OPINION AND ORDER

THOMAS W. THRASH, Jr., District Judge.

In FTC v. Actavis, Inc., 133 S.Ct. 2223 (2013), the Supreme Court reversed and remanded this case and instructed the Court to subject the Defendants' reverse payment settlements to a rule of reason antitrust analysis. Notwithstanding, Par, Paddock and Solvay claim in a renewed motion to dismiss that their reverse payment settlement is protected by the Noerr-Pennington doctrine because the underlying litigation was terminated by a consent judgment.

I. Background

This case concerns AndroGel, a testosterone replacement gel that has been a huge commercial success. Besins Healthcare, S.A. ("Besins") developed the pharmaceutical formula. It granted Solvay2 a license to sell AndroGel in the United States, and agreed to supply AndroGel to Solvay when the drug was approved for sale. Solvay began clinical trials of AndroGel in 1996.

In April 1999, Solvay filed a New Drug Application ("NDA") with the Food and Drug Administration, seeking approval to commercially market AndroGel [see Doc. 587-68]. See 21 U.S.C. § 355(a). The FDA approved the NDA in February 2000, and Solvay began marketing AndroGel that June. On August 30, 2000, Solvay and Besins filed a patent application with the U.S. Patent and Trademark Office ("PTO") [see Doc. 587-68]. On January 7, 2003, the patent application issued as U.S. Patent No. 6,503,894 (the "`894 Patent") [Doc. 587-66].

Before the `894 Patent issued, Watson Pharmaceuticals, Inc. (now Actavis, Inc.) and Paddock Laboratories, Inc. (collectively, the "Generics") began developing generic versions of AndroGel. The Generics attempted to copy AndroGel "as close as humanly possible"3 [Doc. 555, Ex. 1, at 14]. The Generics completed development even after learning of the `894 Patent. Watson filed a Paragraph-IV Abbreviated New Drug Application ("ANDA")4 for generic AndroGel in May 2003 [Doc. 587-13]. See 21 U.S.C. § 355(j)(2)(A)(vii). Shortly thereafter, Paddock filed its own Paragraph IV ANDA for its own generic AndroGel [Doc. 587-22]. In July 2003, Paddock entered into an agreement with Par Pharmaceutical Companies, Inc. (collectively "ParPaddock") whereby Par agreed to share potential patent litigation costs with Paddock and to sell Paddock's generic AndroGel. In return, Paddock agreed to share profits with Par. See In re Androgel Antitrust Litigation (No. II), 687 F.Supp.2d 1371, 1374 (N.D. Ga. 2010). As required by 21 U.S.C. § 355(j)(2)(A)(vii), both Watson and ParPaddock notified Solvay of the ANDAs and asserted that the `894 Patent was invalid or would not be infringed by their generic drugs.

Solvay responded to the ANDA notices by asserting its rights under the `894 Patent, again pursuant to the procedure laid out in 21 U.S.C. § 355(j)(2)(A)(vii). In August 2003, Solvay's subsidiary, Unimed, filed patent infringement actions against Watson and ParPaddock in this Court which automatically prevented the Generics from entering the market for 30 months. See Complaint, Unimed Pharm., Inc. v. Watson Pharm., Inc., No. 03 Civ. 2501 (N.D. Ga. Aug. 21, 2003) (2003 WL 23824320); Complaint, Unimed Pharm., Inc. v. Paddock Labs., Inc., No. 03 Civ. 2503 (N.D. Ga. Aug. 21, 2003) (2003 WL 23824347).

From late-2003 to mid-2005, the litigation proceeded with discovery and other preliminary matters. By August 2005, the parties had filed claim construction motions, agreeing that 25 claim terms required construction. No party filed a Daubert motion. By December 2005, Watson and ParPaddock had filed motions for summary judgment on the validity of the `894 Patent. Solvay opposed summary judgment, and the parties vigorously argued their positions.

Before the Court could resolve the motions, Solvay, Watson, and ParPaddock settled the cases [see Docs. 604-87, 604-88, 604-89, 604-91, 604-90, 604-92, 604-93, and 604-94, collectively, the "Settlement and License Agreements"]. Under the Settlement and License Agreements between Solvay and ParPaddock, Solvay agreed to a consent judgment dismissing the infringement action. In general, ParPaddock not to market generic AndroGel until the earliest of August 31, 2015, or the date another company launched generic AndroGel. Solvay also agreed to share profits of AndroGel with Par, and Par agreed to promote AndroGel to primary care physicians. Solvay estimated that its annual payments to Par would be about $6 million. (See [Doc. 604-94], Art. III). Under the agreement between Solvay and Paddock, Solvay committed to share profits of AndroGel with Paddock, and Paddock agreed to serve as a backup supplier of AndroGel. Solvay estimated that its annual payments to Paddock would be about $2 million. The profit sharing and business promotion agreements between ParPaddock and Solvay were not disclosed to the Court and were not embodied in the consent judgment they submitted to the Court.5 In essence, the Court rubber-stamped the proposed consent judgment.

The Settlement and License Agreements prompted an investigation by the Federal Trade Commission ("FTC"). In 2009, the FTC and a number of private parties filed these antitrust actions against Solvay, Watson, Par, and Paddock. All the actions were filed in other federal district courts and then transferred to this Court either by change of venue or by order of the United States Judicial Panel on Multidistrict Litigation. In 2009, ParPaddock and Solvay filed motions to dismiss [Docs. 8, 9, 22, 23, 24, 25, 26, 27, 28, and 29]. On February 22, 2010, the Court granted in part and denied in part the Defendants' motions [Doc. 50]. See In re Androgel Antitrust Litigation (No. II), 687 F.Supp.2d 1371 (N.D. Ga. 2010). The Court concluded that, under Eleventh Circuit precedent, the Settlement and License Agreements were immune from antitrust scrutiny unless the underlying litigation itself was a sham. See id. at 1379-80.

The Eleventh Circuit affirmed that decision. But the Supreme Court reversed and remanded in FTC v. Actavis, Inc., 133 S.Ct. 2223 (2013). The Court held that the "near-automatic antitrust immunity" for reverse payment settlements in the Eleventh Circuit should be replaced with a "rule of reason" antitrust analysis. Id. at 2237. "That is because the likelihood of a reverse payment bringing about anticompetitive effects depends upon its size, its scale in relation to the payor's anticipated future litigation costs, its independence from other services for which it might represent payment, and the lack of any other convincing justification." Id.

Now, back before this Court, ParPaddock and Solvay argue that their settlement arrangement is protected by the First Amendment because it was embodied in a consent judgment signed by the Court. ParPaddock contends that the FTC's complaint be dismissed as a matter of law because its conduct was legitimate petitioning for government action and thus protected by the Noerr-Pennington doctrine.6

II. Motion to Dismiss Standard

A complaint should be dismissed under Rule 12(b)(6) only where it appears that the facts alleged fail to state a "plausible" claim for relief. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009); Fed. R. Civ. P. 12(b)(6). A complaint may survive a motion to dismiss for failure to state a claim, however, even if it is "improbable" that a plaintiff would be able to prove those facts; even if the possibility of recovery is extremely "remote and unlikely." Bell Atlantic v. Twombly, 550 U.S. 544, 556 (2007). In ruling on a motion to dismiss, the court must accept the facts pleaded in the complaint as true and construe them in the light most favorable to the plaintiff. See Quality Foods de Centro America, S.A. v. Latin American Agribusiness Dev. Corp., S.A., 711 F.2d 989, 994-95 (11th Cir. 1983); see also Sanjuan v. American Bd. of Psychiatry and Neurology, Inc., 40 F.3d 247, 251 (7th Cir. 1994) (noting that at the pleading stage, the plaintiff "receives the benefit of imagination"). Generally, notice pleading is all that is required for a valid complaint. See Lombard's, Inc. v. Prince Mfg., Inc., 753 F.2d 974, 975 (11th Cir. 1985), cert. denied, 474 U.S. 1082 (1986). Under notice pleading, the plaintiff need only give the defendant fair notice of the plaintiff's claim and the grounds upon which it rests. See Erickson v. Pardus, 551 U.S. 89, 93 (2007) (citing Twombly, 127 S.Ct. at 1964).

III. Discussion

A. The Noerr-Pennington Doctrine

"Concerted efforts to restrain or monopolize trade by petitioning government officials are protected from antitrust liability" under the Noerr-Pennington doctrine. See Allied Tube & Conduit Corp. v. Indian Head, Inc., 486 U.S. 492, 499 (1988) (citing Eastern Railroad Presidents Conference v. Noerr Motor Freight, 365 U.S. 127, 132 (1961)).

Id. at 499 (quoting Noerr, 365 U.S. at 136). However, in Allied Tube, the Court rejected the "absolutist position that the Noerr doctrine immunizes every concerted effort that is genuinely intended to influence governmental action." Id. at 503. "If all such conduct were immunized then, for example, competitors would be free to enter into horizontal price agreements as long as they wished to propose that price as an level for governmental ratemaking." Id. Ultimately, the Court did not apply Noerr-Pennington immunity in Allied Tube because "the context and nature of petitioner's activity [in stacking the votes in a private standard-setting organization] make it the type of commercial activity that has traditionally had its validity determined by the antitrust laws themselves." Id. at 505.

Noerr-Pennington immunity also attaches to efforts seeking governmental action from the courts. See California Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508 (1972); Professional Real Estate Investors v. Columbia Pictures Industries, 508 U.S. 49 (1993) (petitioning activity before a court is protected from antitrust scrutiny unless the conduct was objectively baseless and motivated by an improper subjective motivation to harm competitors simply through litigation); Andrx Pharm., Inc. v. Elan Corp., PLC, 421 F.3d 1227, 1234 (11th Cir. 2005) (noting that "the Sherman Act cannot be read to impede a litigant from seeking to defend constitutionally-permitted patent rights ... engaging in litigation to seek an anticompetitive outcome from a court is a First Amendment activity that is immune from antitrust liability," but nevertheless subjecting the settlement agreement ending the litigation to antitrust scrutiny).

There are three cases that consider Noerr-Pennington immunity regarding consent judgments settling patent suits involving generic and brand-name drug Two of the cases concluded that Noerr-Pennington immunity should not protect the consent judgment settling the suits. In In re Nexium (Esomeprazole) Antitrust Litigation, No. 12-md-02409-WGY, 2013 WL 4832176 (D. Mass Sep. 11, 2013) ("Nexium"), AstraZeneca entered into settlement agreements with three generic drug makers. AstraZeneca paid one generic drug manufacturer to stop its patent suit against AstraZeneca; accepted a significantly reduced judgment from a prior successful infringement litigation against a second generic company; and agreed with a third generic company that its generic drug did not infringe AstraZeneca's patent, allegedly hindering the efforts of other generics to enter the market. Importantly, each of these agreements was embodied in a consent judgment. AstraZeneca argued that the consent judgments were entitled to Noerr-Pennington immunity, but the district court disagreed. The court initially noted that "[c]ourts are largely uniform in their view that private settlement agreements entered into during the pendency of litigation that are neither presented to nor approved by the judge presiding over the dispute fall outside the ambit of Noerr-Pennington immunity." Id. at *18 (citing Andrx Pharms., 256 F.3d at 818-19). Further:

Id. at *19 (citing MedImmune, Inc. v. Genentech, Inc., No. CV 03-2567 MRP, 2003 WL 25550611, at *7 (C.D. Cal. Dec. 23, 2003)). The court further stated that it was "not apparent that the New Jersey District Court actually played an independent role in drafting the terms in the consent judgments" and that, in the First Circuit, "the entering of a consent decree does not, by itself, reflect a court's assent to the substantive terms found therein." Id. at *20 (citing Liu v. Amerco, 677 F.3d 489, 497 (1st Cir. 2012)). The consent judgment was not protected by Noerr-Pennington.

Likewise, in In re Ciprofloxacin Hydrochloride Antitrust Litigation, 261 F.Supp.2d 188 (E.D.N.Y. 2003) ("Cipro"), the court summarily dismissed the defendants' argument that a consent judgment produced Noerr-Pennington antitrust immunity. There, the branded manufacturer, Bayer, entered into three settlement agreements with generic manufacturers that stipulated to the validity of Bayer's patent, provided for licensing and distribution agreements, made payments to the generic companies, and required one generic maker to change its Paragraph IV certification to a Paragraph III certification. Bayer and Barr, one of the settling generic manufacturers, submitted a two-page consent judgment to the court, which the judge signed. That agreement provided that Barr had infringed Bayer's patent but did not Bayer's payment to Barr or the agreements Bayer made with the other generic competitors.

Defendants' argument [that the consent judgment is protected by Noerr-Pennington] is easily refuted. The challenged agreements in this case are private agreements between the defendants, in which Judge Knapp played no role other than signing the Consent Judgment. The Consent Judgment did not include the terms of the agreements, nor was the judge even apprised of the terms before he "so ordered" the Consent Judgment. Even if signing the Consent Judgment could be construed as approving the Settlement Agreements, government action that "amounts to little more than approval of a private proposal" is not protected. Cantor v. Detroit Edison Co., 428 U.S. 579, 602 (1976).

In re Cipro, 261 F. Supp. 2d at 212-13. The settlement agreement, like the judgment in Nexium, was not immune from antitrust scrutiny.

Conversely, in MedImmune, Inc. v. Genentech, Inc., No. CV 03-2567 MRP, 2003 WL 25550611 (C.D. Cal. Dec. 23, 2003), the court concluded that a consent judgment was protected by Noerr-Pennington immunity. In that case, the parties reached an agreement, and then they worked with Judge Chesney of the Northern District of California to develop an order and judgment which Judge Chesney signed. Like the plaintiffs in Nexium and Cipro, MedImmune argued that the results of the consent judgment could have been obtained without the court's approval. But the court noted that "[n]o law supports MedImmune's contention that Noerr-Pennington immunity does not attach to petitioning if the petitioner's desired result could have accomplished through means not involving petitioning." Id. at *6. Even accepting MedImmune's arguments,

This case can be distinguished from those that do not raise Noerr-Pennington questions because this is not a case of the government acting in some way on an agreement that is independently anti-competitive, but the very anti-competitiveness of the agreement depends on the government exercising its discretion to create an anti-competitive result.... This is not a case of an anti-competitive private agreement receiving immunity because it passed through government hands in some ministerial way. Here, the very anti-competitiveness of the agreement depended on the government exercising its independent power to decide priority and issue the [new patent at issue] ... the Defendants in this case did not merely present their settlement to Judge Chesney for approval; they sought a Judgment and an Order as well. The documents that [Judge Chesney] signed accomplished results, such as overturning [the PTO's Board of Patent Appeals and Interferences] priority decision, that could not have been accomplished through private agreement.

Id. at *6-7. Because of Judge Chesney's role in developing the consent judgment, and because the judgment itself did more than make a settlement arrangement between parties the judgment of the court, the court concluded that the consent judgment was protected by Noerr-Pennington.7

B. Noerr-Pennington Immunity Should Not Apply Here

The reverse payment agreement between ParPaddock and Solvay should not be entitled to Noerr-Pennington immunity. First, the consent judgment here, which did not encompass the full scope of ParPaddock and Solvay's agreement, was more like the consent judgments in Nexium and Cipro than the one in MedImmune. Second, the Supreme Court's Noerr-Pennnington precedents, read in conjunction with Actavis, counsel against immunizing this reverse payment agreement. Third, consent judgments of this nature should generally not be entitled to Noerr-Pennington immunity.

As noted, the consent judgment between ParPaddock and Solvay did not encompass their entire agreement. The consent judgment provided the following:

(Defs.' Mot. to Dismiss Ex. A). This consent judgment merely embodied some of the private agreements between ParPaddock and Solvay. Notably, the profit sharing agreements were not included. ParPaddock and Solvay entered into a series of agreements — a settlement agreement, a co-promotion agreement, and a back-up manufacturing agreement — along with the consent judgment that together form the basis for the FTC's lawsuit. (See Sec. Am. Compl. at ¶¶ 69-80). In Cipro, the fact that consent judgment itself did not include all the terms of the agreement counseled against extending Noerr-Pennington immunity to the agreement. See In re Cipro, 261 F. Supp. 2d at 212-13. Indeed, the second amended complaint explicitly alleges that ParPaddock's reverse payment agreement with Solvay was not contingent on the issuance of the consent judgment. (Sec. Am. Compl. ¶ 80). Further, according to the complaint, the Court, like the court in Cipro never saw or approved the agreements setting forth Par's compensation for agreeing to stay off the market. (Id. at ¶ 80). Likewise, unlike the consent judgment in MedImmune, this consent judgment did not require the Court to exercise its independent power to achieve the desired results. At most, this consent judgment "serves merely to memorialize a bargained-for agreement." In re Nexium (Esomeprazole) Antitrust Litigation, No. 12-md-02409-WGY, 2013 WL 4832176, at *19 (D. Mass Sep. 11, 2013). If ParPaddock and Solvay could obtain antitrust immunity merely by securing a consent judgment, they would have "an avenue wholly impervious to antitrust scrutiny simply by seeking out a court's rubber-stamped approval." Id.; In re Cipro, 261 F. Supp. 2d at 213 ("government action that `amounts to little more than approval of a private proposal' is not protected").

Additionally, the holding in Actavis indicates that Noerr-Pennington should not protect the reverse payment settlement. As noted, "[t]he scope of Noerr-Pennington] depends ... on the source, context, and nature of the anticompetitive restraint at issue." Allied Tube, 486 U.S. at 499. In Allied Tube, the Supreme Court concluded that efforts to influence a private standard setting organization did not warrant Noerr protection. The Court noted that "[w]hat distinguishes [Allied Tube] from Noerr and its progeny is that the context and nature of petitioner's activity make it the type of commercial activity that has traditionally had its validity determined by the antitrust laws themselves." Allied Tube, 486 U.S. at 505 (emphasis added). In Actavis, the Court specifically stated "that the FTC must prove its case as in other rule-of-reason cases." Actavis, 133 S. Ct. at 2237. The anticompetitive nature of the Defendants' settlement must be based on the reverse payment's "size, its scale in relation to the payor's anticipated future litigation costs, its independence from other services for which it might represent payment, and the lack of any other convincing justification." Id. Based on this language, the settlement arrangement between ParPaddock and Solvay is precisely the type of agreement that should have its validity determined by the antitrust laws themselves. Thus, according to Allied Tube, the consent judgment should not have Noerr-Pennington immunity. Indeed, providing the consent judgment with Noerr-Pennington immunity would largely eviscerate the ruling in Actavis and the Court can be sure that subsequent patent settlements would always include a consent judgment.

Finally, the nature of consent judgments themselves counsels against extending Noerr-Pennington protection. Although consent judgments can be labeled as a judgment or as a private contract, the "voluntary nature of a consent decree is its most fundamental characteristic." Local No. 93, Intern. Ass'n of Firefighters v. City of Cleveland, 478 U.S. 501, 521-22 (1986).

Id. at 522 (quoting United States v. Armour & Co., 402 U.S. 673, 681-82 (1971)). Here, the consent decree was formed by Par and Solvay to settle their dispute, not by the Court in order to terminate pending litigation. (Sec. Am. Compl. ¶ 80). "Indeed, it is the parties' agreement that serves as the source of the court's authority to enter any judgment at all." Id. (quoting United States v. Ward Baking Co., 376 U.S. 327 (1964)). This logic indicates that the "source ... of the anticompetitive restraint at issue" is the parties' reverse payment agreement itself, not the governmental action. See Allied Tube, 486 U.S. at 499. The Defendants' private agreement should not be due Noerr-Pennington immunity.

Further, the consent judgment here, unlike a final judgment on the merits, could not have preclusive effect on non-parties. "[A] consent judgment, even one entered at the behest of the [Department of Justice], does not immunize the defendant from liability for actions, including those contemplated by the decree, that violate the rights of non-parties." Broadcast Music, Inc. v. Columbia Broadcasting System, Inc., 441 U.S. 1, 13 (1979). Although the consent judgment purports to control generic entry before 2015 and hold the AndroGel patent valid, the consent judgment does not prevent a new party from challenging the `894 Patent. See, e.g., Local 93, 478 U.S. at 529 ("parties who choose to resolve litigation through settlement may not dispose of the claims of a third party"); Foster v. Hallco Mfg. Co., Inc., 947 F.2d 469, 480 (Fed. Cir. 1991) ("Where a judgment between parties is entered by consent prior to trial on any issue, no issue may be said to have been fully, fairly, or actually litigated."); Kaspar Wire Works, Inc. v. Leco Engineering & Mach., Inc., 575 F.2d 530, 537 (5th Cir. 1978) ("Because the judgment entered in [Defendants' prior] action was a consent decree dismissing the suit, we need not consider to what extent the resolution of a particular issue need be embodied in a declaration of rights for a reviewing court to consider the issue adjudicated for issue preclusion purposes ... no of law or fact was ever adjudicated [and] we thus hold that the judgment in [Defendants' prior] suit has no preclusive effect [with respect to the plaintiff's] claim for infringement."). Cf. Antrim Min., Inc. v. Davis, 775 F.Supp. 165, 171 (1991) ("Private parties in [Pennsylvania clean water law] litigation may enter consent decrees which do not require the abatement of pollution. For example, in this case, the parties' mutual reluctance to endure the costs and uncertainty of litigation led to the entry of a consent decree ... Allowing such litigation to bar subsequent enforcement efforts by [state enforcement agencies] could conceivably grant a polluter a license to continue to pollute and would limit [the agencies'] discretion to enforce the law in the public interest."). Because the resolution of this case through a consent judgment does not provide for issue preclusion in subsequent litigation with non-parties, the consent judgment is not the sort of government action typically due Noerr-Pennington immunity.

In sum, the consent judgment here is not entitled to Noerr-Pennington immunity. The judgment did not contain the full scope of the agreement between ParPaddock and Solvay. Further, the full agreement between ParPaddock and Solvay is precisely the sort of agreement the Supreme Court directed district courts to review with the rule of reason. Allowing the Defendants to shield themselves from antitrust simply by obtaining a consent judgment would largely eliminate the application of the Supreme Court's decision in Actavis.

IV. Conclusion

For the reasons set forth above, Defendants Par and Paddock's Motion to Dismiss the Second Amended Complaint [Doc. 923] is DENIED.

SO ORDERED.