IP Law Alert : Intellectual Property Lawyers & Attorneys : Gibbons Law Firm : Copyrights, Patent Infringement, Unfair Competition

As the so-called pay for-delay case is ripening for Supreme Court oral argument on March 25, 2013, on Tuesday a bi-partisan group of senators introduced legislation meant to strongly deter such arrangements.

The introduction of the bill, known as the "Preserve Access to Affordable Generics Act," follows an annual FTC report disclosing 40 potential pay-for-delay deals struck in the 2012 fiscal year — a jump from 28 such deals in 2011. The goal of the bill is "to prohibit brand name drug companies from compensating generic drug companies to delay the entry of a generic drug into the market." Such reverse payments (payments made by branded pharmaceutical patent holders to generic challengers to postpone market entry) are considered lawful by some, and anti-competitive by others, including the FTC.

The proposed bill would establish a presumption that a drug related patent infringement settlement agreement has an anticompetitive effect and is unlawful if:

(i) an ANDA filer receives anything of value; and
 

(ii) the ANDA filer agrees to limit or forego research, development, manufacturing, marketing, or sales of the ANDA product for any period of time.

• Email This
• Print
• Comments/Questions
• Trackbacks
• Share Link

Defendants in reverse-payment actions pending in the Third Circuit (New Jersey, Pennsylvania, and Delaware) take note: in In re Effexor XR Antitrust Litigation the Honorable Joel A. Pisano, U.S.D.J., of the District of New Jersey has stayed several class-action litigations challenging the legality of certain reverse-payment settlement agreements between Wyeth and generic drug manufacturer Teva Pharmaceuticals, pursuant to which Wyeth allegedly paid Teva to delay its marketing of a generic counterpart to Wyeth’s Effexor XR drug.

Judge Pisano issued the stay in light of the pending petition for certiorari with respect to the Third Circuit’s decision in In re K-Dur Antitrust Litigation, which created a circuit split by holding that reverse-payment settlement agreements constitute “prima facie evidence of an unreasonable restraint of trade” in violation of federal antitrust laws, even if the settlement agreement does not exceed the scope of the patent in suit. Other circuits, in contrast, have upheld such reverse-payment agreements when the agreement corresponds to the scope of the patent. We previously reported here and here on the circuit split and the pending petitions for certiorari on this issue.

Judge Pisano’s stay is to continue until the K-Dur proceedings in the Supreme Court have been concluded. Thus, if the Supreme Court hears K-Dur on the merits, the length of the stay could be significant.

Christopher Walsh is a Director in the Gibbons Business & Commercial Litigation Department. This blog post originally appeared on Gibbons Business Litigation Alert on October 24, 2012.

• Email This
• Print
• Comments/Questions
• Trackbacks
• Share Link

As we anticipated, the Federal Trade Commission (“FTC”) filed a petition for certiorari yesterday with the Supreme Court in FTC v. Watson Pharmaceuticals, Inc.

In that case, the Eleventh Circuit upheld reverse payments (payments made by branded pharmaceutical patent holders to generic challengers to postpone market entry under the scope-of-the-patent approach, i.e., as long as the anti-competitive effects fall within the scope of the exclusionary potential of the patent, absent sham litigation or fraud), as lawful. The Second and Federal Circuits follow that approach. In contrast, the Third Circuit has held that such payments are presumptively anti-competitive under the “quick look rule of reason analysis” that may be rebutted by showing that the payments was for something other than delay or that the payment has a competitive benefit, and thereby increases competition.

The FTC’s petition, filed by the U.S. Solicitor General, exhorts the Supreme Court to take up the case to resolve this clear Circuit split. The FTC’s petition urges the Court to adopt the Third Circuit’s interpretation that reverse-payment agreements are presumptively anti-competitive.

Clearly, much is at stake here; Gibbons will continue to monitor developments.

Charles H. Chevalier is an Associate in the Gibbons Intellectual Property Department. Todd M. Nosher, an Associate in the Gibbons Intellectual Property Department, co-authored this post.

• Email This
• Print
• Comments/Questions
• Trackbacks
• Share Link

We have written previously on numerous developments concerning reverse payments in Hatch-Waxman litigation settlements (i.e., payments made by branded pharmaceutical patent holders to generic challengers to postpone market entry of proposed generic products).

Earlier this month, we reported that Merck & Co. had filed a petition for a Writ of Certiorari seeking to challenge the Third Circuit’s decision in In re K-Dur Antitrust Litig. holding that reverse payments are prima facie evidence of an antitrust violation.

It now appears the Federal Trade Commission (“FTC”) will follow suit and file its own petition for Certiorari in FTC v. Watson Pharmaceuticals, Inc., No. 10-12729, where the Eleventh Circuit upheld reverse payments -- finding no antitrust violation in settlements involving generic Androgel. Indeed, FTC Chairman Jon Leibowitz, speaking last week at Fordham’s 39th Annual Conference on International Antitrust Law and Policy, suggested the likelihood that FDA will file such petition with the High Court on or before the October 16, 2012 deadline. Challenges to the conflicting Third and Eleventh Circuit decisions will virtually assure Supreme Court review of the antitrust implications of reverse payments.

Gibbons will continue to track the status of this potential petition and other developments relating to reverse payments including the Supreme Court’s likely grants of Certiorari. Stay tuned for more on these important developments.

Todd M. Nosher is an Associate in the Gibbons Intellectual Property Department. Charles H. Chevalier, an Associate in the Gibbons Intellectual Property Department, co-authored this post.

• Email This
• Print
• Comments/Questions
• Trackbacks
• Share Link

We previously reported on developments in various United States Courts of Appeal decisions concerning reverse payments in Hatch-Waxman litigation settlements - that is, payments made by branded pharmaceutical patent holders to generic challengers to postpone market entry of the generic product.

Most recently, as we reported here, the Third Circuit in In re K-Dur Antitrust Litig. bucked prior holdings of the Eleventh, Second, and Federal Circuits, ruling that a reverse payment is prima facie evidence of an antitrust violation and, therefore, serves as evidence of unreasonable restraints of trade. In light of the Third Circuit’s divergent decision from other circuit precedent, many predicted a subsequent Petition for Certiorari.

As expected, Merck & Co. recently filed its Petition for a Writ of Certiorari, citing this split of circuit authority as the compelling factor favoring a review by the Supreme Court.

Gibbons will continue to track the status of this pending petition and other developments relating to reverse payments. Of particular interest will be whether the Federal Trade Commission (“FTC”) opts to file its own Petition for a Writ of Certiorari in connection with the Eleventh Circuit’s decision upholding a reverse payment in FTC v. Watson Pharmaceuticals, Inc., No. 10-12729 (11th Cir. Apr. 25, 2012). Stay tuned for more on these important developments.

Todd M. Nosher is an Associate in the Gibbons Intellectual Property Department.

• Email This
• Print
• Comments/Questions
• Trackbacks
• Share Link