U.S. Supreme Court To Rule On "Pay-For-Delay" Antitrust Issue

On December 7, 2012, the Supreme Court of the United States granted the U.S. government's petition for a writ of certiorari and agreed to hear a case involving the contentious "pay-for-delay" antitrust theory applied to certain patent settlement agreements between branded pharmaceutical companies and generic drug applicants.  Federal Trade Commission v. Watson Pharmaceuticals Inc., Case No. 12-416 (Dec. 7, 2012).

The Federal Trade Commission (FTC) has opposed pay-for-delay agreements, also called "reverse payment" settlements, on antitrust grounds since at least 2001.  Until earlier this year, however, U.S. courts of appeals have repeatedly rejected the FTC's theory of consumer harm and ruled for defendants in upholding the agreements.  That trend changed in July 2012 when, in a private antitrust challenge to a patent settlement, the U.S. Court of Appeals for the Third Circuit  in In re K-Dur Antitrust Litigation, adopted the FTC's analysis and ruled against the