AAI Backs Federal Trade Commission in “Pay-for-Delay” Challenge at the Supreme Court (FTC v. Watson Pharmaceuticals, No. 12-416)

The AAI joined 118 professors of economics, business, innovation, antitrust law, and intellectual property law in asking the U.S. Supreme Court to reject an unduly permissive standard for evaluating so called “pay-for-delay” (or “reverse payment”) settlements, i.e. settlements of patent infringement claims brought by branded drug manufacturers against generic competitors pursuant to which the branded drug manufacturer pays the generic to delay entry into the market. The brief argues that a “scope-of-the-patent” test would result in severe anticompetitive harm and would upset a carefully crafted statutory scheme designed to prevent weak or narrow patents from blocking the entry of affordable generic drugs. Amici ask the Court instead to adopt the reasoning of the Third Circuit in In re K-Dur Antitrust Litigation, 686 F.3d 197 (3d Cir. 2012), which held that reverse payment settlements are presumptively unlawful.

The brief was written by AAI Advisory Member Michael Carrier of Rutgers Law School–Camden and Mark Lemley of Stanford Law School.