Patheon Prevails in Antitrust Battle with Procaps

Washington, DC – October 30, 2015 – Cooley obtained a complete victory for client Patheon, a defendant in a three-year long $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 Colombian-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 acquired Banner Pharmacaps, a softgel specialist company. Following this acquisition, Procaps sued Patheon, alleging that the acquisition converted the collaboration agreement into an illegal market division, and was, therefore, a "per se" violation of US antitrust laws.

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.

Procaps' complaint included numerous other state law claims, such as common law, unfair competition and violation of Florida's deceptive trade practices act. Procaps sought more than $380 million in damages and substantial equitable relief, such as divestiture of Banner Pharmacaps, disgorgement and restitution, and the return of Procaps' confidential information.   

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

The cross-office, multi-practice Cooley team advising Patheon was comprised of Mike Klisch, Mazda Antia, Bob Cahill, Marc Schildkraut, Howard Morse, Mary Kathryn Kelley, Dee Bansal, David Burns, Josh Siegel, Michael Mortorano, Scott Stemetzki, Craig TenBroeck, Dana Moss and Mike Herring.

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