The Californian Supreme Court crafts a structured rule of reason test for evaluating pay-for-delay settlements (Cipro)

Following Actavis, California Supreme Court Crafts “Structured Rule of Reason” Test for Evaluating Pay-for-Delay Settlements* Last Thursday the Supreme Court of California decided In re Cipro Cases I & II, No. S198616 (Cal. May 7, 2015), holding that reverse payment, or “pay-for-delay,” settlements can be challenged as unreasonable restraints on trade. In so doing, it followed the U.S. Supreme Court’s 2013 decision in Federal Trade Commission v. Actavis, Inc., 133 S.Ct. 2223 (2013). But the California court went a step further. It laid out a “structured rule of reason” test for assessing when pay-for-delay settlements are anticompetitive – an issue left open in Actavis. Reverse payment settlements are used to dispose of challenges

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