Question

Billy and Bobby each sells bagels, and each says it has a trade secret for the bagel recipe. Billy accuses Bobby of stealing his trade secret, and files a lawsuit. Bobby proposes that Billy pay him $100,000 per year in exchange for not making any bagels, until their lawsuit can be resolved. Under Case Example 19.3, In re Cardizem CD Antitrust Litigation, this would be a per se violation of the Sherman Act.

a. True
b. False

Answer 1

The assertion that Bobby's proposal constitutes a per se violation of the Sherman Act is false without further context indicating anti-competitive intent similar to the ice market case.

Step-by-step explanation:

The statement is false. In the case example provided, Bobby's proposal to Billy to pay him for not making bagels would not be considered a per se violation of the Sherman Act under Case Example 19.3, In re Cardizem CD Antitrust Litigation, because this case involved a specific type of anti-competitive conduct known as 'reverse payment settlements' or 'pay-for-delay' in the pharmaceutical industry. Without more context showing that this is a payment to delay entering the market or that the parties are competitors agreeing to divide a market similar to the ice market example provided, we cannot definitively say it is a per se violation. Anticompetitive agreements are judged on a spectrum from per se illegal to those evaluated under a rule of reason analysis, and not all agreements between competitors will fall under the per se rule without further context.

Answer 2

True

Step-by-step explanation:

According to the Sherman Antitrust Act of 1890,

It is unlawful in the US to establish a trust, create and operate a monopoly, and or a cartel.

Under the above said Act, contracts, schemes, strategies, practices, and or conspiracies that put a restriction on the way trade ought to be conducted within industries are illegal.

So in the case of Billy Vs Bobby, (if they are the only players in the market) it means that as competitors, they cannot divide the market intentionally amongst themselves via some agreement or the other.

It may not have been the intention of Bobby to create a trust, however, if Billy had agreed, then it would count as such. Because it can then be inferred that both of them have shared the market amongst themselves.

In the case of Cardizem CD Antitrust Litigation, we know that there were only two players. Both agreed to a monopoly.

The defendants HMRI/Andrx had agreed to play the monopoly for 180 days with HMRI agreeing to pay Andrix $89 Million. HMRI was the older player. Adrix was the latest entrant in the market with a bioequivalent alterntive t HMRI's drug.

When the news got to the public, stakeholders were irked. They were suited and the court ruled that their actions violated the Sherman Act and that the agreement be terminated immediately.

Cheers