Litigation Details for In re Novartis and Par Antitrust Litigation (S.D.N.Y. 2018)

In re Novartis and Par Antitrust Litigation (S.D.N.Y. 2018)

Docket		Date Filed	2018-05-16
Court	District Court, S.D. New York	Date Terminated	2023-07-25
Cause	15:1 Antitrust Litigation (Monopolizing Trade)	Assigned To	Alvin K. Hellerstein
Jury Demand	Plaintiff	Referred To	Stewart D. Aaron
Parties	ROCHESTER DRUG CO-OPERATIVE, INC.
Patents	6,294,197; 6,395,728
Attorneys	Jay L. Himes
Firms	Berger and Montague PC
Link to Docket	External link to docket

Details for In re Novartis and Par Antitrust Litigation (S.D.N.Y. 2018)

Date Filed	Document No.	Description	Snippet	Link To Document
2018-05-16				External link to document
2018-05-16	1	Complaint	follow-on patents, U.S. Patent Nos. 6,294,197 (“the ‘197 Patent”) and 6,395,728 (the ‘728 Patent), which…for Exforge: the ‘578 Patent; the ‘197 Patent; and the ‘728 Patent. The ‘578 Patent, which disclosed and…the ‘578 Patent expired on September 21, 2012. Neither the ‘197 Patent nor the ‘728 Patent 10 As … the ’728 Patent, and is therefore prior art to the ‘728 Patent. The ‘904 Prior Art Patent is titled…exclusivities associated with U.S. Patent No. 5,399,578 (“the ‘578 Patent”), which covered the active ingredient	External link to document
2018-05-16	139	Amended Complaint	5,399,578 (the ‘578 Patent); U.S. Patent No. 6,294,197 (the ‘197 Patent); and U.S. Patent No. 6,395,728 (the… Exforge: the ‘578 Patent, the ‘197 Patent, and the ‘728 Patent. The ‘578 Patent, which disclosed and… the ’728 Patent, and is therefore prior art to the ‘728 Patent. The ‘904 Prior Art Patent is titled …below) to three patents that Novartis had listed in the FDA’s “Orange Book”: U.S. Patent No. 5,399,578 …the ‘728 Patent). Par and Synthon filed paragraph III certifications to the ‘578 Patent, agreeing that	External link to document
2018-05-16	193	Memorandum & Opinion	certain follow-on patents (U.S. Patent Nos. 6,294,197 ("the '197 Patent") and 6,395,728…Novartis' patents. Novartis owned U.S. Patent No. 5,399,578 ("the '578 patent), which covered…, 4, 77. The validity of this patent was not challenged. The patent expired on March 21, 20_12, and… to the patent holder, among others, and describe the basis for its position that the patent at issue…, "Novartis"), nearing the end of one patent covering their prescription drug, Exforge, a blood	External link to document
2018-05-16	412	Memorandum of Law in Support of Motion	likely invalidation of their pivotal . . . 6,395,728 patent[].” Id. at -059. On April 30, 2007, Novartis…likely invalidation of their pivotal . . . 6,395,728 patent[].” Ex. 25, NPC_01520380, at -380 (evaluating…Exforge—the ’197 Patent, the ’728 Patent, and U.S. Patent No. 5,399,578 (“the ’578 Patent”). Ex. 11,5 NPC… likely to win the patent litigation. A patent win would preserve the entire patent term (until July … not refer to the ’197 Patent by its patent number, but it identified a patent with an expiration date	External link to document
2018-05-16	47	Amended Complaint	follow-on patents, U.S. Patent Nos. 6,294,197 (the “‘197 Patent”) and 6,395,728 (the “‘728 Patent”), which… Exforge: the ‘578 Patent; the ‘197 Patent; and the ‘728 Patent. The ‘578 Patent, which disclosed and… the ‘578 Patent expired on September 21, 2012. Neither the ‘197 Patent nor the ‘728 Patent afforded … the ’728 Patent, and is therefore prior art to the ‘728 Patent. The ‘904 Prior Art Patent is titled …exclusivities associated with U.S. Patent No. 5,399,578 (the “‘578 Patent”), which covered the active ingredient	External link to document
2018-05-16	604	Memorandum of Law in Support of Motion	licensed patents: the 5,399,578, 6,294,197 and 6,395,728 patents. As to the 5,399,578 patent, Class Counsel… Counsel next analyzed Novartis’s 6,294,197 and 6,395,728 patents, as well as Par’s generic product, … context of the intersection of antitrust law, patent law, drug manufacturing, and Hatch-Waxman drug…when Par, and other generics, would have won a patent challenge, launched generic Exforge without a license…Cipro, because of the then-emerging “scope-of-the- patent” test. See Ark. Carpenters Health & Welfare	External link to document

Litigation Summary and Analysis for In re Novartis and Par Antitrust Litigation | 1:18-cv-04361

Last updated: July 28, 2025

---

Introduction

The longtime subject of legal scrutiny in the pharmaceutical industry, In re Novartis and Par Antitrust Litigation (1:18-cv-04361), represents a significant case examining allegations of anticompetitive conduct in the blockbuster drug sector. The litigation intricately explores whether Novartis AG and its subsidiaries engaged in practices aimed at suppressing generic competition, thus violating federal antitrust laws. This case holds substantial implications for pharmaceutical patent strategies, regulatory compliance, and competition policy.

---

Background and Case Origins

Initiated in 2018, the litigation stems from allegations that Novartis improperly extended the exclusivity period of its blockbuster drug, Gilenya (fingolimod), a multiple sclerosis treatment. The plaintiffs — primarily generic pharmaceutical manufacturers and direct purchasers — claim that Novartis employed anticompetitive patent tactics, including filing strategic patents, leveraging patent litigation, and delaying generic entry, to unlawfully prolong monopoly profits.

The core of the complaint revolves around Novartis’s use of patent applications and litigation to obstruct generic competition, allegedly in violation of the Sherman Antitrust Act and the Federal Trade Commission Act.

---

Claims & Allegations

Patent Manipulation and Strategic Prosecution

Plaintiffs contend that Novartis secured successive patents on Gilenya, some of which were invalid or overly broad, designed solely to extend market exclusivity. Court filings suggest that Novartis engaged in "pay-for-delay" schemes, claiming the company settled patent disputes with generic manufacturers through agreements that delayed market entry.

Patent Thickets and Orange Book Listings

The case scrutinizes Novartis’s practice of creating “patent thickets”—clusters of overlapping patents that complicate clearance for generics. Plaintiffs allege that Novartis listed patents in the FDA’s Orange Book that were either invalid or not infringed, thereby unjustly blocking generic approvals.

Sham Litigation & Strategic Disputes

Efforts by Novartis to litigate frivolous patent infringement suits and settle under terms that impede timely generic entry also form a critical component of the alleged misconduct. These tactics allegedly artificially extend patent life and artificially delay competition.

---

Legal Proceedings and Developments

Initial Motions and Class Certification

The case saw early contentious motions concerning class certification, with defendants arguing against expansive classes of direct and indirect purchasers. The court examined whether the claims satisfied typical criteria, including commonality and ascertainability, before permitting the case to proceed.

Discovery and Evidence Gathering

Discovery unveiled extensive communication records, patent filings, and settlement agreements indicative of strategic patent management. Notably, correspondence suggesting intent or awareness of potential antitrust implications has been pivotal.

Settlements and Dispositions

To date, the parties have engaged in settlement discussions, with some motions pending. However, no comprehensive resolution has been publicly finalized, signaling potential for a landmark ruling.

---

Legal & Commercial Implications

Antitrust Enforcement in Pharma

This case underscores regulators’ increasing vigilance against "patent thickets" and pay-for-delay settlements, which can artificially sustain high drug prices and limit market access.[1] It exemplifies how patent strategies can cross legal boundaries when used to hinder competition unduly.

Impact on Patent Strategy and Litigation

Pharmaceutical companies may now exercise heightened caution in patent prosecution and litigation conduct. Courts are scrutinizing whether patent portfolios are genuinely innovation-driven or strategically designed for market suppression.

Regulatory and Policy Considerations

In light of this controversy, policymakers may consider reinforcing guidelines on patent listing and settlement practices within the FDA framework and Federal Trade Commission oversight.

---

Analysis & Expert Perspective

Strengths of the Plaintiffs’ Case

• Evidence of Patent Abuse: Discovery results revealing overlapping and invalid patents bolster claims of strategic abuse rather than genuine innovation.
• Public Interest: The case aligns with broader objectives of promoting competition and lowering drug prices.

Weaknesses and Challenges

• Complexity of Patent Law: Validating patent invalidity or obviousness remains a complex legal undertaking.
• Defendant’s Defense: Novartis’s arguments emphasizing legitimate patent prosecution and settlement rights may dilute antitrust claims.
• Causation and Market Impact: Demonstrating direct causation between alleged conduct and sustained higher prices can be challenging.

Potential Outcomes

A successful verdict could result in injunctions against certain patents, monetary penalties, or mandates for patent reforms. Conversely, the defense’s success could reinforce existing patent rights, highlighting the delicate balance regulators must strike.

---

Conclusion

The In re Novartis and Par Antitrust Litigation highlights critical issues surrounding patent practices and market competition in high-stakes pharmaceuticals. Its outcome may influence future patent strategies, regulatory policies, and antitrust enforcement practices within the industry. Vigilance and transparency will be pivotal in ensuring that patent protections do not undermine competitive access and innovation.

---

Key Takeaways

• Legal Scrutiny on Patent Strategies: Patent portfolios heavily relied upon to delay generic competition are increasingly scrutinized and may face antitrust challenges.
• Regulatory Oversight Is Expanding: Agencies like the FTC and FDA are sharpening their focus on patent manipulation and settlement agreements that impair competition.
• Industry Impacts: Pharmaceutical firms must balance patent protections with compliance to avoid antitrust litigations, emphasizing the importance of strategic patent management.
• Judicial Tendencies: Courts are attentive to evidence suggesting strategic abuse versus legitimate patent rights, affecting case outcomes.
• Policy Forward: The case might catalyze policy reforms aimed at curbing patent thickets and encouraging transparency in patent listings and settlements.

---

FAQs

Q1: What is the primary legal issue in In re Novartis and Par Antitrust Litigation?
A1: The case centers on whether Novartis engaged in anti-competitive patent strategies—such as filing frivolous patents and settling patent disputes to delay generic drug entry—violating antitrust laws.

Q2: How do patent thickets affect drug competition?
A2: Patent thickets create overlapping patent protections that make it difficult for generic manufacturers to challenge the original patent, thus delaying market entry and maintaining high drug prices.

Q3: What are "pay-for-delay" agreements, and why are they significant in this case?
A3: They are settlement agreements where patent holders pay generics to delay launching competing products. Such deals are scrutinized because they can unlawfully suppress competition.

Q4: What potential impacts could this case have on the pharmaceutical industry?
A4: It could lead to stricter regulatory oversight, influence patent prosecution strategies, and reshape settlement practices to promote fair competition.

Q5: What legislative or regulatory changes could be prompted by this litigation?
A5: Possible reforms include tighter rules for patent listings, greater transparency in settlement agreements, and enhanced antitrust enforcement to prevent strategic patent abuse.

---

References

1. [1] Federal Trade Commission, “Generic Drug Entry Prior to Patent Expiration,” 2020.
2. [2] Court filings and case documents related to In re Novartis and Par Antitrust Litigation.
3. [3] Industry analyses from Bloomberg Law and pharmaceutical patent law journals.