Nearly two years ago the Supreme Court issued its opinion in FTC v. Actavis, 133 S. Ct. 2223 (2013), holding that a reverse payment made by a brand manufacturer to a generic manufacturer to resolve pending patent litigation could satisfy a violation of the Sherman Antitrust Act. In adopting a "rule of reason" test and rejecting the "scope of the patent" test adopted by several lower courts, the Supreme Court held that "[i]t would be incongruous to determine antitrust liability by measuring the settlement's anticompetitive effects solely against patent law policy, and not against procompetitive antitrust policies as well." Id. at 2231. Thus, "the antitrust question should be answered by considering traditional antitrust factors." Id.
Unfortunately, as Chief Justice Roberts predicted when he wished "good luck to the district courts" in his dissent in Actavis, the Court's majority opinion left more questions unanswered than answered. The majority declined to provide a structure for the rule-of-reason analysis, leaving it to the lower courts to establish the framework. That uncertainty is now making its way through district and circuit courts.
Perhaps the biggest issue left undecided by the Supreme Court in Actavis is the definition of a...
