Pharmaceutical Patents, Settlements, Reverse Payments, and Exclusion: Update

John Bigelow, Jul 27, 2012

In the June issue of this Chronicle my fellow contributors and I described a trend in appellate court decisions involving so called “Reverse Payment” settlements. The trend was towards a rule, called the “scope of the patent” rule, which protects settlements from challenge so long as the terms of settlement are confined to the nominal life of the patent. Less than three weeks after those articles were published the Third Circuit Court of Appeals in Philadelphia handed down a decision establishing a rule for the Third Circuit that is diametrically opposed to the trend we described. In the Third Circuit merely showing that a settlement embodies a “reverse payment” will be sufficient to establish prima facie evidence of anticompetitive effect, and the burden of proof will shift to the antitrust defendants to defend their agreement.

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