U.S. Supreme Court Holds That "Reverse Payment" Patent Litigation Settlements Are Not Immune From Antitrust Review

In a significant ruling involving both intellectual property rights and competition policy, the Supreme Court of the United States held in a 5–3 decision issued on June 17 that patent litigation settlements involving "reverse payments" are not immune from antitrust review and are subject to a rule-of-reason antitrust analysis to determine if they are likely to result in unjustified anticompetitive harm. The Supreme Court's ruling means that reverse payment settlements may be subject to challenges by regulators and private litigants in the United States as a form of anticompetitive agreement among competitors. The Court's decision will likely have significant implications for the pharmaceutical industry and other intellectual property (IP) rights holders, and may open the door to similar challenges in Canada.