(Story updated with comment from Abbott at 9:45 a.m. ET, Thursday, April 26, 2012.)
Several drug companies, including a division of Abbott Laboratories, have won a federal appeal in which the Federal Trade Commission had argued that the drugmakers illegally conspired to restrain competition by agreeing to settle patent-dispute litigation in exchange for annual payments.
Writing for a three-judge panel of the 11th U.S. Circuit Court of Appeals in Atlanta, U.S. Circuit Judge Edward Carnes rejected the FTC's legal analysis of how courts ought to view so-called pay-for-delay cases that involve settlements between makers of branded and generic drugs.
"It is worth emphasizing that what the FTC proposes is that we attempt to decide how some other court in some other case at some other time was likely to have resolved some other claim if it had been pursued to judgment," Carnes wrote in the opinion (PDF). "If we did that, we would be deciding a patent case within an antitrust case about the settlement of a patent case, a turducken task."
The FTC had argued that since Abbott subsidiary Solvay Pharmaceuticals' 2000 patent for testosterone drug AndroGel was "not likely" to prevent generics from entering the market, Solvay's decision to pay its competitors a cut of its annual sales in exchange for agreements not to market competing generics amounted to illegal restraint of trade.