Notice & Comment

D.C. Circuit Review – Reviewed: Late August Opinion Slowdown

The summer gush of opinions that my fellow bloggers have been reviewing appears to have slowed down to a trickle as we head into the last week of August. Only one opinion this week, and it’s antitrust … though I suppose we can call it admin-law-adjacent because the (unsuccessful) antitrust claim was brought by the FTC.

The case is FTC v. Endo Pharmaceuticals Inc., No. 22-5137. Endo Pharmaceuticals and Impax Laboratories reached an agreement whereby Endo agreed not to re-launch a certain extended release opioid drug, Endo clarified that Impax held a license for all of its patents related to that drug, and Impax paid Endo a share of the profits from its generic version of the same drug. (I’m skipping over a lot of background related to patent litigation, a settlement, and a suit for breach of the settlement agreement that led up to this agreement). The FTC alleged that the agreement “violated Sherman Act §§ 1 and 2 by creating an impermissibly anticompetitive exclusive licensing arrangement, which resulted in the monopolization of profits and denial of the benefits of competition to consumers.” Op. at 10. The district court dismissed the complaint, and the D.C. Circuit affirmed, because the Patent Act authorizes the conduct at issue. Judge Childs wrote the opinion for the court (joined by Chief Judge Srinivasan and Judge Millett), and framed the question this way:

“Does a valid patent holder’s grant of a nearly exclusive license to a single potential competitor in exchange for royalty payments violate antitrust law when that nearly exclusive license restrains trade only to an extent traditionally recognized by patent law as reasonable?” Op. at 11.

The court’s answer: “We think not.”

Not being an antitrust expert, I will leave it there, but those interested in pay-for-delay issues may find the case a useful read. The case also includes a discussion of the application of the automatic stay in bankruptcy to FTC litigation and the need to cross-appeal to preserve personal jurisdiction issues for appeal.

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