DLA Piper secures significant defense win for Adamas Pharmaceuticals

DLA Piper achieved a significant victory for client Adamas Pharmaceuticals in a novel False Claims Act (FCA) lawsuit on behalf of the US government.

An outside patent lawyer filed this relator lawsuit in San Francisco federal court under the “qui tam” provision of the FCA in 2018. The complaint alleged that Adamas procured patents via fraud on the US Patent and Trademark Office (PTO), enforced those patents to wrongfully block generic medicines from entering the market, and caused Medicare and Medicaid to overpay for branded drugs by more than US$2 billion.

The allegations were based entirely on public records disclosed during historical patent prosecutions. After the US Department of Justice declined to intervene in the lawsuit, DLA Piper moved to dismiss the complaint under the FCA’s public disclosure bar, which precludes FCA claims based on information disclosed in a “Federal report, hearing, audit, or investigation” unless the relator was an “original source of the information.”

While the district court initially denied the motion to dismiss, DLA Piper successfully convinced the US Court of Appeals for the Ninth Circuit to reverse that ruling, on an interlocutory basis, in August 2022. The Ninth Circuit held, as a matter of first impression, that the PTO’s review of a patent application is a “Federal hearing” under the public disclosure bar, and the Court remanded the case for the district judge to decide whether the relator fit within the FCA’s original source exception.

The district court dismissed the case with prejudice on the grounds that the relator’s complaint did not “materially add” to the public record, nor did his “specialized expertise” as a patent lawyer make him an original source.

The DLA Piper team, in collaboration with Saul Ewing LLP, included Andrew Hoffman (Los Angeles), Matt Holian (Boston), Courtney Saleski (Philadelphia) and Lianna Bash (Seattle).