King Drug’s Significance: The Sounds of Silence

On November 4, 2016, the U.S. Supreme Court met for its fifth conference of the 2016 term and denied review of a Third Circuit opinion holding that a patentee's otherwise lawful grant of an exclusive license must undergo antitrust scrutiny. The Third Circuit, in King Drug, interpreted the Supreme Court's 2013 Actavis opinion to include antitrust scrutiny of exclusive license arrangements.  In Actavis, the Supreme Court looked a reverse-payment patent litigation settlements (often to resolve Hatch-Waxman litigation for alleged infringement by the generic company's filing of an Abbreviated New Drug Application or ANDA). 

Note that all the King Drug opinion tells us is that such exclusive license agreements as consideration for an agreement not to launch an authorized  generic are within the umbrella of Actavis scrutiny. This means the agreement must be scrutinized as follows:  1) Was there a reverse payment? 2 Was the reverse payment large and unjustified? and 3) Would the reverse payment survive scrutiny under Antitrust's rule of reason analysis?

So, now we know something but I'll be darned if we know exactly what.  The Third Circuit's opinion that a monetary payment is not the sine qua non of an Actavis antitrust scrutiny trigger is interesting.   A no- authorized generic agreement can be quite valuable and, so, meets the Actavis  antitrust scrutiny test.

Then, how far does the Actavis antitrust scrutiny trigger analysis extend, to anything that can be monetized?