Rochester Drug Co-Operative, Inc., et al. v. Braintree Labs, Inc.

Rochester Drug Co-Operative, Inc., et al. v. Braintree Labs, Inc. (D. Del.)

In 2007, Rochester Drug, and a class of similarly situated direct purchasers of the prescription drug, MiraLax, (“the Direct Purchasers”), brought a class action antitrust suit against Braintree Laboratories, the manufacturer of MiraLax.

The Direct Purchasers alleged that the Braintree initiated baseless patent litigation against a generic drug manufacturer in order to delay FDA approval for generic MiraLax and to improperly maintain monopoly power. MiraLax (polyethylene glycol) is a prescription osmotic laxative approved by the FDA for the treatment of occasional constipation. The Direct Purchasers alleged that Braintree’s enforcement of U.S. Patent No. 5,710,183 against the generic drug manufacturer was baseless as the patent was invalid, not infringed, and wrongfully listed in the Orange Book.

In May of 2010, the U.S. District Court for the District of Delaware denied Braintree’s motion to dismiss the case finding, inter alia, that the Direct Purchasers had stated a claim for antitrust injury, which could properly be forged as an “overall scheme” to forestall competition. Rochester Drug Co-Operative, Inc. v. Braintree Labs., 712 F. Supp. 2d 308 (D. Del. 2010).

Following the denial of its motion to dismiss the case, Braintree sent a letter to certain Direct Purchasers stating that it would cease selling them products, including MiraLax. Thereafter, the Direct Purchasers moved for a preliminary injunction to return the status quo, which Judge Robinson granted. Rochester Drug Co-Operative, Inc. v. Braintree Labs., 796 F.Supp.2d 560 (D. Del. 2011). Braintree appealed the preliminary injunction to the U.S. Court of Appeals for the Federal Circuit, and the case settled in late 2011 before resolution of the appeal.

Braintree agreed to settle the case for $17.25 million. Russell A. Chorush and Miranda Y. Jones acted as counsel for the Direct Purchasers in this litigation.