Conduct Is Always a Threshold Requirement: Step Zero of the Antitrust Rule of Reason in Cases under Actavis

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  • The antitrust rule of reason is a tool for assessing the competitive impact of conduct, not determining whether that conduct occurred.  The first step of any rule of reason analysis is thus to determine if the conduct at issue happened.
  • In cases brought under FTC v. Actavis, the conduct at issue is a large, unexplained reverse payment that could suggest that the patent challenger was paid to delay entry.
  • Failing to identify a large, unexplained reverse payment of this type before starting the rule of reason analysis can result in false positives—condemning conduct that never even happened. Courts thus cannot skip this threshold step.


Reproduced with permission from 2024 American Bar Association.

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