| Randy Stutz, David O. Fisher, Mark S. Hegedus, Addison Wagner
Exclusionary Conduct, Intellectual Property, Monopolies, Health & Pharmaceuticals, Innovation
The American Antitrust Institute (AAI) filed an amicus brief before the U.S. Court of Appeals for the Fourth Circuit in CareFirst of Maryland, Inc. v. Amgen Inc. (No. 26-10394), urging affirmance of the district court’s denial of Amgen’s motion to dismiss plaintiff purchasers’ Section 2 monopolization case involving the blockbuster drug Enbrel.
According to CareFirst’s complaint, Amgen—which held a patent over Enbrel that was set to expire in 2012—entered into an agreement with Roche under which it acquired an exclusive license to Roche’s then-pending patent application for etanercept, the active ingredient in Enbrel. CareFirst alleged that the agreement prevented Roche and other potential competitors from entering the market for etanercept, extending Amgen’s monopoly over the drug beyond the terms of its lawful patent and causing CareFirst and other purchasers to pay higher prices for the drug.
The district court denied Amgen’s motion to dismiss after finding that CareFirst had suffered an antitrust injury and that Amgen was not immunized under the Noerr-Pennington doctrine. On appeal, Amgen argues that the alleged overcharges were not caused by the licensing agreement, but by subsequent court orders enforcing its patent rights, and that its agreement with Roche cannot give rise to antitrust liability because it is protected under Noerr-Pennington or otherwise immune from antitrust scrutiny.
In its brief, AAI argues that Amgen’s causation arguments would improperly impose a heightened pleading requirement on antitrust plaintiffs. Like other civil plaintiffs, antitrust plaintiffs need only plausibly allege causation at the motion-to-dismiss stage. CareFirst therefore need not disprove Amgen’s competing theory that subsequent patent-enforcement litigation, rather than the challenged licensing agreement, caused its injuries. It only need plausibly allege that the licensing agreement was a material cause of its overpayments. AAI also argues that Amgen incorrectly conflates causation on the merits with the antitrust-injury element of antitrust standing. CareFirst alleges that Amgen’s exclusive agreement excluded potential competitors, reduced competition, and contributed to higher prices. Those allegations plausibly describe an injury stemming from the competition-reducing effect of the challenged conduct and therefore satisfy the antitrust-injury requirement.
AAI also urges the Fourth Circuit to reject Amgen’s proposed expansion of Noerr-Pennington immunity and its argument that the acquisition of a pending patent application cannot give rise to antitrust liability. Although Noerr protects efforts to petition the government, AAI argues that Amgen’s acquisition of exclusive rights to Roche’s pending patent application was a commercial transaction, not petitioning activity. The fact that Amgen later sought and enforced patent rights does not immunize the antecedent commercial agreement from antitrust scrutiny. Extending Noerr in that fashion would substantially expand an implied antitrust immunity that the Supreme Court has repeatedly instructed courts to construe narrowly.
AAI also addresses Amgen’s argument that exempting the acquisition of pending patent applications from antitrust liability is necessary to protect innovation, explaining that antitrust law and patent law both serve to promote innovation and that exempting such acquisitions from antitrust scrutiny could serve to thwart innovation by incentivizing drugmakers to invest in exclusive licenses rather than in research and development of new drugs.
The brief was written by AAI Senior Counsel David O. Fisher with assistance from AAI President Randy Stutz, AAI Senior Counsel Mark S. Hegedus, and former AAI intern Addison Wagner.
Read the brief: CareFirst v. Amgen
