False Claims Act Qui Tam Action Against Janssen for Zytiga Survives Motion to Dismiss

On December 17, 2021, U.S. District Court for the District of New Jersey largely denied the motions to dismiss from Johnson & Johnson pharmaceutical unit and affiliates from a patent attorney’s False Claims Act lawsuit over the prostate cancer treatment Zytiga, finding that the complaint adequately alleged that the company obtained a patent under false pretenses, before the eventual invalidation of the patent. The lawsuit alleged Janssen obtained the patent after several failed attempts patent regulators by misrepresenting Zytiga’s market share and then trying to delay generic competition with sham infringement litigation. Judge McNulty, who had presided over the underlying litigation in which the patent was eventually invalidated, rejected application of the FCA’s public disclosure bar. In doing so, Judge McNulty rejected that the relator’s allegations were disclosed in inter partes review, as the government is not party to the inter partes review process and the proceedings are “more akin to a private civil litigation.” As part of the ruling, Judge McNulty dismissed BTG International Ltd., Zytiga’s developer and licensor, due to a lack of detail about the company’s role in the alleged wrongdoing.

The plaintiffs claimed injury after overpaying for Zytiga during the period during which Janssen had sued generic manufacturers for infringement of its combination therapy patent (the ‘438 patent). The underlying patent action was resolved in favor of the generic manufacturers after an eight-day bench trial, during which Judge McNulty found the ‘438 patent invalid for obviousness.

On October 27, 2021, Judge McNulty dismissed a separate antitrust lawsuit brought against Janssen by a class of indirect purchasers of Zytiga. See Louisiana Health Svc. & Indem. Co., et al. v. Janssen Biotech, Inc. et al., No. 2:19-cv-14146 (D. N.J.). Judge McNulty dismissed these claims under the Noerr-Pennington doctrine finding that Janssen’s unsuccessful infringement suit was protected activity under Noerr-Pennington,  and not sham litigation which was so lacking in merit as to amount to nothing more than an attempt to interfere directly with business relationships of a competitor. Judge McNulty found that the infringement action, though unsuccessful, was not objectively baseless and that Janssen had probable cause to bring the infringement action. The court was careful to note that the plaintiffs, although relying on litigation following fraud on the PTO, “specifically disclaim a Walker Process theory that Janssen committed fraud on the PTO.” The claim of fraud on the PTO is supported by the theory pled by a relator in a qui tam case also before Judge McNulty, based on the same patent.

Silbersher et al v. Janssen Biotech Inc. et al., Case No. 2:2019-cv-12107 (D. N.J.).