The ways in which things are used change over time. For example, “orange juice – it isn’t just for breakfast anymore.” Well, now the insanity defense isn’t just for serial killers and child molesters – it’s being used by accused patent infringers. (Karyn McGaughey, et al. v. Bayer Corporation, et al.)
McGaughey, the named plaintiff in a class action suit, sued Bayer, essentially alleging monopolistic practice in the sale of the well-known, patented drug Cipro. For reasons too complex to set forth herein, the plaintiffs had the burden of establishing that Bayer knew the patent on Cipro to be invalid.
In earlier litigation with Barr Laboratories, Inc., Bayer’s German patent agent had testified that Bayer had knowingly withheld a pertinent prior art reference from the patent examiner during prosecution of the subject patent. This testimony was corroborated by one of Bayer’s U.S. patent attorneys. If true, such withholding would constitute inequitable conduct, invalidating the patent, thereby costing Bayer an estimated $3.336 billion in future sales. What to do?
Bayer settled the lawsuit, paying almost $400 million to the accused infringer. Bayer also made payments to other pharmaceutical companies to induce them not to attack the patent. Then, just to make sure it had covered its posterior, Bayer retained the attorneys who had previously represented Barr. This was, allegedly, done to prevent these attorneys from “representing other potential competitors in disclosing what they had uncovered (and were set to prove at trial) concerning the prior art in the [subject] patent and the inequitable conduct in its prosecution.”
Just as the folks at Bayer were heaving a sigh of relief at having successfully dodged the bullet, along came Ms. McGaughey, alleging monopolistic practice by Bayer, which resulted in excessive prices for the Cipro she and others in the class had purchased.
At this point, Bayer had no choice but to deal with the alleged inequitable conduct. Having apparently watched lots of lawyer shows on television, Bayer’s attorneys presented a defense truly unique in the annals of patent law – INSANITY.
Yes, Bayer insisted that the German patent agent, the U.S. patent attorney and all the other Bayer employees who should have insisted upon disclosure of the withheld reference suffered incapacitating mental problems. The German patent agent suffered from “depression serious enough to require treatment with tricyclic antidepressants,” while the U.S. attorney suffered “from Parkinson’s or a related degenerative disease involving extreme mental degeneration.”
Needless to say, the plaintiffs were not buying this argument. Their expert testified that these contentions were “incredible and unbelievable … No person could perform such meticulous and complex legal work involving sophisticated pharmaceutical chemistry over such an extended period of time without comprehending the consequences of his intended actions.”
We can’t wait to see how this plays out. In the meantime, regardless of what you may think of Bayer’s morality, you’ve got to give them credit for creativity and, apparently, for hiring the handicapped.
THE LESSON TO BE LEARNED: Sometimes life does imitate art.
Sounds like Bayer is trying to have it both ways. However, they can run, but they can't hide. In addition to the fact that the FTC has long had it in for reverse payment agreements resolving patent litigation, Congress recently inserted an anti-pay-for-delay amendment into a House appropriations bill. Plus there's now the potential for a Tamoxifen rehearing. Looks like pay-for-delay won't last much longer.