FTC v. Watson Pharmaceuticals, Inc., et al.

This case involved a type of patent litigation settlement known as a "pay for delay" or "reverse payment" agreement. In this type of settlement, a patent holder paid the allegedly infringing generic drug company to delay entering the market until a specified date, thereby protecting the patent monopoly against a judgment that the patent was invalid or would not be infringed by the generic competitor. This case began when the FTC filed a complaint in district court alleging that the reverse payment settlements between the holder of a drug patent and two generic manufacturers of the drug were unfair restraints on trade that violated federal antitrust laws. The court's precedent established the rule that, absent sham litigation or fraud in obtaining the patent, a reverse payment settlement was immune from antitrust attack so long as its anticompetitive effects fell within the scope of the exclusionary potential of the patent. The court rejected the FTC's claims to the contrary and affirmed the judgment. View "FTC v. Watson Pharmaceuticals, Inc., et al." on Justia Law