On August 25, the U.S. Court of Appeals for the Ninth Circuit issued an opinion in which it held that ex parte patent prosecutions by the Patent and Trademark Office (PTO) qualify as “other Federal . . . hearing[s]” under prong (ii) of the False Claims Act’s Public Disclosure Bar. In so ruling, the Ninth Circuit affirmed that the Public Disclosure Bar should not be read in a restrictive manner but should be given a broad construction.
The relator in the case, U.S. ex rel. Silbersher v. Allergan, Inc., is a patent attorney who alleged that the defendant pharmaceutical companies unlawfully obtained patents on two Alzheimer’s drugs, which allegedly prevented generic versions from coming to market and thus increased the prices Medicaid paid for the drugs. However, the Ninth Circuit recognized that “the key factual information underlying [the relator’s] complaint was all publicly disclosed and much could be found in websites maintained by the PTO and other government agencies.”
The Public Disclosure Bar, 31 U.S.C. § 3730(e)(4)(A), prevents False Claims Act lawsuits based on information publicly disclosed:
- in a Federal criminal, civil, or administrative hearing in which the Government or its agent is a party;
- in a congressional, Government Accountability Office, or other Federal report, hearing, audit, or investigation; or
- from the news media.
The question presented to the Ninth Circuit was whether the ex parte patent prosecutions that disclosed the information underlying the relator’s complaint fell within prong (ii) of the Public Disclosure Bar as a type of “other Federal . . . hearing.”
The Ninth Circuit cited the Supreme Court’s observation that the Public Disclosure Bar has a “broad scope,” and reasoned that prong (ii) is meant “to cover a wide array of investigatory processes.” The Ninth Circuit also found that it is acceptable—and even expected—that there will be overlap between the different prongs of the Public Disclosure Bar and that “some potential redundancy in the FCA does not justify reading the statutory language in an overly narrow manner. The possibility that some hearings might be encompassed by both prongs (i) and (ii) does not change our analysis.” Based on this reasoning, the Ninth Circuit held that ex parte patent prosecutions are an “other federal . . . hearing” under prong (ii), and thus that the Public Disclosure Bar applied to the relator’s claims.
The Ninth Circuit’s reasoning on the broad scope of the Public Disclosure Bar could prove influential in cases addressing other provisions of the Public Disclosure Bar.
For more information about Silbersher or other FCA-related case law developments, please subscribe to this blog or contact the author or a member of the Bass, Berry & Sims Healthcare Fraud & Abuse Task Force.