FTC expands the scope of reportable pharma patent licences under Hart-Scott-Rodino Act
The Federal Trade Commission (FTC) has announced revisions to the rules implementing the Hart-Scott-Rodino (HSR) Act that clarify and expand somewhat the types of patent licences in the pharmaceutical industry for which a filing must be made before such licences may become effective. The revised rules require a filing for a licence that gives the licensee ‘all commercially significant rights’, defined as the exclusive right ‘to use the patent in a particular therapeutic area (or specific indication within a therapeutic area)’, even if the licensor retains (i) the right to manufacture the product(s) covered by the patent solely for the licensee and/or (ii) ‘co-rights’ to assist the licensee in developing and commercialising the products covered by the patent.
The FTC describes the co-rights provision as merely codifying its existing application of the HSR rules, but it acknowledges that the inclusion of licences in which the licensor retains the right to manufacture exclusively for the licensee is an expansion of the existing filing requirements.
The HSR Act requires parties to certain acquisitions of voting securities, non-corporate interests and assets to submit a filing to the FTC and the Department of Justice and observe a waiting period (generally 30 days, unless terminated early or extended by the agencies), before consummating the reported transaction. An acquisition of a patent is clearly a potentially reportable transaction (if it satisfies certain size criteria), but the FTC has also required a filing for a patent licence that gives the licensee the right to use the patent commercially to the exclusion of all others, including the licensor, either for all uses or in a specific use or geographic area, because it has the same effect on competition as an outright acquisition of the patent. The exclusivity test was often described as the exclusive right to ‘make, use and sell’ a product under the patent…
If you are registered and logged in to the site, click on the link below to read the rest of the Debevoise & Plimpton briefing. If not, please register or sign in with your details below.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.
News from The Lawyer
Briefings from Debevoise & Plimpton
This client update focuses on the examination priorities that are most relevant to investment advisers to private equity and hedge funds.
Debevoise & Plimption has published its FCPA Update for January 2013. The lead article concerns anti-corruption compliance in 2013.
Analysis from The Lawyer
Shell legal director Peter Rees is switching litigation control away from external counsel to a unified global team of in-housers