[Ip-health] Federal Appellate Court: Pay-for-Delay is prima facie evidence of an unreasonable restraint of trade

Krista Cox krista.cox at keionline.org
Thu Jul 19 06:47:38 PDT 2012

Federal Appellate Court: Pay-for-Delay is "prima facie evidence of an
unreasonable restraint of trade"

On Monday, July 16, 2012, the Court of Appeals for the Third Circuit ruled
that pay-for-delay agreements between branded pharmaceutical companies and
generic manufacturers are prima facie evidence of anticompetitive behavior.
In so holding, the court noted that permitting such reverse payments
results in "protect[ing] intellectual property, not on the strength of a
patent holder's legal rights, but on the strength of his wallet." The Third
Circuit remanded the case to the lower court in line with the rule that
reverse payment in exchange for a generic manufacturer's delayed entry into
the market is *prima facie *evidence of unreasonable restraint of trade.
Such a presumption can be rebutted by a showing either that the payment was
for a purpose other than delayed entry or is a rare case where such payment
offers some pro-competitive benefit.

Background to the case and the Third Circuit opinion available here:

Krista L. Cox
Staff Attorney
Knowledge Ecology International
(202) 332-2670

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