(83) Similarly, a change from per se illegality
to a rule of reason made
Applying the per se illegality
doctrine for years has proven to be a mistake.
This Comment will examine how the particulars of the Hatch-Waxman Act, the regulatory scheme that governs generic competition in pharmaceutical industry, gives rise to reverse settlements in infringement litigation; (8) review existing analysis of the pay for delay problem in judicial decisions, in academic commentary, and amongst antitrust enforcement bodies; (9) and finally, draw upon a decision theoretic framework to propose per se illegality
as the appropriate antitrust rule for pay-for-delay settlements.
Rule of Per Se Illegality
. The Court also adopted a corollary rule to the Rule of Reason: the Rule of "Per Se" illegality.
In fact, courts over the years have applied the term boycott to a variety of arrangements with disparate economic effects, (74) and the law's approach to boycotts has evolved significantly, from what was nominally a broad rule of per se illegality
to application of an explicit or implicit rule of reason in most if not all cases.
(11) For 96 years, the Court had adhered to a rule of per se illegality
for minimum resale price maintenance (RPM) on the grounds that it was a violation of the Sherman Act.
It leaves horizontal pricing agreements--collusion among competitors--under the per se illegality
The treatment of some types of actions, such as horizontal conspiracy, evolved toward a standard of per se illegality
in a relatively straightforward fashion, with the exception of an infrequent aberrant decision such as Appalachian Coals.
Bulow argues for per se illegality
of settlements that include side payments or deals which are beneficial to the generic.
Under the traditional model, the "class" into which the challenged practice is placed then determines the "standard" used (per se illegality
or rule of reason).
Courts have available one of only three possible options for treating vertical restraints: (1) per se illegality
, (2) a rule of reason under which courts sit in judgment of the welfare effects of each challenged instance of vertical restraints, and (3) per se legality.
Despite the conceptual difficulties inherent in determining which practices constitute "unreasonable" restraints of trade the Supreme Court settled on an apparently clear-cut and easily administrable rule of law for cases of RPM: per se illegality
.(19) Under the per se approach, once a court identifies a given course of conduct or restraint as falling within a proscribed category, it finds a violation of the Sherman Act, regardless of the actual effects of the conduct and despite any benefits that the conduct produces.(20) Courts purportedly reserve per se illegality
for privately created market restraints that lack ...