Corporate & Securities Law

DOJ Changes Its Position on Reverse Payment Settlements

By David Fischer

In the “not surprising at all” category, yesterday the United States Department of Justice filed its amicus brief in the United States Court of Appeals for the Second Circuit in the “Cipro” case (a.k.a. Arkansas Carpenters v. Bayer).  In its brief, DOJ states:

Private agreements that include reverse payments are properly evaluated under the antitrust rule of reason, which takes into account efficiency-related justifications as well as anticompetitive potential.  The anticompetitive potential of reverse payments in the Hatch-Waxman context in exchange for the alleged infringer?s agreement not to compete and to eschew any challenge to the patent is sufficiently clear that such agreements should be treated as presumptively unlawful under Section 1 of the Sherman Act.  Defendants may rebut that presumption by providing a reasonable explanation of the payment, so that there is no reason to find that the settlement does not provide a degree of competition reasonably consistent with the parties? contemporaneous evaluations of their prospects of litigation success.

If/when I figure out how to upload a pdf file I will attach the brief (or link to it if/when DOJ posts the brief on its website).

Full post as published by Antitrust Review on July 07, 2009 (boomark / email).