Litigation Details for Philadelphia Federation of Teachers Health and Welfare Fund v. Allergan, Inc. (E.D.N.Y 2017)

Philadelphia Federation of Teachers Health and Welfare Fund v. Allergan, Inc. (E.D.N.Y 2017)

Docket		Date Filed	2017-12-19
Court	District Court, E.D. New York	Date Terminated	2023-08-01
Cause	15:25 Clayton Act	Assigned To	Nina Gershon
Jury Demand	Plaintiff	Referred To	Lois Bloom
Patents	9,248,191
Link to Docket	External link to docket

Details for Philadelphia Federation of Teachers Health and Welfare Fund v. Allergan, Inc. (E.D.N.Y 2017)

Date Filed	Document No.	Description	Snippet	Link To Document
2017-12-19	1		048 patent”), and 8,685,930 (“the ’930 patent”) were all issued in 2014. U.S. Patent No. 9,248,191 (“the…. 1, 2014), and US 9,248,191 (dated Feb. 2, 2016). As of September 8, 2017, Allergan purports to have … was protected by U.S. Patent No. 5,474,979 (the “979 Patent” or “Ding I Patent,”) which issued in 1995…eligible for patent protection under United States law. These patents provide the patent-holders (“Brand…was protected by U.S. Patent No. 4,839,342 (“the °342 Patent”). The ‘342 Patent claimed that, by topically	External link to document

Philadelphia Federation of Teachers v. Allergan: Restasis Antitrust Litigation and Patent Strategy

Last updated: August 5, 2026

Philadelphia Federation of Teachers Health and Welfare Fund v. Allergan, Inc., No. 1:17-cv-07377, was a direct-purchaser antitrust action challenging Allergan's efforts to delay generic competition for Restasis, its cyclosporine ophthalmic emulsion product. The case centered on Allergan's transfer of Restasis patents to the Saint Regis Mohawk Tribe, the resulting sovereign-immunity strategy in inter partes review proceedings, and Allergan's patent litigation against prospective generic manufacturers.

The litigation was consolidated with related Restasis antitrust actions in the Eastern District of New York as part of In re Restasis (Cyclosporine Ophthalmic Emulsion) Antitrust Litigation, MDL No. 2804. The principal commercial issue was whether Allergan used objectively weak patents and procedural tactics to maintain Restasis pricing after generic applicants filed Abbreviated New Drug Applications.

What was Philadelphia Federation of Teachers v. Allergan about?

The plaintiffs alleged that Allergan unlawfully prolonged its monopoly over Restasis through a coordinated patent strategy. The alleged conduct included:

• Obtaining and listing several patents covering Restasis;
• Filing infringement suits against generic applicants;
• Transferring the Restasis patent portfolio to the Saint Regis Mohawk Tribe;
• Taking an exclusive license back from the tribe;
• Attempting to prevent the Patent Trial and Appeal Board from reviewing the patents;
• Using patent litigation and regulatory barriers to delay generic entry.

The plaintiffs sought damages under federal antitrust law and related state-law theories. They alleged that Allergan's conduct caused direct purchasers, including health and welfare funds and pharmaceutical wholesalers, to pay supracompetitive prices.

The case did not determine that every patent-enforcement action by Allergan was unlawful. The core legal question was whether the overall strategy constituted an exclusionary scheme under Section 2 of the Sherman Act and whether the alleged conduct caused antitrust injury.

Which Restasis patents were involved?

Allergan's Restasis portfolio included patents directed to cyclosporine ophthalmic emulsions and related formulation characteristics. The principal patents involved in the patent disputes included:

Patent	General subject matter	Litigation significance
U.S. Patent No. 8,629,111	Cyclosporine ophthalmic emulsion	One of the principal Restasis patents challenged by generic applicants
U.S. Patent No. 8,642,556	Ophthalmic emulsion formulation	Asserted against generic applicants
U.S. Patent No. 8,648,048	Cyclosporine ophthalmic compositions	Included in the Restasis patent dispute
U.S. Patent No. 8,685,930	Ophthalmic emulsion technology	Part of Allergan's later-issued patent portfolio

The patents covered formulation and product characteristics rather than the active pharmaceutical ingredient alone. Cyclosporine was an established immunosuppressive compound, and the commercial value of the portfolio depended on maintaining protection for the specific ophthalmic emulsion sold as Restasis.

The Delaware patent litigation produced a major adverse result for Allergan. In Allergan, Inc. v. Teva Pharmaceuticals USA, Inc., the district court held asserted Restasis claims invalid for obviousness. The decision weakened Allergan's ability to rely on the patents as a conventional barrier to generic approval and launch. The Federal Circuit later affirmed the invalidity determination. [1][2]

Why did Allergan transfer Restasis patents to the Saint Regis Mohawk Tribe?

In September 2017, Allergan assigned six Restasis patents to the Saint Regis Mohawk Tribe for reported consideration of $13.75 million, plus potential royalties. Allergan received an exclusive license back and retained commercial control over the patents.

The transaction was designed to invoke tribal sovereign immunity in inter partes review proceedings before the PTAB. Allergan argued that the tribe, as patent owner, could not be compelled to participate in IPR proceedings without its consent.

The strategy drew immediate scrutiny from generic companies, health plans, and the Federal Trade Commission. The antitrust plaintiffs treated the assignment as evidence of an effort to obstruct administrative patent review after generic challengers had already attacked the patents.

The PTAB rejected the sovereign-immunity argument and continued the IPR proceedings. The Federal Circuit affirmed, holding that tribal sovereign immunity did not prevent the PTAB from proceeding because the agency was determining whether to continue its own proceedings rather than adjudicating a private claim against the tribe. [3]

The Federal Circuit's ruling removed the principal procedural benefit of the assignment. The tribe remained the nominal patent owner, but the transaction did not stop the PTAB from evaluating patent validity.

What were the antitrust claims against Allergan?

The complaint alleged that Allergan violated Section 2 of the Sherman Act by maintaining monopoly power through exclusionary conduct. The plaintiffs also asserted claims under Section 4 of the Clayton Act for damages caused by the alleged antitrust violation.

The pleaded theory had four principal components:

1. Allergan allegedly obtained or maintained patents that were invalid or unlikely to withstand challenge.
2. Allergan allegedly filed sham or objectively baseless patent litigation against generic applicants.
3. Allergan allegedly used the tribe assignment to block IPR review.
4. The combined conduct allegedly delayed generic entry and maintained Restasis prices above competitive levels.

The plaintiffs' theory required proof beyond patent invalidity. A patent holder generally may enforce a patent even if the patent is later held invalid. To establish antitrust liability, the plaintiffs had to connect the patent conduct to exclusionary behavior, lack of objective basis, improper intent, or another recognized antitrust theory.

The litigation therefore presented a higher burden than the underlying patent case. The invalidity ruling supported the plaintiffs' theory of competitive harm but did not automatically establish a Sherman Act violation.

How did the Restasis patent litigation affect the antitrust case?

The patent litigation supplied the factual and economic foundation for the antitrust claims.

Generic applicants, including Teva Pharmaceuticals and Mylan, challenged Allergan's Restasis patents after filing ANDAs. Allergan sued the applicants for infringement. The resulting litigation triggered the Hatch-Waxman framework, including the statutory stay that can delay FDA approval of an ANDA for up to 30 months after notice of a Paragraph IV certification.

The district court's invalidity ruling reduced the expected value of Allergan's patent claims. The plaintiffs argued that Allergan's continued enforcement and sovereign-immunity strategy caused generic manufacturers to defer entry and allowed Allergan to preserve Restasis revenue.

The defense position focused on the legal right to enforce issued patents, the absence of a guaranteed generic launch date, and the need to prove actual causation. Allergan also contested whether the plaintiffs could show that the alleged conduct, rather than regulatory or commercial factors, caused the claimed overcharges.

What was the Orange Book status of Restasis?

Restasis was approved by the FDA in 2003 as cyclosporine ophthalmic emulsion 0.05% for increasing tear production in patients whose tear production is presumed to be suppressed due to ocular inflammation associated with keratoconjunctivitis sicca.

Allergan listed Restasis patents in the FDA's Orange Book. Generic applicants used Paragraph IV certifications to challenge those listings. The certifications alleged that the patents were invalid, unenforceable, or would not be infringed by the proposed generic products.

The relevant FDA and patent sequence was:

Date	Event
2003	FDA approval of Restasis
2015-2016	Generic applicants filed ANDAs and Paragraph IV certifications
2016 onward	Allergan filed patent-infringement actions
2017	Delaware court invalidated asserted Restasis patent claims
September 2017	Allergan transferred Restasis patents to Saint Regis Mohawk Tribe
2018	PTAB and Federal Circuit rejected the sovereign-immunity strategy
2022	FDA approvals for generic cyclosporine ophthalmic emulsion products expanded competitive pressure

FDA approval and patent expiration are separate issues. A generic may receive approval while patent litigation remains pending, but a manufacturer can face launch risk if it enters before patent resolution. The Restasis dispute illustrates how Orange Book listings, Paragraph IV litigation, IPR proceedings, and settlement negotiations can operate together.

Which companies challenged Allergan's Restasis patents?

The principal generic challengers included Teva Pharmaceuticals and Mylan. Other generic companies participated in related litigation or patent challenges involving cyclosporine ophthalmic emulsion.

The competitive threat was commercially significant because Restasis had a large branded prescription base and limited therapeutic substitution at the time. Generic applicants did not need to reproduce every commercial attribute of Restasis. They needed to satisfy FDA requirements for therapeutic equivalence and demonstrate that their products met the applicable ANDA standards.

The invalidity ruling and PTAB proceedings increased the probability of generic competition. That probability affected both the damages theory and Allergan's settlement leverage.

What was the court's treatment of class certification?

The consolidated litigation included a proposed class of direct purchasers. In 2020, the Eastern District of New York addressed class-certification issues in In re Restasis Antitrust Litigation. The plaintiffs sought to represent purchasers that allegedly paid inflated prices for Restasis during the period of delayed generic entry.

The class-certification analysis focused on common proof of:

• The effect of the alleged exclusionary conduct;
• The timing and likelihood of generic entry;
• The overcharge attributable to the delay;
• A method for measuring damages across direct purchasers.

Direct purchasers generally have a stronger position than indirect purchasers under federal antitrust law because they can claim that they purchased directly from the defendant or its distribution chain. The class still had to satisfy Federal Rule of Civil Procedure 23, including predominance and superiority requirements. [4]

The damages model was central. A successful model needed to estimate the price that would have prevailed if generic Restasis had entered earlier and compare that counterfactual price with actual branded Restasis prices.

Was there a settlement in the Restasis antitrust litigation?

The Restasis antitrust litigation proceeded toward settlement rather than a reported trial verdict establishing Allergan's liability. Public settlement materials described a proposed monetary resolution for the direct-purchaser claims. The settlement structure required court review, notice to class members, an opportunity to object or opt out, and final approval under Rule 23.

A settlement does not constitute an admission that Allergan violated the antitrust laws. It resolves litigation risk, including the possibility of treble damages under the Clayton Act, expert damages exposure, attorney fees, and continued discovery into Allergan's patent and launch strategy.

The settlement also separated commercial resolution from patent validity. The Delaware invalidity decision and Federal Circuit rulings remained relevant to the factual record, but they did not themselves award damages to the antitrust plaintiffs.

How strong was Allergan's Restasis patent estate?

The Restasis patent estate was commercially important but legally weakened by the invalidity rulings and the failure of the tribal-assignment strategy.

Factor	Assessment
Product importance	High; Restasis was a major branded ophthalmic product
Active-ingredient protection	Limited; cyclosporine was not a new molecule
Formulation protection	Central to the estate
Orange Book leverage	Significant during the ANDA litigation period
Patent validity	Weak after the Delaware invalidity decision
IPR strategy	Unsuccessful after PTAB and Federal Circuit rulings
Generic-entry barrier	Temporary rather than durable
Antitrust exposure	Elevated because of the combination of invalidity, litigation delay, and assignment conduct

The estate's weakness was not that formulation patents lack value. Formulation patents can support meaningful exclusivity when they withstand validity challenges and map closely to the approved product. The risk arose from the combination of broad commercial reliance on formulation patents, adverse obviousness findings, and conduct that plaintiffs characterized as an effort to prevent administrative review.

What generic entry risks existed for Restasis?

Generic entry risk became material once the asserted patents were invalidated and the IPR strategy failed. The primary launch scenarios were:

1. A negotiated launch date under a settlement agreement;
2. An authorized or licensed generic arrangement;
3. An at-risk launch before all patent issues were finally resolved;
4. FDA approval followed by commercial launch after patent invalidity became established.

The economic effect of entry depended on the number of approved competitors, product interchangeability, pharmacy substitution rules, payer formularies, and the ability of generic manufacturers to obtain supply at scale.

For Allergan, the commercial risk included price erosion, formulary displacement, lower prescription volume, and loss of branded Restasis revenue. For generic applicants, the primary risks were infringement damages, injunction exposure, manufacturing costs, and the possibility that multiple competitors would enter simultaneously.

What litigation and licensing issues mattered most?

The Saint Regis transaction was the most distinctive licensing issue. Allergan retained practical control through an exclusive license-back arrangement while transferring nominal ownership to the tribe. The Federal Circuit's decision limited the usefulness of that structure for avoiding IPR review.

The case also involved the broader Hatch-Waxman settlement environment. Patent settlements can resolve infringement claims but may create antitrust risk if they include payment-for-delay provisions, restrictions on generic entry, or other terms that delay competition beyond the legitimate scope of patent rights. No antitrust conclusion follows merely from the existence of a settlement. The relevant terms, economic consideration, and expected patent strength control the analysis.

What is the current legal significance of the case?

Philadelphia Federation of Teachers v. Allergan is significant for three reasons.

First, it demonstrates that a patent assignment to a sovereign entity does not necessarily prevent PTAB review. The Federal Circuit's reasoning applies broadly to patent owners seeking to use sovereign or tribal immunity in IPR proceedings. [3]

Second, the case illustrates the difference between patent invalidity and antitrust liability. The invalidity ruling supported the plaintiffs' competitive narrative, but the antitrust claims still required proof of exclusionary conduct, causation, and damages.

Third, the case shows how formulation patents can become the central barrier to generic entry for an off-patent active ingredient. When the active molecule is old, the commercial contest often moves to delivery systems, particle size, emulsion characteristics, dosing, stability, and product-specific claims.

Key Takeaways

• The case challenged Allergan's strategy for delaying generic Restasis competition.
• The principal conduct involved patent litigation and the transfer of Restasis patents to the Saint Regis Mohawk Tribe.
• The PTAB and Federal Circuit rejected the attempt to use tribal sovereign immunity to block IPR proceedings.
• A Delaware court found asserted Restasis patent claims invalid for obviousness, and the Federal Circuit affirmed.
• The antitrust plaintiffs still had to prove exclusionary conduct, causation, and damages.
• The litigation proceeded through consolidated MDL proceedings and settlement review rather than a reported antitrust trial verdict.
• Restasis demonstrates the commercial value and litigation risk of formulation patents covering an established active ingredient.

FAQs About Philadelphia Federation of Teachers v. Allergan

Did Philadelphia Federation of Teachers win its Restasis antitrust case?

The litigation was resolved through settlement proceedings rather than a reported trial judgment finding Allergan liable for antitrust violations. Settlement approval resolves claims without an admission of liability.

Did the Saint Regis Mohawk Tribe own the Restasis patents?

The tribe became the nominal assignee of the patents under the 2017 transaction, while Allergan received an exclusive license back. Allergan retained commercial control over the product and patent rights.

Did the FDA approve generic Restasis?

Yes. The FDA approved generic cyclosporine ophthalmic emulsion products after the principal patent disputes weakened Allergan's ability to prevent competition.

Were the Restasis patents invalidated?

Asserted Restasis patent claims were held invalid for obviousness in federal district court, and the Federal Circuit affirmed the decision.

What damages theory did the plaintiffs use?

The plaintiffs sought to compare actual Restasis prices with prices that allegedly would have prevailed if generic competition had entered earlier. The analysis depended on the timing of hypothetical entry, the number of generic competitors, and expected price erosion.

References

1. Allergan, Inc. v. Teva Pharmaceuticals USA, Inc., 2017 WL 4803941 (D. Del. Oct. 25, 2017).

2. Allergan, Inc. v. Teva Pharmaceuticals USA, Inc., 914 F.3d 1374 (Fed. Cir. 2019).

3. Saint Regis Mohawk Tribe v. Mylan Pharmaceuticals Inc., 896 F.3d 1322 (Fed. Cir. 2018).

4. In re Restasis (Cyclosporine Ophthalmic Emulsion) Antitrust Litigation, 335 F.R.D. 1 (E.D.N.Y. 2020).

5. U.S. Food and Drug Administration. (2003). Restasis ophthalmic emulsion approval information.

6. U.S. Food and Drug Administration. (2022). Orange Book: Approved drug products with therapeutic equivalence evaluations.