Jessica M. Karmasek Aug. 22, 2014, 12:15pm

WASHINGTON (Legal Newsline) - The U.S. Court of Appeals for the Federal Circuit has remanded a case that accused a patent holder of filing a sham infringement lawsuit and a sham citizen petition with a federal agency.

Mutual Pharmaceutical Co. and United Research Laboratories Inc. appealed to the Federal Circuit from a summary judgment entered by the U.S. District Court for the District of New Jersey in favor of Tyco Healthcare Group and Mallinckrodt Inc.

In its order last year, the district court held that Tyco did not violate the antitrust laws by filing suit against Mutual, or by filing a citizen petition with the Food and Drug Administration seeking to bar Mutual from obtaining the FDA’s permission to market its generic version of one of Tyco’s drugs, temazepam.

The drug, marketed under the name Restoril, is used to treat insomnia.

In its Aug. 6 decision, a three-judge panel of the Federal Circuit revived Mutual’s antitrust claims.

The court, in its 22-page ruling, affirmed the district court in part, vacated in part and sent the case back to the lower court.

Judge William C. Bryson was joined by Judge Kimberly A. Moore. Judge Pauline Newman filed a separate dissent.

In 2006, Mutual filed an Abbreviated New Drug Application, or ANDA, with the FDA, seeking approval to manufacture and sell a generic version of temazepam.

Soon after, Tyco sued Mutual for patent infringement and subsequently filed a citizen petition with the FDA.

In response, Mutual filed antitrust counterclaims. The company asserted that Tyco’s suit constituted sham litigation; that its citizen petition also was a sham; and Tyco was trying to enforce patents obtained by “means of fraud.”

The district court found that Mutual did not infringe Tyco’s patents and found the patents to be invalid.

At the same time, the FDA approved Mutual’s ANDA without deciding Tyco’s citizen’s petition. It later denied the petition.

The district court subsequently granted summary judgment to Tyco with respect to Mutual’s antitrust counterclaims.

The Federal Circuit agreed with the district court that Mutual did not present any evidence that Tyco knew that Sandoz Limited -- the company from which Tyco acquired Restoril and several related patents -- planned to defraud the U.S. Patent and Trademark Office at the time Tyco filed its lawsuit.

“A reasonable finder of fact could not conclude that Tyco had knowledge of any alleged fraud by Sandoz just because Tyco had reviewed the record and thereby presumably had knowledge of those redactions from the materials supplied to the PTO,” Bryson wrote for the Federal Circuit.

However, the court vacated the district court’s summary judgment that Tyco’s infringement claims were not a sham.

The panel said that a “factual inquiry” was needed to make that determination, and remanded the case for further consideration.

“If necessary, the court should then determine whether Mutual has shown that the subjective element of the sham-litigation test has been satisfied,” Bryson added.

On remand, the district court also must determine whether the citizen petition caused any antitrust injury to Mutual, the Federal Circuit ruled.

“The district court should determine whether Mutual suffered an anticompetitive harm in the form of a delay in the approval of its ANDA due to the filing of Tyco’s citizen petition with the FDA,” Bryson explained. “Tyco would be entitled to summary judgment if there is no evidence that the citizen petition caused a delay in the approval of Mutual’s ANDA.”

Attorneys for Mutual and Tyco could not immediately be reached for comment.

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