Antitrust Liability For Protecting Patent Rights: Where’s The 'Clear And Convincing' Evidentiary Standard At The Summary Judgment Stage?

The Federal Circuit recently permitted Mutual Pharmaceutical to proceed with counterclaims that Tyco's patent enforcement litigation and FDA citizen's petition violated the antitrust laws. Yet neither the majority nor the dissent discussed whether Mutual had presented evidence at the summary judgment stage that could satisfy the "clear and convincing" standard for Mutual's antitrust counterclaims. Tyco briefed the issue, but did the Federal Circuit ignore the standard or apply it without comment?

After Mutual Pharmaceutical filed an ANDA seeking to market a generic version of Tyco's Restoril product, Tyco filed a patent infringement suit. Shortly after Tyco lost that suit, it filed a citizen's petition with the FDA arguing that Mutual's generic should be subject to further bioequivalency testing in light of the differences the court found between Mutual's product and Restoril.

Mutual responded with antitrust counterclaims. Mutual alleged that Tyco's patent litigation and citizen's petition were not entitled to Noerr-Pennington immunity because they were objectively baseless and because Mutual's patent was obtained through fraud on the patent office. See Professional Real Estate Investors, Inc. v. Columbia Pictures Indus., Inc., 508 U.S. 49 (1993); Walker Process Equip., Inc. v. Food Mach. & Chem. Corp., 382 U.S. 172 (1965). Specifically, Mutual alleged that: (1) Tyco's patent infringement action was objectively baseless because Mutual's ANDA relied on a different specific surface area than Tyco's patent; (2) Tyco lacked a reasonable prospect of defending the validity of its patent because Tyco knew it was obvious; and (3) Tyco's citizen's petition claiming that Mutual's product was not bioequivalent to Restoril was objectively baseless.

The requirement that antitrust claims based on sham patent litigation must be proved by clear and convincing evidence emerged from the Ninth Circuit's decision in the Handgards case. The Handgards court held that "a patentee's infringement suit is presumptively in good faith and . . . this presumption can be rebutted only by clear and convincing evidence." Handgards, Inc. v. Ethicon, Inc., 601 F.2d 986, 996 (9th Cir. 1979). The Federal Circuit adopted this standard and held that it applied both to antitrust claims premised on patent invalidity and claims premised on lack of infringement. See Loctite Corp. v. Ultraseal, Ltd., 781 F.2d 861, 876-77 (Fed. Cir. 1985).

Further, where the clear-and-convincing...