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ARTICLE · 01 AUGUST 2013

IP Update, Vol. 16, No. 7, July 2013

Resolving a split among the U.S. Courts of Appeals, the U.S. Supreme Court ruled that patent infringement settlement agreements between branded and generic drug manufacturers containing "reverse payment" provisions "can sometimes violate the antitrust laws".

United StatesIntellectual Property

Edited by Paul Devinsky and Rita Weeks

PATENTS

Patents / Reverse Payments (ANDA)

"Reverse Payment" Settlements Face Greater Antitrust Scrutiny Following U.S. Supreme Court Ruling in FTC v. Actavis

Federal Trade Commission v. Actavis, Inc.

by Jeffrey W. Brennan

Resolving a split among the U.S. Courts of Appeals, the U.S. Supreme Court ruled that patent infringement settlement agreements between branded and generic drug manufacturers containing "reverse payment" ("pay-for-delay") provisions "can sometimes violate the antitrust laws" and that courts must apply the rule of reason when adjudicating antitrust challenges to them. A reverse payment settlement restricts the generic from entering the market until a future date (even if that date is before the patent at issue expires) and includes a transfer of value from the brand to the generic firm, typically in the form of payments arising from an ancillary agreement for services or products provided by the

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