Supreme Court’s pay-for-delay ruling raises more questions than answers

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On 17 June 2013, the US Supreme Court ruled in Federal Trade Commission v Actavis that antitrust challenges to pay-for-delay agreements between drug makers should be analysed under the ‘rule of reason’.

The court took a middle ground between the position advanced by the Federal Trade Commission (FTC), which argued that the burden should be on the settling parties to demonstrate that a pay-for-delay agreement is not anticompetitive, and the Eleventh Circuit Court of Appeal’s ‘scope of the patent’ test, which would presume a pay-for-delay settlement legal as long as the agreement does not exceed the subject matter or term of a valid patent.

In forging its own approach, the Supreme Court has set the stage for increased and more costly challenges of pay-for-delay settlements by the FTC and private parties moving forward…

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