Antitrust Law—Rejecting the “Scope of the Patent” Test in Analysis of Reverse Payments in Pharmaceutical Industry—In re K-Dur Antitrust Litigation, 686 F.3d 197 (3d Cir.), petition for cert. filed, 81 U.S.L.W. 3090 (U.S. Aug. 29, 2012) (No. 12-265); 81 U.S.L.W. 3090 (U.S. Aug. 24, 2012) (No. 12-245)

The Sherman Antitrust Act (Sherman Act) prohibits businesses from contracting, combining, and conspiring to restrain trade or commerce.  Reverse-payment-patent-settlement agreements between brand-name and generic pharmaceutical companies—whereby a brand-name-patent holder pays its generic competitor to drop a pending patent suit and refrain from producing its generic drug for a definite period of time—are generally subject to antitrust review under the Sherman Act.  In In re K-Dur Antitrust Litigation, the Court of Appeals for the Third Circuit considered whether reverse-payment agreements between Schering-Plough Corporation (Schering) and its generic competitors Upsher-Smith Laboratories (Upsher) and ESI Lederle (ESI) amounted to an unreasonable restraint on trade.  Parting with other circuits that more recently addressed the issue, the court expressly rejected the common scope-of-the-patent test and held that reverse-payment agreements between a pharmaceutical patent holder and a potential generic competitor constitute a prima facie violation of the Sherman Act’s proscription against unreasonable restraints on trade. . .