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SmithKline Beecham Corp. v. Abbott Laboratories

United States District Court, N.D. California

November 24, 2014

SMITHKLINE BEECHAM CORPORATION, d/b/a GLAXOSMITHKLINE, Plaintiff,
v.
ABBOTT LABORATORIES, Defendant

For SmithKline Beecham Corporation, dba GlaxoSmithKline, Plaintiff: Alexander Frank Wiles, LEAD ATTORNEY, Irell & Manella LLP, Los Angeles, CA; Brian James Hennigan, LEAD ATTORNEY, Moez Mansoor Kaba, Steven N. Feldman, Irell and Manella LLP, Los Angeles, CA; Barbara Lynne Harris Chiang, Dillingham & Murphy, LLP, San Francisco, CA; Barbara H. Wootton, PRO HAC VICE, Arnold & Porter LLP, Washington, DC; Daniel S. Pariser, Kenneth A. Letzler, PRO HAC VICE, Arnold & Porter, Washington, DC.

For Abbott Laboratories, Defendant: Charles B. Klein, Winston & Strawn LLP, Washington, DC; David J. Doyle, James F. Hurst, Samuel S. Park, Winston & Strawn LLP, Chicago, IL; Jeffrey I. Weinberger, Munger Tolles & Olson LLP, Los Angeles, CA; Kathryn Ann Eidmann, Munger Tolles and Olson LLP, San Francisco, CA; Keith Rhoderic Dhu Hamilton, II, Munger, Tolles & Olson LLP, Los Angeles, CA; Krista M. Enns, Winston & Strawn LLP, San Francisco, CA; Michelle Friedland, Munger, Tolles & Olson LLP, San Francisco, CA; Nicole Michelle Norris, Winston & Strawn, LLP, San Francisco, CA; Seth Andrew Weisburst, Winston & Strawn LLP, SF, CA; Steffen N. Johnson, Winston and Strawn LLC, Washington, DC; Stephanie Suzanne McCallum, Chicago, IL; Stuart Neil Senator, Munger Tolles & Olson, Los Angeles, CA.

ORDER DENYING DEFENDANT'S RENEWED MOTION FOR JUDGMENT AS A MATTER OF LAW (Docket No. 574)

CLAUDIA WILKEN, United States District Judge.

In January 2014, the Ninth Circuit issued its opinion in Plaintiff GlaxoSmithKline's (GSK's) cross-appeal of the jury verdict in this case. The court held that a Batson[1] violation had occurred during jury selection and that, as a result, a new trial must be held. On July 10, 2014, it issued its mandate with respect to that decision. Defendant Abbott Laboratories has now renewed its motion for judgment as a matter of law. GSK opposes the motion. Having considered the papers filed by the parties and oral argument, the Court DENIES the motion for judgment as a matter of law. Docket No. 574.

BACKGROUND

Because the parties are intimately familiar with the facts of this case, the Court provides only the background necessary to resolve their motions.

I. Factual Background

Abbott and GSK manufacture and sell protease inhibitors (PIs), which are drugs used to treat human immunodeficiency virus (HIV) infection.

In 1996, Abbott introduced Norvir, which contained the active ingredient ritonavir, as a stand-alone PI. After Norvir's release, it was discovered that, when used in small quantities with another PI, Norvir would " boost" the anti-viral properties of that PI.

GSK desired to obtain a license from Abbott, " to promote and market certain of GSK's HIV products with Ritonavir for the purpose of co-prescription/co-administration . . . ." GSK's Trial Ex. 5, License Agreement, at 0001. On December 13, 2002, Abbott and GSK executed a " Non-Exclusive License Agreement, " under which Abbott granted GSK a license to " recommend, label, market, use, sell, have sold and offer to sell one or more of the GSK Products, but no other product, in co-prescription and/or co-administration with Ritonavir . . . ." Id. at 0001 and 0005.

In 2003, GSK introduced Lexiva to the market. Although the drug could be prescribed as a stand-alone PI, its daily dose was less if it was administered along with Norvir. Abbott was aware of studies that showed Norvir-boosted doses of Lexiva had efficacy similar to Kaletra, another Abbott PI.

On December 3, 2003, Abbott raised the price of 100 milligrams of Norvir from $1.71 to $8.57, which amounted to a 400-percent increase. This price hike commensurately increased the cost of a boosted Lexiva therapy to some consumers.

II. Procedural and Trial History

GSK brought a claim against Abbott for allegedly breaching the implied covenant of good faith and fair dealing associated with the parties' December 2002 agreement, as well as claims under the Sherman Act and North Carolina's Unfair and Deceptive Trade Practices Act (UDTPA). These claims were tried to a jury. At the close of evidence, Abbott moved under Rule 50(a) for judgment as a matter of law on all of GSK's claims. The Court did not grant Abbott's motion and submitted the case to the jury.

In accordance with the jury's verdict, judgment was entered in favor of GSK on its implied covenant claim and in favor of Abbott on GSK's other claims. GSK was awarded $4, 549, 590.96, which was the sum of $3, 486, 240.00 and interest provided under New York law. After judgment, Abbott filed a renewed motion for judgment as a matter of law pursuant to Rule 50(b) on GSK's claim for breach of the implied covenant of good faith ...


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