Causation in Reverse Payment Antitrust Claims

Abstract

Following the Supreme Court’s 2013 holding in FTC v. Actavis that two companies settling a patent dispute can violate the antitrust laws if the patent-holder makes a reverse payment to the alleged infringer, courts have diverged about how to determine whether private parties who demonstrate such a violation of antitrust law are entitled to any relief. Unresolved issues about the private plaintiff causation requirement are likely to recur as more courts reach the issue. This Note identifies two approaches to causation in these cases. It demonstrates that the barriers some courts and commentators construct to private plaintiff recovery cannot be reconciled with the Actavis Court’s holding and reasoning. The Note then explains how an alternative approach better aligns with the rationales undergirding private enforcement of reverse payment settlement agreements.

Keywords: patent, antitrust, pharmaceuticals, settlements, Actavis, reverse payment, private antitrust

JEL Classification: I18, K21, L40, L41, L43, L65, O34, O38