In FTC v. Actavis, 133 S.Ct. 2223 (2013), a decision that has captured the attention of both antitrust and intellectual property lawyers alike, the U.S. Supreme Court recently held in a 5-3 vote that reverse-payment settlements resolving Hatch-Waxman Act patent litigation are not immune from antitrust liability simply because they fall within the scope of the patent being challenged in the litigation. Instead, courts must now assess the legality of such settlements under traditional antitrust principles by applying the rule-of-reason standard and analyzing the agreements on a case-by-case basis.
The Actavis decision has the potential to create antitrust issues in the context of settlement agreements that were previously viewed as lawful private agreements subject only to restrictions established under patent law. It could also have broader implications for settlement agreements and patent and other intellectual property rights generally.
