Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

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Wednesday, November 11, 2009

Applying Litigation Economics to Patent Settlements: Why Reverse Payments Should be Per Se Illegal

Posted by D. Daniel Sokol

Josh Davis (University of San Francisco - Law) explains Applying Litigation Economics to Patent Settlements: Why Reverse Payments Should be Per Se Illegal.

ABSTRACT: One of the most pressing issues in antitrust law is how to assess settlements of patent disputes that involve payments from brand name to generic drug manufacturers. At stake are billions of dollars, both in inflated prices to consumers attempting to meet their medical needs and in exposure to liability for drug manufacturers. This Article applies the economics of dispute resolution to clarify the costs and benefits of various approaches to assessing patent settlements in the context of the Hatch-Waxman Act. It concludes that reverse payments should be banned under a per se rule, unless and until courts are presented with evidence that brand name drug manufacturers are at some sort of systematic disadvantage in their settlement negotiations with generic drug manufacturers, an unlikely possibility.

http://lawprofessors.typepad.com/antitrustprof_blog/2009/11/applying-litigation-economics-to-patent-settlements-why-reverse-payments-should-be-per-se-illegal.html

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The Journal of Corporation Law recommends the following related article:

Thomas F. Cotter, Patent Holdup, Patent Remedies, and Antitrust Responses, 34 Iowa J. Corp. L. 1151

Available in PDF form at:
http://www.law.uiowa.edu/journals/jcl/pastissues.php

Posted by: The Journal of Corporation Law | Nov 16, 2009 12:58:03 PM

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