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Federal Trade Commission v. Actavis, Inc., Et. Al.

Summarized by: 

Date Filed: June 17, 2013
Case #: 12-416
Breyer, J., delivered the opinion of the Court, in which Kennedy, Ginsburg, Sotomayor, and Kagan, JJ., joined. Roberts, C. J., filed a dissenting opinion, in which Scalia and Thomas, JJ., joined. Alito, J., took no part in the consideration or decision of the case.
Full Text Opinion: http://www.supremecourt.gov/opinions/12pdf/12-416_m5n0.pdf

Patents: Reverse payment agreements, while not per se illegal, are subject to a "rule of reason" in determining their anti-competitive effect in an anti-trust action.

Respondent entered into “reverse payment” settlement agreements in which the manufacturers of approved generic drugs agreed to keep generic drugs off of the market past the brand-name drug’s patent expiration in exchange for payment, and settlement of pending patent litigation. Petitioner, the Federal Trade Commission, filed suit alleging that reverse payment agreements are anti-competitive and violate §5 of the Federal Trade Commission Act because Respondent agreed to share in monopoly profits by abandoning their generic drug patent claims.

The district court held that absent fraud or sham litigation, "reverse-payment" settlements are permissible so long as the anti-competitive effect is within the scope of the patent. The Eleventh Circuit affirmed this decision, and Petitioner sought certiorari. The Supreme Court reversed the Eleventh Circuit’s decision, and remanded. The Court held "reverse payment" agreements, while not per se illegal, are subject to a "rule of reason" in determining their anti-competitive effect in an anti-trust action.