FTC challenges patent settlement between Bayer and Barr

WASHINGTON The Federal Trade Commission is arguing that if a ruling upholding a 1997 settlement between Bayer and Barr is upheld, it will threaten generic competition.

Plaintiffs who buy Bayer’s antibiotic, Cipro, have started an appeal in the U.S. Court of Appeals for the Federal Circuit after a district court ruled that the settlement fell within the scope of Bayer’s patent rights and therefore is not subject to antitrust claims.

The settlement ended patent infringement litigation that Bayer initiated after Barr filed an application for Cipro. Weeks before the trial, the companies entered into an agreement under which Bayer paid Barr nearly $50 million to convert its Paragraph IV certification into a Paragraph III and then made quarterly payments to Barr up to the time that the patent expired in December 2003.

When the plaintiffs challenged the settlement on antitrust grounds, a U.S. District Court for the Eastern District of New York judge ruled that, “any conduct within the scope of the patent is exempt from antitrust scrutiny.” The plaintiffs contended that Barr might have prevailed in patent litigation and successfully invalidated the patent, and the FTC feels the same way regarding the outcome.