ASCOLA Competition Law series
Edited by Josef Drexl, Warren S. Grimes, Clifford A. Jones, Rudolph J.R. Peritz and Edward T. Swaine
Chapter 12: Patent Ambush and Reverse Payments: Comments
Gustavo Ghidini My comments are very short and address both topics jointly. I believe that, in the case of both reverse payment and patent ambush, antitrust enforcement should not take into consideration, as arguments for defence, the questions of validity and/or scope of the patent concerned, or the degree of market power it may embody or has come to embody. In either case, indeed, on the one hand, the competitor’s behaviour is not based, in a proper sense, on the exercise of her/his statutory patent rights (see below). On the other hand, symmetrically, the rationale of antitrust enforcement rests on different and independent legal grounds, not essentially influenced by ‘strictly IP’ questions. Of course, patents come into play, but in relation to the factual, rather than the legal, framework. Take, for example, the issue of reverse payments: what has this practice to do, in a proper sense, with the exploitation of patent rights? Patent rights allow the exclusion of free riders, and not of lawful entries. In other words, contractual exclusion is not a legal exercise of patent rights. Therefore, a pay-for-delay settlement is just a straightforward horizontal agreement in restraint of competition, which would be equally illicit – this is a counterproof of my assumption – even if no patent existed. Wouldn’t pay-for-delay settlements violate antitrust rules even if they took place between two producers of generics? As Abbott and Michel of the FTC have convincingly argued in 2006,1 ‘the payment and not the patent provides exclusion resulting from the...
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