On September 4, 2014, Judge William E. Smith of the US District Court for the District of Rhode Island held in In re Loestrin 24 Fe Antitrust Litigation that the US Supreme Court's ruling in FTC v. Actavis, Inc. applies only to reverse payment settlements, also known as pay-for-delay agreements, that involve cash payments ( (D.R.I. Sept. 5, 2014)). In Loestrin, plaintiffs, direct purchasers and end payors for the contraceptive pill Loestrin 24, alleged that defendant Warner Chilcott Company, LLC entered into unreasonable reverse payment settlements with Watson Pharmaceuticals, Inc. and Lupin Pharmaceuticals, Inc. The settlements resolved Warner Chilcott's patent infringement suits against Watson and Lupin in exchange for their delaying launches of generic alternatives to Loestrin. The court dismissed all claims in Loestrin because the challenged agreements did not include a cash payment.

Under a 2009 agreement with Watson, in exchange for Watson delaying its generic until January 2014, Warner Chilcott agreed to:

Under the 2010 agreement with Lupin, in consideration for Lupin's agreement not to sell its generic until July 2014, Warner Chilcott agreed to:

The court held that the settlements did not violate the Sherman Act under the guidance set forth in Actavis. The court reasoned that because the Supreme Court's ruling specifically focused on monetary payments, and the reverse payment settlements at issue did not involve monetary payments, Actavis did not apply to Loestrin. The court noted that the factors laid out by the Supreme Court to determine whether a reverse payment settlement violates the rule of reason hinge on the ability to assess the true value of the payment. In the absence of a cash payment, the court found it impossible to apply the Actavis test. Reading the Actavis opinion narrowly, the district court concluded that it did not apply to reverse settlements that did not involve cash payments.

The court also noted that by limiting the reach of Actavis to monetary payments, the Supreme Court intended to allow patent litigation to be settled through non-cash reverse payment settlements, which is in the interest of public policy.

Judge Smith noted that his decision was difficult and expressed two reservations about reading Actavis to apply only to monetary reverse payment settlements:

This decision signifies another attempt by district courts to interpret the reach of Actavis as it relates to reverse payment settlements. The decision in Loestrin aligns with one District of New Jersey case that held Actavis is limited to cash payments only. However, a second District of New Jersey judge has held that Actavis can include non-cash settlements. For more information on past court holdings, see Legal Updates, District of New Jersey Holds that Actavis Applies Only to Monetary Reverse Payment Settlements and Federal Judge Holds that Actavis Is Not Limited to Cash Payment Settlements.