Wyeth Pharmaceuticals went the safe route in its fight over the patent for Effexor, the company's top-selling drug and the world's best-selling antidepressant. Rather than risk the patent at trial with Teva Pharmaceuticals, USA, Inc., Wyeth agreed to lop a few years off its patent.

In September 2005, a month before the trial was set to begin, a Newark federal district court judge issued a Markman ruling that was slightly in Teva's favor, says P. Branko Pejic, a senior litigation associate at Greenblum & Bernstein, who wrote about the case in his firm's monthly newsletter. But the ruling "wasn't a slam dunk for Teva," he adds. In other words, conditions were ripe for settlement. On the day the trial was set to begin, Wyeth announced that it would let Teva begin selling generic Effexor XR, the extended release version of the drug, in 2010, seven years ahead of its patent expiration. In return, Teva agreed to pay Wyeth a percentage of profits from sales.

Settlements with generic drug companies have gotten other Big Pharma companies in antitrust trouble. Not Wyeth. The company was able to get the Federal Trade Commission's approval. The key difference was in the payout. Other deals were considered anticompetitive because the patent holder paid the generic drugmaker to stay out of the market, keeping drug prices high. In the Effexor deal, Teva is the one making the payments. And generic Effexor will be on the market ahead of patent expiration. Those kinds of deals don't concern the FTC, says an agency official who asked not to be named.

But Wyeth's Effexor troubles aren't over. In April, Wyeth sued two generic drugmakersÑImpax Laboratories, Inc., and Anchen Pharmaceuticals IncÑwho have filed applications with the Food and Drug Administration to sell generic Effexor XR. Then, at the end of July, Alza Corporation, a Johnson & Johnson subsidiary, filed a patent suit against Wyeth in U.S. district court in Lufkin, Texas. Alza claims that Effexor XR infringes a patent covering a technology that allows a drug to be slowly released into the blood stream. Alza received the patent in 2002, five years after Effexor XR came on the market.

The suit's timing could have something to do with Wyeth's Teva settlement and the two new generic challenges to Effexor, says Steven Lieberman, a partner with Rothwell, Figg, Ernst & Manbeck in Washington, D.C., who specializes in pharmaceutical litigation. Lieberman says that this could be a good time to exert settlement pressure on Wyeth. Lawyers involved in the case declined to comment.

A Wyeth loss could open up the path for Alza to sue Teva for patent infringement when it begins selling generic Effexor XR in 2010. This makes for strange bedfellowsÑWyeth and Teva are currently battling over Wyeth's blockbuster heartburn medication, Protonix. "I'd be very surprised if Wyeth asked Teva for help," says Lieberman.