(Slip Opinion)              OCTOBER TERM, 2012                                       1

                                       Syllabus

         NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
       being done in connection with this case, at the time the opinion is issued.
       The syllabus constitutes no part of the opinion of the Court but has been
       prepared by the Reporter of Decisions for the convenience of the reader.
       See United States v. Detroit Timber & Lumber Co., 

, 337.


SUPREME COURT OF THE UNITED STATES

                                       Syllabus

   FEDERAL TRADE COMMISSION v. ACTAVIS, INC., 

                    ET AL. 


CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
                THE ELEVENTH CIRCUIT

      No. 12–416.      Argued March 25, 2013—Decided June 17, 2013
The Drug Price Competition and Patent Term Restoration Act of 1984
  (Hatch-Waxman Act or Act) creates special procedures for identifying
  and resolving patent disputes between brand-name and generic drug
  manufacturers, one of which requires a prospective generic manufac-
  turer to assure the Food and Drug Administration (FDA) that it will
  not infringe the brand-name’s patents. One way to provide such as-
  surance (the “paragraph IV” route) is by certifying that any listed,
  relevant patent “is invalid or will not be infringed by the manufac-
  ture, use, or sale” of the generic drug.                  

.
  §355(j)(2)(A)(vii)(IV).
    Respondent Solvay Pharmaceuticals obtained a patent for its ap-
  proved brand-name drug AndroGel. Subsequently, respondents Ac-
  tavis and Paddock filed applications for generic drugs modeled after
  AndroGel and certified under paragraph IV that Solvay’s patent was
  invalid and that their drugs did not infringe it. Solvay sued Actavis
  and Paddock, claiming patent infringement.           See 

.
  §271(e)(2)(A). The FDA eventually approved Actavis’ generic prod-
  uct, but instead of bringing its drug to market, Actavis entered into a
  “reverse payment” settlement agreement with Solvay, agreeing not to
  bring its generic to market for a specified number of years and agree-
  ing to promote AndroGel to doctors in exchange for millions of dol-
  lars. Paddock made a similar agreement with Solvay, as did re-
  spondent Par, another manufacturer aligned in the patent litigation
  with Paddock.
    The Federal Trade Commission (FTC) filed suit, alleging that re-
  spondents violated §5 of the Federal Trade Commission Act by un-
  lawfully agreeing to abandon their patent challenges, to refrain from
2                          FTC v. ACTAVIS, INC.

                                  Syllabus

    launching their low-cost generic drugs, and to share in Solvay’s mo-
    nopoly profits. The District Court dismissed the complaint. The
    Eleventh Circuit concluded that as long as the anticompetitive effects
    of a settlement fall within the scope of the patent’s exclusionary po-
    tential, the settlement is immune from antitrust attack. Noting that
    the FTC had not alleged that the challenged agreements excluded
    competition to a greater extent than would the patent, if valid, it af-
    firmed the complaint’s dismissal. It further recognized that if parties
    to this sort of case do not settle, a court might declare a patent inva-
    lid. But since public policy favors the settlement of disputes, it held
    that courts could not require parties to continue to litigate in order to
    avoid antitrust liability.
Held: The Eleventh Circuit erred in affirming the dismissal of the
 FTC’s complaint. Pp. 8–21.
    (a) Although the anticompetitive effects of the reverse settlement
 agreement might fall within the scope of the exclusionary potential of
 Solvay’s patent, this does not immunize the agreement from antitrust
 attack. For one thing, to refer simply to what the holder of a valid
 patent could do does not by itself answer the antitrust question.
 Here, the paragraph IV litigation put the patent’s validity and pre-
 clusive scope at issue, and the parties’ settlement—in which, the FTC
 alleges, the plaintiff agreed to pay the defendants millions to stay out
 of its market, even though the defendants had no monetary claim
 against the plaintiff—ended that litigation. That form of settlement
 is unusual, and there is reason for concern that such settlements
 tend to have significant adverse effects on competition. It would be
 incongruous to determine antitrust legality by measuring the settle-
 ment’s anticompetitive effects solely against patent law policy, and
 not against procompetitive antitrust policies as well. Both are rele-
 vant in determining the scope of monopoly and antitrust immunity
 conferred by a patent, see, e.g., United States v. Line Material Co.,
 

, 310, 311, and the antitrust question should be an-
 swered by considering traditional antitrust factors. For another
 thing, this Court’s precedents make clear that patent-related settle-
 ment agreements can sometimes violate the antitrust laws. See, e.g.,
 United States v. Singer Mfg. Co., 

; United States v. New
 Wrinkle, Inc., 

; Standard Oil Co. (Indiana) v. United
 States, 

. Finally, the Hatch-Waxman Act’s general pro-
 competitive thrust—facilitating challenges to a patent’s validity and
 requiring parties to a paragraph IV dispute to report settlement
 terms to federal antitrust regulators—suggests a view contrary to the
 Eleventh Circuit’s. Pp. 8–14.
    (b) While the Eleventh Circuit’s conclusion finds some support in a
 general legal policy favoring the settlement of disputes, its related
                    Cite as: 570 U. S. ____ (2013)                      3

                               Syllabus

underlying practical concern consists of its fear that antitrust scruti-
ny of a reverse payment agreement would require the parties to en-
gage in time-consuming, complex, and expensive litigation to demon-
strate what would have happened to competition absent the
settlement. However, five sets of considerations lead to the conclu-
sion that this concern should not determine the result here and that
the FTC should have been given the opportunity to prove its anti-
trust claim. First, the specific restraint at issue has the “potential for
genuine adverse effects on competition.” FTC v. Indiana Federation
of Dentists, 

, 460–461. Payment for staying out of the
market keeps prices at patentee-set levels and divides the benefit be-
tween the patentee and the challenger, while the consumer loses.
And two Hatch-Waxman Act features—the 180-day exclusive-right-
to-sell advantage given to the first paragraph IV challenger to win
FDA approval, §355(j)(5)(B)(iv), and the roughly 30-month period
that the subsequent manufacturers would be required to wait out be-
fore winning FDA approval, §355(j)(5)(B)(iii)—mean that a reverse
settlement agreement with the first filer removes from consideration
the manufacturer most likely to introduce competition quickly. Se-
cond, these anticompetitive consequences will at least sometimes
prove unjustified. There may be justifications for reverse payment
that are not the result of having sought or brought about anticompet-
itive consequences, but that does not justify dismissing the FTC’s
complaint without examining the potential justifications. Third,
where a reverse payment threatens to work unjustified anticompeti-
tive harm, the patentee likely has the power to bring about that
harm in practice. The size of the payment from a branded drug
manufacturer to a generic challenger is a strong indicator of such
power. Fourth, an antitrust action is likely to prove more feasible
administratively than the Eleventh Circuit believed. It is normally
not necessary to litigate patent validity to answer the antitrust ques-
tion. A large, unexplained reverse payment can provide a workable
surrogate for a patent’s weakness, all without forcing a court to con-
duct a detailed exploration of the patent’s validity. Fifth, the fact
that a large, unjustified reverse payment risks antitrust liability does
not prevent litigating parties from settling their lawsuits. As in oth-
er industries, they may settle in other ways, e.g., by allowing the ge-
neric manufacturer to enter the patentee’s market before the patent
expires without the patentee’s paying the challenger to stay out prior
to that point. Pp. 14–20.
   (c) This Court declines to hold that reverse payment settlement
agreements are presumptively unlawful. Courts reviewing such
agreements should proceed by applying the “rule of reason,” rather
than under a “quick look” approach. See California Dental Assn. v.
4                         FTC v. ACTAVIS, INC.

                                 Syllabus

    FTC, 

, 775, n. 12. Pp. 20–21.

, reversed and remanded.

  BREYER, J., delivered the opinion of the Court, in which KENNEDY,
GINSBURG, SOTOMAYOR, and KAGAN, JJ., joined. ROBERTS, C. J., filed a
dissenting opinion, in which SCALIA and THOMAS, JJ., joined. ALITO, J.,
took no part in the consideration or decision of the case.
                        Cite as: 570 U. S. ____ (2013)                              1

                             Opinion of the Court

     NOTICE: This opinion is subject to formal revision before publication in the
     preliminary print of the United States Reports. Readers are requested to
     notify the Reporter of Decisions, Supreme Court of the United States, Wash­
     ington, D. C. 20543, of any typographical or other formal errors, in order
     that corrections may be made before the preliminary print goes to press.


SUPREME COURT OF THE UNITED STATES
                                   _________________

                                   No. 12–416
                                   _________________


   FEDERAL TRADE COMMISSION, PETITIONER v.

             ACTAVIS, INC., ET AL. 

 ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF 

          APPEALS FOR THE ELEVENTH CIRCUIT

                                 [June 17, 2013] 


   JUSTICE BREYER delivered the opinion of the Court.
   Company A sues Company B for patent infringement.
The two companies settle under terms that require (1)
Company B, the claimed infringer, not to produce the pat­
ented product until the patent’s term expires, and (2)
Company A, the patentee, to pay B many millions of dol­
lars. Because the settlement requires the patentee to pay
the alleged infringer, rather than the other way around,
this kind of settlement agreement is often called a “reverse
payment” settlement agreement. And the basic question
here is whether such an agreement can sometimes unrea­
sonably diminish competition in violation of the antitrust
laws. See, e.g., 

. §1 (Sherman Act prohibition
of “restraint[s] of trade or commerce”). Cf. Palmer v. BRG of
Ga., Inc., 

 (1990) (per curiam) (invalidating
agreement not to compete).
   In this case, the Eleventh Circuit dismissed a Federal
Trade Commission (FTC) complaint claiming that a par­
ticular reverse payment settlement agreement violated
the antitrust laws. In doing so, the Circuit stated that a
reverse payment settlement agreement generally is “im­
2                   FTC v. ACTAVIS, INC.

                      Opinion of the Court

mune from antitrust attack so long as its anticompetitive
effects fall within the scope of the exclusionary potential of
the patent.” FTC v. Watson Pharmaceuticals, Inc., 

, 1312 (2012). And since the alleged infringer’s
promise not to enter the patentee’s market expired before
the patent’s term ended, the Circuit found the agreement
legal and dismissed the FTC complaint. Id., at 1315. In
our view, however, reverse payment settlements such as
the agreement alleged in the complaint before us can some­
times violate the antitrust laws. We consequently hold
that the Eleventh Circuit should have allowed the FTC’s
lawsuit to proceed.
                              I

                              A

  Apparently most if not all reverse payment settlement
agreements arise in the context of pharmaceutical drug
regulation, and specifically in the context of suits brought
under statutory provisions allowing a generic drug manu­
facturer (seeking speedy marketing approval) to challenge
the validity of a patent owned by an already-approved
brand-name drug owner. See Brief for Petitioner 29; 12 P.
Areeda & H. Hovenkamp, Antitrust Law ¶2046, p. 338
(3d ed. 2012) (hereinafter Areeda); Hovenkamp, Sensible
Antitrust Rules for Pharmaceutical Competition, 39
U. S. F. L. Rev. 11, 24 (2004). We consequently describe
four key features of the relevant drug-regulatory frame­
work established by the Drug Price Competition and
Patent Term Restoration Act of 1984, 98 Stat. 1585, as
amended. That Act is commonly known as the Hatch-
Waxman Act.
  First, a drug manufacturer, wishing to market a new
prescription drug, must submit a New Drug Application to
the federal Food and Drug Administration (FDA) and
undergo a long, comprehensive, and costly testing process,
after which, if successful, the manufacturer will receive
                  Cite as: 570 U. S. ____ (2013)             3

                      Opinion of the Court

marketing approval from the FDA. See 

.
§355(b)(1) (requiring, among other things, “full reports of
investigations” into safety and effectiveness; “a full list
of the articles used as components”; and a “full description”
of how the drug is manufactured, processed, and packed).
   Second, once the FDA has approved a brand-name drug
for marketing, a manufacturer of a generic drug can ob­
tain similar marketing approval through use of abbrevi­
ated procedures. The Hatch-Waxman Act permits a generic
manufacturer to file an Abbreviated New Drug Appli­
cation specifying that the generic has the “same active
ingredients as,” and is “biologically equivalent” to, the al­
ready-approved brand-name drug. Caraco Pharmaceutical
Laboratories, Ltd. v. Novo Nordisk A/S, 

___, ___
(2012) (slip op., at 2) (citing 

. §§355(j)(2)(A)(ii),
(iv)). In this way the generic manufacturer can obtain
approval while avoiding the “costly and time-consuming
studies” needed to obtain approval “for a pioneer drug.”
See Eli Lilly & Co. v. Medtronic, Inc., 

,
676 (1990). The Hatch-Waxman process, by allowing the
generic to piggy-back on the pioneer’s approval efforts,
“speed[s] the introduction of low-cost generic drugs to
market,” Caraco, supra, at ___ (slip op., at 2), thereby
furthering drug competition.
   Third, the Hatch-Waxman Act sets forth special pro­
cedures for identifying, and resolving, related patent dis­
putes. It requires the pioneer brand-name manufacturer
to list in its New Drug Application the “number and the
expiration date” of any relevant patent. See 

.
§355(b)(1). And it requires the generic manufacturer in its
Abbreviated New Drug Application to “assure the FDA”
that the generic “will not infringe” the brand-name’s pa­
tents. See Caraco, supra, at___ (slip op., at 3).
   The generic can provide this assurance in one of several
ways. See 

. §355(j)(2)(A)(vii). It can certify that
the brand-name manufacturer has not listed any rele-
4                   FTC v. ACTAVIS, INC.

                     Opinion of the Court

vant patents. It can certify that any relevant patents have
expired. It can request approval to market beginning
when any still-in-force patents expire. Or, it can certify
that any listed, relevant patent “is invalid or will not be
infringed by the manufacture, use, or sale” of the drug
described in the Abbreviated New Drug Application. See
§355(j)(2)(A)(vii)(IV). Taking this last-mentioned route
(called the “paragraph IV” route), automatically counts as
patent infringement, see 

. §271(e)(2)(A) (2006
ed., Supp. V), and often “means provoking litigation.”
Caraco, supra, at___ (slip op., at 5). If the brand-name
patentee brings an infringement suit within 45 days, the
FDA then must withhold approving the generic, usually
for a 30-month period, while the parties litigate patent
validity (or infringement) in court. If the courts decide the
matter within that period, the FDA follows that determi­
nation; if they do not, the FDA may go forward and give
approval to market the generic product. See 

.
§355(j)(5)(B)(iii).
   Fourth, Hatch-Waxman provides a special incentive for
a generic to be the first to file an Abbreviated New Drug
Application taking the paragraph IV route. That ap-
plicant will enjoy a period of 180 days of exclusivity (from
the first commercial marketing of its drug).              See
§355(j)(5)(B)(iv) (establishing exclusivity period). During
that period of exclusivity no other generic can compete
with the brand-name drug. If the first-to-file generic
manufacturer can overcome any patent obstacle and bring
the generic to market, this 180-day period of exclusivity
can prove valuable, possibly “worth several hundred mil­
lion dollars.” Hemphill, Paying for Delay: Pharmaceutical
Patent Settlement as a Regulatory Design Problem, 81
N. Y. U. L. Rev. 1553, 1579 (2006). Indeed, the Generic
Pharmaceutical Association said in 2006 that the “ ‘vast
majority of potential profits for a generic drug manufac­
turer materialize during the 180-day exclusivity period.’ ”
                  Cite as: 570 U. S. ____ (2013)            5

                      Opinion of the Court

Brief for Petitioner 6 (quoting statement). The 180-day ex-
clusivity period, however, can belong only to the first
generic to file. Should that first-to-file generic forfeit the
exclusivity right in one of the ways specified by statute, no
other generic can obtain it. See §355(j)(5)(D).
                              B
                               1
   In 1999, Solvay Pharmaceuticals, a respondent here,
filed a New Drug Application for a brand-name drug called
AndroGel. The FDA approved the application in 2000. In
2003, Solvay obtained a relevant patent and disclosed that
fact to the FDA, 

, at 1308, as Hatch-Waxman
requires. See §355(c)(2) (requiring, in addition, that FDA
must publish new patent information upon submission).
   Later the same year another respondent, Actavis, Inc.
(then known as Watson Pharmaceuticals), filed an Abbre­
viated New Drug Application for a generic drug modeled
after AndroGel. Subsequently, Paddock Laboratories, also
a respondent, separately filed an Abbreviated New Drug
Application for its own generic product. Both Actavis and
Paddock certified under paragraph IV that Solvay’s listed
patent was invalid and their drugs did not infringe it. A
fourth manufacturer, Par Pharmaceutical, likewise a re-
spondent, did not file an application of its own but joined
forces with Paddock, agreeing to share the patent litiga­
tion costs in return for a share of profits if Paddock ob­
tained approval for its generic drug.
   Solvay initiated paragraph IV patent litigation against
Actavis and Paddock. Thirty months later the FDA ap­
proved Actavis’ first-to-file generic product, but, in 2006,
the patent-litigation parties all settled. Under the terms
of the settlement Actavis agreed that it would not bring its
generic to market until August 31, 2015, 65 months before
Solvay’s patent expired (unless someone else marketed a
generic sooner). Actavis also agreed to promote AndroGel
6                  FTC v. ACTAVIS, INC.

                     Opinion of the Court

to urologists. The other generic manufacturers made
roughly similar promises. And Solvay agreed to pay mil­
lions of dollars to each generic—$12 million in total to
Paddock; $60 million in total to Par; and an estimated
$19–$30 million annually, for nine years, to Actavis. See
App. 46, 49–50, Complaint ¶¶66, 77. The companies de-
scribed these payments as compensation for other services
the generics promised to perform, but the FTC contends
the other services had little value. According to the FTC
the true point of the payments was to compensate the
generics for agreeing not to compete against AndroGel
until 2015. See id., at 50–53, Complaint ¶¶81–85.
                              2
   On January 29, 2009, the FTC filed this lawsuit against
all the settling parties, namely, Solvay, Actavis, Paddock,
and Par. The FTC’s complaint (as since amended) alleged
that respondents violated §5 of the Federal Trade Com­
mission Act, 

. §45, by unlawfully agreeing “to
share in Solvay’s monopoly profits, abandon their patent
challenges, and refrain from launching their low-cost
generic products to compete with AndroGel for nine
years.” App. 29, Complaint ¶5. See generally FTC v.
Indiana Federation of Dentists, 

, 454 (1986)
(Section 5 “encompass[es] . . . practices that violate the
Sherman Act and the other antitrust laws”). The District
Court held that these allegations did not set forth an
antitrust law violation. In re Androgel Antitrust Litiga-
tion (No. II), 

, 1379 (ND Ga. 2010). It
accordingly dismissed the FTC’s complaint. The FTC
appealed.
   The Court of Appeals for the Eleventh Circuit affirmed
the District Court. It wrote that “absent sham litigation
or fraud in obtaining the patent, a reverse payment set­
tlement is immune from antitrust attack so long as its
anticompetitive effects fall within the scope of the exclu­
                  Cite as: 570 U. S. ____ (2013)            7

                      Opinion of the Court

sionary potential of the patent.” 

, at 1312. The
court recognized that “antitrust laws typically prohibit
agreements where one company pays a potential competi­
tor not to enter the market.” Id., at 1307 (citing Valley
Drug Co. v. Geneva Pharmaceuticals, Inc., 

,
1304 (CA11 2003)). See also Palmer, 498 U. S., at 50
(agreement to divide territorial markets held “unlawful on
its face”). But, the court found that “reverse payment
settlements of patent litigation presen[t] atypical cases
because one of the parties owns a patent.” 

, at
1307 (internal quotation marks and second alteration
omitted). Patent holders have a “lawful right to exclude
others from the market,” ibid. (internal quotation marks
omitted); thus a patent “conveys the right to cripple com­
petition.” Id., at 1310 (internal quotation marks omitted).
The court recognized that, if the parties to this sort of case
do not settle, a court might declare the patent invalid. Id.,
at 1305. But, in light of the public policy favoring settle­
ment of disputes (among other considerations) it held that
the courts could not require the parties to continue to
litigate in order to avoid antitrust liability. Id., at 1313–
1314.
   The FTC sought certiorari. Because different courts
have reached different conclusions about the application of
the antitrust laws to Hatch-Waxman-related patent set­
tlements, we granted the FTC’s petition. Compare, e.g.,
id., at 1312 (case below) (settlements generally “immune
from antitrust attack”); In re Ciprofloxacin Hydrochloride
Antitrust Litigation, 

, 1332–1337 (CA Fed.
2008) (similar); In re Tamoxifen Citrate Antitrust Litiga-
tion, 

, 212–213 (CA2 2006) (similar), with
In re K-Dur Antitrust Litigation, 

, 214–218
(CA3 2012) (settlements presumptively unlawful).
8                   FTC v. ACTAVIS, INC.

                      Opinion of the Court

                               II

                               A

   Solvay’s patent, if valid and infringed, might have per­
mitted it to charge drug prices sufficient to recoup the
reverse settlement payments it agreed to make to its po­
tential generic competitors. And we are willing to take
this fact as evidence that the agreement’s “anticompetitive
effects fall within the scope of the exclusionary potential of
the patent.” 

, at 1312. But we do not agree that
that fact, or characterization, can immunize the agree­
ment from antitrust attack.
   For one thing, to refer, as the Circuit referred, simply to
what the holder of a valid patent could do does not by
itself answer the antitrust question. The patent here may
or may not be valid, and may or may not be infringed. “[A]
valid patent excludes all except its owner from the use of
the protected process or product,” United States v. Line
Material Co., 

, 308 (1948) (emphasis added).
And that exclusion may permit the patent owner to charge
a higher-than-competitive price for the patented product.
But an invalidated patent carries with it no such right.
And even a valid patent confers no right to exclude prod­
ucts or processes that do not actually infringe. The para­
graph IV litigation in this case put the patent’s validity at
issue, as well as its actual preclusive scope. The parties’
settlement ended that litigation. The FTC alleges that in
substance, the plaintiff agreed to pay the defendants many
millions of dollars to stay out of its market, even though
the defendants did not have any claim that the plaintiff
was liable to them for damages. That form of settlement
is unusual. And, for reasons discussed in Part II–B,
infra, there is reason for concern that settlements tak­
ing this form tend to have significant adverse effects on
competition.
   Given these factors, it would be incongruous to deter­
mine antitrust legality by measuring the settlement’s
                 Cite as: 570 U. S. ____ (2013)            9

                     Opinion of the Court

anticompetitive effects solely against patent law policy,
rather than by measuring them against procompetitive
antitrust policies as well. And indeed, contrary to the
Circuit’s view that the only pertinent question is whether
“the settlement agreement . . . fall[s] within” the legiti­
mate “scope” of the patent’s “exclusionary potential,” 

, at 1309, 1312, this Court has indicated that patent
and antitrust policies are both relevant in determining the
“scope of the patent monopoly”—and consequently anti­
trust law immunity—that is conferred by a patent.
   Thus, the Court in Line Material explained that “the
improper use of [a patent] monopoly,” is “invalid” under
the antitrust laws and resolved the antitrust question in
that case by seeking an accommodation “between the law-
ful restraint on trade of the patent monopoly and the
illegal restraint prohibited broadly by the Sherman Act.”
333 U. S., at 310. To strike that balance, the Court asked
questions such as whether “the patent statute specifically
gives a right” to restrain competition in the manner chal­
lenged; and whether “competition is impeded to a greater
degree” by the restraint at issue than other restraints
previously approved as reasonable. Id., at 311. See also
United States v. United States Gypsum Co., 

,
390–391 (1948) (courts must “balance the privileges of [the
patent holder] and its licensees under the patent grants
with the prohibitions of the Sherman Act against combi-
nations and attempts to monopolize”); Walker Process
Equipment, Inc. v. Food Machinery & Chemical Corp., 

, 174 (1965) (“[E]nforcement of a patent procured
by fraud” may violate the Sherman Act). In short, rather
than measure the length or amount of a restriction solely
against the length of the patent’s term or its earning
potential, as the Court of Appeals apparently did here,
this Court answered the antitrust question by considering
traditional antitrust factors such as likely anticompetitive
effects, redeeming virtues, market power, and potentially
10                  FTC v. ACTAVIS, INC.

                      Opinion of the Court

offsetting legal considerations present in the circumstances,
such as here those related to patents. See Part II–B,
infra. Whether a particular restraint lies “beyond the
limits of the patent monopoly” is a conclusion that flows
from that analysis and not, as THE CHIEF JUSTICE sug­
gests, its starting point. Post, at 3, 8 (dissenting opinion).
   For another thing, this Court’s precedents make clear
that patent-related settlement agreements can sometimes
violate the antitrust laws. In United States v. Singer
Mfg. Co., 

 (1963), for example, two sewing
machine companies possessed competing patent claims; a
third company sought a patent under circumstances where
doing so might lead to the disclosure of information that
would invalidate the other two firms’ patents. All three
firms settled their patent-related disagreements while
assigning the broadest claims to the firm best able to
enforce the patent against yet other potential competitors.
Id., at 190–192. The Court did not examine whether, on
the assumption that all three patents were valid, patent
law would have allowed the patents’ holders to do the
same. Rather, emphasizing that the Sherman Act “im­
poses strict limitations on the concerted activities in which
patent owners may lawfully engage,” id., at 197, it held
that the agreements, although settling patent disputes,
violated the antitrust laws. Id., at 195, 197. And that, in
important part, was because “the public interest in grant­
ing patent monopolies” exists only to the extent that “the
public is given a novel and useful invention” in “considera­
tion for its grant.” Id., at 199 (White, J., concurring). See
also United States v. New Wrinkle, Inc., 

, 378
(1952) (applying antitrust scrutiny to patent settlement);
Standard Oil Co. (Indiana) v. United States, 

(1931) (same).
   Similarly, both within the settlement context and with­
out, the Court has struck down overly restrictive patent
licensing agreements—irrespective of whether those
                 Cite as: 570 U. S. ____ (2013)          11

                     Opinion of the Court

agreements produced supra-patent-permitted revenues.
We concede that in United States v. General Elec. Co., 

, 489 (1926), the Court permitted a single patentee
to grant to a single licensee a license containing a mini­
mum resale price requirement. But in Line Material,
supra, at 308, 310–311, the Court held that the antitrust
laws forbid a group of patentees, each owning one or more
patents, to cross-license each other, and, in doing so, to
insist that each licensee maintain retail prices set collec­
tively by the patent holders. The Court was willing to
presume that the single-patentee practice approved in
General Electric was a “reasonable restraint” that “accords
with the patent monopoly granted by the patent law,” 333
U. S., at 312, but declined to extend that conclusion to
multiple-patentee agreements: “As the Sherman Act pro­
hibits agreements to fix prices, any arrangement between
patentees runs afoul of that prohibition and is outside the
patent monopoly.” Ibid. In New Wrinkle, 342 U. S., at
378, the Court held roughly the same, this time in respect
to a similar arrangement in settlement of a litigation
between two patentees, each of which contended that its
own patent gave it the exclusive right to control produc­
tion. That one or the other company (we may presume)
was right about its patent did not lead the Court to confer
antitrust immunity. Far from it, the agreement was found
to violate the Sherman Act. Id., at 380.
   Finally in Standard Oil Co. (Indiana), the Court upheld
cross-licensing agreements among patentees that settled
actual and impending patent litigation, 283 U. S., at 168,
which agreements set royalty rates to be charged third
parties for a license to practice all the patents at issue
(and which divided resulting revenues). But, in doing so,
Justice Brandeis, writing for the Court, warned that such
an arrangement would have violated the Sherman Act had
the patent holders thereby “dominate[d]” the industry and
“curtail[ed] the manufacture and supply of an unpatented
12                  FTC v. ACTAVIS, INC.

                     Opinion of the Court

product.” Id., at 174. These cases do not simply ask
whether a hypothetically valid patent’s holder would be
able to charge, e.g., the high prices that the challenged
patent-related term allowed. Rather, they seek to ac­
commodate patent and antitrust policies, finding chal­
lenged terms and conditions unlawful unless patent law
policy offsets the antitrust law policy strongly favoring
competition.
  Thus, contrary to the dissent’s suggestion, post, at 4–6,
there is nothing novel about our approach. What does
appear novel are the dissent’s suggestions that a patent
holder may simply “pa[y] a competitor to respect its pa­
tent” and quit its patent invalidity or noninfringement
claim without any antitrust scrutiny whatever, post, at 3,
and that “such settlements . . . are a well-known feature of
intellectual property litigation,” post, at 10. Closer exami­
nation casts doubt on these claims. The dissent does not
identify any patent statute that it understands to grant
such a right to a patentee, whether expressly or by fair
implication. It would be difficult to reconcile the proposed
right with the patent-related policy of eliminating unwar­
ranted patent grants so the public will not “continually be
required to pay tribute to would-be monopolists without
need or justification.” Lear, Inc. v. Adkins, 

,
670 (1969). And the authorities cited for this proposition
(none from this Court, and none an antitrust case) are not
on point. Some of them say that when Company A sues
Company B for patent infringement and demands, say,
$100 million in damages, it is not uncommon for B (the
defendant) to pay A (the plaintiff) some amount less than
the full demand as part of the settlement—$40 million, for
example. See Schildkraut, Patent-Splitting Settlements
and the Reverse Payment Fallacy, 71 Antitrust L. J. 1033,
1046 (2004) (suggesting that this hypothetical settlement
includes “an implicit net payment” from A to B of $60
million—i.e., the amount of the settlement discount). The
                 Cite as: 570 U. S. ____ (2013)           13

                     Opinion of the Court

cited authorities also indicate that if B has a counterclaim
for damages against A, the original infringement plaintiff,
A might end up paying B to settle B’s counterclaim. Cf.
Metro-Goldwyn Mayer, Inc. v. 007 Safety Prods., Inc., 

, 13 (CA1 1999) (describing trademark dispute and
settlement). Insofar as the dissent urges that settlements
taking these commonplace forms have not been thought
for that reason alone subject to antitrust liability, we
agree, and do not intend to alter that understanding. But
the dissent appears also to suggest that reverse payment
settlements—e.g., in which A, the plaintiff, pays money to
defendant B purely so B will give up the patent fight—
should be viewed for antitrust purposes in the same light
as these familiar settlement forms. See post, at 9–10. We
cannot agree. In the traditional examples cited above, a
party with a claim (or counterclaim) for damages receives
a sum equal to or less than the value of its claim. In
reverse payment settlements, in contrast, a party with no
claim for damages (something that is usually true of a
paragraph IV litigation defendant) walks away with money
simply so it will stay away from the patentee’s market.
That, we think, is something quite different. Cf. Verizon
Communications, Inc. v. Law Offices of Curtis V. Trinko,
LLP, 

, 408 (2004) (“[C]ollusion” is “the su­
preme evil of antitrust”).
   Finally, the Hatch-Waxman Act itself does not embody a
statutory policy that supports the Eleventh Circuit’s view.
Rather, the general procompetitive thrust of the statute,
its specific provisions facilitating challenges to a patent’s
validity, see Part I–A, supra, and its later-added provi­
sions requiring parties to a patent dispute triggered by a
paragraph IV filing to report settlement terms to the FTC
and the Antitrust Division of the Department of Justice,
all suggest the contrary. See §§1112–1113, 117 Stat.
2461–2462. Those interested in legislative history may
also wish to examine the statements of individual Mem­
14                  FTC v. ACTAVIS, INC.

                     Opinion of the Court

bers of Congress condemning reverse payment settlements
in advance of the 2003 amendments. See, e.g., 148 Cong.
Rec. 14437 (2002) (remarks of Sen. Hatch) (“It was and is
very clear that the [Hatch-Waxman Act] was not designed
to allow deals between brand and generic companies to
delay competition”); 146 Cong. Rec. 18774 (2000) (remarks
of Rep. Waxman) (introducing bill to deter companies from
“strik[ing] collusive agreements to trade multimillion dol­
lar payoffs by the brand company for delays in the intro­
duction of lower cost, generic alternatives”).
                               B
   The Eleventh Circuit’s conclusion finds some degree of
support in a general legal policy favoring the settlement of
disputes. 

, at 1313–1314. See also Schering-
Plough Corp. v. FTC, 

, 1074–1075 (2005)
(same); In re Tamoxifen Citrate, 

, at 202 (noting
public’s “ ‘strong interest in settlement’ ” of complex and
expensive cases). The Circuit’s related underlying practi­
cal concern consists of its fear that antitrust scrutiny of
a reverse payment agreement would require the parties to
litigate the validity of the patent in order to demonstrate
what would have happened to competition in the absence
of the settlement. Any such litigation will prove time
consuming, complex, and expensive. The antitrust game,
the Circuit may believe, would not be worth that litigation
candle.
   We recognize the value of settlements and the patent
litigation problem. But we nonetheless conclude that this
patent-related factor should not determine the result here.
Rather, five sets of considerations lead us to conclude that
the FTC should have been given the opportunity to prove
its antitrust claim.
   First, the specific restraint at issue has the “potential
for genuine adverse effects on competition.” Indiana
Federation of Dentists, 476 U. S., at 460–461 (citing 7
                  Cite as: 570 U. S. ____ (2013)           15

                      Opinion of the Court

Areeda ¶1511, at 429 (1986)). The payment in effect
amounts to a purchase by the patentee of the exclusive
right to sell its product, a right it already claims but would
lose if the patent litigation were to continue and the pa­
tent were held invalid or not infringed by the generic
product. Suppose, for example, that the exclusive right to
sell produces $50 million in supracompetitive profits per
year for the patentee. And suppose further that the pa­
tent has 10 more years to run. Continued litigation, if
it results in patent invalidation or a finding of nonin­
fringement, could cost the patentee $500 million in lost
revenues, a sum that then would flow in large part to
consumers in the form of lower prices.
   We concede that settlement on terms permitting the
patent challenger to enter the market before the patent
expires would also bring about competition, again to the
consumer’s benefit. But settlement on the terms said by
the FTC to be at issue here—payment in return for stay­
ing out of the market—simply keeps prices at patentee-set
levels, potentially producing the full patent-related $500
million monopoly return while dividing that return be­
tween the challenged patentee and the patent challenger.
The patentee and the challenger gain; the consumer loses.
Indeed, there are indications that patentees sometimes
pay a generic challenger a sum even larger than what the
generic would gain in profits if it won the paragraph IV
litigation and entered the market. See Hemphill, 81 N. Y.
U. L. Rev., at 1581. See also Brief for 118 Law, Econom­
ics, and Business Professors et al. as Amici Curiae 25
(estimating that this is true of the settlement challenged
here). The rationale behind a payment of this size cannot
in every case be supported by traditional settlement con­
siderations. The payment may instead provide strong
evidence that the patentee seeks to induce the generic
challenger to abandon its claim with a share of its monop­
oly profits that would otherwise be lost in the competitive
16                   FTC v. ACTAVIS, INC.

                      Opinion of the Court

market.
   But, one might ask, as a practical matter would the
parties be able to enter into such an anticompetitive
agreement? Would not a high reverse payment signal to
other potential challengers that the patentee lacks confi­
dence in its patent, thereby provoking additional challeng­
es, perhaps too many for the patentee to “buy off?” Two
special features of Hatch-Waxman mean that the an-
swer to this question is “not necessarily so.” First, under
Hatch-Waxman only the first challenger gains the special
advantage of 180 days of an exclusive right to sell a gener­
ic version of the brand-name product. See Part I–A, su-
pra. And as noted, that right has proved valuable—
indeed, it can be worth several hundred million dollars.
See Hemphill, supra, at 1579; Brief for Petitioner 6. Sub­
sequent challengers cannot secure that exclusivity period,
and thus stand to win significantly less than the first if
they bring a successful paragraph IV challenge. That is, if
subsequent litigation results in invalidation of the patent,
or a ruling that the patent is not infringed, that litigation
victory will free not just the challenger to compete, but all
other potential competitors too (once they obtain FDA
approval). The potential reward available to a subsequent
challenger being significantly less, the patentee’s payment
to the initial challenger (in return for not pressing the
patent challenge) will not necessarily provoke subsequent
challenges. Second, a generic that files a paragraph IV
after learning that the first filer has settled will (if sued by
the brand-name) have to wait out a stay period of (roughly)
30 months before the FDA may approve its application,
just as the first filer did. See 

. §355(j)(5)(B)(iii).
These features together mean that a reverse payment
settlement with the first filer (or, as in this case, all of the
initial filers) “removes from consideration the most moti­
vated challenger, and the one closest to introducing com­
petition.” Hemphill, supra, at 1586. The dissent may
                 Cite as: 570 U. S. ____ (2013)           17

                     Opinion of the Court

doubt these provisions matter, post, at 15–17, but scholars
in the field tell us that “where only one party owns a
patent, it is virtually unheard of outside of pharmaceuti­
cals for that party to pay an accused infringer to settle the
lawsuit.” 1 H. Hovenkamp, M. Janis, M. Lemley, & C.
Leslie, IP and Antitrust §15.3, p. 15–45, n. 161 (2d ed.
Supp. 2011). It may well be that Hatch-Waxman’s unique
regulatory framework, including the special advantage
that the 180-day exclusivity period gives to first filers,
does much to explain why in this context, but not others,
the patentee’s ordinary incentives to resist paying off
challengers (i.e., the fear of provoking myriad other chal­
lengers) appear to be more frequently overcome. See 12
Areeda ¶2046, at 341 (3d ed. 2010) (noting that these
provisions, no doubt unintentionally, have created special
incentives for collusion).
   Second, these anticompetitive consequences will at least
sometimes prove unjustified. See 7 id., ¶1504, at 410–415
(3d ed. 2010); California Dental Assn. v. FTC, 526 U. S.,
756, 786–787 (1999) (BREYER, J., concurring in part and
dissenting in part). As the FTC admits, offsetting or re-
deeming virtues are sometimes present. Brief for Peti­
tioner 37–39. The reverse payment, for example, may
amount to no more than a rough approximation of the
litigation expenses saved through the settlement. That
payment may reflect compensation for other services that
the generic has promised to perform—such as distributing
the patented item or helping to develop a market for that
item. There may be other justifications. Where a reverse
payment reflects traditional settlement considerations,
such as avoided litigation costs or fair value for services,
there is not the same concern that a patentee is using its
monopoly profits to avoid the risk of patent invalidation or
a finding of noninfringement. In such cases, the parties
may have provided for a reverse payment without having
sought or brought about the anticompetitive consequences
18                 FTC v. ACTAVIS, INC.

                     Opinion of the Court

we mentioned above. But that possibility does not justify
dismissing the FTC’s complaint. An antitrust defendant
may show in the antitrust proceeding that legitimate
justifications are present, thereby explaining the presence
of the challenged term and showing the lawfulness of that
term under the rule of reason. See, e.g., Indiana Federa-
tion of Dentists, supra, at 459; 7 Areeda ¶¶1504a–1504b,
at 401–404 (3d ed. 2010).
   Third, where a reverse payment threatens to work
unjustified anticompetitive harm, the patentee likely pos­
sesses the power to bring that harm about in practice.
See id., ¶1503, at 392–393. At least, the “size of the pay­
ment from a branded drug manufacturer to a prospective
generic is itself a strong indicator of power”—namely, the
power to charge prices higher than the competitive level.
12 id., ¶2046, at 351. An important patent itself helps to
assure such power. Neither is a firm without that power
likely to pay “large sums” to induce “others to stay out of
its market.” Ibid. In any event, the Commission has
referred to studies showing that reverse payment agree­
ments are associated with the presence of higher-than­
competitive profits—a strong indication of market power.
See Brief for Petitioner 45.
   Fourth, an antitrust action is likely to prove more fea-
sible administratively than the Eleventh Circuit believed.
The Circuit’s holding does avoid the need to litigate the
patent’s validity (and also, any question of infringement).
But to do so, it throws the baby out with the bath water,
and there is no need to take that drastic step. That is
because it is normally not necessary to litigate patent
validity to answer the antitrust question (unless, perhaps,
to determine whether the patent litigation is a sham, see

, at 1312). An unexplained large reverse pay­
ment itself would normally suggest that the patentee has
serious doubts about the patent’s survival. And that fact,
in turn, suggests that the payment’s objective is to main­
                  Cite as: 570 U. S. ____ (2013)            19

                      Opinion of the Court

tain supracompetitive prices to be shared among the
patentee and the challenger rather than face what might
have been a competitive market—the very anticompetitive
consequence that underlies the claim of antitrust unlaw­
fulness. The owner of a particularly valuable patent
might contend, of course, that even a small risk of invalid­
ity justifies a large payment. But, be that as it may, the
payment (if otherwise unexplained) likely seeks to prevent
the risk of competition. And, as we have said, that conse­
quence constitutes the relevant anticompetitive harm. In
a word, the size of the unexplained reverse payment can
provide a workable surrogate for a patent’s weakness, all
without forcing a court to conduct a detailed exploration of
the validity of the patent itself. 12 Areeda ¶2046, at 350–
352.
   Fifth, the fact that a large, unjustified reverse payment
risks antitrust liability does not prevent litigating parties
from settling their lawsuit. They may, as in other indus­
tries, settle in other ways, for example, by allowing the
generic manufacturer to enter the patentee’s market prior
to the patent’s expiration, without the patentee paying
the challenger to stay out prior to that point. Although the
parties may have reasons to prefer settlements that in­
clude reverse payments, the relevant antitrust question is:
What are those reasons? If the basic reason is a desire to
maintain and to share patent-generated monopoly profits,
then, in the absence of some other justification, the anti­
trust laws are likely to forbid the arrangement.
   In sum, a reverse payment, where large and unjustified,
can bring with it the risk of significant anticompetitive
effects; one who makes such a payment may be unable to
explain and to justify it; such a firm or individual may
well possess market power derived from the patent; a
court, by examining the size of the payment, may well be
able to assess its likely anticompetitive effects along with
its potential justifications without litigating the validity of
20                  FTC v. ACTAVIS, INC.

                     Opinion of the Court

the patent; and parties may well find ways to settle pa­
tent disputes without the use of reverse payments. In
our view, these considerations, taken together, outweigh
the single strong consideration—the desirability of
settlements—that led the Eleventh Circuit to provide
near-automatic antitrust immunity to reverse payment
settlements.
                               III
   The FTC urges us to hold that reverse payment settle­
ment agreements are presumptively unlawful and that
courts reviewing such agreements should proceed via a
“quick look” approach, rather than applying a “rule of
reason.” See California Dental, 526 U. S., at 775, n. 12
(“Quick-look analysis in effect” shifts to “a defendant the
burden to show empirical evidence of procompetitive
effects”); 7 Areeda ¶1508, at 435–440 (3d ed. 2010). We
decline to do so. In California Dental, we held (unani­
mously) that abandonment of the “rule of reason” in favor
of presumptive rules (or a “quick-look” approach) is appro­
priate only where “an observer with even a rudimentary
understanding of economics could conclude that the ar­
rangements in question would have an anticompetitive
effect on customers and markets.” 526 U. S., at 770; id., at
781 (BREYER, J., concurring in part and dissenting in
part). We do not believe that reverse payment settle­
ments, in the context we here discuss, meet this criterion.
   That is because the likelihood of a reverse payment
bringing about anticompetitive effects depends upon its
size, its scale in relation to the payor’s anticipated future
litigation costs, its independence from other services for
which it might represent payment, and the lack of any
other convincing justification. The existence and degree of
any anticompetitive consequence may also vary as among
industries. These complexities lead us to conclude that
the FTC must prove its case as in other rule-of-reason
                  Cite as: 570 U. S. ____ (2013)            21

                      Opinion of the Court

cases.
  To say this is not to require the courts to insist, contrary
to what we have said, that the Commission need litigate
the patent’s validity, empirically demonstrate the virtues
or vices of the patent system, present every possible sup­
porting fact or refute every possible pro-defense theory.
As a leading antitrust scholar has pointed out, “ ‘[t]here is
always something of a sliding scale in appraising reason­
ableness,’ ” and as such “ ‘the quality of proof required
should vary with the circumstances.’ ” California Dental,
supra, at 780 (quoting with approval 7 Areeda ¶1507, at
402 (1986)).
  As in other areas of law, trial courts can structure anti­
trust litigation so as to avoid, on the one hand, the use of
antitrust theories too abbreviated to permit proper analy­
sis, and, on the other, consideration of every possible
fact or theory irrespective of the minimal light it may
shed on the basic question—that of the presence of sig­
nificant unjustified anticompetitive consequences. See 7 id.,
¶1508c, at 438–440. We therefore leave to the lower
courts the structuring of the present rule-of-reason anti­
trust litigation. We reverse the judgment of the Eleventh
Circuit. And we remand the case for further proceedings
consistent with this opinion.
                                              It is so ordered.

  JUSTICE ALITO took no part in the consideration or
decision of this case.
                 Cite as: 570 U. S. ____ (2013)           1

                   ROBERTS, C. J., dissenting

SUPREME COURT OF THE UNITED STATES
                         _________________

                          No. 12–416
                         _________________


   FEDERAL TRADE COMMISSION, PETITIONER v.

             ACTAVIS, INC., ET AL. 

 ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF 

          APPEALS FOR THE ELEVENTH CIRCUIT

                        [June 17, 2013] 


  CHIEF JUSTICE ROBERTS, with whom JUSTICE SCALIA
and JUSTICE THOMAS join, dissenting.
  Solvay Pharmaceuticals holds a patent. It sued two
generic drug manufacturers that it alleged were infringing
that patent. Those companies counterclaimed, contending
the patent was invalid and that, in any event, their prod-
ucts did not infringe. The parties litigated for three years
before settling on these terms: Solvay agreed to pay the
generics millions of dollars and to allow them into the
market five years before the patent was set to expire; in
exchange, the generics agreed to provide certain services
(help with marketing and manufacturing) and to honor
Solvay’s patent. The Federal Trade Commission alleges
that such a settlement violates the antitrust laws. The
question is how to assess that claim.
  A patent carves out an exception to the applicability of
antitrust laws. The correct approach should therefore be
to ask whether the settlement gives Solvay monopoly
power beyond what the patent already gave it. The Court,
however, departs from this approach, and would instead
use antitrust law’s amorphous rule of reason to inquire
into the anticompetitive effects of such settlements. This
novel approach is without support in any statute, and will
discourage the settlement of patent litigation. I respect-
fully dissent.
2                   FTC v. ACTAVIS, INC.

                   ROBERTS, C. J., dissenting


                                I

   The point of antitrust law is to encourage competitive
markets to promote consumer welfare. The point of patent
law is to grant limited monopolies as a way of encouraging
innovation. Thus, a patent grants “the right to exclude
others from profiting by the patented invention.” Dawson
Chemical Co. v. Rohm & Haas Co., 

, 215
(1980). In doing so it provides an exception to antitrust
law, and the scope of the patent—i.e., the rights conferred
by the patent—forms the zone within which the patent
holder may operate without facing antitrust liability.
   This should go without saying, in part because we’ve
said it so many times. Walker Process Equipment, Inc. v.
Food Machinery & Chemical Corp., 

, 177
(1965) (“ ‘A patent . . . is an exception to the general rule
against monopolies’ ”); United States v. Line Material Co.,

, 300 (1948) (“[T]he precise terms of the grant
define the limits of a patentee’s monopoly and the area in
which the patentee is freed from competition”); United
States v. General Elec. Co., 

, 485 (1926) (“It is
only when . . . [the patentee] steps out of the scope of his
patent rights” that he comes within the operation of the
Sherman Act); Simpson v. Union Oil Co. of Cal., 

, 24 (1964) (similar). Thus, although it is per se unlaw-
ful to fix prices under antitrust law, we have long recog-
nized that a patent holder is entitled to license a competi-
tor to sell its product on the condition that the competitor
charge a certain, fixed price. See, e.g., General Elec. Co.,
supra, at 488–490.
   We have never held that it violates antitrust law for a
competitor to refrain from challenging a patent. And by
extension, we have long recognized that the settlement of
patent litigation does not by itself violate the antitrust
laws. Standard Oil Co. (Indiana) v. United States, 

, 171 (1931) (“Where there are legitimately con-
flicting claims or threatened interferences, a settlement by
                 Cite as: 570 U. S. ____ (2013)            3

                   ROBERTS, C. J., dissenting

agreement, rather than litigation, is not precluded by the
[Sherman] Act”). Like most litigation, patent litigation is
settled all the time, and such settlements—which can
include agreements that clearly violate antitrust law, such
as licenses that fix prices, or agreements among competi-
tors to divide territory—do not ordinarily subject the
litigants to antitrust liability. See 1 H. Hovenkamp, M.
Janis, M. Lemley, & C. Leslie, IP and Antitrust §7.3, pp.
7–13 to 7–15 (2d ed. 2003) (hereinafter Hovenkamp).
   The key, of course, is that the patent holder—when
doing anything, including settling—must act within the
scope of the patent. If its actions go beyond the monopoly
powers conferred by the patent, we have held that such
actions are subject to antitrust scrutiny. See, e.g., United
States v. Singer Mfg. Co., 

, 196–197 (1963).
If its actions are within the scope of the patent, they are
not subject to antitrust scrutiny, with two exceptions
concededly not applicable here: (1) when the parties settle
sham litigation, cf. Professional Real Estate Investors, Inc.
v. Columbia Pictures Industries, Inc., 

, 60–61
(1993); and (2) when the litigation involves a patent ob-
tained through fraud on the Patent and Trademark Office.
Walker Process Equipment, supra, at 177.
   Thus, under our precedent, this is a fairly straight-
forward case. Solvay paid a competitor to respect its
patent—conduct which did not exceed the scope of its
patent. No one alleges that there was sham litigation, or
that Solvay’s patent was obtained through fraud on the
PTO. As in any settlement, Solvay gave its competitors
something of value (money) and, in exchange, its competi-
tors gave it something of value (dropping their legal
claims). In doing so, they put an end to litigation that had
been dragging on for three years. Ordinarily, we would
think this a good thing.
4                   FTC v. ACTAVIS, INC.

                   ROBERTS, C. J., dissenting


                               II

   Today, however, the Court announces a new rule. It is
willing to accept that Solvay’s actions did not exceed the
scope of its patent. Ante, at 8. But it does not agree that
this is enough to “immunize the agreement from antitrust
attack.” Ibid. According to the majority, if a patent holder
settles litigation by paying an alleged infringer a “large
and unjustified” payment, in exchange for having the
alleged infringer honor the patent, a court should employ
the antitrust rule of reason to determine whether the
settlement violates antitrust law. Ante, at 19.
   The Court’s justifications for this holding are unpersua-
sive. First, the majority explains that “the patent here
may or may not be valid, and may or may not be in-
fringed.” Ante, at 8. Because there is “uncertainty” about
whether the patent is actually valid, the Court says that
any questions regarding the legality of the settlement
should be “measur[ed]” by “procompetitive antitrust poli-
cies,” rather than “patent law policy.” Ante, at 9. This
simply states the conclusion. The difficulty with such an
approach is that a patent holder acting within the scope of
its patent has an obvious defense to any antitrust suit:
that its patent allows it to engage in conduct that would
otherwise violate the antitrust laws. But again, that’s the
whole point of a patent: to confer a limited monopoly. The
problem, as the Court correctly recognizes, is that we’re
not quite certain if the patent is actually valid, or if the
competitor is infringing it. But that is always the case,
and is plainly a question of patent law.
   The majority, however, would assess those patent law
issues according to “antitrust policies.” According to the
majority, this is what the Court did in Line Material—i.e.,
it “accommodat[ed]” antitrust principles and struck a
“balance” between patent and antitrust law. Ante, at 9.
But the Court in Line Material did no such thing. Rather,
it explained that it is “well settled that the possession of a
                 Cite as: 570 U. S. ____ (2013)           5

                   ROBERTS, C. J., dissenting

valid patent or patents does not give the patentee any
exemption from the provisions of the Sherman Act beyond
the limits of the patent monopoly.” 333 U. S., at 308 (em-
phasis added). It then, in the very next sentence, stated
that “[b]y aggregating patents in one control, the holder of
the patents cannot escape the prohibitions of the Sherman
Act.” Ibid. That second sentence follows only if such
conduct—the aggregation of multiple patents—goes “be-
yond the limits of the patent monopoly,” which is precisely
what the Court concluded. See id., at 312 (“There is no
suggestion in the patent statutes of authority to combine
with other patent owners to fix prices on articles covered
by the respective patents” (emphasis added)). The Court
stressed, over and over, that a patent holder does not
violate the antitrust laws when it acts within the scope of
its patent. See id., at 305 (“Within the limits of the pa-
tentee’s rights under his patent, monopoly of the process
or product by him is authorized by the patent statutes”);
id., at 310 (“price limitations on patented devices beyond
the limits of a patent monopoly violate the Sherman Act”
(emphasis added)).
     The majority suggests that “[w]hether a particular
restraint lies ‘beyond the limits of the patent monopoly’ is
a conclusion that flows from” applying traditional anti-
trust principles. Ante, at 10. It seems to have in mind a
regime where courts ignore the patent, and simply conduct
an antitrust analysis of the settlement without regard to
the validity of the patent. But a patent holder acting
within the scope of its patent does not engage in any un-
lawful anticompetitive behavior; it is simply exercising the
monopoly rights granted to it by the Government. Its
behavior would be unlawful only if its patent were invalid
or not infringed. And the scope of the patent—i.e., what
rights are conferred by the patent—should be determined
by reference to patent law. While it is conceivable to set
up a legal system where you assess the validity of patents
6                   FTC v. ACTAVIS, INC.

                   ROBERTS, C. J., dissenting

or questions of infringement by bringing an antitrust suit,
neither the majority nor the Government suggests that
Congress has done so.
   Second, the majority contends that “this Court’s prece-
dents make clear that patent-related settlement agree-
ments can sometimes violate the antitrust laws.” Ante, at
10. For this carefully worded proposition, it cites Singer
Manufacturing Co., United States v. New Wrinkle, Inc.,

 (1952), and Standard Oil Co. (Indiana). But
each of those cases stands for the same, uncontroversial
point: that when a patent holder acts outside the scope of
its patent, it is no longer protected from antitrust scrutiny
by the patent.
   To begin, the majority’s description of Singer is inaccu-
rate. In Singer, several patent holders with competing
claims entered into a settlement agreement in which they
cross-licensed their patents to each other, and did so in
order to disadvantage Japanese competition. See 374
U. S., at 194–195 (finding that the agreement had “a
common purpose to suppress the Japanese machine com-
petition in the United States” (footnote omitted)). Accord-
ing to the majority, the Court in Singer “did not examine
whether, on the assumption that all three patents were
valid, patent law would have allowed the patents’ hold-
ers to do the same.” Ante, at 10. Rather, the majority
contends, Singer held that this agreement violated the anti-
trust laws because “in important part . . . ‘the public inter-
est in granting patent monopolies’ exists only to the extent
that ‘the public is given a novel and useful invention’ in
‘consideration for its grant.’ ” Ibid. (quoting Singer, 374
U. S., at 199 (White, J., concurring)). But the majority in
Singer certainly did ask whether patent law permitted
such an arrangement, concluding that it did not. See id.,
at 196–197 (reiterating that it “is equally well settled that
the possession of a valid patent or patents does not give
the patentee any exemption from the provisions of the
                  Cite as: 570 U. S. ____ (2013)            7

                   ROBERTS, C. J., dissenting

Sherman Act beyond the limits of the patent monopoly”
and holding that “those limitations have been exceeded in
this case” (emphasis added; internal quotation marks
omitted)); see also Hovenkamp §7.2b, at 7–8, n. 15 (citing
Singer as a quintessential case in which patent holders
were subject to antitrust liability because their settlement
agreement went beyond the scope of their patents and
thus conferred monopoly power beyond what the patent
lawfully authorized). Even Justice White’s concurrence,
on which the majority relies, emphasized that the conduct
at issue in Singer—collusion between patent holders to
exclude Japanese competition and to prevent disclosure of
prior art—was not authorized by the patent laws. 374
U. S., at 197, 200.
   New Wrinkle is to the same effect. There, the Court
explained that because “[p]rice control through cross-
licensing [is] barred as beyond the patent monopoly,” an
“arrangement . . . made between patent holders to pool
their patents and fix prices on the products for themselves
and their licensees . . . plainly violate[s] the Sherman Act.”
342 U. S., at 379, 380 (emphasis added). As the Court
further explained, a patent holder may not, “ ‘acting in
concert with all members of an industry . . . issue substan-
tially identical licenses to all members of the industry
under the terms of which the industry is completely regi-
mented, the production of competitive unpatented prod-
ucts suppressed, a class of distributors squeezed out, and
prices on unpatented products stabilized.’ ” Id., at 379–
380 (quoting United States v. United States Gypsum Co.,

, 400 (1948)). The majority here, however,
ignores this discussion, and instead categorizes the case as
“applying antitrust scrutiny to [a] patent settlement.”
Ante, at 10.
   Again, in Standard Oil Co. (Indiana), the parties settled
claims regarding “competing patented processes for manu-
facturing an unpatented product,” which threatened to
8                  FTC v. ACTAVIS, INC.

                  ROBERTS, C. J., dissenting

create a monopoly over the unpatented product. 283 U. S.,
at 175. The Court explained that “an exchange of licenses
for the purpose of curtailing the . . . supply of an unpat-
ented product, is beyond the privileges conferred by the
patents.” Id., at 174.
   The majority is therefore right to suggest that these
“precedents make clear that patent-related settlement
agreements can sometimes violate the antitrust laws.”
Ante, at 10 (emphasis added). The key word is sometimes.
And those some times are spelled out in our prece-
dents. Those cases have made very clear that patent
settlements—and for that matter, any agreements relating
to patents—are subject to antitrust scrutiny if they confer
benefits beyond the scope of the patent. This makes sense.
A patent exempts its holder from the antitrust laws only
insofar as the holder operates within the scope of the
patent. When the holder steps outside the scope of the
patent, he can no longer use the patent as his defense.
The majority points to no case where a patent settlement
was subject to antitrust scrutiny merely because the valid-
ity of the patent was uncertain. Not one. It is remarka-
ble, and surely worth something, that in the 123 years
since the Sherman Act was passed, we have never let
antitrust law cross that Rubicon.
   Next, the majority points to the “general procompetitive
thrust” of the Hatch-Waxman Act, the fact that Hatch-
Waxman “facilitat[es] challenges to a patent’s validity,”
and its “provisions requiring parties to [such] patent
dispute[s] . . . to report settlement terms to the FTC and
the Antitrust Division of the Department of Justice.”
Ante, at 13. The Hatch-Waxman Act surely seeks to en-
courage competition in the drug market. And, like every
law, it accomplishes its ends through specific provisions.
These provisions, for example, allow generic manufactur-
ers to enter the market without undergoing a duplicative
application process; they also grant a 180-day monopoly to
                 Cite as: 570 U. S. ____ (2013)            9

                   ROBERTS, C. J., dissenting

the first qualifying generic to commercially market a
competing product. See 

. §§355(j)(2)(A)(ii), (iv),
355(j)(5)(B)(iv). So yes, the point of these provisions is to
encourage competition. But it should by now be trite—and
unnecessary—to say that “no legislation pursues its pur-
poses at all costs” and that “it frustrates rather than
effectuates legislative intent simplistically to assume that
whatever furthers the statute’s primary objective must be
the law.” Rodriguez v. United States, 

, 525–
526 (1987) (per curiam). It is especially disturbing here,
where the Court discerns from specific provisions a very
broad policy—a “general procompetitive thrust,” in its
words—and uses that policy to unsettle the established
relationship between patent and antitrust law. Ante, at
13. Indeed, for whatever it may be worth, Congress has
repeatedly declined to enact legislation addressing the
issue the Court takes on today. See Brief for Actavis, Inc.
57 (citing 11 such bills introduced in the House or Senate
since 2006).
   In addition, it is of no consequence that settlement
terms must be reported to the FTC and the Department of
Justice. Such a requirement does not increase the role of
antitrust law in scrutinizing patent settlements. Rather,
it ensures that such terms are scrutinized consistent with
existing antitrust law. In other words, it ensures that the
FTC and Antitrust Division can review the settlements to
make sure that they do not confer monopoly power beyond
the scope of the patent.
   The majority suggests that “[a]pparently most if not all
reverse payment settlement agreements arise in the con-
text of pharmaceutical drug regulation.” Ante, at 2. This
claim is not supported empirically by anything the majority
cites, and seems unlikely. The term “reverse payment
agreement”—coined to create the impression that such
settlements are unique—simply highlights the fact that
the party suing ends up paying. But this is no anomaly,
10                  FTC v. ACTAVIS, INC.

                   ROBERTS, C. J., dissenting

nor is it evidence of a nefarious plot; it simply results from
the fact that the patent holder plaintiff is a defendant
against an invalidity counterclaim—not a rare situation in
intellectual property litigation. Whatever one might call
them, such settlements—paying an alleged infringer to
drop its invalidity claim—are a well-known feature of
intellectual property litigation, and reflect an intuitive
way to settle such disputes. See Metro-Goldwyn Mayer,
Inc. v. 007 Safety Prods., Inc., 

, 13 (CA1 1999);
see also Schildkraut, Patent-Splitting Settlements and
the Reverse Payment Fallacy, 71 Antitrust L. J. 1033,
1033, 1046–1049 (2004); Brief for Actavis 54, n. 20 (citing
examples). To the extent there are not scores and scores
of these settlements to point to, this is because such
settlements—outside the context of Hatch-Waxman—are
private agreements that for obvious reasons are generally
not appealed, nor publicly available.
    The majority suggests that reverse-payment agreements
are distinct because “a party with no claim for damages
. . . walks away with money simply so it will stay away
from the patentee’s market.” Ante, at 13. Again a distinc-
tion without a difference. While the alleged infringer may
not be suing for the patent holder’s money, it is suing for
the right to use and market the (intellectual) property,
which is worth money.
    Finally, the majority complains that nothing in “any
patent statute” gives patent-holders the right to settle
when faced with allegations of invalidity. Ante, at 12. But
the right to settle generally accompanies the right to
litigate in the first place; no one contends that drivers in
an automobile accident may not settle their competing
claims merely because no statute grants them that author-
ity. The majority suggests that such a right makes it
harder to “eliminat[e] unwarranted patent grants.” Ibid.
That may be so, but such a result—true of all patent
settlements—is no reason to adjudicate questions of pa-
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                   ROBERTS, C. J., dissenting

tent law under antitrust principles. Our cases establish
that antitrust law has no business prying into a patent
settlement so long as that settlement confers to the patent
holder no monopoly power beyond what the patent itself
conferred—unless, of course, the patent was invalid, but
that again is a question of patent law, not antitrust law.
  In sum, none of the Court’s reasons supports its conclu-
sion that a patent holder, when settling a claim that its
patent is invalid, is not immunized by the fact that it is
acting within the scope of its patent. And I fear the
Court’s attempt to limit its holding to the context of patent
settlements under Hatch-Waxman will not long hold.
                              III
   The majority’s rule will discourage settlement of patent
litigation. Simply put, there would be no incentive to
settle if, immediately after settling, the parties would have
to litigate the same issue—the question of patent validity—
as part of a defense against an antitrust suit. In that suit,
the alleged infringer would be in the especially awkward
position of being for the patent after being against it.
   This is unfortunate because patent litigation is particu-
larly complex, and particularly costly. As one treatise
noted, “[t]he median patent case that goes to trial costs
each side $1.5 million in legal fees” alone. Hovenkamp
§7.1c, at 7–5, n. 6. One study found that the cost of litiga-
tion in this specific context—a generic challenging a brand
name pharmaceutical patent—was about $10 million per
suit. See Herman, Note, The Stay Dilemma: Examining
Brand and Generic Incentives for Delaying the Resolution
of Pharmaceutical Patent Litigation, 111 Colum. L. Rev.
1788, 1795, n. 41 (2011) (citing M. Goodman, G. Nachman,
& L. Chen, Morgan Stanley Equity Research, Quantifying
the Impact from Authorized Generics 9 (2004)).
   The Court acknowledges these problems but nonetheless
offers “five sets of considerations” that it tells us overcome
12                  FTC v. ACTAVIS, INC.

                   ROBERTS, C. J., dissenting

these concerns: (1) sometimes patent settlements will have
“ ‘genuine adverse effects on competition’ ”; (2) “these anti-
competitive consequences will at least sometimes prove
unjustified”; (3) “where a reverse payment threatens to
work unjustified anticompetitive harm, the patentee likely
possesses the power to bring that harm about in practice”;
(4) “it is normally not necessary to litigate patent validity
to answer the antitrust question” because “[a]n unex-
plained large reverse payment itself would normally sug-
gest that the patentee has serious doubts about the
patent’s survival,” and using a “payment . . . to prevent the
risk of competition . . . constitutes the relevant anticom-
petitive harm”; and (5) parties may still “settle in other
ways” such as “by allowing the generic manufacturer to
enter the patentee’s market prior to the patent’s expira-
tion, without the patentee paying the challenger to stay
out prior to that point.” Ante, at 14–19 (emphasis added).
    Almost all of these are unresponsive to the basic prob-
lem that settling a patent claim cannot possibly impose
unlawful anticompetitive harm if the patent holder is
acting within the scope of a valid patent and therefore
permitted to do precisely what the antitrust suit claims is
unlawful. This means that in any such antitrust suit, the
defendant (patent holder) will want to use the validity of
his patent as a defense—in other words, he’ll want to say
“I can do this because I have a valid patent that lets me do
this.” I therefore don’t see how the majority can conclude
that it won’t normally be “necessary to litigate patent
validity to answer the antitrust question,” ante, at 18,
unless it means to suggest that the defendant (patent
holder) cannot raise his patent as a defense in an antitrust
suit. But depriving him of such a defense—if that’s what
the majority means to do—defeats the point of the patent,
which is to confer a lawful monopoly on its holder.
    The majority seems to think that even if the patent is
valid, a patent holder violates the antitrust laws merely
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                   ROBERTS, C. J., dissenting

because the settlement took away some chance that his
patent would be declared invalid by a court. See ante, at
18–19 (“payment . . . to prevent the risk of competition . . .
constitutes the relevant anticompetitive harm” (emphasis
added)). This is flawed for several reasons.
   First, a patent is either valid or invalid. The parties of
course don’t know the answer with certainty at the outset
of litigation; hence the litigation. But the same is true of
any hard legal question that is yet to be adjudicated. Just
because people don’t know the answer doesn’t mean there
is no answer until a court declares one. Yet the majority
would impose antitrust liability based on the parties’
subjective uncertainty about that legal conclusion.
   The Court does so on the assumption that offering a
“large” sum is reliable evidence that the patent holder has
serious doubts about the patent. Not true. A patent
holder may be 95% sure about the validity of its patent,
but particularly risk averse or litigation averse, and will-
ing to pay a good deal of money to rid itself of the 5%
chance of a finding of invalidity. What is actually motivat-
ing a patent holder is apparently a question district courts
will have to resolve on a case-by-case basis. The task of
trying to discern whether a patent holder is motivated by
uncertainty about its patent, or other legitimate factors
like risk aversion, will be made all the more difficult by
the fact that much of the evidence about the party’s moti-
vation may be embedded in legal advice from its attorney,
which would presumably be shielded from discovery.
   Second, the majority’s position leads to absurd results.
Let’s say in 2005, a patent holder sues a competitor for
infringement and faces a counterclaim that its patent is
invalid. The patent holder determines that the risk of
losing on the question of validity is low, but after a year of
litigating, grows increasingly risk averse, tired of litiga-
tion, and concerned about the company’s image, so it pays
the competitor a “large” payment, ante, at 18, in exchange
14                  FTC v. ACTAVIS, INC.

                   ROBERTS, C. J., dissenting

for having the competitor honor its patent. Then let’s say
in 2006, a different competitor, inspired by the first com-
petitor’s success, sues the patent holder and seeks a simi-
lar payment. The patent holder, recognizing that this
dynamic is unsustainable, litigates this suit to conclusion,
all the way to the Supreme Court, which unanimously
decides the patent was valid. According to the majority,
the first settlement would violate the antitrust laws even
though the patent was ultimately declared valid, because
that first settlement took away some chance that the
patent would be invalidated in the first go around. Under
this approach, a patent holder may be found liable under
antitrust law for doing what its perfectly valid patent
allowed it to do in the first place; its sin was to settle,
rather than prove the correctness of its position by litigat-
ing until the bitter end.
  Third, this logic—that taking away any chance that a
patent will be invalidated is itself an antitrust problem—
cannot possibly be limited to reverse-payment agreements,
or those that are “large.” Ibid. The Government’s brief
acknowledges as much, suggesting that if antitrust scru-
tiny is invited for such cash payments, it may also be
required for “other consideration” and “alternative arrange-
ments.” Brief for Petitioner 36, n. 7. For example, when a
patent holder licenses its product to a licensee at a fixed
monopoly price, surely it takes away some chance that its
patent will be challenged by that licensee. According to
the majority’s reasoning, that’s an antitrust problem that
must be analyzed under the rule of reason. But see Gen-
eral Elec. Co., 272 U. S., at 488 (holding that a patent
holder may license its invention at a fixed price). Indeed,
the Court’s own solution—that patent holders should
negotiate to allow generics into the market sooner, rather
than paying them money—also takes away some chance
that the generic would have litigated until the patent was
invalidated.
                 Cite as: 570 U. S. ____ (2013)          15

                   ROBERTS, C. J., dissenting

   Thus, although the question posed by this case is fun-
damentally a question of patent law—i.e., whether Sol-
vay’s patent was valid and therefore permitted Solvay to
pay competitors to honor the scope of its patent—the
majority declares that such questions should henceforth be
scrutinized by antitrust law’s unruly rule of reason. Good
luck to the district courts that must, when faced with a
patent settlement, weigh the “likely anticompetitive ef-
fects, redeeming virtues, market power, and potentially
offsetting legal considerations present in the circumstanc-
es.” Ante, at 9–10; but see Pacific Bell Telephone Co. v.
linkLine Communications, Inc., 

, 452 (2009)
(“We have repeatedly emphasized the importance of clear
rules in antitrust law”).
                           IV
  The majority invokes “procompetitive antitrust policies,”
ante, at 9, but misses the basic point that patent laws
promote consumer interests in a different way, by pro-
viding protection against competition. As one treatise
explains:
    “The purpose of the rule of reason is to determine
    whether, on balance, a practice is reasonably likely to
    be anticompetitive or competitively harmless—that is,
    whether it yields lower or higher marketwide output.
    By contrast, patent policy encompasses a set of judg-
    ments about the proper tradeoff between competition
    and the incentive to innovate over the long run. Anti-
    trust’s rule of reason was not designed for such judg-
    ments and is not adept at making them.” Hovenkamp
    §7.3, at 7–13 (footnote omitted).
   The majority recognizes that “a high reverse payment”
may “signal to other potential challengers that the patentee
lacks confidence in its patent, thereby provoking addi-
tional challenges.” Ante, at 16. It brushes this off, how-
16                   FTC v. ACTAVIS, INC.

                    ROBERTS, C. J., dissenting

ever, because of two features of Hatch-Waxman that make
it “ ‘not necessarily so.’ ” Ibid. First, it points out that the
first challenger gets a 180-day exclusive period to market
a generic version of the brand name drug, and that subse-
quent challengers cannot secure that exclusivity period—
meaning when the patent holder buys off the first challenger,
it has bought off its most motivated competitor. There
are two problems with this argument. First, according to
the Food and Drug Administration, all manufacturers
who file on the first day are considered “first applicants”
who share the exclusivity period. Thus, if ten gener-
ics file an application to market a generic drug on the
first day, all will be considered “first applicants.” See 

. §355(j)(5)(B)(iv)(II)(bb); see also FDA, Guid-
ance for Industry: 180-Day Exclusivity When Multiple
ANDAs Are Submitted on the Same Day 4 (July 2003).
This is not an unusual occurrence. See Brief for Generic
Pharmaceutical Association as Amicus Curiae 23–24
(citing FTC data indicating that some drugs “have been
subject to as many as sixteen first-day” generic applica-
tions; that in 2005, the average number of first-day appli-
cations per drug was 11; and that between 2002 and 2008,
the yearly average never dropped below three first-day
applications per drug).
   Second, and more fundamentally, the 180 days of exclu-
sivity simply provides more incentive for generic challenges.
Even if a subsequent generic would not be entitled to this
additional incentive, it will have as much or nearly as
much incentive to challenge the patent as a potential
challenger would in any other context outside of Hatch-
Waxman, where there is no 180-day exclusivity period.
And a patent holder who gives away notably large sums of
money because it is, as the majority surmises, concerned
about the strength of its patent, would be putting blood in
water where sharks are always near.
   The majority also points to the fact that, under Hatch-
                 Cite as: 570 U. S. ____ (2013)           17

                   ROBERTS, C. J., dissenting

Waxman, the FDA is enjoined from approving a generic’s
application to market a drug for 30 months if the brand
name sues the generic for patent infringement within 45
days of that application being filed. Ante, at 16 (citing 

. §355(j)(5)(B)(iii)). According to the majority, this
provision will chill subsequent generics from challenging
the patent (because they will have to wait 30 months
before receiving FDA approval to market their drug). But
this overlooks an important feature of the law: the FDA
may approve the application before the 30 months are up
“if before the expiration of [the 30 months,] the district
court decides that the patent is invalid or not infringed.”
§355(j)(5)(B)(iii)(I). And even if the FDA did not have to
wait 30 months, it is far from clear that a generic would
want to market a drug prior to obtaining a judgment of
invalidity or noninfringement. Doing so may expose it to
ruinous liability for infringement.
   The irony of all this is that the majority’s decision may
very well discourage generics from challenging pharma-
ceutical patents in the first place. Patent litigation is
costly, time consuming, and uncertain. See Cybor Corp. v.
FAS Techs., Inc., 

, 1476, n. 4 (CA Fed. 1998)
(opinion of Rader, J.) (en banc) (discussing study showing
that the Federal Circuit wholly or partially reversed in
almost 40 percent of claim construction appeals in a 30-
month period); Brief for Generic Pharmaceutical Associa-
tion as Amicus Curiae 16 (citing a 2010 study analyzing
the prior decade’s cases and showing that generics pre-
vailed in 82 cases and lost in 89 cases). Generics “enter
this risky terrain only after careful analysis of the poten-
tial gains if they prevail and the potential exposure if they
lose.” Id., at 19. Taking the prospect of settlements off
the table—or limiting settlements to an earlier entry date
for the generic, which may still be many years in the
future—puts a damper on the generic’s expected value
going into litigation, and decreases its incentive to sue in
18                  FTC v. ACTAVIS, INC.

                   ROBERTS, C. J., dissenting

the first place. The majority assures us, with no support,
that everything will be okay because the parties can settle
by simply negotiating an earlier entry date for the generic
drug manufacturer, rather than settling with money.
Ante, at 17. But it’s a matter of common sense, confirmed
by experience, that parties are more likely to settle when
they have a broader set of valuable things to trade. See
Brief for Mediation and Negotiation Professionals as
Amici Curiae 6–8.
                               V
   The majority today departs from the settled approach
separating patent and antitrust law, weakens the protec-
tions afforded to innovators by patents, frustrates the
public policy in favor of settling, and likely undermines
the very policy it seeks to promote by forcing generics who
step into the litigation ring to do so without the prospect of
cash settlements. I would keep things as they were and
not subject basic questions of patent law to an unbounded
inquiry under antitrust law, with its treble damages and
famously burdensome discovery. See 

. §15; Bell
Atlantic Corp. v. Twombly, 

, 558–559 (2007).
I respectfully dissent.