Federal Trade Commission v. Actavis, Inc.
Supreme Court
133 S. Ct. 2223 (2013)
Solvay Pharmaceuticals patented the drug AndroGel in 2003, and Actavis, Inc. (defendant) later filed to market a generic version, arguing the patent was invalid and that its generic didn't infringe it. After three years of patent litigation, Solvay settled with Actavis and other challengers: Actavis agreed not to market its generic until 2015 -- 65 months before the patent's expiration -- and in exchange Solvay agreed to pay Actavis $19 million to $30 million annually for nine years. The FTC (plaintiff) sued Solvay and Actavis for antitrust violations, arguing the settlement was really designed to suppress competition; the district court dismissed the suit and the court of appeals affirmed, holding such settlements categorically immune from antitrust liability so long as their anticompetitive effects stayed within the patent's exclusionary scope.
Whether a reverse-payment patent settlement, in which the patent holder pays a generic challenger to delay market entry, is automatically immune from antitrust liability merely because the settlement's terms fall within the scope of exclusion the patent itself would allow.