FTC clarifies rules on patent right transfers

The US Federal Trade Commission (FTC) has issued final changes to the premerger notification rules that require pharmaceutical companies to report certain proposed patent right acquisitions to the commission and US Department of Justice (DoJ) for antitrust review.

The revised rule, announced on November 6, is designed to clarify when a transfer of exclusive rights to a pharmaceutical patent may be known as a reportable asset acquisition under the Hart Scott Rodino (HSR) Act.

The HSR Act established the premerger notification programme, which provides that parties must not complete mergers or acquisitions of a certain size before submitting a form about each company’s business, so the that FTC and DoJ may review the competitive effects of the proposed transaction. Any transaction the agencies believe will “substantially lessen competition” may be blocked or subject to remedies.

The FTC administers the programme and ensures it complies with HSR Rules, which determine the transactions companies need to report. In a statement, the FTC said the revised rules to the programme will make the premerger programme more effective.

The FTC worked with the DoJ to develop the new requirements.

According to a statement on the FTC website, the assistant attorney general of the antitrust division of the Department of Justice concurred with the final rules.

The amendments will go into effect 30 days after the date of publication in the Federal Register.

The finalised rules come days after the FTC announced it will hold a workshop on the competitive impact of state regulations and naming conventions concerning biosimilars on December 10.