FTC finalises rule extending reporting requirements for pharmaceutical patent transfers

Download document:

FTC finalises rule extending reporting requirements for pharmaceutical patent transfers - .PDF file.

On 6 November 2013, the Federal Trade Commission (FTC) announced final changes to certain Hart-Scott-Rodino (HSR) rules regarding acquisitions of exclusive patent rights in the pharmaceutical industry. The revised rules, which apply only to transfers of pharmaceutical patent rights, will increase the number of licensing arrangements in the pharmaceutical industry that will be subject to the HSR Act’s pre-closing filing and waiting period requirements. The FTC estimates that the rule changes will result in filing requirements each year for approximately 30 additional pharmaceutical licensing transactions that were not reportable under the old rules.

Initially proposed in August 2012, the new rules change the test used to determine when an exclusive licence to a pharmaceutical patent transfers rights sufficient to constitute a reportable asset transfer under the HSR rules, assuming the HSR thresholds are met and no exemption applies. The new rules provide that a pharmaceutical patent licence may constitute a potentially reportable asset transfer where it transfers ’all commercially significant rights’ to the licensee on an exclusive basis.

Under the previous test, such arrangements would only be subject to HSR reporting requirements where they involved the transfer of the exclusive right to ‘make, use and sell’ under a patent. Thus, where the licensor retained any one of these three rights — to make, use or sell — the acquisition of the remaining rights by a licensee was not reportable even where the HSR filing threshold tests were satisfied…

If you are registered and logged in to the site, click on the link below to read the rest of the Hogan Lovells briefing. If not, please register or sign in with your details below.