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Biotech / Medical : Sepracor-Looks very promising -- Ignore unavailable to you. Want to Upgrade?

To: j_fir2 who wrote (3613)	8/17/1999 11:53:00 AM
From: Biomaven	Respond to of 10280

I posted this a long while back on the thread, but here again is the description of the FTC's view of licensing IP: cerebalaw.com Of note is this section: 5.7 Acquisition of intellectual property rights Certain transfers of intellectual property rights are most appropriately analyzed by applying the principles and standards used to analyze mergers, particularly those in the 1992 Horizontal Merger Guidelines. The Agencies will apply a merger analysis to an outright sale by an intellectual property owner of all of its rights to that intellectual property and to a transaction in which a person obtains through grant, sale, or other transfer an exclusive license for intellectual property (i.e., a license that precludes all other persons, including the licensor, from using the licensed intellectual property). Note 37 : The safety zone of section 4.3 does not apply to transfers of intellectual property such as those described in this section. Such transactions may be assessed under section 7 of the Clayton Act, sections 1 and 2 of the Sherman Act, and section 5 of the Federal Trade Commission Act. As the Lilly license (as I recall) is exclusive, this means the tougher merger guidelines probably apply. As I said before, I don't think anything will come of this other than delay and conceivably some mild regulation of how Lilly can market Prozac II. Bottom line is the standard used in Section 45: (n) Standard of proof; public policy consideration The Commission shall have no authority under this section or section 57a of this title to declare unlawful an act or practice on the grounds that such act or practice is unfair unless the act or practice causes or is likely to cause substantial injury to consumers which is not reasonably avoidable by consumers themselves and not outweighed by countervailing benefits to consumers or to competition. In determining whether an act or practice is unfair, the Commission may consider established public policies as evidence to be considered with all other evidence. Such public policy considerations may not serve as a primary basis for such determination. I'm no FTC lawyer, so I have no idea if this is the standard they will be using, but certainly it is hard for me to see how the deal could possibly cause "substantial injury to consumers." Peter

To: j_fir2 who wrote (3613)	8/17/1999 2:03:00 PM
From: John Metcalf	Read Replies (1) \| Respond to of 10280

Thanks, j fir2. I don't see how r-fluoxetine will conflict with the Fair Trade Act. To be in violation, "(1) the act or practice causes or is likely to cause substantial injury to consumers; (2) which is not reasonably avoidable by consumers; and (3) is not outweighed by countervailing benefits to consumers or to competition." Since the Lilly-Sepracor arrangement will not preclude availability of generic Prozac, after expiration of the Lilly patent, consumers can readily avoid using, or paying for, r-fluoxetine. In addition, the possibility of "countervailing benefits", like short washout period, is strong. Rkrw has made this point previously.