Reverse payment patent settlements, also known as "pay-for-delay" agreements,[1] are a type of agreement that has been used to settle pharmaceutical patent infringement litigation (or threatened litigation), in which the company that has brought the suit agrees to pay the company it sued.
[2][3] Reverse payment patent settlements result from a peculiarity in US regulatory law arising from the Hatch-Waxman Act passed in 1984.
The Act was intended to increase competition and provide incentives to the entry of generic medications.
[6][7] The first ruling by the US Supreme Court in relation to reverse payment settlements came in 2013, in which the Court ruled that the "Federal Trade Commission can sue pharmaceutical companies for potential antitrust violations" in the face of such settlements.
[8][9] Following that case, which involved Solvay Pharmaceutical's drug AndroGel and a reverse payment settlement between Solvay and Actavis, the number of academic papers about reverse payment patent settlement greatly increased.