Law Commons^™

Asymmetric Stakes In Antitrust Litigation, Erik Hovenkamp, Steven C. Salop

Georgetown Law Faculty Publications and Other Works

Private antitrust litigation often involves a dominant firm being accused of exclusionary conduct by a smaller rival or entrant. Importantly, the firms in such cases generally have asymmetric stakes: the defendant typically has a much larger financial interest on the line. We explore the broad policy implications of this fact using a novel model of litigation with endogenous effort. Asymmetric stakes lead dominant defendants to invest systematically more resources into litigation, causing the plaintiff's success probability to fall below the efficient level--a distortion that carries over to ex ante settlements. We explain that enhanced damages may reduce the problem, but …

Do Patent Challenges Increase Competition?, Stephen Yelderman

Journal Articles

This Article is the first to seriously scrutinize the claim that patent challenges lead to increased competition. It identifies a number of conditions that must hold for a patent challenge to provide this particular benefit, and evaluates the reasonableness of assuming that the pro-competitive benefits of patent challenges are generally available. As it turns out, there are a number of ways these conditions can and regularly do fail. This Article synthesizes legal doctrine, recent empirical scholarship, and several novel case studies to identify categories of challenges in which the potential benefits for competition are smaller than previously thought or, in …

The Actavis Inference: Theory And Practice, Aaron S. Edlin, C. Scott Hemphill, Herbert J. Hovenkamp, Carl Shapiro

All Faculty Scholarship

In FTC v. Actavis, Inc., the Supreme Court considered "reverse payment" settlements of patent infringement litigation. In such a settlement, a patentee pays the alleged infringer to settle, and the alleged infringer agrees not to enter the market for a period of time. The Court held that a reverse payment settlement violates antitrust law if the patentee is paying to avoid competition. The core insight of Actavis is the Actavis Inference: a large and otherwise unexplained payment, combined with delayed entry, supports a reasonable inference of harm to consumers from lessened competition.

This paper is an effort to assist courts …

Actavis And Error Costs: A Reply To Critics, Aaron S. Edlin, C. Scott Hemphill, Herbert J. Hovenkamp, Carl Shapiro

All Faculty Scholarship

The Supreme Court’s opinion in Federal Trade Commission v. Actavis, Inc. provided fundamental guidance about how courts should handle antitrust challenges to reverse payment patent settlements. In our previous article, Activating Actavis, we identified and operationalized the essential features of the Court’s analysis. Our analysis has been challenged by four economists, who argue that our approach might condemn procompetitive settlements.

As we explain in this reply, such settlements are feasible, however, only under special circumstances. Moreover, even where feasible, the parties would not actually choose such a settlement in equilibrium. These considerations, and others discussed in the reply, serve to …

Activating Actavis, Aaron Edlin, C. Scott Hemphill, Herbert J. Hovenkamp, Carl Shapiro

All Faculty Scholarship

In Federal Trade Commission v. Actavis, Inc., the Supreme Court provided fundamental guidance about how courts should handle antitrust challenges to reverse payment patent settlements. The Court came down strongly in favor of an antitrust solution to the problem, concluding that “an antitrust action is likely to prove more feasible administratively than the Eleventh Circuit believed.” At the same time, Justice Breyer’s majority opinion acknowledged that the Court did not answer every relevant question. The opinion closed by “leav[ing] to the lower courts the structuring of the present rule-of-reason antitrust litigation.”

This article is an effort to help courts and …

Federal Trade Commission V. Actavis, Inc. And Reverse-Payment Or Pay-For-Delay Settlements, Jacob S. Sherkow

Articles & Chapters

An imminent US Supreme Court ruling should resolve one of the thorniest legal issues facing pharmaceutical companies today.

Patent Settlements, Risk, And Competition, Mark R. Patterson

Faculty Scholarship

PowerPoint presentation delivered at the session, Patent Settlements: The Issues Beyond the "Reverse Payment" Cases at the ABA 59th Annual Antitrust Spring Meeting, March 30, 2011.

Do Reverse Payment Settlements Violate The Antitrust Laws, Christopher M. Holman

Faculty Works

The term "reverse payment" has been used as shorthand to characterize a variety of diverse agreements between patent owners and alleged infringers that involve a transfer of consideration from the patent owner to the alleged infringer. Reverse payment settlements are particularly associated with drug patent challenges mounted by generic drug companies under the Hatch-Waxman Act. Many, including the Federal Trade Commission, would characterize these agreements as antitrust violations. However, courts have generally declined to find these agreements in violation of the antitrust laws based solely on the presence of a reverse payment.

This article begins in Section II with an …

Ub Viewpoint – Aol/Microsoft Settlement Could Harm Consumers, Robert H. Lande

All Faculty Scholarship

No abstract provided.

Anticompetitive Settlement Of Intellectual Property Disputes, Mark D. Janis, Herbert J. Hovenkamp, Mark A. Lemley

Articles by Maurer Faculty

No abstract provided.

Anticompetitive Settlement Of Intellectual Property Disputes, Herbert J. Hovenkamp, Mark D. Janis, Mark A. Lemley

All Faculty Scholarship

The overwhelming majority of intellectual property lawsuits settle before trial. These settlements involve agreements between the patentee and the accused infringer, parties who are often competitors before the lawsuit. Because these competitors may agree to stop competing, to regulate the price each charges, and to exchange information about products and prices, settlements of intellectual property disputes naturally raise antitrust concerns. In this paper, we suggest a way to reconcile the interests of intellectual property law and antitrust law in evaluating intellectual property settlements. In Part I, we provide background on the issue. Part II argues that in most cases courts …