Federal Trade Commission, Petitioner v. Actavis, Inc.

Summary

The Court, in an opinion by Justice Breyer, held that reverse-payment patent settlements can violate antitrust law even when their restraints fall within the patent’s potential exclusionary scope. It reversed the dismissal of the FTC’s complaint and remanded for rule-of-reason proceedings, rejecting both near-automatic immunity and the FTC’s proposed presumption of illegality. The Court explained that a large, unjustified payment can indicate anticompetitive harm without ordinarily requiring litigation of patent validity. Chief Justice Roberts, joined by Justices Scalia and Thomas, dissented, arguing that settlements within the patent’s scope should remain protected absent sham litigation or fraud in obtaining the patent, and warning that the decision would discourage settlements and patent challenges. Justice Alito did not participate.