Intellectual Property: Competition

In Ritz Camera & Image, LLC v. SanDisk Corp, the US Court of Appeals for the Federal Circuit upheld a district court decision finding that a direct purchaser is not categorically excluded from bringing a Walker Process antitrust claim even if the direct purchaser does not have standing for declaratory relief against the patentee under patent law.  

The FTC recently issued proposed changes to the Hart-Scott-Rodino (HSR) rules regarding tranfers of exclusive rights to pharmaceutical patents.  If the amendments are adopted, transfers of all commercially significant pharmaceutical patent rights would be potentially reportable under the HSR Act. 

The Federal Trade Commission (FTC) recently proposed limiting the ways that holders of standard-essential patents (SEPs) can protect their rights in those patents.  In a recent filing made with the International Trade Commission, the FTC advised against granting SEP holders injunctive relief against infringers because of the potential anticompetitve effects that might result, including higher consumer prices and reduced interoperability.

In Princo Corp. v International Trade Commission and U.S. Philips Corp., the Federal Circuit, sitting en banc, was presented with the question of whether an agreement between two collaborators to suppress a competitive technology would constitute patent misuse and so render the patent unenforceable during the period of misuse.  The Federal Circuit Court of Appeals, "recognising the narrow scope of the [patent misuse] doctrine", found that an agreement did not constitute patent misuse. In the view of the dissent, this decision "emasculate[d] the doctrine so that it will not provide a meaningful obstacle to patent enforcement".

On 24 May 2010, the US Supreme Court, in a unanimous 9-0 decision, denied the National Football League (NFL) broad protection from liability arising from intellectual property licensing which may violate Section 1 of the Sherman Act.  The NFL has long sought immunity from Section 1 of the Sherman Act liability by claiming that it and its 32 teams are a "single entity" incapable of conspiring.  The Supreme Court held that the NFL is not a single entity but rather 32 separate team businesses for purposes of licensing intellectual property, and, therefore, its licensing activities constitute concerted action that is not categorically beyond the coverage of Section 1.  The case was remanded for further examination of the allegations made by the plaintiff ,American Needle, Inc.,  to determine if the restraint of trade is unreasonable and therefore illegal.

On 29 March 2010, a federal judge denied the motions of Cephalon and several generic drugmakers to dismiss federal antitrust claims alleging that Cephalon's reverse payment settlements with generic drugmakers anti-competitively delayed generic drug entry.  The court rejected a per se analysis and noted that the proper standard for evaluating reverse payment settlements is whether the settlements grant rights beyond the scope of the patents. 

The US Federal Trade Commission (FTC) continues to actively advocate for legislation proscribing "pay-for-delay" generic pharmaceutical settlements, with support from a FTC staff report that concludes that the prevalence of  "pay-for-delay" deals is increasing and such deals cost consumers US$3.5 billion per year.

In a speech at the Centre for American Progress on 23 June 2009, US Federal Trade Commission (FTC) Chairman Jon Leibowitz said that eliminating so-called "pay-for-delay" pharmaceutical settlements will save US consumers US$3.5 billion dollars each year, according to an internal study.

On 13 February 2008, the US Federal Trade Commission (FTC) announced that it has filed a complaint in the US District Court for the District of Columbia alleging that Cephalon, Inc. (Cephalon) violated US federal antitrust laws by providing monetary payments to four drug companies (Teva Pharmaceuticals USA, Ranbaxy Pharmaceuticals, Mylan Pharmaceuticals, and Barr Laboratories) in exchange for delayed entry of generic versions of its branded medication, Provigil (a prescription medication that treats excessive sleepiness arising from sleep apnea, narcolepsy, or shift-work sleep disorder). The complaint seeks a judgment that Cephalon violated the US antitrust laws and it also requests a permanent injunction to prevent Cephalon from enforcing the terms of these agreements and from engaging in similar conduct in the future.