Ninth Circuit Refuses to Revive Whistleblower Action Alleging Fraudulently Obtained Patent
- January 31, 2025
A Ninth Circuit panel rejected January 29 a whistleblower’s bid to revive his qui tam action against Allergan Inc. and Adamas Pharma LLC alleging they fraudulently obtained patents for two drugs used to treat Alzheimer’s disease, preventing generic competition that resulted in federal health care programs paying higher prices.
The case was before the Ninth Circuit for a second time after a federal district court in California dismissed the qui tam action under the public disclosure bar. The district court found that the complaint alleged substantially the same transactions as those contained in qualifying public disclosures and that relator Zachary Silbersher was not an original source. In an unpublished opinion, the appeals court affirmed.
“We hold that Silbersher waived the argument that the public disclosure bar does not apply by conceding at a hearing on the first motion to dismiss ‘that the relevant information from which the inference of fraud could be drawn is in the [patent prosecution history],’” the Ninth Circuit said.
Silbersher contended the Ninth Circuit’s recent decision in another qui tam action that he also brought should change the view of his earlier concession as triggering the public disclosure bar in the instant action. In that case, Silbersher v. Valeant Pharmaceuticals International, Inc., 89 F.4th 1154 (9th Cir. 2024), Silbersher successfully argued that his expertise brought the pieces of “scattered public disclosures” together to “provide a critical fact necessary for scienter: [defendants] took conflicting positions in their patent prosecutions.”
But here Silbersher was making his expertise argument as to the “substantially same” prong of the public disclosure bar, rather than the original source exception. And his “November 2020 waiver already conceded that his claims are substantially same as those in the public patent prosecution histories,” the appeals court noted.
United States ex rel. Silbersher v. Allergan, Inc., No. 23-15613 (9th Cir. Jan. 29, 2024).