Supreme Court Shuts Another Door on Patent Settlement Agreement Antitrust Challenge – Denies Certiorari in CIPRO Case

By Kurt R. Karst –      

On March 7th, the U.S. Supreme Court denied yet another Petition for Writ of Certiorari concerning whether patent settlement agreements (what opponents call “pay-for-delay” agreements or “reverse payments”) are unlawful and violate the antitrust laws.  As we previously reported, the case, Louisiana Wholesale Drug Co., Inc., et al. v. Bayer AG, et al. (Docket No. 10-762), involves manufacturers of Ciprofloxacin HCl (CIPRO) and whether a particular patent settlement agreement is per se lawful under the Sherman Act.  The Supreme Court was asked to review the case after the U.S. Court of Appeals for the Second Circuit, in September 2010, denied without comment a Petition for Rehearing and Rehearing En Banc that a panel of the judges on the Court invited in their April 2010 decision affirming (3-0) a 2005 decision by the U.S. District Court for the Eastern District of New York granting summary judgment for defendants (i.e., Ciprofloxacin HCl manufacturers).  Some opponents to patent settlement agreement had pinned high hopes that the Supreme Court would take up the case.  Justices Sotomayor and Kagan took no part in the consideration or decision of the Petition for Writ of Certiorari.

Opponents to patent settlement agreements have a dwindling number of ongoing cases remaining on which to pin new hopes.  Those cases concern K-DUR (potassium chloride) in the Third Circuit, ANDROGEL (testosterone gel) in the Eleventh Circuit, and PROVIGIL (modafinil) in the U.S. District Court for the Eastern District of Pennsylvania. 

Meanwhile, in Congress, Senator Herb Kohl (D-WI) continues his push for passage of the Preserve Access to Affordable Generics Act.  As we previously reported, the latest iteration of that bill, S. 27, was introduced in January 2011 and would, like its predecessor bills, effectively ban patent settlement agreements.  In addition, the President’s Budget for Fiscal Year 2012 seeks to effectively end such agreements, saying that “[t]he Administration proposal would give the [FTC] the authority to prohibit pay-for-delay agreements in order to facilitate access to lower-cost generics.”