King Drug May Chill Voluntary Resolution Of IP Disputes

Law360, New York (August 13, 2015, 10:25 AM EDT) -- On June 26, 2015, the Third Circuit issued an opinion in King Drug Co. of Florence Inc. v. Smithkline Beecham Corp., (Case No. 14-1243). King Drug. The opinion, which already has been extensively commented on and scrutinized, purports to follow the U.S. Supreme Court's holding in Federal Trade Commission v. Acatvis Inc. Actavis holds that patent dispute settlements consisting of reverse cash payments from a brand drug manufacturer to a generic drug manufacturer are subject to rule of reason scrutiny. King Drug holds that, similarly, noncash settlements in which a patentee drug manufacturer agrees to relinquish its right to produce an "authorized generic" of the drug (a "no-AG agreement") to compete with a first-filing generic drug's 180-day exclusivity period, are subject to antitrust scrutiny under a "rule of reason analysis."...

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