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Suit Against J&J Alleges Misuse of Patents

Drugs: The filing follows a ruling that the firm's protections for Imodium Advanced are invalid.

July 10, 2002|From Bloomberg News

Johnson & Johnson's McNeil-PPC Inc. unit is accused in a lawsuit of misusing patents to block competition to a version of its Imodium anti-diarrhea medicine that also helps control gas.

Patents protecting Imodium Advanced were invalidated by a federal judge in Philadelphia on June 25, opening the door to competition from Perrigo Co., a maker of store brand over-the-counter drugs. Imodium Advanced, also sold over the counter, is an improvement on McNeil's Imodium A-D, which has generic rivals.

Perrigo would have begun selling a generic version of Imodium Advanced as early as October 2000 if McNeil had not filed a patent-infringement suit, consumer Marna Berkman of New York claims in a lawsuit. She seeks class-action status on behalf of other consumers.

McNeil engaged in anti-competitive conduct to "obtain and maintain monopoly power in the market for Imodium Advanced," the suit says. McNeil spokesman Mark Gutsche said the antitrust suit is "baseless." "We obtained the patents in good faith and took no actions that interfered with Perrigo's right to market their product," Gutsche said.

McNeil plans to appeal the judge's ruling on the patents.

"We strongly disagree with the decision by the U.S. District Court concerning the validity of the patents," Gutsche said. "We also reject the statements from the court regarding our motives for obtaining patents on Imodium Advanced."

According to the antitrust suit, the judge in the patent case said McNeil's actions before the U.S. Patent and Trademark Office were "careless, irresponsible and, at the very least, tantamount to studied and deceptive ignorance."

Buoyed by about $45 million in advertising and marketing since its introduction in 1997, Imodium Advanced sales are expected to reach $200 million by the end of the year, the suit contends.

The lawsuit, filed July 1 in Philadelphia, seeks damages and a court order barring McNeil from improperly blocking generic competition.

Perrigo shares fell 47 cents to $11.42 on Nasdaq. Johnson & Johnson fell 96 cents to $52.62 on the New York Stock Exchange.

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