“Pay-for-Delay”: What Do We Disagree On?

Pierre Regibeau, Dec 20, 2013

Antitrust concerns about “pay-for-delay” patent settlements are based on two theories of harms, one that stresses the need for courts to review the validity of patents and one that emphasizes the “probabilistic” nature of patent rights. The main weakness of the first theory of harm is that it fails to explain why some forms of patent settlements would be less desirable than others. The “probabilistic” theory of harm raises fundamental questions about the legal obligations of a patent-holder, the type of uncertainty that should be reflected in the probabilistic nature of the patents and whether the theory can be applied to anything but the simplest PFD settlements. This article also discusses the likely effect of a PFD ban on innovation and reviews both the European approach to recent and ongoing PFD cases and the recent Actavis decision of the US Supreme Court.

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