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While the Supreme Court's recent opinion in Federal Trade Commission v. Actavis, Inc.1 resolved the circuit split regarding reverse payment settlements,2 the full scope of its decision is yet to be seen. The Court declined to hold that reverse payments were presumptively unlawful or that they were immune from antitrust attack. Rather, the Court held that a rule-of-reason approach should apply when evaluating the antitrust implications of a reverse payment settlement. The Court left it to lower courts to "jump in the briar patch"3 and structure the rule-of-reason antitrust litigation. Yet, the Actavis decision, statements by the Federal Trade Commission (FTC), and some subsequent rulings provide insight into what may constitute an acceptable reverse payment settlement agreement. Lower courts will have to decide some seminal questions in light of the decision:
(1) What is a "reverse payment"? Can it include nonmonetary compensation?
(2) What makes a payment "large"?
(3) If the first-filed Abbreviated New Drug Application (ANDA) applicant gave up its statutorily granted 180-day market exclusivity, does that impact the analysis?
(4) When is a reverse payment justified?
(5) Should courts apply the rule-of-reason analysis to all patent settlements or only after it has determined that there was a reverse payment?
1. Fed. Trade Comm'n v. Actavis, Inc., I33 S. Ct. 2223 (20I3).
2. Id. at 2227. These settlements have been referred to by a variety of names. While some may find this term misleading or pejorative, the Court chose to use this term to describe a specific type of settlement and I will do the same for consistency.
3. See In re AndroGel Antitrust Litig. (No. II), No. 1:09-MJ).2084, 2013 U.S. Dist. LEXIS 174273, at *10 (N.D. Ga. Oct. 23, 2013) ("As mueh as I would love some guidance from the Eleventh Circuit on how in the heck a trial judge (and a jury) is supposed to apply the Actavis decision to an actual case, I doubt that the Eleventh Circuit is going to jump into that briar patch until it has to.").
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