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Schor v. Abbott Labs.

United States Court of Appeals for the Seventh Circuit

May 1, 2006, Argued ; July 26, 20061, Decided

No. 05-3344

Opinion

 [*609]   EASTERBROOK,Circuit Judge. People infected by the human immunodeficiency virus (HIV), a retrovirus that causes the acquired immune deficiency syndrome (AIDS), can slow the progress of the disease by taking protease inhibitors, which hamper HIV's ability to copy itself into additional cells. Abbott Laboratories holds a patent on NORVIRA ™ (ritonavir), one such drug. When used in doses high enough to work as a stand-alone protease inhibitor, however, NORVIR causes serious side effects. It serves better as a booster for other protease inhibitors, causing them to last longer in the bloodstream. NORVIR has this [**2]  effect because it inhibits Cytochrome P450-3A4, an enzyme in the liver that normally metabolizes away protease  [*610]  inhibitors. For example, a standard dose of FORTOVASEA ™ (saquinavir) is 1,200 mg three times a day; when combined with NORVIR, however, FORTOVASE is effective in doses of 800 mg twice a day. Abbott offers its own combination under the brand name KALETRA ™, which includes ritonavir plus the protease inhibitor lopinavir. Abbott's patents (Nos. 5,886,036 and 6,037,157) cover ritonavir taken alone and in combination with any other protease inhibitor.

Gary Schor, who proposes to represent a class of everyone who uses protease inhibitors, contends that Abbott charges too much for NORVIR alone and too little for the NORVIR component of KALETRA. (Stated otherwise, Schor's contention is that KALETRA sells for less than a cocktail made by combining Abbott's NORVIR with a protease inhibitor from some other supplier.) According to Schor's complaint, the disparity between the unduly high price of NORVIR and the unduly low price of KALETRA is designed to monopolize the market in protease inhibitors, in violation of § 2 of the Sherman Act, 15 U.S.C. § 2. Schor [**3]  calls the strategy "monopoly leveraging": Abbott is trying to use its patent to obtain a monopoly of all protease inhibitors by inducing HIV patients to buy KALETRA, which will lead other vendors to drop out of the market. Once rivals' products have been vanquished, Abbott will be able to jack up the price of KALETRA as well as NORVIR. The district court dismissed the complaint under Fed. R. Civ. P. 12(b)(6), however, after concluding that it does not state a claim on which relief may be granted. 378 F. Supp. 2d 850 (N.D. Ill. 2005). The court concluded that "monopoly leveraging" does not violate the antitrust laws unless it takes a particular form, such as a tie-in sale or refusal to deal.

Schor's complaint does not allege any of the normal exclusionary practices--tie-in sales (or another form of bundling), group boycotts, exclusive dealing and selective refusal to deal, or predatory pricing. Abbott sells ritonavir as part of KALETRA, but this is not a tie-in because ritonavir is available separately as NORVIR. Abbott will sell to anyone willing to pay its price: there is no refusal to deal. ] The price of NORVIR cannot violate the [**4]  Sherman Act: a patent holder is entitled to charge whatever the traffic will bear. This is true of both NORVIR's price, see Brunswick Corp. v. Riegel Textile Corp., 752 F.2d 261, 265 (7th Cir. 1984), and of a claim that the patent holder has engaged in price discrimination by cutting ritonavir's price to people who buy it (through KALETRA) in combination with lopinavir. See In re Brand Name Prescription Drugs Antitrust Litigation, 186 F.3d 781 (7th Cir. 1999); Zenith Laboratories, Inc. v. Carter-Wallace, Inc., 530 F.2d 508, 513 n.9 (3d Cir. 1976). And ] antitrust law does not require monopolists to cooperate with rivals by selling them products that would help the rivals to compete. See Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398, 124 S. Ct. 872, 157 L. Ed. 2d 823 (2004). Cooperation is a problem in antitrust, not one of its obligations.

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457 F.3d 608 *; 2006 U.S. App. LEXIS 18682 **; 2006-2 Trade Cas. (CCH) P75,354

GARY SCHOR, Plaintiff-Appellant, v. ABBOTT LABORATORIES, Defendant-Appellee.

Subsequent History: US Supreme Court certiorari denied by Schor v. Abbott Labs., 127 S. Ct. 1257, 167 L. Ed. 2d 75, 2007 U.S. LEXIS 2080 (U.S., Feb. 20, 2007)

Prior History:  [**1]  Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 05 C 1592--Robert W. Gettleman, Judge.

Disposition: AFFIRMED.

CORE TERMS

ritonavir, inhibitors, protease, monopoly, patent, antitrust, consumers, prices, rivals, leveraging, monopolist, products, anti trust law, monopolize, preclusion, saquinavir, condemn, market power, low price, injure, Sherman Act, lopinavir, costs, sells, dose

Antitrust & Trade Law, Sherman Act, Scope, General Overview, Business & Corporate Compliance, Defenses, Inequitable Conduct, Anticompetitive Conduct, Regulated Practices, Monopolies & Monopolization, Actual Monopolization, Monopoly Power, Price Fixing & Restraints of Trade, Per Se Rule & Rule of Reason, Anticompetitive & Predatory Practices, Predatory Pricing, Civil Procedure, Preliminary Considerations, Federal & State Interrelationships, Judgments, Preclusion of Judgments, Estoppel, Collateral Estoppel