Patents, Copyrights and Trademarks -- 2017

In re Wellbutrin XL Antitrust Litigation   (3rd Circuit)

Antitrust scrutiny of patent litigation settlements

This is another in a series of cases in the pharmaceutical industry in which patent litigation settlement agreements are challenged as being anticompetitive under the antitrust laws. The Supreme Court has indicated that large cash payments from brand owners to generic challengers to settle patent challenges may be anticompetitive, so manufacturers have been seeking other ways to settle expensive litigation that will not raise such concerns.

The NAM weighed in with an amicus brief generally supporting the settlement process, arguing that patent cases are extraordinarily costly and complex, and courts should encourage flexibility in the terms needed to settle such litigation. Here, the agreement allowed the patent litigation to proceed but enabled competition to begin, benefiting both the manufacturers and consumers. Moreover, an agreement by the brand manufacturer not to compete with the authorized generic manufacturer for a limited time is nothing more than a routine patent license, which is perfectly legal. Subjecting such an agreement to antitrust scrutiny would harm consumers and manufacturers.

On 8/17/17, the Third Circuit affirmed the dismissal of the antitrust claims. It ruled that while these reverse payments cases are analyzed under the rule of reason, the plaintiffs failed to show that they had an "antitrust injury" because they could not prove that their injuries were caused by the settlement agreement. The Third Circuit also denied the panel rehearing and designated the opinion precedential, so this case provides good law for pharmaceutical manufacturers to use in the future against these questionable reverse payment antitrust claims.

Related Documents:
NAM amicus brief  (May 10, 2016)


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