In a novel interpretation of the Federal Trade Commission (FTC) Act, the U.S. District Court for the District of Delaware recently held in FTC v. Shire ViroPharma that the FTC had failed to plead the facts necessary to invoke its authority to sue for permanent injunction in federal court because it did not allege an ongoing or imminent violation of the FTC Act. This ruling could broadly impact the FTC’s authority to litigate cases in federal court for past violations of the FTC Act and prevent the FTC from seeking permanent injunctive relief in federal court unless the defendant is currently violating, or is about to violate, the act.

Factual Background

The FTC had brought suit against Shire for anti-competitive use of the U.S. Food and Drug Administration’s (FDA’s) citizen petition process to delay generic competition. The FTC alleged that the company exploited the FDA’s petition process to an extraordinary degree, submitting more than 46 regulatory and court filings. The company’s attempts to delay competition were ultimately unsuccessful, as Shire lost its legal challenges to the FDA, and the company was no longer engaged in the practice at the time the FTC’s complaint was filed. Nevertheless, the FTC’s complaint alleged that Shire had succeeded in delaying generic entry at great cost to consumers and demanded relief.
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