No AG against a winning challenger Sample Clauses

No AG against a winning challenger. The branded firm’s ability to credibly threaten to launch an AG in case a challenger wins a court case gives rise to the P4D deals. If this option is not available – and hence the threat is never credible, then with enough challengers in the market, a P4D deal will never be reached. In the US, this would mean amending the Xxxxx-Xxxxxx Act so that it also applies to the branded firm: if no other generic firm can enter for 180 days as a reward for invalidating the patent, then the branded firm can also not launch an AG prior to the exhaustion of the 180-day exclusivity by the successful challenger. To understand the implications of such a policy, with the same parameters as before, we modified the tree imposing that the brand is (legislatively) prevented from launching an AG, and then resolved when there are ten or twenty challengers. As shown in Figure 9, with no AG option, either by itself or via a third party, the branded firm either has to pay off all the challengers (in case there are few challengers) or if there are many challengers, it may fail to reach an agreement with any of them. This is because after paying off the first challenger, the remaining J − 1 challengers never optimally choose to stay out of the market, and hence the region marked as ‘III – P4D Pay only First’ never occurs. The only exception is when even the first firm does not consider challenging the branded firm’s patent because it is too strong (π ≈ 0) relative to the litigation costs. All in all, removing the AG option for the brand leads to either an unchallenged monopoly for relatively strong patents, or a court decision rather than an out of court settlement if there are enough challengers.
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