An Essay, Taking Antitrust to Patent School: The Instance of Pay-for-Delay Settlements
Rudolph J.R. Peritz
New York Law School
January 17, 2013
Antitrust Bulletin, Forthcoming
NYLS Legal Studies Research Paper No. 12/13 #56
The essay develops a new approach for antitrust analysis of pay-for-delay settlements in pharmaceutical patent infringement cases, an approach that shows them to be presumptively prohibited agreements in restraint of competition. The issue is timely in light of the Watson v FTC case now pending before the Supreme Court; the decision below is one in a line of antitrust cases concluding that the settlement agreements are legal per se so long as their pay-for-delay provisions fall “within the scope of the patent.” The essay explains why proper antitrust analysis calls for separate attention to the scope of the injunction remedy and then shows how antitrust approval of pay-for-delay provisions entails satisfaction of the Supreme Court’s traditional test for the injunction remedy in patent infringement cases set out in the landmark eBay decision. Along the way, the essay briefly describes how the economics of patent law, rightly understood, supports the eBay test’s application in the antitrust analysis of cases like Watson.
Number of Pages in PDF File: 9
Keywords: pay for delay, patent settlements, eBay, reverse payments, Watson v FTC, patents, antitrust, FTC
JEL Classification: K21, L40, L41, L65, O34
Date posted: January 18, 2013 ; Last revised: March 29, 2013
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