Recently, Judge Seibel of the Southern District of New York denied Defendants’ motion to dismiss in the In re DDAVP Indirect Purchaser Antitrust Litigation. The case involves the drug DDAVP, an antidiuretic containing desmopressin acetate. Plaintiffs allege that Defendants Ferring B.V., Ferring Pharmaceuticals, Inc., and Aventis Pharmaceuticals, Inc., violated numerous state antitrust laws by, among other things, committing inequitable conduct before the Patent and Trademark Office (“PTO”) to secure the patents protecting brand name DDAVP.
The denial of the motion to dismiss opinion is important for two primary reasons. First, the court held that class certification is logically antecedent to the issue of standing. While an Article III court must generally determine jurisdiction at the outset of a case, the Supreme Court has provided an exception when class certification issues are “logically antecedent” to Article III concerns. The DDAVP holding is particularly important to indirect purchasers (the “end-payors” in the supply chain, such as consumers) because indirect purchasers must bring antitrust damage claims under state law instead of federal law. Because indirect purchasers in class action antitrust cases must proceed under numerous state laws to obtain redress for everyone injured by the defendant’s conduct, the court must decide whether or not the named plaintiffs can seek to represent class members who reside in or were damaged in states other than the states where the named plaintiffs reside in or were damaged.
In DDAVP, the Southern District of New York court joined a number of other courts in recognizing, correctly I think, that Article III standing is better addressed after the class certification decision. If, at class certification, Plaintiffs adequately show that the Named Plaintiffs satisfy the Rule 23 criteria, which necessarily requires an examination of the elements of the substantive claims for “predominance,” “typicality,” and “commonality” purposes, then there is no reason to narrowly restrict the class to only those states where the named plaintiffs reside or were damaged. As the DDAVP court explained:
[T]he issue “is not whether the Named Plaintiffs have standing to sue Defendants — they most certainly do — but whether their injuries are sufficiently similar to those of the purported Class to justify the prosecution of a nationwide class action,” which is properly determined at the class certification stage, when this Court may consider commonality and typicality issues with respect to the named plaintiffs and other putative class members.
The DDAVP opinion is important to indirect purchaser plaintiffs for another reason too. The court held that indirect purchaser plaintiffs can bring state law Walker Process-type antitrust claims predicated on fraudulent conduct before the PTO. Defendants generally challenge these claims from indirect purchasers by arguing that: (1) Walker Process only extended a cause of action to the parties actually embroiled in the patent dispute, and (2) state law claims are preempted by federal patent law. In holding that Plaintiffs could maintain their claims, the DDAVP court noted that Plaintiffs’ claims were broader than simple “fraud on the PTO”; the antitrust claims also included bad-faith enforcement of the patent through sham litigation and a sham citizen petition to the FDA, among other things. Applying Federal Circuit precedent, the court held that “either fraud on the PTO or bad faith conduct in the marketplace is sufficient to strip a patent holder of its antitrust immunity and render an antitrust claim not preempted by patent law.”
DDAVP is a good precedent for indirect purchaser plaintiffs bringing claims for damages suffered due to patent misconduct by third parties, particularly when the defendant’s inequitable conduct in front of the PTO is accompanied by further anticompetitive conduct in the marketplace. The intersection of patent and antitrust law, and the tension between them, continues to be a complex issue for litigators and courts alike. This case presents a strong, well-reasoned approach to balancing the goals of each.
 2012 U.S. Dist. LEXIS 149588; No. 05-cv-02237 (S.D.N.Y. Oct. 17, 2012).
 Id. at * 27.
 Id. (citing Ortiz v. Fibreboard Corp., 527 U.S. 815, 831 (1999)).
 See Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977).
 In re DDAVP Indirect Purchaser Antitrust Litig., 2012 U.S. Dist. LEXIS 149588, at *29 (quoting In re Grand Theft Auto, 2006 U.S. Dist. LEXIS 78064, at *3 (S.D.N.Y. Oct. 25, 2006).
 Id. at *32.
 Walker Process Equipment, Inc. v. Food Machinery & Chemical Corp., 382 U.S. 172 (1965) (holding that fraud on the PTO can give rise to antitrust claims under federal law).
 In re DDAVP Indirect Purchaser Antitrust Litig., 2012 U.S. Dist. LEXIS 149588, at *40-41.
 Id. at *43 (citing Hunter Douglas, Inc. v. Harmonic Design, 153 F.3d 1318, 1336 (Fed. Cir. 1998).