FTC v. Actavis, Inc., No. 12-416: Respondent Solvay Pharmaceuticals obtained a patent for its approved brand-name drug, and subsequently, respondents Actavis and Paddock filed applications for generic drugs modeled after Solvay’s product. Solvay sued Actavis and Paddock for patent infringement, and Actavis and Paddock entered into separate “reverse payment” settlement agreements with Solvay, whereby Actavis and Paddock agreed not to bring their generic drug to market for a specified number of years, and to promote Solvay’s brand-name drug, in exchange for millions of dollars from Solvay. The Federal Trade Commission (FTC) brought suit, alleging that these reverse payment settlements violated antitrust laws. The District Court dismissed the complaint, and the Eleventh Circuit affirmed, on the basis that as long as the anticompetitive effects of a settlement fall within the scope of the patent’s exclusionary potential, the settlement is immune from antitrust attack. The Court today reversed and remanded, holding that reverse payment settlements such as those at issue here can sometimes violate the antitrust laws.
The Court's decision is available here.