Patheon Prevails in Antitrust Battle with Procaps

Cooley obtained a complete victory for client Patheon, a defendant in a three-year $380 million antitrust case brought by Procaps in the United States District Court in Miami.

Patheon is a leading global provider of outsourced pharmaceutical development and manufacturing services. Procaps is a Colombia-based corporation that develops, manufactures and commercializes pharmaceutical products, veterinary, nutritional supplements and cosmetics.

In January 2012, Patheon and Procaps signed a seven-year collaboration agreement to provide softgel development and manufacturing services to customers worldwide. In December 2012, Patheon announced its intention to acquire Banner Pharmacaps, a leading softgel manufacturer. Procaps sued Patheon, seeking to enjoin the acquisition on the grounds that it would convert the collaboration agreement into an illegal market division and was, therefore, a "per se" violation of US antitrust laws.

After Cooley stopped Procaps' effort to block the acquisition, the company proceeded with the litigation, demanding more than $380 million in damages and equitable relief, including divestiture of Banner Pharmacaps and the return of confidential information.

During discovery, Patheon uncovered that Procaps failed to issue a litigation hold and otherwise failed to preserve potentially relevant evidence or satisfy its eDiscovery obligations. Thus, on Patheon's motion, the court ordered a full forensic analysis of Procaps' computer systems. Over the following year and half, Procaps supplemented its original production with 150,000 documents.

In 2014, Cooley won summary judgment on all claims for Patheon, after which the court allowed Procaps to amend its complaint to add a new antitrust claim under the "rule of reason" standard. The case effectively started over.

Following a second round of discovery, Patheon filed a second summary judgment. On October 29, 2015, two weeks before trial was to begin, the court granted Patheon summary judgment in full, dismissing the case.

Related Contacts
Mike Klisch Partner, Washington, DC
Mazda Antia Partner, San Diego
Robert Cahill Partner, Reston
Marc G. Schildkraut Partner, Washington, DC
Howard Morse Partner, Washington, DC
Mary Kathryn Kelley Pro Bono Counsel, San Diego
Dee Bansal Associate, Washington, DC
David Burns Associate, Washington, DC
Joshua Siegel Special Counsel, Washington, DC
Scott Stemetzki Associate, Reston
Craig TenBroeck Associate, San Diego
Dana Moss Senior Associate, Washington, DC
Related Practices & Industries

Commercial Litigation Antitrust & Competition