Federal Trade Commission v. Actavis, Inc.

133 S.Ct. 2223 (2013)

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Nature of the Case

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Facts

Solvay Pharmaceuticals obtained a patent for its approved brand-name drug AndroGel. Actavis and Paddock filed accelerated applications for generic drugs modeled after AndroGel and certified under paragraph IV that Solvay's patent was invalid and that their drugs did not infringe it. Solvay sued Actavis and Paddock, claiming patent infringement. The FDA eventually approved Actavis' generic product. Actavis then entered into a “reverse payment” settlement agreement with Solvay, agreeing not to bring its generic to market for a specified number of years and agreeing to promote AndroGel to doctors in exchange for millions of dollars. Actavis was forbidden from bringing its generic drug to market until 2015 (65 months before the AndroGel patent expired). Solvay agreed to pay $19,000,000 to $30,000,000 per year to the generic approved owners for the next nine years. P filed suit, alleging that Ds violated §5 of the Federal Trade Commission Act by unlawfully agreeing to abandon their patent challenges, to refrain from launching their low-cost generic drugs, and to share in Solvay's monopoly profits. The District Court dismissed the complaint. The Eleventh Circuit concluded that as long as the anticompetitive effects of a settlement fall within the scope of the patent's exclusionary potential, the settlement is immune from antitrust attack. Since the alleged infringer’s promise not to enter the patentee’s market expired before the patent’s term ended, the Circuit found the agreement legal and dismissed the complaint. The Supreme Court granted certiorari.