Thursday 30 December 2010

Access to confidential patent-litigation settlements

A couple weeks ago, Jeremy made reference to the decision of Mr Justice Floyd granting the application to obtain copies of documents from the court file by a third party (here).

We now read in Dow Jones Financial Information Services:
“Cephalon Inc. asked a U.S. judge Wednesday to order the Federal Trade Commission to release confidential documents regarding drug patent-litigation settlements throughout the pharmaceutical industry.

Cephalon says it needs the documents to mount a defense against an FTC lawsuit that seeks to clear the way for generic competition for the company's top-selling drug, narcolepsy treatment Provigil”.
The origin:
“The FTC sued Cephalon in 2008, accusing it of buying off four generic-drug manufacturers including Teva Pharmaceutical Industries Ltd. in settlements of patent-infringement litigation surrounding Provigil, which generates roughly half of Cephalon's revenue.

The patent settlements, in which Cephalon paid a total of $200 million to the generics manufacturers, forestalled competition from cheaper copycats of Provigil until 2012. The drug generated $828 million in sales for the first nine months of 2010. The FTC has asked a federal judge in Philadelphia to overturn the settlements, arguing they are anticompetitive. Cephalon has denied the allegations”.
Cephalon’s argument:
“Cephalon, of Frazer, Pa., says that in the course of the FTC litigation the commission has cited conclusions from two reports it has issued on patent settlements, including one published in January, titled "Pay-For-Delay: How Drug Company Pay-Offs Cost Consumers Billions." The report estimated drug buyers would save about $3.5 billion annually if Congress banned pay-for-delay deals. The study was based on patent-settlement agreements filed with the FTC between 2004 and 2009.

In a court filing Wednesday, Cephalon asked a U.S. judge to either bar the FTC studies from being used in the case or to compel the FTC to turn over documents supporting the studies. The FTC has so far declined to take either step, according to Cephalon”.
FTC’s position:
“The FTC objected to the release of the confidential agreements, saying they are irrelevant to the case and protected from disclosure by law”.
Even though
“The FTC has notified attorneys for several drug makers including Pfizer Inc., Novartis AG and Bristol-Myers Squibb Co. that as a result of Cephalon's request the commission may be forced to disclose confidential settlement information the companies previously filed with the FTC”.
Would those documents be disclosed?
“The FTC advised the parties they could seek protective orders to block the release.
In a previous letter to Cephalon, the FTC said the request would also be burdensome because the companies that filed the confidential settlement documents must be given an opportunity to ask the court to block their release.

"This process is likely to result in an avalanche of petitions to prevent the disclosure of these competitively sensitive materials," the FTC said".
Cephalon's seems to be exploring a new path. Questions and doubts arise.

What interest for the case would have including third parties settlements?

The FTC seems to “suggest” companies affected to ask the court to block the release. This seems very convenient for those affected. What impact would it have on this claim? (bear in mind that Cephalon asked to bar the FTC studies from being used in the case if documents are not disclosed).

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