Former Clinton Deputy Solicitor General Sheds Light On Flaws In Federal Trade Commission's Case In FTC V. Actavis Inc.
Specifically, Bender's paper takes aim at the idea that settlements are anti-competitive, stating instead that the patent is by design an anti-competitive legal measure to protect intellectual property. The paper states that "By addressing the presence of consideration in patent settlements entirely from the perspective of whether or not competition is increased, S. 214 ignores the fact that patents are themselves 'anti-competitive': the inventor has a monopoly in the inventions as a reward for innovation. That is why courts have generally held patent licenses immune from antitrust review."
He goes on to recommend that the Government use its current statutory authority to ensure that settlements are in the interest of consumers. In discussing the FTC's preferred solution of the presumptive prohibition of consideration, Bender says, "Rather than adopting that unusual and dangerous solution, the government should utilize the tools it has in hand under the Medicare Modernization Act of 2003 that require the FTC to review and prove the illegality of settlements on a case-by-case basis."
Neas said the paper represents a primer for those interested in learning more about patent settlements. "We firmly believe the Court will rule favorably for our position, as have three of four circuit courts of appeal, because patent settlements allow the introduction of the generic drug before brand patents expire. Further, they save the federal government and consumers billions of dollars annually. This new paper provides a useful roadmap for legislators, addressing point-by-point why interfering with this legal right is the wrong thing to do."
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