2018 Articles

Commentary: “Applying the Rule of Reason in the Post-Actavis World”

Morgenstern, Saul P.; Pergament, Adam M.

In FTC v. Actavis, 133 S. Ct. 2223 (2013), the Supreme Court held that in cases challenging alleged “reverse payment” settlements of patent litigation arising in the context of the Hatch-Waxman Act, the Rule of Reason applies—no per se rules, no quick look, no shortcuts. Actavis arose in the context of a motion to dismiss and explicitly left to the lower courts the task of structuring the Rule of Reason analysis. Following Actavis, how the lower courts should apply the Rule of Reason has been the subject of considerable debate. The FTC and private plaintiffs, as well as law professors aligned with their views, have attempted to find in Actavis justifications for injecting shortcuts and presumptions that would undermine the Court’s clear holdings. Those efforts have thus far been largely rejected in post-Actavis litigation. As we argue, courts should continue to reject such efforts—which rest on presumptions rather than proof—and preserve the integrity of the Rule of Reason.