In This Issue:

- INTRODUCTION

- WHAT ARE REVERSE PAYMENT SETTLEMENT AGREEMENTS?

..The Basic Framework of Hatch-Waxman Litigation

..The Federal Trade Commission’s View of Reverse Payment Settlements and Its Future Goals

- LESSONS LEARNED FROM ACTAVIS

..Synopsis of the Facts of the Actavis Decision

..A Detailed Review of the Supreme Court’s Five Sets of Considerations to Bring a Claim.

..Potential Genuine Adverse Effect on Competition

..Was the Payment “Justified”

..The Patentee’s Ability to Bring About the Anticompetitive Harm

..The Size of the Unexplained Payment Is a Workable Surrogate for Litigating the Patent Issues and Makes the Antitrust Litigation Feasible

..Antitrust Liability for Large Unjustified Reverse Payments Does Not Prevent Parties from Settling

..What Is Left Unanswered by Actavis

..What Is “Payment”?

..District Court Construes Reverse Payment Settlements as Requiring a Monetary Payment

..District Courts Construe Reverse Payments as Including Nonmonetary Payments

..What Constitutes a “Large” Payment?

..What Impact, If Any, Does Giving up the 180-Day Market Exclusivity Have?

- STRUCTURING OF THE RULE-OF-REASON ANTITRUST LITIGATION

..Guidance from the Supreme Court’s Actavis Opinion

..Application of the Actavis Rule-of-Reason Analysis

..Market Power in the Relevant Market

..Anticompetitive Consequences

..Weighing Economic Detriments Against the Economic Benefits

..Exception to Antitrust Liability—Noerr-Pennington Immunity

- INSIGHT INTO HOW COURTS MAY STRUCTURE ANTITRUST PROCEEDINGS AND APPLY THE ACTAVIS RULE-OF-REASON

- CONCLUSION

- Excerpt from WHAT ARE REVERSE PAYMENT SETTLEMENT AGREEMENTS?:

The Court characterized a “reverse payment” settlement agreement as a settlement that “requires the patentee to pay the alleged infringer, rather than the other way around.”4 The Court described these settlements as typically taking the form of Company A suing Company B for patent infringement. Company A and Company B settle under terms that require (1) the claimed infringer, Company B, to stay off the market until the patent’s term expires, and (2) the patentee, Company A, paying Company B. The Court noted that: