On Nov. 6, 2013, the Federal Trade Commission (FTC) finalized a new rule amending the filing requirements for patent transfers under the Hart-Scott Rodino Act (HSR). The new rule—largely prompted by the evolving licensing structure within the pharmaceutical industry, as well as the growing antitrust importance of licensing practices generally—ultimately broadens the notification requirements for transfers of pharmaceutical patent rights. The FTC maintains the new rule does little more than codify the current policy positions of the Premerger Notification Office (PNO), but there are a few notable changes with antitrust implications for exclusive patent licensing transactions. Under the new rule, a transfer of pharmaceutical patent rights will be potentially reportable under the HSR if the patent owner exclusively transfers all of the “commercially significant rights” to a patent. The rule will begin to take effect on Dec. 13, 2013.

‘Make, Use or Sell’ Standard

The HSR requires parties to certain proposed large mergers or asset acquisitions to notify both the Antitrust Division and the FTC of the transaction. The parties must allow the enforcement agencies to review the transaction for at least 30 days before completing the deal. Only transactions of a certain size trigger these reporting requirements. Filing is usually required when a proposed deal meets both the size-of-the-person and the size-of-the-transaction tests.

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