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A U.S. appeals court reversed a lower court ruling that required AbbVie (ABBV) and another company to disgorge $448 million in profits for filing “sham” patent litigation to keep generic versions of its blockbuster AndroGel treatment off of the market.

In reviewing an anti-trust case originally brought by the Federal Trade Commission, the appeals court determined that the district court judge who ordered the disgorgement lacked authority under federal law. As a result, the ruling called into question the ability of the agency to use the federal court system to seek disgorgements against drug makers and others.


“This is important because the FTC’s disgorgement power is crucial to its ability to get meaningful remedies,” said Michael Carrier, a Rutgers University School of Law professor who specializes in intellectual property and antitrust issues.

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