief period pending the issuance of a mandate by the Federal Circuit. (Pls. St. ¶¶ 64-65, Alvogen Resp. ¶¶ 64-65.) Indeed, as soon as the Federal Circuit issued its mandate, I vacated the injunctive restraints. (7106 Action at DE 119.) It follows, then, that Plaintiffs' alleged misrepresentations do not support a finding that Plaintiffs' TRO motion was objectively baseless.

Whether the purported misrepresentations were material to my decision to grant the TRO is not a question that needs to be put before a jury. Indeed, the Court is equipped to make that factual determination relying on its own experience presiding over the TRO proceeding and deciding the motion. As this Court has noted previously, "[t]here are numerous indicia that I can look at to determine whether a lawsuit was a sham, including my personal experience presiding over" prior proceedings. Louisiana Health Serv. & Indem. Co. v. Janssen Biotech, Inc., No. 19CV14146KMESK, 2021 WL 4988523, at *8 (D.N.J. Oct. 27, 2021).

Because Alvogen cannot show that Plaintiffs' assertion of the '305 Patent was objectively baseless, Alvogen's monopolization counterclaims on that basis are barred by the Noerr-Pennington doctrine. I will therefore grant Indivior partial summary judgment on the sham litigation aspect of Alvogen's monopolization claims (Counts I and III).

I note that this rejection of Alvogen's sham litigation claims does not preclude Alvogen from citing Plaintiffs' overall litigation activity and litigation strategy at trial as it argues its case with respect to the remaining foreclosure, conspiracy, and attempted monopolization claims (see Sections III.B.1.b, III.B.2, and III.B.3, infra). Though my decision today eliminates Alvogen's sham litigation claims, Alvogen's allegation that Plaintiffs' series of infringement suits were part of "a prolonged and overarching anticompetitive scheme to protect Indivior's monopoly power for . . . Suboxone Film" survives. (Counterclaims ¶ 48.)

(b) Foreclosure

A Section 2 monopolization claim based on "exclusionary" contracts, such as the claim Alvogen asserts against Indivior, requires evidence that the defendant was in a position "to foreclose competition." United States v. Griffith, 334 U.S. 100, 107, 68 S.Ct. 941, 92 L.Ed. 1236 (1948). Such contracts are "illegal under the rule of reason only if the probable effect of the arrangement is to substantially lessen competition, rather than merely disadvantage rivals." Eisai, 821 F.3d 394 at 403 (quotation marks omitted). The Third Circuit has described what constitutes "substantial foreclosure," noting that "although 'the [t]est is not total foreclosure,' the challenged practices must 'bar a substantial number of rivals or severely restrict the market's ambit.' " Id. (quoting United States v. Dentsply Int'l, Inc., 399 F.3d 181, 191 (3d Cir. 2005)). "In analyzing the amount of foreclosure, [the] concern is not about which products a consumer chooses to purchase, but about which products are reasonably available to that consumer . . . [I]f customers are free to switch to a different product in the marketplace but choose not to do so, competition has not been thwarted—even if a competitor remains unable to increase its market share." Id. at 403-04. Although it is "generally 'assume[d] that a customer will make [its] decision only on the merits,' " it is also well-established that "a monopolist may use its power to break the competitive mechanism and deprive customers of the ability to make a meaningful choice." ZF Meritor, LLC, 696 F.3d at 285 (internal quotations omitted). "The relevant inquiry is the [likely or actual] anticompetitive effect of [the defendant's] exclusionary practices considered together." LePage's, 324 F.3d at 162. Indeed, "courts must look to the monopolist's conduct taken as a whole rather than considering each aspect in isolation." Id.

See also Eisai, 821 F.3d at 403 ("While there is no set formula for making this determination, we must consider whether a plaintiff has shown substantial foreclosure of the market for the relevant product [and] analyze the likely or actual anticompetitive effects of the exclusive dealing arrangement . . .")

In response to Indivior's motion for summary judgment, Alvogen has proffered substantial evidence that Indivior's contracting practices with respect to Suboxone had anticompetitive effects and "br[oke] the competitive mechanism." ZF Meritor, LLC, 696 F.3d at 285. Of particular significance is the analysis of Alvogen's expert, Dr. Tasneem Chipty, who examined the extent of Indivior's alleged foreclosure in two different defined markets for buprenorphine-naloxone sublingual film, the "all-payor" market and the "Medicaid-payor" market, at two different levels: the aggregate level and the customer level. (Opp. at 21.)

Indivior takes issue with Alvogen's proposed market definition, arguing with respect to Dr. Chipty's "Medicaid-payor" market only, that courts "rejected defining markets from the perspective of customers because 'the relevant product market consists of all persons or entities to whom that supplier can reasonably sell unless special circumstances exist." (Pls. Mot. n. 4 (citing Shire US, Inc. v. Allergan, Inc., 375 F. Supp. 3d 538, 551 (D.N.J. 2019).) This does not accurately state the law, much less warrant an award of summary judgment. Though "[t]he Third Circuit has not yet ruled on . . . the appropriate relevant product market when a supplier alleges that it has been improperly excluded," Shire, 375 F. Supp. 3d at 547, courts have, in certain supplier-exclusion cases, found it appropriate to define the relevant product market based on category of customer. See, e.g., FTC v. Hackensack Meridian Health, Inc., No. 20-cv-18140, 2021 WL 414506, at *1 (D.N.J. Aug. 4, 2021) ("The relevant product market is a cluster of inpatient general acute care services sold and provided to commercial insurers and their members."). Moreover, summary judgment is not warranted on this issue in any event, given that "the determination of a relevant product market or submarket . . . is a highly factual one best allocated to the trier of fact." In re Ductile Iron Pipe Fittings (DIPF) Direct Purchaser Antitrust Litig., No. CIV. 12-711, 2013 WL 812143, at *15 (D.N.J. Mar. 5, 2013) (citing Fineman v. Armstrong World Indus., Inc., 980 F.2d 171, 199 (3d Cir. 1992)).

At the aggregate level, Dr. Chipty found that Suboxone film retained [Redacted] higher share than industry analogs according to forecasts that Indivior presented both to its board in the normal course of business, as well as to this Court during the TRO proceedings discussed in Section I.C.1, supra. (Id. at 23-24.) Dr. Chipty found the same discrepancy when analyzing the market data against comparators Indivior's CEO considered to be Suboxone's "best analogs." (Id. at 24.) In the all-payor market, Dr. Chipty found that Suboxone film held a [Redacted] market share in February 2020, 12 months after launch, as compared to the [Redacted] market share Indivior's analogs predicted Suboxone film would retain. (Id.) Similarly, in the Medicaid-payor market, Indivior retained [Redacted] of the market share 12 months after launch, as compared to the forecasted [Redacted] share. (Id.)

At the customer level, Dr. Chipty examined the purported foreclosure of the buprenorphine-naloxone sublingual film market in 21 states that offer Medicaid benefits on a fee-for-service basis. (Id.) In each of those 21 states, Suboxone film "dramatically outperformed conversion rates in Indivior's analogs," despite higher prices than competitors were charging for their generic substitutes. (Id.) Specifically, Dr. Chipty found that in each of the 21 states she examined, "Indivior's best net price was [Redacted] (and [Redacted]) than Alvogen's average Medicaid price." (Id.) However, "Indivior nevertheless maintained shares exceeding forecasts in every single [state], in some cases by [Redacted] above analogs." (Id.)

Indivior urges this Court to reject Dr. Chipty's report altogether, arguing that "expert opinions cannot defeat summary judgment where, as here, they are not based on facts in the record." (Pls. Reply. at 8 (citing Brooke Grp. Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 242, 113 S.Ct. 2578, 125 L.Ed.2d 168 (1993).) But this case is a far cry from those in which Indivior says the Third Circuit applied Brooke Grp. to discredit expert opinions that were unlinked to any evidence in the case. Unlike the opinion in Advo, Inc. v. Phila. Newspapers Inc., 51 F.3d 1191, 1198 (3d Cir. 1995)—where the Third Circuit affirmed summary judgment because the claimant's case was premised on an expert opinion estimating below-cost pricing absent "any direct evidence" of below-cost pricing—Dr. Chipty's analysis relies on Indivior's own forecasts and analyses to examine whether Indivior's conduct had anticompetitive effects. Moreover, Dr. Chipty's analysis does not assume any underlying conduct on the part of Indivior that is not already established by the record. Rather, her analysis concerns the effects of Indivior's undisputed contracting practices that are observable in the market based on available economic data. Of course, any expert's report may be attacked at trial by undermining the factual assumptions on which it is based, but I see no basis to exclude Dr. Chipty's report from consideration.

In addition to relying on Dr. Chipty's analysis, Alvogen points to significant evidence in the record suggesting that Indivior intentionally executed a "rebate wall" strategy to block generic competition in the long term. For instance, [Redacted] (Alvogen Supp. St. ¶ 449; Pls. Supp. Resp. ¶ 449.) Internal documents also reveal Indivior employees describing certain challenged provisions as [Redacted]. (Id. at 450.) One internal presentation, for instance, [Redacted] Id.) Similarly, Alvogen cites internal correspondence regarding the [Redacted] in which [Redacted] (Id.)

Meanwhile, it is noteworthy, though not dispositive, that Indivior has not offered any alternative explanation for how Suboxone film so dramatically outperformed the very "analogs" Indivior presented to its board and to this Court. Testifying as a 30(b)(6) corporate designee, Indivior's CEO Mark Crossley acknowledged that [Redacted] (Id. ¶ 423) However, when asked [Redacted] (Id.)

At the very least, Alvogen's evidence and Dr. Chipty's analysis raise genuine issues of material fact that preclude an award of summary judgment here. Naturally, Indivior disputes that Dr. Chipty's findings show that its contracting practices had anticompetitive effects, but it exceeds the bounds of the summary judgment standard in arguing that the evidence proffered by Alvogen is "insufficient." (Pls. Mot. at 25)

Indivior does not dispute that it engaged in the conduct Alvogen characterizes as exclusionary. Rather, Indivior contends that it is "entitled to summary judgment because Alvogen cannot demonstrate that the probable effect of Indivior's conduct was to substantially lessen competition, rather than merely disadvantage rivals." (Pls. Mot. at 28.)

First, Indivior argues that "[t]here is no evidence of substantial foreclosure" because Indivior's generic competitors succeeded at capturing a considerable portion of market share for buprenorphine-naloxone sublingual film. (Id. at 23.) Indivior cites market data showing that its generic competitors captured [Redacted] of film sales within one month of launch" and that "generic competitors had over [Redacted] of total film sales in 2019 and [Redacted] of film sales in 2020," with Alvogen securing [Redacted] of generic film sales in March 2019 and [Redacted] of generic film sales by 2020. (Id. at 23-24.) Indivior contends that this Court should grant it summary judgment because "Indivior never retained more than [Redacted] of film sales after the generics launched," making this record "markedly different from the records on which courts have found substantial foreclosure," i.e. cases in which the defendant retained 75% or more market share. (Id. (citing ZF Meritor, 696 F.3d at 264-67, 287 and Dentsply, 399 F.3d at 184-85).) But 75% is not a magic number, and Alvogen is not required to prove a specific threshold level of foreclosure. "There is no fixed percentage at which foreclosure becomes 'substantial' and courts have varied widely in the degree of foreclosure they consider unlawful." Eisai, 821 F.3d at 403 (citing ZF Meritor, 696 F.3d at 327 (Greenberg, J., dissenting); and McWane, Inc. v. FTC, 783 F.3d 814, 837 (11th Cir. 2015)). Under these circumstances, I find the more appropriate inquiry is not whether Alvogen gained some degree of market share, but rather whether it gained significantly less share "than it likely would have absent the [challenged] conduct." McWane, 783 F.3d at 832. Considering the evidence Alvogen has presented, along with Dr. Chipty's analysis, a factual dispute clearly remains with respect to that question.

It is for this same reason that I do not credit Indivior's additional argument on this point, i.e, that Alvogen cannot show substantial foreclosure because "despite a lengthy discovery period, there is no evidence that Alvogen could not compete for contracts." (Pls. Mot. at 24.) The issue is not whether Alvogen was able to compete at all. It will be up to the trier of fact to determine the extent to which Alvogen's evidence regarding its contracts prove substantial foreclosure. Similarly, Indivior's position that there could not have been substantial foreclosure because "Alvogen has secured more than 30 contracts since launching its product" is untenable absent additional information about the contracts themselves, e.g., what percentage of the market those contracts represent, the effect those contracts have on formulary status, etc. In fact, Alvogen has proffered testimony that as a generic, Alvogen ordinarily did not need to pursue such contracts with payors at all, given the automatic conversion that would typically take place upon the launch of its generic products. (Alvogen Supp. St. ¶ 466; Pls. Supp. Resp. ¶ 466.) Alvogen contends that its own contracting activity was premised on the negotiation of formulary status to overcome the "block" on generics it alleges Indivior imposed. (Id. ¶¶ 469-73.) The degree to which Alvogen was able to compete for contracts, and the extent to which that demonstrates anticompetitive effects flowing from Indivior's purportedly exclusionary conduct, are genuine, disputed issues of material fact.

Second, Indivior argues that it is entitled to summary judgment because "[t]here is no evidence of coercion." (Pls. Mot. at 26.) In support, Indivior emphasizes that 1) Indivior's rebate agreements did not "impose[ ] volume requirements, result[ ] in supply shortages, or claw[ ] back rebates already paid if a payor chose to advantage the generics," and 2) Indivior did not "ma[k]e any threats to customers if they rejected Indivior's rebate contracts (Id. at 26-27.) These assertions by Indivior, though they are not inconsistent with the record, do not warrant an award of summary judgment. To the extent Alvogen is even required to prove coercion to succeed on its Section 2 claim, Alvogen has proffered sufficient evidence from which a reasonable juror could make such a finding here. As for the evidence Indivior contends forecloses a finding of coercion, threats are not required to show coercion, particularly in "a highly concentrated market, in which there is one (or a few) dominant supplier(s)." ZF Meritor, 696 F.3d at 285. Nor is it relevant that payors did not face a penalty in the event they [Redacted]; the key indicator is whether the payors had "the ability to make a meaningful choice" in the first instance. Id. Here, Indivior possessed a monopoly on the buprenorphine-naloxone sublingual film market, and therefore had the power to impose certain exclusionary contract terms on payors ahead of generic entry. Based on the facts here, a juror might reasonably conclude that Indivior exercised that coercive power and, as a result, caused the anticompetitive effects Alvogen alleges.

See ZF Meritor, 696 F.3d at 284 ("Exclusive dealing will generally only be unlawful where . . . there is some element of coercion present."); but see Race Tires Am., Inc. v. Hoosier Racing Tire Corp., 614 F.3d 57, 78 (3d Cir. 2010) (holding that a defendant is not entitled to summary judgment "merely because there is an absence of coercion").

Finally, Indivior argues that Alvogen cannot show that Indivior's conduct had anticompetitive effects because "Alvogen has not adduced any evidence that the contract provisions it challenges resulted in a reduction of output or an increase in price." (Pls. Mot. at 27.) But this observation ignores another of the key questions of material fact in the case, i.e., whether prices were higher and output lower than they would have been but for Indivior's challenged conduct. A simple measurement of price and output levels in absolute terms is insufficient to support a conclusion on this record that Indivior's conduct was unlikely to have anticompetitive effects. Like the questions surrounding market share and coercion, this is a factual, or contrafactual, dispute that precludes an award of summary judgment to Indivior.

Indivior separately discusses the effect of the Sandoz AG Agreement on the market for buprenorphine-naloxone sublingual film market, arguing that "the introduction of the AG does not save Alvogen's antitrust claim" because the launch of an AG is pro-competitive, there is no evidence that Indivior controlled or otherwise coordinated with Sandoz, and there is no evidence that the AG harmed competition. (Pls. Mot. at 28-29.) In response, Alvogen clarifies that it "is not alleging that the introduction of the AG itself was anticompetitive." (Alvogen Opp. at n. 6.) Rather, Alvogen contends that it views the Sandoz AG as "relevant to the question of Indivior's market power after generic entry." (Id.) The parties have not addressed the issue further (see generally Pls. Reply), so I decline to take it up here.

Viewing the evidence in the light most favorable to Alvogen, a reasonable jury could find that Indivior's combined actions effectively broke the competitive mechanism in the market, severely restricted the market's ambit, and deprived buyers of the ability to make a meaningful choice. The fact that generics gained market share and competed for some number of payor contracts does not dispel the genuine issues of material fact as to whether the probable effect of Indivior's conduct would have been to "substantially lessen competition, rather than merely disadvantage rivals." Eisai, 821 F.3d 394 at 403. Accordingly, I will deny summary judgment on the foreclosure aspect of Alvogen's monopolization claims (Counts I and III) on this basis.

2. Attempted Monopolization

Indivior independently asserts that it is entitled to summary judgment on Alvogen's attempted monopolization claims. (Pls. Mot. at 29.) An attempted monopolization claim has three elements: "a plaintiff must prove that the defendant (1) engaged in predatory or anticompetitive conduct with (2) specific intent to monopolize and with (3) a dangerous probability of achieving monopoly power." Queen City Pizza, 124 F.3d at 442. For the reasons I provided in Section III.B.1.b, supra, the parties dispute numerous issues of material fact that bear on whether Indivior engaged in predatory or anticompetitive conduct and whether that conduct had a dangerous probability of achieving monopoly power. According to Indivior, however, there is no "evidence that Indivior had a specific intent to monopolize any market in entering into its contracts with payors or in launching the AG." (Pls. Mot. at 29.) This contention is belied by ample evidence from which a juror might infer intent to monopolize on the part of Indivior, including but not limited to the evidence discussed in Section III.B.1.b, supra, [Redacted] y (Alvogen Supp. St. ¶ 449; Pls. Supp. Resp. ¶ 449), and various internal documents showing [Redacted] (Id. ¶450). I therefore must deny Indivior's motion on that ground.

Consistent with my prior rulings on Alvogen's monopolization claims (see Section III.B.1, supra), I will grant Indivior partial summary judgment on attempted monopolization only as it pertains to Alvogen's sham litigation arguments. Indivior's motion for summary judgment on all other aspects of Alvogen's attempted monopolization claims will otherwise be denied.

3. Conspiracy to Monopolize

Indivior and Aquestive both move for summary judgment on Alvogen's conspiracy claims. However, genuine disputed issues of material fact bar an award of summary judgment to either party.

A Section 2 conspiracy claim, like the one Alvogen asserts against Indivior and Aquestive, has four elements: "(1) an agreement to monopolize; (2) an overt act in furtherance of the conspiracy; (3) a specific intent to monopolize; and (4) a causal connection between the conspiracy and the injury alleged." Dentsply, 602 F.3d at 253. Again, Alvogen has proffered substantial evidence from which a jury could reasonably conclude that Indivior and Aquestive "intentionally engaged in a conspiracy to monopolize the [buprenorphine-naloxone sublingual film market] by delaying Alvogen's entry." (Counterclaims ¶¶ 327, 335; Opp. to Aquestive at 3-4.)

With respect to the first and third elements—agreement to monopolize and specific intent to monopolize—Alvogen points to numerous provisions in Indivior's contracts with Aquestive and says that they demonstrate a concerted, collective effort to block generic entry into the buprenorphine-naloxone sublingual film market and protect Indivior's monopoly. Indeed, the agreements provided for [Redacted] For instance, under the 2008 Commercial Exploitation Agreement, [Redacted] (Alvogen Supp. 2 ¶¶ 12-15; Aquestive Resp. ¶¶ 12-15.) In addition, under the 2017 Agreement, [Redacted] (Id. ¶¶ 21-24.) [Redacted]. (Id.) [Redacted] (Id. ¶ 25.)

Indivior argues that there is no evidence that Indivior and Aquestive "agreed to engage in unlawful conduct." (Pls. Mot. at 30.) But "[n]o formal agreement is necessary to constitute an unlawful conspiracy." American Tobacco Co. v. United States, 328 U.S. 781, 809, 66 S.Ct. 1125, 90 L.Ed. 1575 (1946). What is required to find an agreement to monopolize is "a unity of purpose, a common design and understanding, or a meeting of the minds." Big Apple BMW, Inc. v. BMW of N. Am., Inc., 974 F.2d 1358, 1364 (3d Cir. 1992) (quoting American Tobacco, 328 U.S. at 810, 66 S.Ct. 1125). Aquestive, for its part, argues that its contracts with Indivior are "procompetitive and ordinary" (Aquestive Reply at 1), but the fact that these contracts included [Redacted] provides sufficient evidence that Indivior and Aquestive had a unity of purpose that centered around maintaining Indivior's allegedly unlawful monopoly. As I held previously, "[i]t is well established that 'a claim of conspiracy to monopolize requires only that a company agree with another company to assist the first in its attempt to monopolize the market.' " (MTD Op. at 10 (quoting In re Suboxone (Buprenorphine Hydrochloride & Naloxone) Antitrust Litig., No. 13-MD-2445, 2017 WL 4910673, at *11 n.10 (E.D. Pa. Oct. 30, 2017)).) A juror could reasonably adduce such an intentional agreement here.

Aquestive tries to distance itself from Indivior by arguing that it could not have "harbored the requisite specific intent to facilitate the alleged plan to exclude competition" because [Redacted] (Aquestive Mot. at 15 (quotations omitted).) Aquestive goes on to say that it [Redacted] (Id. (quotations omitted).) Even if true, this does not preclude a finding of specific intent given that Aquestive intentionally [Redacted]. Contrary to Aquestive's characterization that [Redacted], a reasonable juror might instead conclude that Aquestive [Redacted]

The record also contains ample evidence of overt acts by both parties in furtherance of the alleged conspiracy. With respect to Indivior, the Court need look no farther than Indivior's purportedly exclusionary contracting practices discussed in Section III.B.1.b, supra. As for Aquestive, the evidence shows that its partnership with Indivior involved numerous overt acts aimed at protecting Indivior's monopoly power, which included obtaining patents for Indivior's products and participating in litigation to enforce those patents against generic competitors. In fact, under the 2008 Commercial Exploitation Agreement, Aquestive agreed [Redacted] (Alvogen Supp. 2 ¶ 14; Aquestive Resp. ¶ 14.) Under the 2017 Agreement, [Redacted]. (Id. ¶¶ 26-28.) Indeed, a reasonable juror might conclude that even developing and manufacturing Suboxone—conduct Aquestive contends was innocuous and "purely competitive"—constitute overt acts in furtherance of a conspiracy to monopolize. I held previously that Alvogen plausibly alleged Aquestive contributed to Plaintiffs' purported conspiracy "by applying for new patents, filing lawsuits and multiple motions in conjunction with Indivior, and by manufacturing the film for Indivior to then market." (MTD Op. at 11.) Considering the breadth of the evidence Alvogen has presented, the same remains true at summary judgment. Whether, as a matter of fact, these acts were procompetitive and divorced from any attempt by Indivior to monopolize the market will be a question for trial.

My finding that Aquestive's participation in Indivior's patent lawsuits supports a finding of an overt act in furtherance of a conspiracy does not imply those infringement actions were baseless or constituted sham litigation. See Section III.B.1.a, supra.

Neither Indivior nor Aquestive raise specific arguments regarding the final causation element of Alvogen's conspiracy claims. For good measure, I pause briefly to note that the element of causation, too, hinges on numerous factual questions that render summary judgment inappropriate here. Indeed, those question largely overlap with those I analyze in my discussion regarding the purported anticompetitive effects of Indivior's conduct in Section III.B.1.b, supra.

Genuine issues of material fact remain as to whether Indivior and Aquestive agreed to maintain an allegedly unlawful monopoly over the buprenorphine-naloxone sublingual film market. I will therefore deny both of Plaintiffs' motions for summary judgment as to Alvogen's conspiracy claims.

* * *

In sum, because Alvogen cannot show that Indivior's assertion of the '305 Patent was objectively baseless, I will grant Indivior partial summary judgment on the sham litigation aspect of Alvogen's monopolization and attempted monopolization claims (Counts I and III). Because numerous factual issues that are material to Alvogen's foreclosure (i.e., monopolization), attempted foreclosure, and conspiracy claims remain in dispute, I will deny Plaintiffs' joint motion for summary judgment in all other respects, and I will deny Aquestive's motion for summary judgment in its in entirety.

IV. CONCLUSION

For the reasons set forth above, Alvogen Pine Brook LLC's motion for summary judgment is DENIED, Plaintiffs' joint motion for summary judgment is GRANTED in part and DENIED in part, and Aquestive's separate motion for summary judgment is DENIED.

An appropriate order follows.

Indivior Inc. v. Alvogen Pine Brook LLC

Opinion

OPINION

A. Suboxone Film Litigation Overview

B. Indivior's Remaining Infringement Claim

C. Alvogen's Antitrust Counterclaims

1. The '305 Patent Litigation

2. Indivior's Suboxone Contracts

(a) Rebate Contracts

(b) The AG Agreement

3. The Indivior-Aquestive Partnership

D. The Pending Motions

A. Alvogen Pine Brook LLC's Motion for Summary Judgment on Indivior's Infringement Claim

B. Plaintiffs' Motions for Summary Judgment on Alvogen's Antitrust Counterclaims

1. Monopolization

(a) Sham Litigation

(b) Foreclosure

2. Attempted Monopolization

3. Conspiracy to Monopolize

* * *

Indivior Inc. v. Alvogen Pine Brook LLC

Indivior Inc. v. Alvogen Pine Brook LLC

Case Details

Citations

Indivior Inc. v. Alvogen Pine Brook LLC

Opinion

OPINION

A. Suboxone Film Litigation Overview

B. Indivior's Remaining Infringement Claim

C. Alvogen's Antitrust Counterclaims

1. The '305 Patent Litigation

2. Indivior's Suboxone Contracts

(a) Rebate Contracts

(b) The AG Agreement

3. The Indivior-Aquestive Partnership

D. The Pending Motions

A. Alvogen Pine Brook LLC's Motion for Summary Judgment on Indivior's Infringement Claim

B. Plaintiffs' Motions for Summary Judgment on Alvogen's Antitrust Counterclaims

1. Monopolization

(a) Sham Litigation

(b) Foreclosure

2. Attempted Monopolization

3. Conspiracy to Monopolize

* * *

Indivior Inc. v. Alvogen Pine Brook LLC

Indivior Inc. v. Alvogen Pine Brook LLC

Case Details

CitationsCopy Citation

Citations