U.S. Supreme Court grants certiorari to consider the legality of reverse payment settlements

On 7 December 2012 the U.S. Supreme Court granted a petition to consider whether reverse payment settlement agreements are per se lawful or presumptively anti-competitive.

In the case (U.S. Federal Trade Commission v. Watson Pharmaceuticals, Inc., et al., Docket 12-416), the U.S. Court of Appeals for the Eleventh Circuit held – like several other courts of appeals – that such settlements are generally per se lawful (see Newsletter 3/2012 p.4). Recently, however, an explicit conflict between the approaches of courts of appeal was created when the U.S. Court of Appeals for the Third Circuit held that such settlements are presumptively illegal (see Newsletter 4-5/2012 p. 3).

The U.S. Supreme Court will now be in a position to resolve the apparent conflict between these Courts of Appeal as well as to address the criticism that, among others, the U.S. Federal Trade Commission and Department of Justice Antitrust Division have mounted against the nearly per se legality approach followed by certain Courts of Appeal. [Juha Vesala]