Anybody who litigates antitrust cases should pay attention to Procaps v. Patheon, currently pending in the Southern District of Florida. It’s a debacle. Procaps is getting crushed. Morgan Lewis is running circles around Carlton Fields. I tell you, it’s a scene man.
Let’s start with a little background: Procaps S.A. is a Colombian pharmaceutical manufacturing and distribution company. Patheon, Inc. is a Canadian pharmaceutical development and manufacturing company. As of 2010, Patheon did not have the manufacturing capabilities to produce softgels. Patheon wanted to enter the softgel market through acquiring Banner Pharmacaps Europe. Banner was the world’s second largest commercial manufacturer of softgel capsules, but had placed its softgel business up for sale in 2009.
Throughout 2011, Patheon engaged in talks to acquire Banner, but those talks failed. In late 2011, Patheon and Procaps engaged in talks about possible collaboration in the softgel space. In January 2012, Patheon and Procaps signed a Collaboration Agreement. Under the Collaboration Agreement, Procaps would produce softgel capsules for Patheon’s pharmaceutical customers. Patheon received the exclusive right to market Procaps’ softgel technology in North America, Europe and Asia and received licenses to use all of Procaps’ intellectual property.
On October 22, 2012, Patheon and Procaps held an urgent meeting in Miami: As it turned out, Patheon had resumed talks with Banner and a deal seemed eminent. A week later, Patheon acquired Banner.
On December 10, 2012, Procaps sued Patheon and Banner for antitrust and violations of the Florida Deceptive & Unfair Trade Practices Act (“FDUTPA”). The upshot of Procaps’ complaint: Because Patheon acquired Banner, the Collaboration Agreement now created a horizontal restraint of trade in violation of the Sherman Act.
The case has been in litigation for 2 and ½ years. […]