Supreme Court: FTC confronts decision that liberally allows brand-generic patent settlements

PatSeminar026FTC v. Schering-Plough (on Petition for Cert).

After losing at the 11th Circuit, the FTC has filed a petition for certiorari asking the Supreme Court to hear its appeal.  In a March 2005 decision, the 11th Circuit Court of Appeals set aside an FTC order that barred Schering-Plough from settling an infringement suit with generic makers regarding the patented blood pressure drug K-Dur.  The FTC had concluded that the settlement was an “unreasonable restraint of trade.”  The 11th Circuit, however, disagreed, finding that payment from a patent holder to a generic competitor cannot be the sole basis of a violation of antitrust law. Accordingly, the court SET ASIDE the decision of the Federal Trade Commission and VACATED its cease and desist order.

In its petition for certiorari, the FTC presents two questions to the Court:

1. Whether an agreement between a pharmaceutical patent holder and a would-be generic competitor, in which the patent holder makes a substantial payment to the challenger for the purpose of delaying the challenger’s entry into the market, is an unreasonable restraint of trade.

2. Whether the court of appeals grossly misapplied the pertinent “substantial evidence” standard of review, by summarily rejecting the extensive factual findings of an expert federal agency regarding matters within its purview.

In its supporting brief, the FTC argues that agreements between competitors should not be per se lawful simply because they are within the “potential” reach of a patent claim. The Public Patent Foundation (PubPat) supported the FTC at the Eleventh Circuit and will likely file an Amici Brief in support of the FTC’s petition.


One thought on “Supreme Court: FTC confronts decision that liberally allows brand-generic patent settlements

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    Patents, Drugs and Antitrust, Oh My!

    Several days ago Bristol-Myers Squibb, Sanofi-Aventis and Apotex, Inc. announced a settlement regarding Plavix.  Some background: Plavix is used to prevent blood clots that can lead to heart attack or stroke.  The key patents are held by Sanofi and …

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