Paragraph IV of the Hatch-Waxman Act provides a mechanism for litigating pharmaceutical patent infringement disputes. Many of these cases have been settled with “reverse payments” from the brand to the generic in return for delayed generic entry. The U.S. Federal Trade Commission (FTC) has contested a number of these settlements with mixed results. On July 16, 2012, the U.S. Court of Appeals for the Third Circuit issued a decision holding that pharmaceutical patent settlements that restrict generic entry and contain a payment to the generic company are presumptively unlawful under U.S. antitrust laws. By holding that a patent settlement can violate antitrust laws without proof that it affected competition outside the scope of a valid patent, the decision directly conflicts with the holdings of three other U.S. Courts of Appeals, and sets up a strong debate across the nation. On December 7, 2012, the U.S. Supreme Court finally agreed to review an antitrust challenge to reverse payment settlements and granted a writ of certiorari. This comment analyzes the conflict among the U.S. Courts of Appeals involving differential applications of either patent law or antitrust law to address reverse payment settlements. After analyzing the conflict, this comment offers a set of rules to guide the U.S. Supreme Court and legislators in determining the legality of such reverse payment settlements.
Tyler Cho, Reverse Payment Settlements: The U.S. Supreme Court Has Finally Agreed to Resolve the Issue, 12 J. Marshall Rev. Intell. Prop. L. 787 (2013)