US reverse payment judgement deals blow to FTC

Monday 20 October 2008
Nancy Faigen - Assistant US Editor

A US federal appeals court has upheld a lower court's dismissal of a lawsuit which had challenged the lawfulness of a 1997 settlement of patent litigation between Bayer and Barr Pharmaceuticals regarding Cipro (ciprofloxacin).

In an October 15th ruling, the US Court of Appeals for the Federal Circuit affirmed the 2005 decision of the US District Court for the Eastern District of New York, which granted summary judgment for dismissal and found no antitrust violations.

The case appears to squash concerns that a settlement between a patent holder and a generics manufacturer (ie, one involving a reverse payment) violates antitrust law.

Indeed, Barr's CEO Bruce Downey claimed the ruling "provides additional legal precedent that will allow companies to settle patent challenge cases under terms that are both pro-competitive and pro-consumer". Lawyers following the case also put forward the view that, in general, patents lead to the right to exclude. Thus, a patentee will not have antitrust liability for activity within the "zone of exclusion" of its patent – a view upheld by the appeals court, as it concurred with the lower court that the reverse payment was within the zone of exclusion...


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