Patent Settlement Agreements

06 August 2008
By Dr. Sumanth Addanki and Dr. Alan J. Daskin (Jeff)

Various commentators have argued that while agreements in settlement of patent litigation are generally procompetitive, they harm consumers if they include so-called "reverse payments" from the incumbent patentee to the would-be entrant. Therefore, they suggest, settlements that include reverse payments should be condemned. In this chapter from Issues in Competition Law and Policy, NERA Senior Vice President Dr. Sumanth Addanki and Vice President Dr. Alan J. Daskin (Jeff) show that this proposed filter is not particularly useful: in fact, settlement agreements that include such terms are not necessarily anticompetitive. Moreover, seemingly innocuous agreements that exclude such terms may well turn out to be anticompetitive and to harm consumers.

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