Cross-posted by Forbes.com at On the Docket.
Opponents of a certain type of patent litigation settlement suffered yet another courtroom setback today when the U.S. Supreme Court decided not to review a U.S. Court of Appeals for the Second Circuit decision, In re: Ciprofloxacin Hydrochrolide Antitrust Litigation. The Petitioners asked the Court to review whether federal antitrust laws prohibit the settlement of patent litigation between a branded drug maker and a generic drug company which include a financial incentive for the generic company to hold off marketing its product for a time period. Numerous Legal Pulse blog posts have focused on such so-called “pay-for-delay” or “reverse payment” settlements and antitrust litigation challenging them, including the Cipro case. The Federal Trade Commission (FTC), state attorneys general, “consumer” groups, and some in Congress have crusaded for the prohibition of these settlements for several years. Key Members have introduced legislation aimed at the settlements, and even the President’s budget proposal includes providing FTC with the authority to prohibit them among its health care costs-savings ideas.
Reverse payment settlement opponents had placed a great deal of emphasis on the Cipro case as a cure-all solution. FTC had filed an amicus brief urging the entire Second Circuit to rehear a three-judge panel’s decision ruling for the settling drug companies. A number of consumer activist groups and 32 state attorneys general filed briefs imploring the Supreme Court to grant review. The Cipro petitioners claimed there was a split of opinion on the legality of these settlements.
In the end, though, it was all for naught. Though numerous cases alleging antitrust violations will continue in the lower federal courts, one can fairly say that the debate over “pay-for-delay” settlements’ legality is mostly over. The High Court’s cert denial is not binding precedent, but defendants in these cases have one more appeals court precedent to which they can cite, one which survived motions to rehear en banc and a cert petition to the Supreme Court. The FTC, plaintiffs’ lawyers, and activists will continue to press their case on Capitol Hill. How much less persuasive their argument is today, after the Court’s cert denial, is uncertain, but if well-reasoned judicial decisions count for anything in Congress, we’d say quite a bit less.