US Judge calls payments for patent settlements into question

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Ed Silverman, writing in a Wall Street Journal blog post, claims that a recent US district court judge's opinion regarding patent settlements may call into question the very definition of "reverse settlements."

Teva, in trying to make a generic version of Lamictal—a drug used to treat epilepsy and bipolar disoder—was sued by GSK for patent infringement. The two drug makers settled the case with GSK allowing Teva to sell generic chewable and tablet forms of Lamictal before the drug's patent expired. 

In the federal court ruling that followed Judge William Walls wrote, "While there may be instances in which settlement without a monetary payment provision would raise antitrust concerns, this is not one," and suggested that since no money exchanged hands between GSK and Teva that the arrangement could not be scrutinized as anticompetitive.

Judge Walls also wrote in a case regarding patents for Pizer's statin Lipitor and AstraZeneca's acid reflux medicine Nexium that "other district courts have found that [the Supreme Court] ruling applies only to reverse settlements that involve money, this court...finds their readings unpersuasive."

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