By Mark H. Anderson
Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- The U.S. Supreme Court rejected a lawsuit challenging Bayer AG's (BAYRY) deal with Barr Pharmaceuticals Inc. (BRL) to delay producing a generic version of Cipro, an antibiotic drug.
The case is the latest example of a "pay for delay" dispute that has made it way up to the high court. The Federal Trade Commission has actively opposed the agreements, which it views as anticompetitive, but the high court did not seek a brief from the government before rejecting the appeal.
Separate litigation on the Cipro agreements brought by drug wholesalers and retailers is still pending in a lower court. The Obama administration intends to file a brief in that case, which is in the 2nd U.S. Circuit Court of Appeals in New York.
Bayer paid $398 million to Barr and other generic drug makers in return for an agreement that they would not market a generic version of Cipro until Bayer's patent on the drug expired. Drug purchasers and advocacy groups challenged the agreement as anticompetitive, saying it violated federal and state antitrust laws as well as state consumer protection laws.
The lawsuit was thrown out by a U.S. trial judge in New York in 2005. Last year the U.S. Court of Appeals for the Federal Circuit affirmed the rejection, agreeing that Bayer's patent rights gave it the ability to enter into agreements limiting generic alternatives to its antibiotic.
The case is Arkansas Carpenters Health and Welfare Fund v. Bayer AG, 08-1194.
In other Supreme Court action:
- The justices rejected an appeal from the credit card and banking units of Capital One Financial Corp. (COF), which has challenged efforts by Massachusetts to tax credit card revenues for the financial firm's customers in the state. Capital One maintains it does not have a physical presence in Massachusetts and that the lack of offices or buildings shields it from state excise taxes under Supreme Court precedent.
The lawsuit involves $1.76 million in tax assessments on credit card services and $159,100 for banking services for the years 1995 through 1998. The Supreme Judicial Court of Massachusetts in January 2009 upheld the ability of the state to levy the taxes.
"The physical-presence requirement should govern the income tax at issue here," Capital One said in its appeal. "The problems posed by state departures from the physical-presence requirement have grown more severe."
The case is Capital One Bank (USA) v. Massachusetts Revenue Commissioner, 08-1169.
- The high court rejected an appeal from a unit of AT&T Corp. (T), which has been trying to stop a class-action lawsuit over cell phone termination policies at the company. AT&T has tried to get the lawsuit, filed in West Virginia state courts, transferred to a federal venue by citing the Class Action Fairness Act of 2005, which sought to make it easier for companies to get lawsuits transferred out of state courts. The case is AT&T Mobility LLC v. Shorts, 08-1156.
-By Mark H. Anderson, Dow Jones Newswires; 202-862-9254; mark.anderson@dowjones.com
(Brent Kendall contributed to this report.)