This appeal involves a patented drug called AndroGel. A blockbuster testosterone replacement therapy that generated billions of dollars in sales, AndroGel caught the attention of the Federal Trade Commission. The FTC sued the owners of an AndroGel patent—AbbVie, Inc., Abbott Laboratories, Unimed Pharmaceuticals LLC, and Besins Healthcare, Inc.— under Section 13(b) of the Federal Trade Commission Act in the United States District Court for the Eastern District of Pennsylvania. The FTC alleged that Defendants filed sham patent infringement suits against Teva Pharmaceuticals USA, Inc. and Perrigo Company, and that AbbVie, Abbott, and Unimed entered into an anticompetitive reverse-payment agreement with Teva. The FTC accused Defendants of trying to monopolize and restrain trade over AndroGel.
The District Court dismissed the FTC’s claims to the extent they relied on a reverse-payment theory but found Defendants liable for monopolization on the sham-litigation theory. The Court ordered Defendants to disgorge $448 million in ill-gotten profits but denied the FTC’s request for an injunction. The parties cross-appeal.
We hold the District Court erred by rejecting the reverse-payment theory and in concluding Defendants’ litigation against Teva was a sham. The Court did not err, however, in concluding the Perrigo litigation was a sham and that Defendants had monopoly power in the relevant market. Yet the FTC has not shown the monopolization entitles it to any remedy. The Court did not abuse its discretion in denying injunctive relief; and the Court erred by ordering disgorgement because that remedy is unavailable under Section 13(b) of the FTC Act. Accordingly, we will reinstate the FTC’s dismissed claims and remand for further proceedings consistent with this opinion. We will also affirm in part and reverse in part the Court’s order adjudging Defendants liable for monopolization. Finally, we will affirm the Court’s order denying injunctive relief and reverse the Court’s order requiring Defendants to disgorge $448 million.
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