Federal Court Confirms that Upsher-Smith/Schering Settlement
Benefited Consumers
MINNEAPOLIS, March 9, 2005—A United States
Court of Appeals has ruled that Upsher-Smith Laboratories and
Schering-Plough acted lawfully in settling patent litigation
between them in 1997. This ruling
should put to rest litigation initiated by the US Federal Trade
Commission in 2001.
In
its 2001 complaint, the FTC alleged that the Upsher-Smith/Schering
settlement violated antitrust laws. After a lengthy trial,
the FTC's own administrative law judge ruled in favor of Upsher-Smith
and Schering-Plough in 2002, dismissing the complaint. But
the FTC reversed this ruling, and found against the companies.
Yesterday, the United States Court of Appeals for the Eleventh
Circuit ruled, in a unanimous decision, that
the administration law judge was right and the FTC was wrong.
The
appeals court stated that the FTC's decision was "not
supported by law or logic." The appeals court also found
that the FTC decision was "contradict[ed]" by "overwhelming
evidence." The court added: "It would seem as though
the Commission clearly made its decision before it considered
any contrary conclusion."
Under
the 1997 Upsher-Smith/Schering settlement, Upsher-Smith won
the right to introduce its Klor-Con M20 product on September
1, 2001, even though Schering-Plough's patent does not expire
until September 5, 2006. In the three-and-a-half years since
September 1, 2001, millions of consumers have benefited from
Klor-Con M20 due to the settlement.
Upsher-Smith's
President Mark Evenstad stated: "Throughout this long-running
litigation, we have felt strongly that our settlement promoted
consumer savings by allowing our Klor-Con M20 to enter the
market long before the expiration of Schering's patent. We
are gratified that an independent Federal appeals court has
agreed, and has completely vindicated our position. I believe
that the content and tone of the appeals court decision speaks
for itself."
Upsher-Smith's outside counsel, Christopher M. Curran of White
and Case LLP in Washington, added: "The Federal Trade
Commission was misguided in pursuing this case. The FTC's own
trial judge found that this was a pro-competitive settlement.
The FTC Commissioners had no basis for rejecting the
trial judge's findings. Understandably, the appeals court revived
the trial judge's decision. I credit Upsher-Smith's management
and employees for having the courage to stand up to the allegations
made by the FTC. They deserve this complete vindication."
Upsher-Smith
Laboratories, Inc. is a fully integrated pharmaceutical company
that manufactures and markets prescription pharmaceutical,
OTC, and cosmetic products. Upsher-Smith is also actively involved
in licensing innovative compounds that are in clinical development.
For more information about Upsher-Smith Laboratories, Inc.,
call 1-800-654-2299 or visit www.upsher-smith.com.
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