To recap, the issue arose in a class action lawsuit against AbbVie and AbbVie Biotechnology Ltd. by consumer groups, drug wholesalers, and unions (including the City of Baltimore, Miami Police Department insurance trust fund, and a Minnesota-based employee welfare benefits plan for workers in the pipe trade industries), as well as corresponding state law causes of action for Alaska, California, District of Columbia, Georgia, Illinois, Nevada, New Hampshire, North Carolina, Utah, and West Virginia.  The basis of the complaint was AbbVie's actions in seeking and obtaining additional patents when the patent on the adalimumab molecule itself (U.S. Patent No. 6,090,382) was set to expire on December 31, 2016.  AbbVie filed 247 patent applications, resulting in 132 patents, and this behavior was sufficiently anticompetitive, plaintiffs argued, that it rose to the level of an antitrust violation under the Sherman Act.

The District Court discerned the following allegations in the class action Plaintiffs' complaint:

• that AbbVie "cornered the market" on Humira (and other, unnamed biosimilar drugs) by "anticompetitive conduct";

• that AbbVie obtained and asserted patents "to gain the power it needed to elbow its competitors" out of the Humira market;

• that AbbVie then entered into agreements with those competitors "to keep their competing drugs off the market" (and then, paradoxically, "gave those competitors permission to market their drugs in Europe"; unremarked is that AbbVie gave those same competitors permission to enter the U.S. market a few years thereafter, without having to face those dastardly and profuse patents).

The District Court dismissed the complaint under the rationale that:

Plaintiffs say that AbbVie's plan to extend its power over Humira amounts to a scheme to violate federal and state antitrust laws.  But what plaintiffs describe is not an antitrust violation.  AbbVie has exploited advantages conferred on it through lawful practices and to the extent this has kept prices high for Humira, existing antitrust doctrine does not prohibit it.  Much of AbbVie's petitioning was protected by the Noerr Pennington doctrine, and plaintiffs' theory of antitrust injury is too speculative.

The District Court agreed with AbbVie that "there is nothing illegal about amassing a broad portfolio of legitimate patents" under Sherman Act § 2 and, to the extent that some of these patents may turn out to be improvidently granted, "the Noerr–Pennington doctrine immunizes them from liability."  Regarding the Section 1 allegations, the District Court agreed with Defendants that these settlement agreements don't violate the Sherman Act because "they[] allow AbbVie's competitors to enter the market before the expiration of AbbVie's patents, do not involve any reverse payments from AbbVie (the patentee) to Amgen, Samsung Bioepis, and Sandoz (the alleged infringers), and only divvy up the market in ways consistent with AbbVie's patent rights."  And while the District Court agreed that even if a single one of AbbVie's patents are not invalid and infringed that would have been sufficient to keep the biosimilar applicants from marketing Humira biosimilars until that patent expired (a date that would have been very much later than January 2023), for Plaintiffs' antitrust allegations to create liability against Defendants, Plaintiffs would need to show that AbbVie had obtained each and every one of its patents "unlawfully," which the Court found was unlikely, as a "but-for" cause of Plaintiffs' alleged injury.

The 7th Circuit affirmed, in an opinion by Judge Easterbrook joined by Judge Wood and Judge Kirsch.  The opinion begins with a litany of precedent that the parties did not rely on (for AbbVie, Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977) on jurisdictional grounds, and for plaintiffs, Walker Process Equipment, Inc. v. Food Machinery & Chemical Corp., 382 U.S. 172 (1965) for inequitable conduct or "fraud on the Patent Office").  But the heart of the Court's opinion can be found in almost its first legally substantive sentence, where the Court asks plainly "what's wrong with having lots of patents"?  And further, the Court states that "[t]he patent laws do not set a cap on the number of patents any one person can hold—in general, or pertaining to a single subject," citing In re Brand Name Prescription Drugs Antitrust Litigation, 186 F.3d 781 (7th Cir. 1999).  Tellingly the opinion goes on to note that "[t]ech companies such as Cisco, Qualcomm, Intel, Microsoft, and Apple have much larger portfolios of patents" and "Thomas Edison alone held 1,093 U.S. patents."  Finally in this regard the Court notes that the Federal Trade Commission tried, and failed, to establish antitrust liability against Qualcomm based on the sheer number of patents that company had amassed.  FTC v. Qualcomm Inc., 969 F.3d 974 (9th Cir. 2020).

The Court recognizes the distinction between valid and invalid patents, but notes that Plaintiffs did not allege that they will invalidate all 132 of AbbVie's patents.  Nor was the Court persuaded by the fact that "the 132 patents can be traced to continuation applications from 20 root patents" (which "seem neither here not there" to the panel).  As for the argument that these patents are "weak" the Court says this "leaves us cold" because a weak patent is just one having limited scope not one that is "illegitimate."  Those arguments are appropriate in proceedings like inter partes review the opinion states, for which the Patent Trial and Appeal Board have found more consistently that challengers have failed (13 instances) to satisfy the statutory requirements for challenge than it has found a challenged patent invalid (3) (and noting that in still other instances AbbVie has prevailed before the Board).

The Court also recognizes the disjointed nature of Plaintiffs' argument that, while eschewing Walker Process-based allegations maintained its Section 2 challenge merely because AbbVie obtained the (presumptively) valid patents and asserted them against competitors.  While the law recognizes that "objectively baseless petitions" to the government can be an antitrust violation, Professional Real Estate Investors, Inc. v. Columbia Pictures Industries, Inc., 508 U.S. 49 (1993), like the District Court the panel noted that AbbVie had a "batting average" of .534 for patent procurement (a 53.4% allowance rate), which "cannot be called baseless."  But without this ground "[t]rying to conjure liability out of successful petitions for governmental aid in blocking competition runs into the Noerr-Pennington doctrine according to the opinion, Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127 (1961); Mine Workers v. Pennington, 381 U.S. 657 (1965).  Other grounds for finding antitrust liability (unsuccessful petitioning that increases competitors' costs, such as filing frivolous lawsuits, citing BE&K Construction Co. v. NLRB, 536 U.S. 516 (2002)) did not exist under the circumstances before the Court (although the panel recognized there may be ways for AbbVie to assert their patents that the Noerr-Pennington doctrine would not protect).

Turning to the Section 1-based allegations arising from the settlement agreements, the opinion first notes that those settlement agreements permitted biosimilar entry much earlier than the expiration date of at least some of AbbVie's patents.  The Court views these agreements as "compromises" and the agreements do not violate the Sherman Act under Supreme Court precedent in favor of settlements in litigation.  But the opinion states that the basis of one such possible antitrust violation, falling under the Court's FTC. v. Actavis decision, cannot arise here because there is no exclusivity period for the first biosimilar filer as there was in Actavis for the first ANDA filer.  "The payors do not contend that there is anything fishy or anticompetitive about the settlements allowing entry in 2023 without any payment from AbbVie to the potential entrants," the opinion asserts, and acknowledges Plaintiffs' argument that the differential entry date of Humira biosimilars in Europe (2018) and the U.S. (2023) could produce a similar "reverse-payment deal" here.  Neither the District Court nor this panel were persuaded because there was no "pay-for-delay" ("0+0=0") in these settlements.  There were also factual distinctions between the settling parties and the legal and regulatory conditions in the European countries that were contrary to Plaintiffs' arguments that somehow somewhere someone had or could make money they should not have been able to make under these agreements.  And to the extent Plaintiffs' argument sounded in the economic theory of "opportunity costs" the panel understood the Supreme Court's Actavis decision to have "considered, and rejected, the argument that an opportunity cost is the same as a reverse-payment settlement."

The District Court characterized Plaintiffs' arguments as "a new kind of antitrust claim" that "brings together a disparate set of aggressive but mostly protected actions to allege a scheme to harm competition and maintain high prices."  Novel legal theories of course is how the law progresses.  Indeed, the current Chair of the Federal Trade Commission became something of an enfant terrible based on her law review article on antitrust in the technological age (Khan, Lina M. (January 2017), "Amazon's Antitrust Paradox", Yale Law Journal, 126 (3): 710–805).  But a risk of some legal theories arises when they are outcome oriented to the extent that they ignore traditional legal principles in search of the desired outcome.  (The dissent by Chief Justice Roberts in Actavis is illustrative of the dangers attendant thereupon.)  And the mantra of the undesirability if not illegality per se of so-called patent thickets for blockbuster drugs can appear politically expedient but is not supported by the facts, as shown inter alia by Mossoff, Unreliable Data Have Infected the Policy debates over Drug Patents, Policy Memo, Hudson Institute, January 2022.  For now, this latest flight of legal fancy has crashed on the rocks of antitrust jurisprudence reality but it would be imprudent not to expect other attempts prompted by patent protection of blockbuster drugs (and their related costs) to arise.