US Supreme Court decision on reverse payment agreements: new era in patent litigation settlements – FTC v Actavis, Inc., 570 US (2013)
Reverse payment agreements have long been the cause of sharp debate between pharmaceutical industry stakeholders as regards this fundamental question: what is more important within the context of Hatch-Waxman patent settlements – patent law or competition law? As with the question, ‘what came first, the chicken or the egg?’, US courts also seem to struggle to answer this question. However, the US Supreme Court has finally considered the issue and has given guidance to the lower courts. It held that these type of agreements are not immune from antitrust scrutiny and firmly rejected the settled ‘scope of patent’ approach largely used by the courts, as well as the FTC’s ‘quick look’ test, suggesting that reverse payment agreements must be analysed under the antitrust ‘rule of reason’ approach.