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In re Zetia (Ezetimibe) Antitrust Litigation

United States District Court, E.D. Virginia, Norfolk Division

August 9, 2019

In re: ZETIA (EZETIMIBE) ANTITRUST LITIGATION THIS DOCUMENT RELATES TO: ALL CASES

          OPINION

          Rebecca Beach Smith, United States District Judge.

         These matters come before the court on the Glenmark Defendants'[1] Motion to Dismiss Direct Purchaser Plaintiffs' Consolidated Class Action Complaint, ECF No. 157;[2] the Defendants' Joint Motion to Dismiss the Retailer Plaintiffs' Complaints, ECF No. 160; and the Defendants' Joint Motion to Dismiss All Claims Asserted by End Payer Plaintiffs, ECF No. 162.

         On November 27, 2018, these matters were referred to United States Magistrate Judge Douglas E. Miller pursuant to the provisions of 28 U.S.C. § 636 (b) (1) (B) and Federal Rule of Civil Procedure 72 (b), to conduct necessary hearings, including the hearing that was held on January 14, 2019, and to submit to the undersigned district judge proposed findings of fact, if applicable, and recommendations for the disposition of the Motions. Referral Order, ECF No. 208.

         By copy of the Magistrate Judge's Report and Recommendation ("R&R"), filed on February 6, 2019, the parties were advised of their right to file written objections to the findings and recommendations made by the Magistrate Judge within fourteen (14) days from the date of service of the R&R on the objecting party. R&R at 105, ECF No. 234. Three sets of objections were filed on February 20, 2019: Retailer Plaintiffs' Objections to Report and Recommendation Regarding Motions to Dismiss ("Retailer Plaintiffs' Objections"), ECF No. 235; Glenmark Defendants' Objections to the February 6, 2019 Report and Recommendation Denying Motions to Dismiss Claims by Direct Purchaser Plaintiffs, End-Payor Plaintiffs, and Retailer Plaintiffs ("Glenmark Defendants' Objections"), ECF No. 236; and Merck Defendants' Written Objections to the Magistrate Judge's Report and Recommendation Dated February 6, 2019 ("Merck Defendants' Objections"), ECF No. 237.[3] Responses to each set of objections were filed on March 6, 2019: Defendants' Joint Response to Retailer Plaintiffs' Objections ("Defendants' Response"), ECF No. 240; Plaintiffs' Response to Glenmark Defendants' Objections ("Plaintiffs' Response"), ECF No. 239; and End-Payor Plaintiffs' Opposition to the Merck Defendants' Objections ("EPPs' Opposition"), ECF No. 238. On March 6, 2019, the Glenmark Defendants filed a request for hearing on their Objections. ECF No. 241. The court finds a hearing unnecessary to resolve the Glenmark Defendants' Objections.

         Pursuant to Rule 72 (b) of the Federal Rules of Civil Procedure, the court, having reviewed the record in its entirety, hereby makes a de novo determination of those portions of the R&R to which the Defendants have specifically objected. See Fed.R.Civ.P. 72(b). The court may accept, reject, or modify, in whole or in part, the recommendation of the Magistrate Judge, or recommit the matter to him with instructions. 28 U.S.C. § 636 (b) (1).

         I. Retailer Plaintiffs' Objections

         The Retailer Plaintiffs object to the portion of the R&R "that recommends dismissal of Retailer Plaintiffs' per se claim under section 1 of the Sherman Act, 15 U.S.C. § 1." Retailer Pis.' Objs. at 1. Specifically, the Retailer Plaintiffs assert that this "recommendation rests on two legally untenable propositions." Id. The first proposition is that Merck's existing patent rights preclude application of the per se rule. Id. (citing R&R at 51). The second proposition is that applying a per se rule would preclude the court from examining the Defendants' proffered justifications for settlement. Id. As explained below, the court finds that both propositions are legally tenable and consistent with controlling Supreme Court precedent.

         The Retailer Plaintiffs' objections assume that the form of the alleged reverse payment settlement in this case, an agreement by Merck not to compete with Glenmark by launching an authorized generic (a "no-AG agreement"), requires this court to depart from FTC v. Actavis, Inc., 570 U.S. 136 (2013), and apply a per se rule. Retailer Pis.' Objs. at 15 ("Retailer Plaintiffs do not contend that all reverse-payment settlement[s] should be subject to per se condemnation, but rather that no-AG agreements should be subject to such condemnation."). However, the Retailer Plaintiffs have not put forth any meritorious argument why the form of a reverse payment settlement, such as a no-AG agreement, warrants a departure from Actavis. The Retailer Plaintiffs also have not identified any case in which a court applied a per se rule to a reverse payment settlement or a no-AG agreement, and courts have universally applied the rule of reason to reverse payment settlements, including those involving a no-AG agreement. See, e.g., United Food & Commercial Workers Local 1776 & Participating Emps. Health & Welfare Fund v. Teikoku Pharma USA, Inc., 74 F.Supp.3d 1052, 1075 & n.30 (N.D. Cal. 2014) (citing cases in which "district courts have considered no-authorized generic agreements under the rule of reason approach as set forth by the Court in Actavis"); see also Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 877, 886 (2007) ("[T]he per se rule is appropriate only after courts have had considerable experience with the type of restraint at issue." (citing Broadcast Music, Inc. v. Columbia Broadcasting System, Inc., 441 U.S. 1, 9 (1979))).

         Instead, the Retailer Plaintiffs have analogized the alleged no-AG agreement to three instances in which per se rules apply: a horizontal market-allegation agreement, a horizontal output restriction, and a price-fixing agreement. See Retailer Pis.' Objs. at 18-23. In the R&R, the Magistrate Judge aptly concluded that these analogies to various per se violations all share "the same fatal defect. Each relies solely on a characterization of the [no-AG] Agreement's effects while ignoring entirely the admittedly lawful basis Defendants assert for those same effects." R&R at 54. The Retailer Plaintiffs do not challenge this conclusion by adjusting their analogies or making any new arguments for applying a per se rule. See Retailer Pis.' Objs. In fact, the Retailer Plaintiffs' objections appear to repeat verbatim their entire argument for applying a per se rule, including the analogies, from their Memorandum in Opposition to Defendants' Motion to Dismiss. Compare id. at 15-23, with ECF No. 186 at 7-16.[4]

         To undermine the Magistrate Judge's conclusion, the Retailer Plaintiffs attack his consideration of "the admittedly lawful basis Defendants assert for [the] effects [of the no-AG agreement]" in determining that a per se rule would be inappropriate. R&R at 54. The Retailer Plaintiffs do so by objecting to the Magistrate Judge's recognition of Merck's patent rights and the Magistrate Judge's proper application of Actavis, which permits courts to consider the proffered justifications for an alleged reverse payment settlement. Retailer Pis.' Objs. at 1. The Retailer Plaintiffs' objections overlook the very nature of the per se rules and disregard the clear and binding precedent of Actavis that directs courts to analyze reverse payment settlements under the rule of reason.

         The per se rules treat certain business practices as "necessarily illegal." Leegin Creative Leather Prods., Inc., 551 U.S. at 886 (''The per se rule, treating categories of restraints as necessarily illegal, eliminates the need to study the reasonableness of an individual restraint in light of the real market forces at work . . . ." (emphasis added) (citing Bus. Elecs. Corp. v. Sharp Elecs. Corp., 485 U.S. 717, 723 (1988))). Thus, if the court applied a per se rule to an alleged reverse payment settlement because it took the form of a no-AG agreement, the court must treat that settlement as "necessarily illegal." See id. By treating a particular business practice as "necessarily illegal," the per se rules, by their very nature, preclude a court from considering the surrounding circumstances of that practice before deeming it illegal. See id.

         Thus, applying a per se rule to the alleged no-AG agreement and finding it to be necessarily illegal would preclude the court from balancing the competing patent and antitrust polices that arise in the context of a reverse payment settlement. See Actavis, 570 U.S. at 148 ("[P]atent and antitrust policies are both relevant in determining the 'scope of the patent monopoly'-and consequently antitrust law immunity-that is conferred by a patent."). The line of reasoning in the R&R related to Merck's patent rights does nothing more than recognize that applying a per se rule would be inappropriate in this case because of the balance that must be struck between competing patent and antitrust policies. See R&R at 51-53. This line of reasoning in the R&R further recognizes that patent polices do not become any less relevant in determining the antitrust immunity conferred by a patent when the reverse payment settlement takes the form of a no-AG agreement. See id.

         Similarly, applying a per se rule to the alleged no-AG agreement and finding it to be necessarily illegal would preclude the court from considering the reasonableness of and the procompetitive justifications for the alleged reverse payment settlement, as required by Actavis. See Actavis, 570 U.S. at 148 ("[I]t would be incongruous to determine antitrust legality by measuring the settlement's anticompetitive effects solely against patent law policy, rather than by measuring them against procompetitive antitrust policies as well."); id. at 154 ("We concede that settlement on terms permitting the patent challenger to enter the market before the patent expires would also bring about competition, again to the consumer's benefit.").

         Moreover, this court is bound by Actavis to evaluate a reverse payment settlement under the rule of reason, regardless of the settlement's form. In Actavis, the Supreme Court held that "reverse payment settlements . . . can sometimes violate the antitrust laws." Id. at 141 (emphasis added). Accordingly, the Court specifically refused to evaluate reverse payment settlements under "presumptive rules (or a 'quick look' approach)." Id. at 159. The Court reasoned that applying presumptive rules "is appropriate only where 'an observer with even a rudimentary understanding of economics could conclude that the arrangements in question would have an anticompetitive effect on customers and markets.'" Id. (quoting Cal. Dental Ass'n v. FTC, 526 U.S. 756, 770 (1999)). The Court did "not believe that reverse payment settlements . . . meet this criterion." Id.

         The Court further reasoned that applying presumptive rules to reverse payment settlements would be inappropriate "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. To account for "these complexities" of a reverse payment settlement, the Court also held that a court reviewing a reverse payment settlement should apply the "rule of reason" to determine whether that settlement violates the antitrust laws. Id.; see also Cont'l T. V., Inc. v. GTE Sylvania Inc., 433 U.S. 36, 49 (1977) ("Under th[e] rule [of reason], the factfinder weighs all of the circumstances of a case in deciding whether a restrictive practice should be prohibited as imposing an unreasonable restraint on competition."); United States v. Topco Assocs., Inc., 405 U.S. 596, 607 (1972) ("An analysis of the reasonableness of particular restraints includes consideration of the facts peculiar to the business in which the restraint is applied, the nature of the restraint and its effects, and the history of the restraint and the reasons for its adoption." (citing Chicago Board of Trade v. United States, 246 U.S. 231, 238 (1918))). In reaching this conclusion, the Court implicitly held that applying a per se rule to a reverse payment settlement would be inappropriate because a presumptive rule would not account for the circumstances and complexities surrounding a reverse payment settlement. See Actavis, 570 U.S. at 159.

         Accordingly, the court finds that the reasoning and conclusions in the R&R that the Retailer Plaintiffs have specifically objected to are consistent with controlling Supreme Court precedent. The court further agrees with the Magistrate Judge's conclusion that the reverse payment settlement at issue in this case is properly evaluated under the rule of reason. Therefore, the Retailer Plaintiffs' Objections are hereby OVERRULED, and the Retailer Plaintiffs' per se claim under § 1 of the Sherman Act, 15 U.S.C. § 1, is DISMISSED with prejudice.[5]

         II. Glenmark Defendants' Objections

         The Glenmark Defendants "object[] to Section V(A) of the R&R that concludes Direct Purchaser Plaintiffs, End-Payor Plaintiffs, and Retailer [Plaintiffs] have plausibly pled (1) the existence of a reverse payment that is large and unjustified, and (2) anticompetitive effects." Glenmark Defs.' Objs. at 1. The Glenmark Defendants also object to Sections V(C), (D)(1), and (D)(4) of the R&R to the extent those Sections incorporate the reasoning in Section V(A). Id.

         At this stage of the litigation, the Complaints must be dismissed if Plaintiffs' allegations "fail[] to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b) (6) . "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Facial plausibility means that a "plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556). It is, therefore, not enough for a plaintiff to allege facts demonstrating a "sheer possibility" or "mere[] consist[ency]" with unlawful conduct. Id. (citing Twombly, 550 U.S. at 557).

         The court accepts facts alleged in the Complaints as true and views those facts in the light most favorable to the Plaintiffs. See, e.g., Venkatraman v. REI Sys., Inc., 417 F.3d 418, 420 (4th Cir. 2005). "A motion to dismiss under Rule 12 (b) (6) tests the sufficiency of a complaint; importantly, it does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses." Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992) (emphasis added).[6]

         A. Objection Regarding the Existence of a Large and Unjustified Reverse Payment

         The Glenmark Defendants object to two different aspects of the Magistrate Judge's finding that the Plaintiffs have plausibly pled the existence of a large and unjustified reverse payment. First, the Glenmark Defendants assert that the Magistrate Judge's conclusion that the Settlement Agreement contains a no-AG provision applies the improper legal standard and misreads the Settlement Agreement. Glenmark Defs.' Objs. at 4-5, 14-19. Second, the Glenmark Defendants assert that the Plaintiffs' circumstantial allegations of parallel conduct, without more, are insufficient to plausibly allege the existence of a no-AG agreement. Id. at 5, 19-22.

         1. The Settlement Agreement

         As a threshold matter, the Settlement Agreement is properly considered at this stage of litigation. Consideration of the Settlement Agreement does not convert, under Federal Rule of Civil Procedure 12(d), the Motions to Dismiss into Motions for Summary Judgment under Federal Rule of Civil Procedure 5 6, because the Settlement Agreement is "integral to and explicitly relied on in the [C]omplaint[s] and because [P]laintiffs do not challenge its authenticity." Phillips v. LCI Int'l, Inc., 190 F.3d 609, 618 (4th Cir. 1999). The Settlement Agreement must be viewed in the light most favorable to the Plaintiffs and all reasonable inferences from it must be drawn in the Plaintiffs' favor. See, e.g., Zak v. Chelsea Therapeutics Int'l, Ltd., 780 F.3d 597, 607 (4th Cir. 2015) ("[W]hen a court considers relevant facts from the public record at the pleading stage, the court must construe such facts in the light most favorable to the plaintiffs.").

         The Glenmark Defendants assert that the R&R is incorrect when it states that the Settlement Agreement's "language is only relevant if it unambiguously contradicts the factual claims in the Complaint." Glenmark Defs.' Objs. at 14 (emphasis omitted) (quoting R&R at 34) . There is no question that the Settlement Agreement's language is relevant, as its contents are directly at issue in this case, the point here being relevancy. Better stated, and what the court concludes, is that the Settlement Agreement language only requires dismissal of the Plaintiffs' claims if it unambiguously contradicts the allegations in the Complaints. See R&R at 40; see also, e.g., Lazy Y Ranch Ltd. v. Behrens, 546 F.3d 580, 588 (9th Cir. 2008) ("[W]e need not accept as true allegations contradicting documents that are referenced in the complaint."); Alt. Energy, Inc. v. St. Paul Fire & Marine Ins. Co., 267 F.3d 30, 34-36 (1st Cir. 2001) (concluding the complaint was properly dismissed under 12(b)(6) because the contract language at issue was unambiguous and released defendant from liability as a matter of law).

         The Glenmark Defendants assert that three provisions of the Settlement Agreement, sections 1.14, 5.3, and 7.2(c), "unambiguously contradict" the Plaintiffs' allegations that Merck agreed not to compete with Glenmark by launching an AG. Glenmark Defs.' Objs. at 14 n.8. Section 5.3 of the Settlement Agreement grants Glenmark a limited exclusive license to market "Generic Ezetimibe":

During any period of exclusivity to which Glenmark is entitled under 21 U.S.C. § 355 (j) (5) (B) (iv), and through the expiration of Schering's rights under the '721 Patent and Ezetimibe Pediatric Exclusivity, Schering's grant of the rights in Paragraphs 5.1 and 5.2 is exclusive to Glenmark and its Affiliates with respect to the commercial distribution and sale of Generic Ezetimibe, subject only to Schering's right to grant rights to or otherwise authorize Third Parties to make, have made, use, sell, offer to sell, import or distribute Generic Ezetimibe pursuant to such Third Parties' ANDAs or applications pursuant to 21 U.S.C. § 355 (b) (2).

         Settlement Agreement § 5.3, ECF No. 159.[7] Section 1.14 of the Settlement Agreement defines the term "Generic Ezetimibe":

The term 'Generic Ezetimibe' shall mean a drug product containing ezetimibe as its sole active ingredient (a) that refers to the Approved Zetia Product as the reference-listed drug in an ANDA or pursuant to an application under 21 U.S.C. § 335 (b) (2) or (b) that is sold pursuant to NDA No. 21-445 but is not sold under the trademark Zetia® or another trademark or trade name of Schering, MSP or their Affiliates.

Id. § 1.14. Section 7.2(c) reserves Merck's right to engage in "conventional commercial conduct in competition with the Glenmark Product." Id. § 7.2(c).

         The Glenmark Defendants have aptly identified the current question before the court as "whether [this] license can plausibly be read to be an anticompetitive agreement by Merck not to compete with Glenmark by launching an AG." Glenmark Defs.' Objs. at 10. The answer to this question depends on the interpretation of the Settlement Agreement's definition of "Generic Ezetimibe," and whether that definition permits Merck to sell an AG. The Settlement Agreement's definition of "Generic Ezetimibe" permits Merck to sell a product pursuant to its NDA, provided the product is "sold under the trademark Zetia® or another trademark or trade name of Schering, MSP or their Affiliates." Settlement Agreement § 1.14.

         The parties and the court agree that the Settlement Agreement's definition of "Generic Ezetimibe" clearly permits Merck to sell a branded product, that is, a product "sold under the trademark Zetia® or another trademark ... of Schering, MSP or their Affiliates." Id.; Glenmark Defs.' Objs. at 17 ("'Zetia' and 'trademark' already refer to branded products."); Pis.' Resp. at 10 ("Glenmark's exclusivity does not extend to branded Zetia or to an ezetimibe product that Merck might sell under another trademark or trade name."). The Magistrate Judge and the Plaintiffs agree that the Settlement Agreement's definition of "Generic Ezetimibe," permitting Merck to sell a product that is "sold under . . . another . . . trade name of Schering, MSP or their Affiliates," can plausibly be read to allow Merck to sell only a branded product. Settlement Agreement § 1.14 (emphasis added); R&R at 35-39; Pis.' Resp. at 10 ("Glenmark's exclusivity does not extend to branded Zetia or to an ezetimibe product that Merck might sell under another trademark or trade name."). The Glenmark Defendants contend that this same language unambiguously "allowed Merck to . . . launch a nonbranded form of Zetia under a *trade name' of Merck or an affiliate, i.e., an in-house AG." Glenmark Defs.' Objs. at 14 (citing Settlement Agreement § 1.14).

         The court agrees with the Magistrate Judge and the Plaintiffs that the Settlement Agreement's definition of "Generic Ezetimibe" can plausibly be read as a no-AG agreement because it permits Merck to sell only a branded, and not a generic, product. See Settlement Agreement § 1.14. As the Magistrate Judge noted, "pharmaceuticals are not sold 'under' a manufacturer's name, but under either a trademarked specialty name for branded drugs (e.g. Zetia, Lipitor, or Celebrex) or under the generic name assigned by the [United States Adopted Names ("USAN")] Council (e.g. ezetimibe, atorvastatin, celecoxib)." R&R at 38. Moreover, the pharmaceutical industry uses the term "trade name" to refer to" a drug product, not the drug company." Pis.' Resp. at 13. This usage of the term "trade name" in the pharmaceutical industry is supported by statutory and regulatory provisions, industry publications, and the Glenmark Defendants' filings in the underlying litigation between the Defendants.

         At least one provision of the Food, Drug, and Cosmetic Act ("FDCA") specifically uses the term "trade name" to refer to a pharmaceutical product, not a pharmaceutical company. See 21 U.S.C. § 355(t) (1) (A) (i) . Title 21 U.S.C. § 355(t) (1) (A) (i) directs that the "drug trade name" and "brand company manufacturer" are to be included in a" [d]atabase for authorized generic drugs." Id. The United States Food & Drug Administration's ("FDA") Listing of Authorized Generics indicates that a drug's trade name is the same as its proprietary or brand name, as the Listing of Authorized Generics includes the" [p] roprietary [n]ame," but not the generic name of a given product.[8]

         At least three provisions in Title 21 of the Code of Federal Regulations also use the term "trade name" to refer to a pharmaceutical product, not a pharmaceutical company. See, e.g., 21 C.F.R §§ 1.101, 60.20, 316.28. At least two of these provisions also distinguish the "trade name" of a product from its "generic name." See, e.g., id. §§ 60.20, 316.28. Section 1.101 requires "[t]he product's trade name" be identified in the notifications required "for drugs, biological products, and devices exported under section 802 of the act." Id. § 1.101 (d) (1) (i) . Under § 60.20, the FDA will include "[t]he trade name and generic name (if applicable) of the product" in the "regulatory review period determination" notice published in the Federal Register. Id. § 60.20 (c) (2). Pursuant to § 316.28, the FDA will include "[t]he generic name and trade name, if any, or if neither is available, the chemical name or a meaningful descriptive name of the drug" in a "publicly available cumulative posting of all drugs designated as orphan drugs." Id. § 316.28 (b).

         Publications from the FDA and Merck further support the Plaintiffs' reading of the term "trade name" to refer to a pharmaceutical product, not a pharmaceutical company. The FDA's publication Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the "Orange Book," uses the term "trade name" to refer to the proprietary name of a pharmaceutical product. FDA, Approved Drug Products with Therapeutic Equivalence Evaluations ("Orange Book") at vi (39th ed. 2019) ("This publication also includes indices of prescription and OTC drug products by trade name (proprietary name) or established name (if no trade name exists)."); see also id. at xii, xxii, 2-2. A publication from Merck discussing drug naming explains that pharmaceuticals are "given a [g]eneric (official) name" and a "[b]rand (proprietary or trademark or trade) name."[9] This publication not only demonstrates the use of "trade name" to identify a drug, but further illustrates that a drug's "trade name" refers to a brand, proprietary, or trademark name, not a generic name. See Marsh, supra note 9. This use and understanding of the term "trade name" is further confirmed by the Glenmark Defendants' filing in the underlying litigation between the Glenmark and the Merck Defendants. In that litigation, Glenmark identified Zetia as "Schering's trade name of the drug product at issue in this litigation." Defendant/Counterclaim Plaintiff Glenmark Pharmaceuticals Inc. USA's, Corrected Answer, Affirmative Defenses, and Counterclaims to Complaint ¶ 82, Scherinq Corp. v. Glenmark Pharm., Inc. USA, No. 2:07-cv-01334 (D.N.J. Jun. 7, 2007), ECF No. 20 ("Ezetimibe is the active ingredient in Schering's drug product Zetia®, Schering's trade name of the drug product at issue in this litigation." (emphasis added)).

         Thus, the court can conclude that the term "trade name," as used in the Settlement Agreement's definition of "Generic Ezetimibe," can plausibly mean the proprietary or brand name of a drug product, and the Settlement Agreement permitted Merck to sell only a branded product. Because the Settlement Agreement allowed Merck to sell ezetimibe under a "trade name," or brand name, and not under the generic name "ezetimibe," the Settlement Agreement did not allow Merck to sell a generic product, including an AG. See R&R at 38. Therefore, the Settlement Agreement's definition of "Generic Ezetimibe" can plausibly be read as a no-AG agreement.

         The Glenmark Defendants advance a competing interpretation of the Settlement Agreement that does not unambiguously contradict Plaintiffs' reading and render it implausible. See Glenmark Defs.' Objs. at 14-19. Instead, the Glenmark Defendants' competing interpretation highlights an ambiguity in the Settlement Agreement. See, e.g., Cooper River Plaza E., LLC v. Briad Grp., 359 N.J.Super. 518, 528 (App. Div. 2003) ("An ambiguity in a contract exists if the terms of the contract are susceptible to at least two reasonable alternative interpretations." (quoting Kaufman v. Provident Life & Cas. Ins. Co., 828 F.Supp. 275, 283 (D.N.J. 1992))); see also Settlement Agreement § 10.3 (selecting New Jersey Law). The Glenmark Defendants' interpretation relies upon the ordinary, dictionary, meaning of "trade name" to refer to a company. Glenmark Defs.' Objs. at 15-18; Flanigan v. Munson, 175 N.J. 597, 606 (2003) ("Consistent with familiar canons of construction, the words of an agreement are given their 'ordinary' meaning."). Whereas, the Plaintiffs' interpretation relies on the meaning of "trade name" as used in the pharmaceutical industry to refer to a branded product. Plfs.' Resp. at 13-14; Guide to New Jersey Contract Law § 5.4.5 (2013) ("Technical terms or words of art will be given their technical meaning, unless the context or local usage shows a contrary intention." (citing Josefowicz v. Porter, 32 N.J.Super. 585, 591 (App. Div. 1954))).

         At this juncture, the court does not need to determine which interpretation is more probable or correct. Martin, 980 F.2d at 952 ("A motion to dismiss under Rule 12 (b) (6) . . . does not resolve contests surrounding the facts."). Rather, the court finds that the Settlement Agreement's definition of "Generic Ezetimibe," specifically, the meaning of "sold under . . . another . . . trade name of Schering, MSP or their Affiliates," is open to at least two reasonable alternative interpretations, and thus, the meaning of "trade name" is ambiguous. See Cooper River Plaza E., LLC, 359 N.J.Super. 518. Accordingly, the Settlement Agreement does not clearly and unambiguously allow Merck to sell an AG, and it can plausibly be read as a no-AG agreement because it only permits Merck to sell a branded, rather than a generic, product.

         2. The ...


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