The Federal Trade Commission (FTC) filed a Petition for Rehearing En Banc in the case of Schering-Plough Corp., v. Federal Trade Commission, 2005 WL 528439 (11th Cir.) on April 21, 2005. This case of “reverse payments” litigation has spanned over ten years and the story isn’t over yet.
The following is a very brief summary of some of the milestones in the case, to date:
• 1995 – Upsher-Smith Laboratories (Upsher) and ESI Lederle, Inc. (ESI) separately seek Food and Drug Administration approval for their generic versions of Schering-Plough’s potassium supplement (patent expiration date of September 5, 2006). Schering-Plough (Schering) separately sues both companies for patent infringement.
• 1997 – Schering settles separately with both companies. Instead of the alleged infringers (Upsher and ESI) paying Schering in the settlement, Schering actually agrees to license other products from the two companies and make payments to them – thus the “reverse payments” term. As part of the settlement, both companies agree to delay market release of their two generic potassium supplement products, albeit before expiration of Schering’s U.S. Patent No. 4,863,743 (one of several covering their product).
• March 30, 2001 – The FTC files an administrative complaint against Schering, Upsher and ESI’s parent (American Home Products Corporation) saying that the settlements are in violation of the FTC Act and the Sherman Act.
• The administrative law judge (ALJ) dismisses the complaint, saying that both agreements are lawful.
• The FTC’s complaint counsel appeals the ALJ’s decision to the full FTC.
• December 8, 2003, the FTC reverses the ALJ’s decision saying that the settlements do violate the FTC Act and the Sherman Act.
• Schering and Upsher petition for the 11th Circuit review of the ruling.
• March 8, 2005 – The 11th Circuit rejects the FTC’s decision.
• April 21, 2005 – The FTC files a Petition for Rehearing En Banc.
I am anxious to see if the 11th Circuit will grant a rehearing En Banc in the case and if so, to learn the outcome.
For a more detailed description of the case, see FTC Seeks En Banc Rehearing in Schering-Plough "Reverse Payments" Litigation, Pharmaceutical Law & Industry Report, May 6, 2005 (Vol. 3 No. 18, pp 486 – 487) by H. Keeto Sabharwal a skilled patent litigator with Blank Rome LLP whose practice focuses on a variety of technologies including pharmaceutical.