In Federal Trade Commission v. Actavis Inc., the U.S. Supreme Court made a watershed recognition that will drastically affect a common practice in the pharmaceutical industry. The court held that a practice known as reverse settlement or reverse payment, in which the plaintiff pays the defendant, is not immune from antitrust laws, even if the patent holder’s conduct falls within the exclusionary scope of the patent.
This ruling certainly will lead to an increase in antitrust challenges to reverse settlements in pharmaceutical-related patent litigation. The court’s ruling also is likely to spill into other areas where antitrust law and patent law converge, as a basis to challenge the inherent “monopoly” granted to patent holders.
