Supreme Court hears arguments in FTC v Actavis

Managing IP is part of Legal Benchmarking Limited, 1-2 Paris Gardens, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2026

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Supreme Court hears arguments in FTC v Actavis

supct45new.jpg

Supreme Court justices seemed divided on Monday over the legality of pharmaceutical companies paying generic rivals to keep cheaper alternatives to brand name drugs off the market.

supct.jpg

In Federal Trade Commission v Actavis, the justices heard oral arguments concerning the legality of so-called reverse payment agreements.

The case concerns a fee paid to Actavis by Solvay Pharmaceuticals, which owns a patent on testosterone-raising drug AndroGel. In exchange, Actavis agreed not to produce a generic version of AndroGel for an agreed period.

The FTC claimed the agreement amounted to illegal collusion. Actavis argued that such payments are legal provided the generic company’s delay in producing the drug is limited to the period in which the patent is valid.

But the justices seemed more concerned with the economic impact of the deals.

Justice Anthony Kennedy suggested that reverse payments should not exceed what the generic company could make by launching a competing drug, while Justice Elena Kagan said the companies involved were harming consumers by “splitting monopoly profits”.

Justice Antonin Scalia seemed to attribute the situation to a loophole in the Hatch-Waxman laws, and questioned why the court should correct a “mistake” made by Congress.

The case was previously referred to as Federal Trade Commission v. Watson Pharmaceuticals et. Al, before the combination of Actavis and Watson.

more from across site and SHARED ros bottom lb

More from across our site

IP firms say they have been educating some clients on AI use, with ‘knowledge-sharing’ becoming more prevalent
As the US patent system tilts further toward favouring patent owners, firms with a strong patentee focus can get ahead of the game
Amanda Yang and Rachel Tan at Rouse and Landy Jiang at Lusheng Law Firm provide an overview of the draft amendments to China’s trademark law
News of EIP launching an AI platform and a trade secret blow for TCS in the US were also among the top talking points
The four-partner addition includes A&O Shearman’s former co-head of global IP litigation
A settlement involving Disney and another ruling concerning a lawyer’s request for access to documents were also among the big developments
Merchant & Gould's managing partner explains why the firm launched a Boston office and why it brought on board a local boutique
The model covers court-guided settlements, submissions-led determination of infringement and validity issues, and provides leeway for the court to determine a FRAND rate during negotiations
Tie up between Belgium-based firms will create an outfit with almost 30 UPC representatives, and a tier one-ranked patent disputes team
Blank Rome’s launch in West Palm Beach, marked by the arrival of two IP partners, comes in response to rising demands from technology clients
Gift this article