Eleventh Circuit Vacates FTC’s Order that Patent Litigation Settlements Violate Antitrust Law

The Eleventh Circuit, in Schering-Plough Corporation v. FTC, No. 04-10688 (11th Cir. March 8, 2005), recently vacated a Federal Trade Commission (FTC) order requiring pharmaceutical companies to cease enforcement of certain patent litigation settlement agreements involving generic versions of patented drugs.

One of the underlying patent disputes at issue in Schering-Plough, by way of illustration, involved Schering’s branded extended release potassium chloride product, K-Dur 20. Schering owns a formulation patent on K-Dur 20’s extended release coating (the ’743 patent) that expires in September 2006.

Upsher-Smith Laboratories (Upsher), one of Schering’s competitors, sought approval from the U.S. Food and Drug Administration (FDA) to market a generic version of K-Dur 20. As allowed under the Hatch-Waxman Act, a federal statute intended to facilitate the marketing of generic pharmaceuticals, Schering sued Upsher for patent infringement after Upsher sought approval of its generic