Decision by court of appeals affirms that settlements
that do not expand the exclusionary scope of a patent are not
subject to antitrust challenge.
On April 25, the U.S. Court of Appeals for the Eleventh Circuit
affirmed a lower court's dismissal of the Federal Trade
Commission's (FTC's) challenge to a patent settlement
agreement between Solvay Pharmaceuticals and three generic
competitors. The decision in Federal Trade Commission v. Watson
Pharmaceuticals, Inc. et al. is the latest in a series of
defeats for the FTC involving challenges to so-called "reverse
payment settlements" or "pay-for-delay settlements"
in the pharmaceutical industry. In a strongly worded opinion, the
Eleventh Circuit rejected the FTC's contention that it was
necessary to determine Solvay's likelihood of prevailing in the
underlying patent litigation in order to assess the legality of its
settlement agreement under the FTC Act. The court instead held
that, with a few narrow exceptions,
