Can A Bad Patent = False Claims Act Violation?

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Hat tip to my favorite patent law blog, Patently-O, for unearthing this truly creative–and probably doomed-to-fail–use of the False Claims Act. In United States ex rel. Lower Drug Prices for Consumers (LDPFC) v. Allergan and Forest Labs., Case No. 16-cv-09 (E.D.Tex. 2016), the relator is alleging that the price of a particular drug is higher than it should be due to the defendant’s invalid patent. The complaint alleges that a variety of federally funded medical programs are therefore paying more for the drug than they otherwise ought to be.

Although there are myriad potential problems with the relator’s suit, perhaps the most obvious is that the patent was validly issued by the US Patent and Trademark Office after a review by an examiner. Although it is possible the relator has knowledge of fraud committed on the patent office by the patentee, that does not appear to be alleged in the complaint. It seems that the relator’s only evidence is that the patent is invalid as obvious–a complex factual and legal question.

Although the False Claims Act is intended to be flexible and “to reach all types of fraud, without qualification, that might result in financial loss to the Government,” United States v. Neifert-White Co., 390 U.S. 228, 232 (1968), this seems on its face to be a bridge too far.