A Reverse Perspective on Reverse Payment Settlements

Abstract

This essay addresses the ongoing debate, both judicial and political, over whether “pay-for-delay” settlements of patent infringement claims brought by branded pharmaceutical companies against generic competitors under the auspices of a Hatch-Waxman “Paragraph IV” ANDA certification should be deemed per se violations of the U.S. antitrust laws. It begins by placing the debate in the context of three overlapping legal regimes: patent, food and drug, and antitrust law. Next, it considers the debate over per se liability as a clash between two largely incommensurable legal paradigms. To help resolve the dispute, the author suggests that we consider a nontraditional perspective on intellectual property rights, measuring them not against a but-for world of legally unprotected words and ideas (an approach which tends to emphasize the need to protect and incentivize innovation) but rather against the world of real property. The distinctions between real and intellectual property provide an intellectual framework favoring lower protection for suspect patent claims, and the essay provides both conceptual and empirical arguments for moving in that direction in the Hatch-Waxman context.