Exceeding the Scope of the Patent: Solving the Reverse Payment Settlement Problem Through Antitrust Enforcement and Regulatory Reform

by William J. Newsom –

Reverse payment settlements in pharmaceutical patent litigation, also known as “pay for delay” settlements, are almost universally anticompetitive. Nonetheless, because of the current regulatory framework and a failure of courts to address the definition of patent scope, many of these settlements are upheld as legal, falling under a patent “exception” to antitrust liability. The patent “exception”, however, does not apply to pay-for-delay settlements, because paying to protect a patent is inherently beyond the scope of that patent. This note addresses the problem of reverse payment settlements and proposes a new comprehensive solution.

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