          United States Court of Appeals
                      For the First Circuit


No. 18-2086

       IN RE: LANTUS DIRECT PURCHASER ANTITRUST LITIGATION


     CÉSAR CASTILLO, INC., on behalf of itself and all others
  similarly situated; FWK HOLDINGS LLC, on behalf of itself and
                  all others similarly situated,

                     Plaintiffs, Appellants,

                                v.

                    SANOFI-AVENTIS U.S., LLC,

                       Defendant, Appellee,

                           SANOFI GMBH,

                            Defendant.


          APPEAL FROM THE UNITED STATES DISTRICT COURT
                FOR THE DISTRICT OF MASSACHUSETTS

          [Hon. Judith G. Dein, U.S. Magistrate Judge]


                              Before

                Torruella, Thompson, and Kayatta,
                         Circuit Judges.


     Matthew W.H. Wessler, with whom Joshua Matz, Gupta Wessler
PLLC, Thomas M. Sobol, Kristie A. LaSalle, Kristen A. Johnson,
Hagens Berman Sobol Shapiro LLP, John D. Radice, Radice Law Firm,
P.C., Joseph M. Vanek, David P. Germaine, John P. Bjork, Vanek,
Vickers & Masini, P.C., Paul E. Slater, Matthew T. Slater, Sperling
& Slater, P.C., Linda P. Nussbaum, Bradley J. Demuth, Nussbaum Law
Group, P.C., Juan R. Rivera Font, and Juan R. Rivera Font LLC were
on brief, for appellants.
     Benjamin C. Mizer, with whom Laura Diss Gradel, Julia E.
McEvoy, Rosanna K. McCalips, Alisha M. Crovetto, and Jones Day
were on brief, for appellee.


                        February 13, 2020
          KAYATTA, Circuit Judge.       The FDA maintains a publication

called   Approved    Drug   Products    with   Therapeutic   Equivalence

Evaluations, known in the industry as "the Orange Book."            The

Orange Book lists patents said by their owners to claim FDA-

approved drugs.     The listing of a patent in the Orange Book arms

the patent-owning drug manufacturer with the ability to trigger an

automatic, thirty-month suspension of the FDA's approval of a

competitive product.    The principal questions posed on this appeal

are whether Sanofi improperly submitted a patent for listing in

the Orange Book and, if so, whether Sanofi is potentially liable

under the antitrust laws to drug purchasers who were allegedly

harmed by the effective extension of Sanofi's monopoly.        We answer

"yes" to both questions and vacate the dismissal of the plaintiffs'

complaint to the extent that the district court held otherwise.

                                   I.

                                   A.

          When a drug manufacturer files an application for FDA

approval of a new drug (a "new drug application," or NDA) or a

supplemental application for approval of changes to an already-

approved drug (a "supplemental new drug application," or sNDA),

the manufacturer must

          file with the application the patent number
          and the expiration date of any patent which
          claims the drug for which the applicant
          submitted the application or which claims a
          method of using such drug and with respect to


                                 - 3 -
               which a claim of patent infringement could
               reasonably be asserted if a person not
               licensed by the owner engaged in the
               manufacture, use, or sale of the drug.

21    U.S.C.    § 355(b)(1).1    The    FDA   reviews   the    submission    for

completeness and to see, in Sanofi's words, whether the patent "is

not    facially     ineligible    for     listing."           See    21   C.F.R.

§ 314.53(c)(2)(ii).       Upon accepting the submission, the FDA then

lists the patent in the Orange Book.              Pointing to its "scarce

resources," the FDA has expressly declared that it does not "review

patent information for its accuracy and relevance."                 59 Fed. Reg.

50,338, 50,343, 50,345 (Oct. 3, 1994). Rather, the agency requires

the manufacturer to declare that the submitted patent claims the

"drug substance," "drug product (composition/formulation)," or

"one or more methods of using" the drug for which it is listed.

21 C.F.R. § 314.53(c)(2)(i)(M)–(O).           The plaintiffs characterize

the FDA's review of tendered Orange Book listings as purely

"ministerial," noting that the FDA has refused to create any

additional processes for "review[ing] the scope of [a submitted

Orange Book] patent and its application to the approved drug




       1
       The legal obligations of drug manufacturers at issue in this
case are set out by the Hatch-Waxman Amendments, or the Drug Price
Competition and Patent Term Restoration Act of 1984, Pub. L. No.
98–417, 98 Stat. 1585 (codified as amended at 21 U.S.C. § 355 and
35 U.S.C. § 271(e)), which amended the Federal Food, Drug, and
Cosmetic Act ("FDCA"), Pub. L. No. 75–717, 52 Stat. 1040 (1938)
(codified as amended at 21 U.S.C. §§ 301–397).


                                   - 4 -
product" or for delisting patents in the Orange Book.              68 Fed.

Reg. 36,676, 36,683 (June 18, 2003).2

              The Orange Book listing comes into play when another

manufacturer seeks FDA approval to sell a competing drug based on

the safety and efficacy studies for the original, already-approved

drug.       See 21 U.S.C. § 355(b)(2); 21 C.F.R. § 314.54(a)(1)(iii).

In its application, the aspiring competitor must certify for each

patent listed in the Orange Book for the original drug that (1)

the patent has expired, (2) the competing manufacturer will wait

for the patent to expire before marketing its competing product,

or (3) the listed patent is invalid, unenforceable, or will not be

infringed.       21 U.S.C. § 355(b)(2)(A)(i)–(iv).        The last of the

foregoing      certifications   is   referred   to   as   a   "Paragraph IV

certification."



        2
        The FDA does have a limited mechanism for reviewing the
"accuracy or relevance of patent information submitted" for
listing in the Orange Book. 21 C.F.R. § 314.53(f). Specifically,
anyone may notify the Agency in writing about a potential problem.
Id. § 314.53(f)(1).    In the case of patents claiming the drug
substance or drug product, the NDA holder may then be required
either to "confirm the correctness of the patent information," or
"withdraw    or    amend     the    patent    information."    Id.
§ 314.53(f)(1)(i)(A).    There is no indication that any party
attempted to use this process in this case. And in any case, as
noted in In re Buspirone Patent Litigation, this process would not
provide convincing evidence that "the FDA engaged in substantive
review of the information." 185 F. Supp. 2d 363, 371-72 (S.D.N.Y.
2002). In fact, the regulation is clear that "[u]nless the NDA
holder withdraws or amends its patent information in response to
the patent listing dispute, the Agency will not change the patent
information in the Orange Book." 21 C.F.R. § 314.53(f)(1)(i)(A).


                                     - 5 -
           A Paragraph IV certification has two direct effects on

the   resolution    of   any      patent    dispute    between    the     original

manufacturer and the putative competitor.                 First, the statute

treats   the   filing      of     a   Paragraph IV      certification      as     an

infringement   of    the        listed     patent,    allowing    the     putative

competitor to force the patentholder to acquiesce or sue without

exposing the competitor to damages for actual infringement.                      See

21 U.S.C. § 355(c)(3)(C); 35 U.S.C. § 271(e)(2)(A).                     Second, if

the patentholder initiates an infringement lawsuit within forty-

five days of receipt of a Paragraph IV certification, the mere

filing of the lawsuit triggers an automatic, thirty-month stay of

FDA approval of the would-be competitor's application.                   21 U.S.C.

§ 355(c)(3)(C).      And    while        that    thirty-month    period    may    be

shortened by resolution of the infringement action or order of the

court, id., the status quo, the allocation of burdens, and the

life-span of patent litigation can all work against any such

shortening.

           The plain text of the statute calls for the listing of

patents "which claim[] the drug for which [an application is

submitted] or which claim[] a method of using such drug."                        Id.

§ 355(b)(1).   In its implementing regulations, the FDA makes it

clear that "only" such patents are to be listed.                        21 C.F.R.

§ 314.53(b)(1).     The FDA also provides further guidance, to be

discussed, infra, on what patents qualify as claiming a drug. See,


                                         - 6 -
e.g., id.     The FDA has noted that these requirements "reflect an

attempt     to   balance    two   competing     interests:      [p]romoting

competition      between    'brand-name'   or    'innovator    drugs'   and

'generic' drugs, and encouraging research and innovation."               68

Fed. Reg. at 36,676.

                                     B.

            In reviewing the dismissal of a complaint, see Fed. R.

Civ. P. 12(b)(6), we assume that all pleaded facts and reasonable

inferences drawn from those facts are true, Breiding v. Eversource

Energy, 939 F.3d 47, 49 (1st Cir. 2019) (quoting Fothergill v.

United States, 566 F.3d 248, 251 (1st Cir. 2009)).            The complaint

in this case, as amended, focuses on the drug insulin glargine,

sold by Sanofi under the brand name "Lantus."         Insulin glargine is

a long-lasting and much-favored form of insulin that can be used

to manage diabetes.        In 2014, annual sales of Lantus products in

the United States amounted to $7.87 billion.

            Sanofi first obtained approval from the FDA to market

Lantus for management of diabetes in 2000.             With its original

application, Sanofi submitted U.S. Patent No. 5,656,722 ("the '722

patent") for listing in the Orange Book.          The '722 patent claimed

the drug insulin glargine and was set to expire in August 2014,

with its period of regulatory exclusivity ending in February 2015.

Had Sanofi filed nothing else with the FDA, other companies would

have been able to pursue requests for FDA approval to sell insulin


                                   - 7 -
glargine products beginning in 2015 with the end of the '722

patent's grace period of exclusivity.

             In 2006, Sanofi filed an sNDA to sell insulin glargine

in a disposable injector pen device called the Lantus SoloSTAR.

Sanofi had previously sold Lantus only in vials or cartridges for

reusable injectors.        The FDA reviewer evaluating the SoloSTAR

product described it this way:

             The SoloStar injection system is a device that
             provides a method of accurately injecting a
             selected dose of insulin . . . . The device
             is intended to be used for self-injection by
             patients. . . . The dose is pre-selected by
             rotating a dosage selector at the rear end of
             the device.   The number of selected insulin
             units is displayed in the dose window on the
             side of the pen.       The dialing mechanism
             allows dosage in 1 insulin unit increments.
             It provides a maximum of 80 insulin units in
             one dosing. . . .   The dose is delivered by
             pressing the injection button.

Sanofi sells the SoloSTAR pen for use with several active drugs in

addition to insulin.

             In 2007, the FDA accepted Sanofi's sNDA for the SoloSTAR

and categorized it as a change to Lantus's labeling or container.

In 2013, Sanofi submitted patents associated with the SoloSTAR to

the FDA for listing in the Orange Book.               While the complaint

references    a   number   of   those    patents,   plaintiffs   pare    their

arguments    on   appeal   to   U.S.    Patent   No. 8,556,864   ("the   '864

patent"), named "Drive Mechanisms Suitable for Use in Drug Delivery

Devices," which is set to expire in 2024.


                                       - 8 -
            In intellectual property law, a "patent claim" is "the

portion of the patent document that defines the scope of the

patentee's rights."          Markman v. Westview Instruments, Inc., 517

U.S. 370, 372 (1996).          The '864 patent contains ten claims, all

concerning aspects of a "drive mechanism" that serves as a part of

the SoloSTAR drug injector pen.         The "drive mechanism" "enabl[es]

the administration of medicinal products from" a pen injector's

cartridge. Claim 1 sets out the attributes of the drive mechanism;

Claim 2   describes      a   drive   mechanism   with    slightly    different

attributes; Claims 3 through 7 describe different constructions of

the mechanism in Claim 2; Claim 8 describes yet another variation

on the drive mechanism; and Claims 9 and 10 describe alternative

variations to the mechanics of Claim 8.                 The patent does not

include a claim for an injector pen more broadly, though it does

mention that the drive mechanism is intended for use in a "drug

delivery device."        Elsewhere the patent states that the technical

field of the patent is "drive mechanisms suitable for use in drug

delivery devices, in particular pen-type injectors."                The patent

does not mention insulin glargine or the Lantus SoloSTAR at any

point.    The patent's specification only briefly mentions diabetes

and insulin, the latter as an example of the type of drug the

device using the drive mechanism could dispense.

            In   2013,    competitor   Eli   Lilly   planned   to    market   a

competing insulin glargine product, called Basaglar, in its own


                                     - 9 -
injector pen, the KwikPen. Confronted with the Orange Book listing

of the '864 patent, Lilly submitted a Paragraph IV certification

stating that its Basaglar KwikPen product would not infringe that

patent.   Within forty-five days, Sanofi sued Lilly for patent

infringement, seeking to bar Lilly from manufacturing or selling

the Basaglar KwikPen until the last of the patents listed in the

Orange Book for Lantus and the Lantus SoloSTAR expired in 2024.

That lawsuit triggered the thirty-month stay of FDA approval for

Basaglar under 21 U.S.C. § 355(c)(3)(C).    In filing the lawsuit,

Sanofi thus protected its monopoly from Lilly's competition for up

to thirty months more, even if the KwikPen did not actually

infringe any Sanofi patent. In September 2015, the parties settled

the lawsuit, and Sanofi granted Lilly a royalty-bearing license to

sell Basaglar beginning over a year later in December 2016.

          Lilly was not the only would-be competitor in the insulin

glargine market.   In 2016 and 2017, Merck and Mylan both submitted

applications to market insulin glargine in injector pens, along

with Paragraph IV certifications on the patents that Sanofi had

listed for the Lantus SoloSTAR.      After it settled with Lilly,

Sanofi also sued Merck and Mylan.   The Merck lawsuit settled after

a trial on some of the patents at issue.   Stipulation of Dismissal

(redacted), Dkt. 339, Sanofi-Aventis U.S. LLC v. Merck Sharp &

Dohme Corp., No. 16-cv-00812 (D. Del. Nov. 1, 2018). A bench trial

was held but not decided in the Mylan lawsuit in December 2019.


                              - 10 -
Minute Entry, Dkt. 528, Sanofi-Aventis U.S. LLC v. Mylan GmbH, No.

17-cv-09105 (D.N.J. Dec. 2, 2019).

          The plaintiffs in this case are a putative class of

direct   insulin   glargine   purchasers   who   allege     that   Sanofi

artificially restricted competition in the market for insulin

glargine by impermissibly extending its monopoly over insulin

glargine products.    They allege that Sanofi improperly listed the

'864 patent in the Orange Book, thereby delaying competition in

the insulin glargine market and resulting in inflated prices. They

also allege that Sanofi's lawsuit alleging infringement of the

'864 patent was a "sham" that was initiated merely to trigger the

automatic stay of FDA's approval of the KwikPen.          They bring two

claims under section 2 of the Sherman Act, 15 U.S.C. § 2, based on

an unlawful scheme to monopolize and an attempt to monopolize the

market for insulin glargine products.

          The district court dismissed the plaintiffs' Sherman Act

claims, reasoning that as a matter of law Sanofi's decision to

list the '864 patent was reasonable and not "objectively baseless"

given what the court deemed to be ambiguities in the FDA's listing

requirements.3     In re Lantus Direct Purchaser Antitrust Litig.,

284 F. Supp. 3d 91, 104–05 (D. Mass. 2018).      This appeal followed.




     3 The district court also determined that the plaintiffs'
allegations that Sanofi's lawsuits against Lilly, Merck, and Mylan
did not constitute impermissible serial petitioning.           The


                                - 11 -
                                  II.

            To make out a violation of section 2 of the Sherman Act,

a plaintiff must demonstrate, "(1) that the defendant possesses

'monopoly power in the relevant market,' and (2) that the defendant

has acquired or maintained that power by improper means."   Town of

Concord v. Bos. Edison Co., 915 F.2d 17, 21 (1st Cir. 1990)

(quoting United States v. Grinnell Corp., 384 U.S. 563, 570

(1966)).    Here, all parties assume -- and so do we -- that the

complaint adequately alleges that Sanofi possessed monopoly power

in the relevant market.     Our analysis thus turns on whether the

complaint plausibly alleges that the challenged method by which

Sanofi allegedly maintained that power, that is to say, submitting

the '864 patent for listing in the Orange Book, was an "improper

means" of maintaining that power. Id.; see also Ashcroft v. Iqbal,

556 U.S. 662, 678 (2009) (requiring "sufficient factual matter,

accepted as true, to 'state a claim to relief that is plausible on

its face'" (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 554, 570

(2007))).

                                  A.

            We consider first whether, under the facts alleged by

the plaintiffs, it was proper for Sanofi to submit the '864 patent

for listing in the Orange Book.    At first blush, the answer seems


plaintiffs have abandoned those arguments on appeal, so we need
not address them.


                               - 12 -
readily apparent:    The statute and applicable regulations call for

the listing of only patents that claim the pertinent drug or a

method of using the drug, and the '864 patent does not even

mention, much less claim, either insulin glargine or any method of

using it.

            Sanofi, though, points out that the term "drug" as used

in the FDA's regulation includes not just the drug substance

itself, but also the "drug product."          21 C.F.R. § 314.53(b)(1).

FDA regulations further define a "drug product" as "a finished

dosage form, e.g., tablet, capsule, or solution, that contains a

drug substance, generally, but not necessarily, in association

with one or more ingredients."         Id. § 314.3(b).       Sanofi argues

that the Lantus SoloSTAR is a "drug product" because it is a

"finished dosage form," which the regulations define as "the

physical    manifestation     containing     the    active   and    inactive

ingredients that delivers a dose of the drug product."             Id.   This

reading of the regulations finds support in FDA guidance, which

has described the "appendix in the Orange Book" as "list[ing]

current    dosage   forms   for   approved   drug   products,"     including

"metered aerosols, capsules, metered sprays, gels, and pre-filled

drug delivery systems."           68 Fed. Reg. at 36,680.          Indeed, a

"Frequently Asked Questions" page on the FDA website actually lists

an "insulin injector pen" as an example of a "[p]refilled drug

delivery system[]."


                                   - 13 -
             Working backward, then, Sanofi's principal argument goes

like this:    the Lantus SoloSTAR is an injector pen, and as such is

a "pre-filled drug delivery system[]," meaning that it qualifies

as   a   "dosage   form,"   which   under    the   regulations   is   a   "drug

product," which in turn is a "drug."          Hence, Sanofi concludes that

because the FDA approved the Lantus SoloSTAR as a "pre-filled drug

delivery system," any patent claiming the Lantus SoloSTAR is a

"patent which claims the drug for which" the sNDA was submitted.

             Even if we accept Sanofi's chain of reasoning, however,

and thus assume for the sake of argument that the Lantus SoloSTAR

is a drug under the statute, there is still a vital link missing:

the '864 patent does not claim or even mention the Lantus SoloSTAR.

Indeed, though it claims a device intended for use in an injector

pen, it does not claim any injector pen, nor even a method of using

a pen.

             Under the plain wording of the statute, proper filing of

the '864 patent would require not only that it be a patent that

claims a drug; it must be a patent that claims the drug (or a

method of using the drug) "for which the applicant submitted" the

sNDA.    21 U.S.C. § 355(b)(1).       It therefore follows that because

the claims of the '864 patent do not mention the drug for which

the sNDA was submitted, the patent does not "claim the drug," and

it was improper for Sanofi to have submitted it for listing in the

Orange Book as a drug claiming either insulin glargine or the


                                    - 14 -
Lantus SoloSTAR.         The regulations clearly require a patent not to

be   submitted     if     it    does   not     claim    the     drug    for    which    the

application was filed:            "For patents that claim a drug product,

the applicant must submit information only on those patents that

claim the drug product, as is defined in § 314.3, that is described

in   the   pending       or    approved      NDA."      21     C.F.R.   § 314.53(b)(1)

(emphasis added).

            Confronted with this gap between its reading of the law

and its filing of a patent that does not claim the listed drug,

Sanofi argues that the regulations also require listing in the

Orange Book any patents that contain "integral components" of an

approved drug product.              According to this line of reasoning,

because the drive mechanism is an integral part of the Lantus

SoloSTAR, a patent that claims the drive mechanism claims a part

of a drug product, and thus "claims the drug."

            We   see      nothing      in    the     statute    or    regulations      that

welcomes    such     a    further      expansion       of    the     already   stretched

statutory terms, whereby an integral part of an injector pen

becomes the pen itself, and in turn is a drug.                           One would not

think, for example, that a patent claiming only a transmission

system must be read as also claiming any car in which it is used.

            The FDA has already passed on opportunities to stretch

the statutory terms in this way.                      In 2003, the FDA addressed

commentary to a proposed rule that "would not have allowed an


                                            - 15 -
applicant to list a patent that claimed packaging."       68 Fed. Reg.

at 36,680.    Some of that commentary argued that "patents claiming

devices or containers that are 'integral' to the drug product . . .

should be submitted and listed."     Id.   The FDA acknowledged those

comments but did not adopt them.     See id.   Instead it responded by

reiterating that:     "[t]he key factor is whether the patent being

submitted claims the finished dosage form of the approved drug

product."     Id.   And the '864 patent does not.   Rather, it claims

several versions of a device that can be combined with other

components to produce the finished dosage form of the approved

drug product.

             Sanofi also argues that, because the language of the

regulations suggests that multiple patents can be filed with an

application,    the   regulations   must   contemplate   submission    of

patents claiming components of a drug product4 -- otherwise, Sanofi

reasons, manufacturers would have to claim every part of a drug in

a single patent in order to file it, and the plural language in

the regulations would be meaningless.          See, e.g., 21 C.F.R.

§ 314.53(b)(1) (referring to "those patents that claim the drug

product," and those "patents that claim the drug substance").         But

Sanofi does not explain why multiple patents could not all directly



     4 Sanofi does not make the same argument with regard to the
statute, which itself employs the term "any patent." 21 U.S.C.
§ 355(b)(1).


                                 - 16 -
claim a drug product.          And in any case, the plaintiffs point out

that some patents do claim all the components of a combination

drug       product,   even   for   drug   products   similar   to   the   Lantus

SoloSTAR.       Specifically, they point to the patent for Narcan, U.S.

Patent No. 9,211,253, as well as the patent for the EpiPen, U.S.

Patent No. 8,870,827.          So even if in some cases only one patent

can legitimately be listed as a patent claiming the drug product,

that does not mean that the patent will necessarily be unable to

claim all the important components of the drug.            And in any event,

even if we misunderstand Sanofi's rather cryptic point here,5 the

possibility that the statute does not accommodate all desired

listings does not mean that we rewrite it.

               At oral argument, Sanofi tried another argument.               It

pointed to the general definition of "drug" set forth at 21 U.S.C.

§ 321(g)(1), which states that the term includes, among other

things, both "articles intended for use in the diagnosis, cure,

mitigation, treatment, or prevention of disease in man or other

animals," and "articles intended for use as a component of any

article specified" in the previous clause.            21 U.S.C. § 321(g)(1).

The definitions included at 21 U.S.C. § 321 are "[f]or the purposes



       5
       And if this is the case, then it is waived for lack of
development. See United States v. Zannino, 895 F.2d 1, 17 (1st
Cir. 1990) ("[I]ssues adverted to in a perfunctory manner,
unaccompanied by some effort at developed argumentation, are
deemed waived.").


                                      - 17 -
of this chapter," referring presumably to Chapter 9 of Title 21,

at which is codified the entire FDCA.             The definition likely

applies to the requirements under section 355, then, and it very

clearly includes "components" of "articles intended for use in

the" treatment of disease. Id. § 321(g)(1).           Nevertheless, it is

not clear how far this textual focus on Chapter 9's general

definition of "drug" gets Sanofi.           That definition of "drug" in

section 321(g)(1) demonstrates that Congress knew that some drugs

had "components"; thus the absence of any mention of "components"

in the provisions setting out which patents should be filed cuts

against any attempt to interpret the statute and its implementing

regulations as requiring or allowing listing of patents that claim

only components of a proposed drug.         See 21 U.S.C. § 355(b)(1).

              More importantly, even assuming that the drive mechanism

claimed by the '864 patent is itself a drug, we still find Sanofi

falling short of its goal because the drive mechanism is not the

"drug   for     which   [Sanofi]   submitted"   the   sNDA.    21   U.S.C.

§ 355(b)(1).       For that reason alone the patent for the drive

mechanism does not qualify for listing in the Orange Book as

claiming the Lantus SoloSTAR.

              Sanofi also seeks to find support in communications

between other drug manufacturers and the FDA.           Sanofi points to

requests for advisory opinions submitted by Ropes & Gray in 2006,

Forest Laboratories in 2011, Novo Nordisk in 2012, and AstraZeneca


                                   - 18 -
in 2007, all asking, in substance, "whether patents directed to

drug delivery systems . . . that do not recite the approved active

ingredient or formulation should be listed in the [Orange Book]."

According to Sanofi, the FDA has not responded satisfactorily to

any of the requests.          Instead, the FDA has simply acknowledged

that the Orange Book "was not designed to separately address

combination product listings or to identify the specific type of

drug delivery system" and that it "could benefit from enhanced

listing capabilities."         In response to one request from Forest

Laboratories, the FDA also stated that it had "been unable to reach

a   decision    . . .   due    to   the   need   to   address   other   Agency

priorities"     and   noted   the   "numerous    demands   on   the   Agency's

resources."

            We find no warrant to read anything into the FDA's non-

answer beyond a conclusion that it simply chose not to answer the

question.      To infer an answer, or even to infer that silence by

the FDA indicates that the correct answer is uncertain, would be

to force agencies to respond to all inquiries lest their silence

be misunderstood.       And even if one could infer an answer from

silence, Sanofi points to no support for affording any deference

to its chosen inference.        Moreover, the fact that the Orange Book

is not designed to separately address combination product listings

hardly helps Sanofi's argument that the '864 patent was listable

as claiming a component of a combination product.               Nor does the


                                     - 19 -
fact that some manufacturers view the FDA's guidance as outdated

in that regard.   The statute and regulations clearly require that

only patents that claim the drug for which the NDA is submitted

should be listed in the Orange Book.         The '864 patent, which

neither claims nor even mentions insulin glargine or the Lantus

SoloSTAR, does not fit the bill.

                                  B.

          Having determined that the complaint adequately alleges

that Sanofi should not have submitted the '864 patent for Orange

Book listing, we turn to Sanofi's alternative argument, accepted

by the district court, that submitting the '864 patent for listing

was reasonable, and that Sanofi cannot be held liable under the

antitrust laws for a reasonable mistake.        Plaintiffs challenge

this argument on both levels:     they argue that reasonableness is

not a defense, and they argue that the statute was sufficiently

unambiguous so as to render Sanofi's filing unreasonable as a

matter of law. For the following reasons we find that neither side

is quite correct, and that further proceedings beyond a Rule 12

motion are necessary to determine whether Sanofi should be held

liable under the Sherman Act for any antitrust injury caused by

its improper submission of the '864 patent.

          Generally in a section 2 case, we would examine the

effects of a monopolist's improper conduct, rather that the reasons

why it engaged in such conduct.        See Barry Wright Corp. v. ITT


                                - 20 -
Grinnell Corp., 724 F.2d 227, 232 (1st Cir. 1983) (Breyer, J.)

(observing that, though "[s]ome courts have written as if one might

look to a firm's 'intent to harm' to separate 'good' from 'bad'

[conduct]," this search for "improper intent" in reality "refer[s]

to a set of objective economic conditions"); see also United States

v. Microsoft Corp., 253 F.3d 34, 60 (D.C. Cir. 2001) (en banc)

("[I]n considering whether the monopolist's conduct on balance

harms competition and is therefore condemned as exclusionary for

purposes of § 2, our focus is upon the effect of that conduct, not

upon       the   intent   behind   it.");   Phillip   E.   Areeda   &   Herbert

Hovenkamp, Antitrust Law:          An Analysis of Antitrust Principles and

Their Application ¶ 658f (4th ed. 2019) [hereinafter Areeda &

Hovenkamp] ("[I]nquiries into subjective intent should be limited

in § 2 cases."). Presumably for this reason, Sanofi does not point

us to any section 2 cases holding that reasonableness generally

immunizes monopolists from section 2 liability.6


       6
       Sanofi does seem to argue that the "rule of reason" doctrine
applies, but that doctrine developed in the context of section 1
claims and is not typically applied to claims under section 2.
See Fraser v. Major League Soccer, L.L.C., 284 F.3d 47, 55-61 (1st
Cir. 2002) (characterizing the rule as "section 1's rule of reason"
and discussing whether it could be applied to evaluate claims of
conspiracy between distinct members of the same franchise); MCI
Commc'ns Corp. v. Am. Tel. & Tel. Co., 708 F.2d 1081, 1139 (7th
Cir. 1983) ("The Rule of Reason is a rule of construction which
applies to section 1 of the Sherman Act. The need for such a rule
arose because a literal reading of section 1 would prohibit
virtually every private contract. . . . [T]he Rule of Reason does
not directly apply as such to the offense of monopolization under
section 2 of the Sherman Act." (internal citations omitted)).


                                     - 21 -
            In   this    regulatory    setting,    however,   there    is    some

reason to consider the rationale for the monopolist's challenged

conduct, rather than just the effects of that conduct.                Under the

Hatch-Waxman Amendments, Sanofi is subject to Congress's command

to submit any patent that claims the drug for which it seeks

approval.   See 21 U.S.C. § 355(b)(1).          And the improper failure to

comply   with     that    command     could     itself   arguably     have    an

anticompetitive     effect    by    depriving     potential   competitors     of

notice and of the other procedural benefits that result from an

Orange Book listing. Sanofi has pointed to one 1996 complaint

seeking to charge a manufacturer with antitrust liability for not

filing relevant patents in the Orange Book.               The plaintiffs in

that case alleged that they were damaged by the defendant's failure

to list the patent because they spent money developing a potential

generic competitor they would not have developed had they known of

the original patent through an Orange Book listing. See Complaint,

Mut. Pharm. Co. v. Hoechst Marion Roussel, Inc., No. CIV. A. 96-

1409, 1996 WL 34406666 (E.D. Pa. Feb. 23, 1996) ("Had the '129

patent been listed in the Orange Book, [the plaintiff] would not

have expended over $500,000.00 to develop its generic . . . product

. . . .").7      Sanofi therefore reasons that if liability flowed




     7 The parties appear to have settled the case after summary
judgment briefing. See Stipulation of Dismissal, Dkt. 65, Mut.


                                      - 22 -
from improper submission of patents for Orange Book listing, Sanofi

and others seeking FDA approval would find themselves "between the

horns of an insoluble dilemma:                 list -- or not -- at risk of treble

damage claims" either way.

                 This may be something of an overstatement.                      It would

appear that a company unsure about whether it must submit a patent

for listing might protect itself from liability by submitting the

patent and then not suing within forty-five days of any subsequent

Paragraph IV certification, thereby ensuring that the mere listing

would      not    slow     down      final     FDA       approval    of   a   competitor's

submission.

                 That    being      said,    such    a    strategy    would    potentially

sacrifice a benefit that Congress gave to patent holders in the

Hatch-Waxman Amendments.               So, in the end, Sanofi has a fair point

in arguing that the plaintiffs' version of what would essentially

be strict liability for improper Orange Book submissions could

slightly tilt the regulatory balance Congress sought in this

bespoke scheme at the intersection of the FDCA and patent law.

See   68    Fed.        Reg.   at    36,676    (seeking      a   "balance     between   the

innovator companies' intellectual property rights and the desire

to get generic drugs on the market in a timely fashion").




Pharm. Co. v. Hoechst Marion Roussel, Inc., No. CIV. A. 96-1409,
(E.D. Pa. July 1, 1999).


                                              - 23 -
             The   fact   that   Sanofi    must   align   its   conduct   with

regulatory requirements does not, however, mean that Sanofi gets

a free pass from antitrust scrutiny.              Courts do not frequently

find an implied repeal of antitrust law, except where there is a

"plain      repugnancy    between    the     antitrust     and    regulatory

provisions."       Gordon v. N.Y. Stock Exch., Inc., 422 U.S. 659, 682

(1975) (quoting United States v. Phila. Nat'l Bank, 374 U.S. 321,

350-51 (1963)); see also MCI Commc'ns Corp. v. Am. Tel. & Tel.

Co., 708 F.2d 1081, 1101-02 (7th Cir. 1983) (finding no immunity

where "AT&T is not subject to conflicting requirements, nor would

it be held liable for decisions which were not its own business

judgment"); Town of Norwood v. New England Power Co., 202 F.3d

408, 422 (1st Cir. 2000) (noting "the default rule retaining

antitrust liability").       There is no such repugnancy here where,

far from seeking a contradictory result from the regulatory regime,

the plaintiffs' antitrust claim relies upon obligations created by

it.8       Moreover, the FDA does not police the accuracy of an

applicant's contention that a patent claims a drug, nor does the

FDA profess to have any special expertise in construing patents.



       8
       As a counter-example, see our recent opinion in Breiding,
939 F.3d at 54–57, in which we applied the filed-rate doctrine to
claims challenging conduct that was expressly allowed in a FERC
tariff.   See also, e.g., In re Celexa & Lexapro Mktg. & Sales
Practices Litig., 915 F.3d 1 (1st Cir. 2019); Gustavsen v. Alcon
Labs., Inc., 903 F.3d 1 (1st Cir. 2018); In re Celexa & Lexapro
Mktg. & Sales Practices Litig., 779 F.3d 34 (1st Cir. 2015).


                                    - 24 -
See 68 Fed. Reg. at 36,683.          Sanofi acknowledges as much:        "Orange

Book listings are not immune from antitrust scrutiny and might

subject a patent holder to liability under certain circumstances."

            Nevertheless,       antitrust      precedent     anticipates       the

possibility that section 2 liability might work a bit differently

in the regulatory context.        As Areeda and Hovenkamp note, "even if

the   challenged      conduct   is    not   the   proper    implementation      of

regulatory policies, condemning conduct undertaken in a reasonable

good faith effort to comply with such policies would punish

regulated firms for trying to act consistent with those policies."

Areeda & Hovenkamp, supra, ¶ 246a.

            Several circuits have identified a defense to antitrust

liability where the defendant's action was taken as part of a good

faith, reasonable attempt to comply with a regulatory scheme.                  In

MCI   Communications,     the    Seventh      Circuit held    that     "[i]n   the

particular context of an industry subject to extensive and rapidly

changing    regulatory     demands,      we    believe     that   an   antitrust

defendant is entitled both to raise and to have the jury consider

its good faith adherence to regulatory obligations as a legitimate

antitrust defense."        708 F.2d at 1109–10; see also id. at 1138

("An ideal instruction would very briefly explain . . . that a

carrier    has   an    obligation     under    the   Communications      Act    to

interconnect, but may deny interconnections if it determines that

the public interest is to the contrary; and that if the carrier at


                                      - 25 -
the time had a reasonable basis in regulatory policy to conclude,

and in good faith concluded, that denial of interconnections is

required      by    concrete,     articulable        concerns       for    the     public

interest, then there is no liability under the antitrust laws.").

See also S. Pac. Commc'ns Co. v. Am. Tel. & Tel. Co., 740 F.2d

980,   1010    (D.C.    Cir.     1984)     ("[W]e    agree    with        the    standard

articulated by the Seventh Circuit . . . ."); see also Phonetele,

Inc. v. Am. Tel. & Tel. Co., 664 F.2d 716, 737–38 (9th Cir. 1981)

(Kennedy, J.).

              Though    the     aforementioned       cases   all     deal       with   the

Communications        Act   of   1934,     and   while    recognizing           that   the

regulatory overlay may be less extensive here, we nevertheless see

no principled reason why the same defense should not arise from a

reasonable,        good-faith    attempt    to   comply      with    the    regulatory

demands of the Hatch-Waxman Amendments.                   Deterring reasonable,

good-faith attempts at compliance "would obviously impair the

achievement of regulatory goals."                   Areeda & Hovenkamp, supra,

¶ 246a.

              The defense recognized in the regulatory context of the

communications industry is not quite the defense that Sanofi seeks.

Sanofi asks for immunity if its proffered reading of the statute

was objectively reasonable.              But the precedent we have cited

requires that the challenged conduct be both reasonable and in

good faith. See MCI Commc'ns, 708 F.2d at 1138 (allowing the


                                      - 26 -
defense "if the [defendant] at the time had a reasonable basis in

regulatory policy to conclude, and in good faith concluded," that

its actions were required by regulation); S. Pac. Commc'ns, 740

F.2d at 1010 (quoting the same). We adopt that two-pronged version

of the defense here, to be proven by Sanofi on remand.                     See MCI

Commc'ns, 708 F.2d at 1109–10 ("[W]e believe that an antitrust

defendant is entitled both to raise and to have the jury consider

its good faith adherence to regulatory obligations as a legitimate

antitrust   defense.");      Phonetele,       664   F.2d   at     737–38    ("If   a

defendant    can   establish        that,     at    the    time     the     various

anticompetitive acts alleged here were taken, it had a reasonable

basis to conclude that its actions were necessitated by concrete

factual imperatives recognized as legitimate by the regulatory

authority, then its actions did not violate the antitrust laws.").9

Certainly the dilemma faced by companies seeking to comply with

the Hatch-Waxman Amendments is no greater than the regulatory

dilemmas    presented   by    the    "extensive      and   rapidly        changing"




     9 One recent district court decision directly addressed the
question of whether antitrust plaintiffs were required to plead
facts alleging an absence of good faith in their prima facie case
in order to avoid dismissal on the basis of this exception to
antitrust liability. See In re Actos End-Payor Antitrust Litig.,
No. 13-CV-9244, 2019 WL 4805843, at *14-15 (S.D.N.Y. Sept. 30,
2019). At least in part because the defendant had acknowledged at
oral argument that the exception was an affirmative defense to
liability, the court determined that the complaint was not required
to include allegations of bad faith in order to survive a motion
to dismiss. Id.


                                     - 27 -
regulation under the Communications Act in the other cases.                MCI

Commc'ns, 708 F.2d at 1109.         Nor can we see any good reason to

immunize improper, exclusionary conduct by a monopolist unable to

show it was acting in good faith -- especially in the section 2

context, where reasonableness alone has never been considered to

be a generally available defense to antitrust liability. See supra

n.5.

               Plaintiffs seem to argue that the allegations in the

complaint necessarily defeat the reasonableness prong of any such

defense.       At this early stage of the lawsuit, however, the record

does not yet contain any evidence about custom and practice in the

industry, or what if any legal opinions Sanofi sought and obtained

before submitting the patent.            Indeed, Sanofi has yet to answer

the complaint.        And while we are reasonably confident of our

reading of the statutory and regulatory texts, we cannot ignore

either the complexity of that endeavor or the fact that at least

one    other    district   court   has    found    it   difficult   to   arrive

comfortably at a similar conclusion.              See Organon, Inc. v. Mylan

Pharm., Inc., 293 F. Supp. 2d 453, 459–60 (D.N.J. 2003) (finding

no liability where the defendant listed a patent claiming an "off-

label" use of the drug because there was a "reasonable basis for

the submission").       But see In re Buspirone Patent Litig., 185 F.

Supp. 2d 363, 375–76 (S.D.N.Y. 2002) (finding that the defendant's

improper listing of a patent in the Orange Book and subsequent


                                   - 28 -
litigation to enforce it was "objectively baseless" under the

Noerr-Pennington framework).10            A statute can be unambiguous once

carefully construed, yet nevertheless be reasonably susceptible to

mis-readings        until    that     unambiguous   reading    is    explained.

Occasionally, even courts that find a text unambiguous may split

on the meaning of the text.             See, e.g., Kasten v. Saint-Gobain

Performance Plastics Corp., 563 U.S. 1, 16, 20–21 (2011) (majority

finding      that     a     statute    supports     one   interpretation      so

unambiguously as to preclude use of the rule of lenity, with

dissent finding a contrary interpretation of the statute so clear

as to obviate any need to consider its purpose); Staples v. United

States, 511 U.S. 600, 604–07, 624–25 (1994) (majority espousing

one interpretation of the statute, with dissent arguing that it

"unambiguous[ly]" means something different).

             Conversely, the fact that the law in this area is

complicated does not by itself mean that Sanofi's action was

reasonable.     Cf. Chevron, U.S.A., Inc. v. Nat. Res. Def. Council,

467   U.S.    837,     842–43    (1984)     (anticipating     that   there   are

impermissible readings even of ambiguous statutes: "if the statute

is silent or ambiguous with respect to the specific issue, the

question for the court is whether the agency's answer is based on


      10
       See United Mine Workers of Am. v. Pennington, 381 U.S. 657
(1965); E. R.R. Presidents Conf. v. Noerr Motor Freight, Inc., 365
U.S. 127 (1961).    The parties agree that the Noerr-Pennington
doctrine does not apply to this issue.


                                       - 29 -
a permissible construction of the statute").              An experienced and

sophisticated    drug    manufacturer        routinely    works       with    such

complexity.     And in this instance no close reader could have

reasonably thought that submitting the '864 patent was so clearly

proper as to obviate the need for inquiry and advice.

          We    therefore    hold    that     the   facts       and   reasonable

inferences found in the complaint describe an improper submission

of the '864 patent for listing in the Orange Book; that the

defenses to antitrust liability as a result of such an improper

submission include proving that the submission was the result of

a reasonable, good-faith attempt to comply with the Hatch-Waxman

scheme; and that the record does not now allow for the adjudication

of that defense as a matter of law.

                                      C.

          Finally,      Sanofi   briefly      argues     that    even    if   its

submission of the '864 patent was improper and not subject to any

reasonableness defense, the plaintiffs could not win on their

claims because the improper Orange Book listing could not alone

have caused an antitrust injury.            Antitrust causation, however,

requires only that the complained-of activity be a "material" or

"substantial" cause of the injury.           Areeda & Hovenkamp, supra, ¶

338a ("It is . . . enough that the antitrust violation contributes

significantly to the plaintiff's injury, even if other factors

amounted in the aggregate to a more substantial cause.").                As best


                                    - 30 -
we can tell, Sanofi's premise is that without the Orange Book

listing of the '864 patent, the patent infringement litigation

between   Sanofi    and    its    putative    competitors,    including    its

ultimate settlement with Lilly, would have proceeded and concluded

exactly the same way as it did, such that the listing itself was

not a substantial cause of the extension of Sanofi's monopoly.

Even   putting     aside   the     sham-litigation       claims,   which   the

plaintiffs have abandoned on appeal, nothing in the operative

complaint requires us to conclude that the automatic thirty-month

freeze on FDA approval of the other companies' products had no

plausible effect on the course of the underlying litigation.               So

we see no basis for affirming the dismissal of the complaint under

Rule 12(b)(6) on this alternative basis.

                                     III.

           We    reverse    the    district    court's    dismissal   of   the

plaintiffs' claims as to Sanofi's alleged improper Orange Book

listing of the '864 patent and remand for further proceedings in

accord with this opinion.




                                    - 31 -
