Litigation Details for Silbersher v. Valeant Pharmaceuticals International, Inc (N.D. Cal. 2018)

Silbersher v. Valeant Pharmaceuticals International, Inc (N.D. Cal. 2018)

Docket		Date Filed	2018-03-08
Court	District Court, N.D. California	Date Terminated	2020-07-02
Cause	31:3729 False Claims Act	Assigned To	James Donato
Jury Demand	Plaintiff	Referred To
Patents	6,551,620; 8,337,886; 8,496,965; 8,865,688
Link to Docket	External link to docket

Details for Silbersher v. Valeant Pharmaceuticals International, Inc (N.D. Cal. 2018)

Date Filed	Document No.	Description	Snippet	Link To Document
2018-03-08				External link to document
2018-03-08	1	Complaint	the Otterbeck Patents. 26 4 27 The Otterbeck Patents are U.S. Patent Nos. 6,551,620 ("the …Otterbeck Patent to be approved, United States 21 Patent No. 6,551,620 ("the '620 Patent"…See e.g., U.S. Patent No. 6,551,620 at col. 5, lines 15-19. 4 70. Apriso® is a granulated…. Patent No. 8,865,688 ("the '688 Patent"). The '688 Patent was issued 3 on October… United States Patent Law 11 64. United States patents grant the patent owner or assignee	External link to document
2018-03-08	10	Amended Complaint	Otterbeck Patent to be approved, United States Patent No. 6,551,620 (“the ’620 Patent”). The ’620 Patent issued… Patent Nos. 6,551,620 (“the 7620 Patent”), 8,337,886 (“the ’886 Patent”), 8,496,965 (“the ’965 Patent….g., U.S. Patent No. 6,551,620 at col. 5, lines 15-19. 76. Apriso® is a granulated mesalamine formulation…knew that ’990 Patent, the’742 Patent, the ’858 Patent, and the “EP0169821A2 Patent patents were all in … when the Patent Office’s Patent Trial and Appeal Board (“PTAB”) invalidated the 688 Patent on the grounds	External link to document
2018-03-08	36	Appendix Appendix A	themselves, which are available online U.S. Patent No. 8,337,886 (Ex. C-2). matrix “surprisingly” … U.S. Patent No. 6,290,990 (Ex. D-1). Patent, the ’858 Patent, and ¶¶ 106-115 Patent, the ’742…742 Patent, the ’858 European Patent Patent, and European Patent …prosecuted both patents is disclosed in the ’344 Patent application the patents themselves,… contained in the patents U.S. Patent No. 4,784,858 (Ex. D-3). Otterbeck Patents invalid.	External link to document
2018-03-08	109	Order on Motion to Dismiss	defendants fraudulently obtained U.S. Patent No. 8,865,688 (the “’688 patent”), which … 18 Patent and Trademark Office (“USPTO”) issued the ’688 patent, which has been assigned…the morning, without food.” ’688 patent, col. 34, ll. 11-15. The patent’s other independent …references the patent law doctrine of inequitable conduct, which makes the claims in a patent … 19, 2017, when the Patent 5 Office’s Patent Trial and Appeal Board	External link to document
2018-03-08	123	USCA Order	, and the PTO granted Patent No. 8,865,688 (“the ’688 Patent”) in 2014.6 Valeant’s… of obtaining a patent is called a patent prosecution. In a patent prosecution, an… the patent argues against the validity of the patent, and the patent owner defends…Otterbeck Patents rested on shaky ground. Several patents predating the Otterbeck Patents describe…for the ’688 Patent, Valeant had applied for Patent No. 8,921,344 (“the ’344 Patent”). In the	External link to document
2018-03-08	127	USCA Order	succeeded, and the PTO granted Patent No. 8,865,688 (“the ’688 Patent”) in 2014.6 Valeant’s 6…process of obtaining a patent is called a patent prosecution. In a patent prosecution, an inventor…challenging the patent argues against the validity of the patent, and the patent owner defends it…Otterbeck Patents rested on shaky ground. Several patents predating the Otterbeck Patents describe…for the ’688 Patent, Valeant had applied for Patent No. 8,921,344 (“the ’344 Patent”). In the ’344	External link to document

Silbersher v. Valeant Pharmaceuticals International, Inc.: A Comprehensive Analysis

Introduction

The case of Silbersher v. Valeant Pharmaceuticals International, Inc. is a significant legal battle that delves into the intricacies of the False Claims Act (FCA), patent law, and the public disclosure bar. This article provides a detailed summary and analysis of the case, highlighting its key points, legal implications, and the broader impact on similar litigation.

Background

Zachary Silbersher, a patent attorney, filed a qui tam action under the False Claims Act against Valeant Pharmaceuticals International, Inc., and its affiliates. Silbersher alleged that Valeant fraudulently obtained patents related to the drug Apriso, which is used to treat ulcerative colitis, and used these patents to stifle competition from generic drugmakers. He also claimed that Valeant defrauded the federal government by charging an artificially inflated price for Apriso while falsely certifying that the price was fair and reasonable[2][3][5].

Allegations and Claims

Silbersher's allegations centered on two main points:

• Fraudulent Patent Acquisition: Valeant allegedly obtained two sets of patents (the '688 Patent and the Otterbeck Patents) through fraudulent means. Specifically, Silbersher claimed that Valeant withheld material information from the Patent and Trademark Office (PTO) regarding the effectiveness of Apriso when administered with food, contrary to what was claimed in the later patent applications[1][3][5].
• Overcharging the Government: Silbersher alleged that Valeant charged Medicare and Medicaid artificially high prices for Apriso, while falsely certifying that these prices were fair and reasonable. This resulted in the government paying nearly $250 million for Apriso from 2011 to 2016, an amount that could have been significantly lower if generic versions were allowed to enter the market[1][3][5].

Procedural History

The case began in the Northern District of California, where the district court dismissed Silbersher's qui tam action under the public disclosure bar of the FCA. The court reasoned that the allegations had already been publicly disclosed during an inter partes review (IPR) proceeding that invalidated one of Valeant's patents. Silbersher appealed this decision to the U.S. Court of Appeals for the Ninth Circuit[1][2][5].

Ninth Circuit Decision

The Ninth Circuit reversed the district court's dismissal, ruling that the IPR proceedings did not trigger the public disclosure bar. The court held that IPR proceedings, although adversarial, do not qualify as "Federal . . . hearings" where the government is a party, which is a requirement for the public disclosure bar to apply. The court also found that the scattered public disclosures did not present the full picture of fraud, and Silbersher's claims filled the gaps by stitching together the material elements of the allegedly fraudulent scheme[3][5].

Public Disclosure Bar Analysis

The public disclosure bar under the FCA is designed to prevent opportunistic lawsuits based on information already publicly available. The bar requires that the allegations must be "substantially the same" as information that was publicly disclosed in one of three enumerated channels: (i) in a Federal criminal, civil, or administrative hearing in which the government or its agent is a party, (ii) in a congressional, Government Accountability Office, or other Federal report, hearing, audit, or investigation, or (iii) from the news media. The Ninth Circuit determined that the IPR proceedings and other public disclosures did not meet these criteria, thus allowing Silbersher's qui tam action to proceed[1][3][5].

Impact and Implications

The decision in Silbersher v. Valeant Pharmaceuticals International, Inc. has significant implications for future qui tam actions and the interpretation of the public disclosure bar. It clarifies that IPR proceedings do not trigger the public disclosure bar, opening the door for whistleblowers to bring actions based on information uncovered during such proceedings. This ruling also emphasizes the importance of thorough investigation and the need for whistleblowers to present a complete picture of fraud beyond what is publicly disclosed[3][5].

Petition for Certiorari

Valeant has petitioned the U.S. Supreme Court for a writ of certiorari, arguing that the Ninth Circuit's decision could lead to a flood of qui tam actions based on publicly disclosed information and seeking clarification on the scope of the public disclosure bar. The petition highlights the potential ramifications of the Ninth Circuit's ruling and the need for Supreme Court intervention to resolve a circuit split and clarify the application of the FCA's public disclosure bar[5].

Key Takeaways

• Fraudulent Patent Practices: The case highlights the potential for fraudulent practices in patent acquisition and the use of such patents to stifle competition.
• Public Disclosure Bar: The Ninth Circuit's decision clarifies that IPR proceedings do not trigger the public disclosure bar under the FCA.
• Whistleblower Actions: The ruling supports the ability of whistleblowers to bring qui tam actions based on information uncovered during IPR proceedings.
• Government Overcharging: The case underscores the importance of ensuring that pharmaceutical companies do not overcharge the government for their products.

FAQs

1. What was the main allegation in Silbersher v. Valeant Pharmaceuticals International, Inc.? The main allegation was that Valeant fraudulently obtained patents related to the drug Apriso and used these patents to stifle competition, while also overcharging the government for the drug.

2. What is the public disclosure bar under the FCA? The public disclosure bar is a provision under the FCA that requires the court to dismiss an action if the allegations are substantially the same as information that was publicly disclosed in one of three enumerated channels.

3. Why did the district court dismiss Silbersher's qui tam action? The district court dismissed the action under the public disclosure bar, reasoning that the allegations had already been publicly disclosed during an IPR proceeding.

4. How did the Ninth Circuit differ from the district court's decision? The Ninth Circuit reversed the dismissal, ruling that IPR proceedings do not trigger the public disclosure bar and that Silbersher's claims were not substantially the same as the publicly disclosed information.

5. What are the implications of the Ninth Circuit's decision? The decision clarifies that IPR proceedings do not trigger the public disclosure bar, allowing whistleblowers to bring qui tam actions based on information uncovered during such proceedings, and emphasizes the need for a complete picture of fraud beyond public disclosures.

Cited Sources

1. Silbersher v. Valeant Pharmaceuticals International, Inc., 76 F.4th 843 (9th Cir. 2023).
2. Silbersher v. Valeant Pharm. Int'l, Inc., VLEX 972938531.
3. Ninth Circuit Denies Review of Decision that IPR Proceedings Do Not Trigger FCA's Public Disclosure Bar, IPWatchdog, January 8, 2024.
4. Silbersher v. Valeant Pharm. Int'l, Inc., CaseText, May 7, 2020.
5. VALEANT PHARMACEUTICALS INTERNATIONAL, INC., Petition for a Writ of Certiorari, Supreme Court of the United States, April 4, 2024.