New Jersey District Court dismisses proposed antitrust class action over LAMICTAL patent settlement
On January 24, 2014, the District Court released its reconsideration opinion again dismissing a previously-dismissed proposed antitrust class action against GSK and Teva under the “rule of reason” test set down in the 2012 U.S. Supreme Court’s Actavis decision.
In doing so, the Court made some important statements about Actavis:
- It does not allow scrutiny of all patent settlements with anticompetitive potential.
- It requires scrutiny only of patent settlements that contain “reverse payments”.
- A “reverse payment” must include the exchange of money.
GSK and Teva had settled patent litigation over LAMICTAL (lamotrigine) tablets, which are used to treat epilepsy and bipolar disorder. The patent in issue expired in 2008. According to the patent settlement, Teva was permitted to sell generic tablets prior to patent expiry. GSK also agreed not to launch its own authorized generic version of LAMICTAL during a certain period of exclusivity. The plaintiff alleged the settlement violates antitrust law. There was, however, no transfer of money under the settlement.
The Court previously dismissed the proposed class action under the plaintiff-friendly K-Dur analysis because there was no transfer of money. In reconsidering, the Court found that Actavis did not change the outcome. The Court thereby gave a narrow interpretation of “reverse payment” as requiring the exchange of money, despite two other decisions supposedly reading Actavis as applying to non-monetary patent settlements (see: In re Lipitor and In re Nexium).
* Ryann Atkins is an Articling Student at McCarthy Tétrault.
litigation; patents; patent infringement;