Monday, September 25, 2023
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Patheon Can’t Shake $375M Antitrust Claim

(CN) - A federal judge refused to toss Procaps' antitrust claims against collaborator Patheon, saying the drugmaker's alleged injuries are not self-inflicted simply because it "could have ducked the punch."

"If I swing my fist at your face, you may decide to duck. But if you stand still, and I deck you, I am the cause of your injury. You did not punch yourself," the ruling begins, quoting the 7th Circuit.

"In other words, Patheon says that by not ducking its antitrust punch, Procaps has punched itself," U.S. Magistrate Judge Jonathan Goodman wrote.

The dispute stems from a January 2012 agreement that gave pharmaceutical company Patheon the exclusive rights to market technology from soft-gel manufacturer Procaps.

Patheon acquired Banner Pharmcaps Europe, a major competitor of Procaps, later that year.

Procaps sued Patheon for more than $375 million, claiming the acquisition makes their collaboration illegal under antitrust laws because it positions Patheon as a competitor in the soft-gel market.

Patheon moved for judgment on the pleadings, claiming Procaps lacks standing for having brought the injuries on itself, as it declined several offers to terminate the collaboration agreement.

"To be sure, Procaps could have ducked Patheon's antitrust punch by terminating the collaboration agreement," U.S. Magistrate Judge Jonathan Goodman wrote. "It likewise could have sought to block the punch by seeking an injunction to prevent the Banner acquisition. But the fact that Procaps did neither of those things does not mean that Patheon didn't throw the punch that started the causal chain in Procaps' antitrust injury."

Goodman denied Patheon's motion without prejudice.

In a separate order, he largely granted Patheon's three motions to compel discovery, mainly depositions.

Procaps has insisted that its lead trial counsel personally defend all depositions, which put Patheon "at the mercy of lead counsel's calendar," according to Patheon.

Goodman agreed that "it is no longer reasonable for Procaps to postpone depositions based on the schedule of only one attorney."

"This is a major lawsuit, with more than a third of a billion dollars in alleged damages -- not a garden-variety breach of contract case," he wrote. "It is simply impractical to postpone depositions for weeks and weeks in order to accommodate one attorney's hectic schedule."

The judge also noted that in a recent hearing, counsel for both parties agreed to clean the slate and extend the olive branch to the other side. In a prior discovery dispute, Goodman urged them to take some advice from the Beatles song "We Can Work It Out."

"But based on the tone, tenor, and language in the motions and responses at issue, and in the emails submitted as exhibits, it seems that the olive branch has been burned up by vitriol, anger, and frustration," he wrote in the discovery order. "And that's a shame."

In one of its oppositions, Procaps accused Patheon's counsel of "xenophobia" because he described Colombia as a "third-world country" too risky for a deposition location.

"That argument might have had better traction several years ago, but it is not a viable argument in 2014," Goodman wrote. "Procaps' counsel has traveled to Colombia for this case and Patheon's own employees have traveled to Colombia in connection with the collaboration agreement. If Patheon wishes to retain its own security, then it is surely entitled to make those arrangements on its own. But the court is not requiring Procaps to pay those (likely unnecessary) expenses and will not declare the entire country off limits for depositions in this case."

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