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Intellectual Property

Viewing FTC v. Actavis Through the Lens of Clayton Act Section 4

Ian Simmons, Kenneth O’Rourke, and Scott Schaeffer, Antitrust Magazine, Vol. 28 No. 1, Fall 2013.

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In the wake of the Supreme Court’s decision in FTC v. Actavis,1 the following proposition is clear: reverse-payment settlement agreements are subject to the rule-of-reason antitrust standard; they are neither presumptively lawful nor presumptively unlawful. But how the rule of reason applies in practice—particularly with regard to the role played by the temporal and physical scope of the branded firm’s patent(s)—is less certain. According to the five-justice majority, courts assessing the competitive effects of reverse-payment settlements “normally” need not litigate the scope of the underlying patents. Under this somewhat obscure phraseology, the size of the reverse payment apparently tells the court all it needs to know about the patent’s reach; a more detailed examination is duplicative.

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