Supremes’ FTC v. Actavis® “Pay to Delay” Decision Unlikely To Change Outcome Of S-P K-Dur® Antitrust Appeal Loss


Well, one cannot fault a skillful lawyer for trying, I guess. Last July, the Third Circuit handed legacy Schering-Plough a loss, on antitrust grounds, for paying to delay generic versions of K-Dur® (after some 23 years of patent monopoly protections). K-Dur is simply a coated potasium chloride crystal. And so, the efforts to delay generics were found to be unlawful.

That is, the “presumptively unlawful” standard had been embraced by the Third Circuit, in In re K-Dur Antitrust Litig., 686 F.3d 197 (3d Cir. 2012). This week, Merck’s lawyers, as successors to legacy Schering-Plough’s lawyers, filed a supplemental brief essentially re-arguing their appeal in light of the Supremes’ “rule of reason” analysis in Actavis, this week.

At base, it argues that since the Supremes have rejected a “bright line” test advocated by the FTC (called the “presumptively unlawful” test), Merck ought to get a reconsideration at the Third Circuit.

I will analyze this brief in closer detail over the weekemd, and post on it then. Other duties call at the moment, but here is a bit from that prior Third Cicuit decision, and my full backgrounder, on it:

. . . .After consideration of the arguments of counsel, the conflicting decisions in the other circuits, the Report of the Special Master, and our own reading, we cannot agree with those courts that apply the scope of the patent test. In our view, that test improperly restricts the application of antitrust law and is contrary to the policies underlying the Hatch-Waxman Act and a long line of Supreme Court precedent on patent litigation and competition.

Rather than adopt an unrebuttable presumption of patent validity, we believe courts must be mindful of the fact that “[a] patent, in the last analysis, simply represents a legal conclusion reached by the Patent Office.” Lear, Inc. v. Adkins, 395 U.S. 653, 670 (1969). Many patents issued by the PTO are later found to be invalid or not infringed, and a 2002 study conducted by the FTC concluded that, in Hatch-Waxman challenges made under paragraph IV, the generic challenger prevailed seventy-three percent of the time. . . .

Actually, that sounds like a “rule of reason,” just travelling under an assumed name — so I think the outcome will not change. More later. Have a great Friday, one and all!

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