Barr Pharmaceuticals, Inc announced that the US Court of Appeals for the Federal Circuit has upheld the 2005 decision of the US District Court for the Eastern District of New York, which rejected a challenge to the lawfulness of a 1997 patent litigation settlement between its wholly owned subsidiary, Barr Laboratories, Inc, and Bayer Corporation related to the antibiotic Cipro.

In announcing its decision, the Court of Appeals affirmed, "The grant of summary judgment by the District Court for the Eastern District of New York that the Agreements were not in violation of section 1 of the Sherman Act because any anti-competitive effects caused by the Agreements were within the exclusionary zone of the patent. We further affirm the court's dismissal of the state antitrust claims."

"The decision clearly upholds Barr's assertion that our ciprofloxacin settlement with Bayer was a valid settlement to a patent suit and cannot be used as the basis of an antitrust claim," said Bruce L Downey, Barr's chairman and chief executive officer. "The Appeals Court specifically noted that 'settlement of patent claims by agreement between the parties--including exchange of consideration--rather than by litigation is not precluded by the Sherman Act'."

"This ruling provides additional legal precedent that will allow companies to settle patent challenge cases under terms that are both pro-competitive and pro-consumer," Downey added. "Barr continues to defend itself vigorously in a parallel appeal of the district court's decision by direct purchasers that remains pending in the United States Court of Appeals for the Second Circuit, as well as similar cases in several state courts."

In 2000, approximately 38 class action complaints were filed by direct and indirect purchasers of ciprofloxacin in state and federal courts against Bayer, Barr, and Barr's litigation partners in the 1997 settlement. All of the federal complaints were consolidated in the US District Court for the Eastern District of New York. In 2005, the US District Court for the Eastern District of New York granted summary judgment in the company's favour.