Eleventh Circuit Rejects Antitrust Challenge to Reverse Payment Patent Settlements

The U.S. Court of Appeals for the Eleventh Circuit recently rejected the Federal Trade Commission’s (FTC) antitrust challenge to settlement agreements reached between Solvay Pharmaceuticals Inc. and two generic drug manufacturers resolving patent litigation and enforcing the exclusionary rights of the challenged patent. The Eleventh Circuit rejected the FTC’s proposal to allow its antitrust challenge to the settlement agreements to be anchored on an allegation that the patent holder “was not likely to prevail” in the patent litigation. In so ruling, the court adhered to its precedent establishing that reverse payment settlements are “immune from antitrust attack so long as its anticompetitive effects fall within the scope of the exclusionary potential of the patent.” The Eleventh Circuit further noted that the standard proposed by the FTC would impose too great a burden on courts, requiring them to conduct “an after-the-fact calculation of how ‘likely’ a patent holder was to succeed in a settled lawsuit if it had not settled.”

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