SETTLING THE CONTROVERSY OVER PATENT SETTLEMENTS: PAYMENTS BY THE PATENT HOLDER SHOULD BE PER SE ILLEGAL

Cristofer Leffler and Keith Leffler

A chapter in Antitrust Law and Economics, 2004, pp 475-504 from Emerald Group Publishing Limited

Abstract: Under the patent system created by Congress a patent enjoys only a rebuttable presumption of validity. The resulting probability of invalidity has an economic value. The incentive for a challenger to capture that value creates consumer benefit. In contrast, a payment by the patent holder to the challenger to recognize validity changes the congressionally mandated rebuttable presumption into a conclusive presumption. When a patent holder enlarges the reward granted to him by Congress, by paying a potential rival to confess validity, he reduces efficiency and consumer welfare and, therefore, commits a per se violation of the antitrust laws.

Date: 2004
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Persistent link: https://EconPapers.repec.org/RePEc:eme:rlwezz:s0193-5895(04)21010-7

DOI: 10.1016/S0193-5895(04)21010-7

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