On March 25, 2013, the Supreme Court heard oral argument in Federal Trade Commission v. Actavis. This case involves so-called “reverse-payments” between brand name drug manufacturers and their potential generic competitors. The brand name manufacturer brings an action for patent infringement against a generic competitor, which defends by arguing that their generic product does not infringe and that the patent is invalid. To settle the litigation, the brand name manufacturer agrees to pay the generic competitor a large sum of money in exchange for the competitor’s agreement to delay marketing of the generic drug for period of years. The question in this case is whether such “reverse-payment” agreements are per se lawful (assuming the underlying litigation was not a sham and the patent not obtained by fraud), or instead presumptively anti-competitive and unlawful.
To discuss the case, we have Dan Crane, who is a professor at the University of Michigan Law School.