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An Essay, Taking Antitrust to Patent School: The Instance of Pay-for-Delay Settlements

9 Pages Posted: 18 Jan 2013 Last revised: 29 Mar 2013

Rudolph J.R. Peritz

New York Law School

Date Written: January 17, 2013

Abstract

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.

Keywords: pay for delay, patent settlements, eBay, reverse payments, Watson v FTC, patents, antitrust, FTC

JEL Classification: K21, L40, L41, L65, O34

Suggested Citation

Peritz, Rudolph J.R., An Essay, Taking Antitrust to Patent School: The Instance of Pay-for-Delay Settlements (January 17, 2013). Antitrust Bulletin, Forthcoming; NYLS Legal Studies Research Paper No. 12/13 #56. Available at SSRN: https://ssrn.com/abstract=2202323

Rudolph J.R. Peritz (Contact Author)

New York Law School ( email )

185 West Broadway
New York, NY 10013
United States

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