scholarly journals Brief Amici Curiae of 118 Law, Economics, and Business Professors and the American Antitrust Institute in Support of Petitioners

2016 ◽  
Author(s):  
Mark Lemley
Keyword(s):  
Supreme Court ◽  
Federal Trade Commission ◽  
Patent Law ◽  
Antitrust Law ◽  
Practical Result ◽  
Rule Of Reason ◽  
Business Professors ◽  
Weak Patents

This Supreme Court amicus brief, filed in Federal Trade Commission v.Watson, explains why exclusion-payment settlements, by which brand-namedrug companies pay generic firms to delay entering the market, contravenethe policies of patent law, antitrust law, and the Hatch-Waxman Act. Itaddresses five points.First, the settlements are not consistent with the Hatch-Waxman Act,Congress’s framework for balancing patent and antitrust law in thepharmaceutical industry, which encouraged generics to challenge patents.Second, the settlements are anticompetitive, serving as a form of marketdivision, which is the practical result when brands pay generics to dropchallenges to weak patents and delay entering the market instead.Third, the mere fact of a patent cannot justify the payments. The PatentOffice frequently issues invalid patents, and the patents at the heart ofthese settlements present concern, often covering not the drug’s activeingredient but narrower aspects like the formulation or method of use thatare less innovative and bear more potential for anticompetitive mischief.Patent policy encourages challenges to weak patents, and the proceduralpresumption of validity does not justify the settlements.Fourth, exclusion payments are not needed to settle cases in the publicinterest; history has shown that brands and generics can reach settlementswithout them.Fifth, the most appropriate antitrust framework employs a “quick look”rule-of-reason analysis that treats exclusion payments as presumptivelyunlawful. Such a framework recognizes the potentially severeanticompetitive effects of exclusion-payment settlements while permittingthe settling parties to introduce possible procompetitive justifications,if any, for their agreement.

Antitrust: U.S. Supreme Court Affirms FTC Jurisdiction but Vacates Scope of Analysis on CDA Policy

1999 ◽  
Vol 27 (2) ◽  
pp. 197-198
Author(s):  
Joseph R. Zakhary
Keyword(s):  
Public Relations ◽  
Supreme Court ◽  
Federal Trade Commission ◽  
Ninth Circuit ◽  
Court Of Appeals ◽  
For Profit ◽  
Rule Of Reason ◽  
Antitrust Analysis ◽  
Business Financing ◽  
The U.S

In California Dental Association v. FTC, 119 S. Ct. 1604 (1999), the U.S. Supreme Court reviewed a decision by the U.S. Court of Appeals for the Ninth Circuit that a nonprofit affiliation of dentists violated section 5 of the Federal Trade Commission Act (FTCA), 15 U.S.C.A. § 45 (1998), which prohibits unfair competition. The Court examined two issues: (1) the Federal Trade Commission's (FTC) jurisdiction over the California Dental Association (CDA); and (2) the proper scope of antitrust analysis. The Court unanimously held that CDA was subject to FTC's jurisdiction, but split 5-4 in its finding that the district court's use of abbreviated rule-of-reason analysis was inappropriate.CDA is a voluntary, nonprofit association of local dental societies. It boasts approximately 19,000 members, who constitute roughly threequarters of the dentists practicing in California. Although a nonprofit, CDA includes for-profit subsidiaries that financially benefit CDA members. CDA gives its members access to insurance and business financing, and lobbies and litigates on their behalf. Members also benefit from CDA marketing and public relations campaigns.

scholarly journals Policy Levers Tailoring Patent Law to Biotechnology: Comparing European and US Approaches

2016 ◽  
Author(s):  
Mark Lemley
Keyword(s):  
Supreme Court ◽  
Patent Law ◽  
Antitrust Law ◽  
Class Actions ◽  
Injunctive Relief ◽  
American Express ◽  
Antitrust Case ◽  
The Supreme Court ◽  
The Right ◽  
Appeals Process

In a string of recent opinions, the Supreme Court has made it harder forconsumers to avoid arbitration clauses, even when businesses strategicallyinsert provisions in them that effectively prevent consumers from beingable to bring any claim in any forum. In American Express Co. v. ItalianColors Restaurant, an antitrust case, the Court held that class-actionwaivers embedded in mandatory arbitration clauses were enforceable evenwhen they had the effect of making it economically irrational for thevictims of antitrust violations to pursue their claims.Courts have long considered antitrust claims to be too complex and tooimportant to trust to private arbitrators. By the 1980s, the Supreme Courtpermitted federal statutory rights, including antitrust claims, to bearbitrated so long as the plaintiffs could effectively vindicate theirrights in the alternative forum. In 2013, the Supreme Court in ItalianColors fundamentally weakened the Effective Vindication Doctrine when itheld that arbitration clauses that precluded class actions and classwidearbitration were enforceable even when they effectively prohibited allindividual plaintiffs from bringing a case.Arbitration differs from litigation in ways that harm the interests ofconsumer antitrust plaintiffs. For example, arbitration limits discoveryand has no meaningful appeals process. Furthermore, defendants use theterms in arbitration clauses to prevent class actions and to undercut thepro-plaintiff features of antitrust law, including mandatory trebledamages, meaningful injunctive relief, recovery of attorneys’ fees, and alengthy statute of limitations. With the Court’s undermining of theEffective Vindication Doctrine in Italian Colors, defendants’ efforts todismantle these pro-plaintiff components of antitrust law may prove moresuccessful in the future.The problems associated with antitrust arbitration are magnified inconcentrated markets. Supporters of enforcing arbitration clauses assumethat they these contractual provisions are the result of an informed,voluntary bargain. But when a market is dominated by a single supplier or asmall group of firms, consumers often find it impossible to purchase anecessary product while retaining the right to sue, especially sincearbitration clauses are generally embedded in contracts of adhesion. Thismeans that in the markets most likely to be affected by antitrustviolations, consumers are least likely to be able to avoid mandatoryarbitration clauses. Furthermore, when mergers result in concentratedmarkets, they can increase the problems explored in Part Two.Antitrust authorities can address the problem of proliferating arbitrationclauses. When evaluating mergers, officials at the Federal Trade Commissionand the Antitrust Division of the Department of Justice can threaten tochallenge the merger unless the merging parties agree to specifiedconditions, such as the divestiture of certain assets. Because thosemergers that pose the greatest risk of anticompetitive effects also magnifythe problems associated with mandatory arbitration clauses, antitrustofficials would be wise to condition merger approval on the mergingparties’ agreement to not require arbitration of antitrust claims.

scholarly journals Optimal Incentives for Patent Challenges in the Pharmaceutical Industry

2021 ◽  
Author(s):  
Enrico Böhme ◽  
Jonas Severin Frank ◽  
Wolfgang Kerber
Keyword(s):  
Pharmaceutical Industry ◽  
Market Entry ◽  
Consumer Welfare ◽  
Antitrust Law ◽  
Patent Litigation ◽  
Weak Patents ◽  
Optimal Incentives

AbstractIn this paper, we show that a provision in antitrust law to allow patent settlements with a later market entry of generics than the date that is expected under patent litigation can increase consumer welfare. We introduce a policy parameter for determining the optimal additional period for collusion that would incentivize the challenging of weak patents and maximize consumer welfare. While in principle, later market entry leads to higher profits and lower consumer welfare, this can be more than compensated for if more patents are challenged as a result.

scholarly journals Night Landings on an Aircraft Carrier: Hospital Mergers and Antitrust Law

1997 ◽  
Vol 23 (2-3) ◽  
pp. 191-220
Author(s):  
Thomas L. Greaney
Keyword(s):  
Federal Trade Commission ◽  
Federal Courts ◽  
Antitrust Law ◽  
Department Of Justice ◽  
Aircraft Carrier ◽  
Hospital Mergers ◽  
The Past ◽  
Consent Decrees ◽  
The Government ◽  
Administrative Proceedings

Justice Stewart’s 1966 dictum about the inevitability of government success in challenging mergers under Section 7 of the Clayton Act held true for another fifteen years or so. In the early 1980s, however, federal enforcement agencies, the Department of Justice (DOJ) and the Federal Trade Commission (FTC), began to find the federal courts less hospitable to antitrust merger cases as more sophisticated economic inquiries and changing proof burdens complicated the task of identifying anticompetitive mergers. Indeed, since the early 1980s, the government has lost more litigated merger cases than it has won and has come under criticism from some quarters for becoming gun shy and not adequately policing the wave of consolidations that have occurred over the past decade.Hospital mergers, however, are a different story. Until two years ago, the government rode a streak of important victories in federal courts and FTC administrative proceedings, and had obtained consent decrees from scores of hospitals that had announced plans to merge.

scholarly journals Life After Bilski

2016 ◽  
Author(s):  
Mark Lemley
Keyword(s):  
Supreme Court ◽  
Real World ◽  
Subject Matter ◽  
Case Law ◽  
Patent Law ◽  
District Courts ◽  
The Supreme Court ◽  
Federal Circuit ◽  
Abstract Ideas ◽  
New Applications

In Bilski v. Kappos, the Supreme Court declined calls to categoricallyexclude business methods - or any technology - from the patent law. It alsorejected as the sole test of subject matter eligibility the FederalCircuit’s deeply-flawed "machine or transformation" test, under which noprocess is patentable unless it is tied to a particular machine ortransforms an article to another state or thing. Subsequent developmentsthreaten to undo that holding, however. Relying on the Court’s descriptionof the Federal Circuit test as a "useful and important clue', the U.S.Patent and Trademark Office, patent litigants, and district courts have allcontinued to rely on the machine-or-transformation test in the wake ofBilski: no longer as the sole rule, but as a presumptive starting pointthat threatens to effectively become mandatory. In this Article, we suggesta new way to understand the exclusion of abstract ideas from patentablesubject matter. No class of invention is inherently too abstract forpatenting. Rather, the rule against patenting abstract ideas is an effortto prevent inventors from claiming their ideas too broadly. By requiringthat patent claims be limited to a specific set of practical applicationsof an idea, the abstract ideas doctrine both makes the scope of theresulting patent clearer and leaves room for subsequent inventors toimprove upon - and patent new applications of - the same basic principle.Recasting the abstract ideas doctrine as an overclaiming test eliminatesthe constraints of the artificial machine-or-transformation test, as wellas the pointless effort to fit inventions into permissible or impermissiblecategories. It also helps understand some otherwise-inexplicabledistinctions in the case law. Testing for overclaiming allows courts tofocus on what really matters: whether the scope of the patentee's claimsare commensurate with the invention’s practical, real-world contribution.This inquiry, we suggest, is the touchstone of the abstract ideas analysis,and the way out of the post-Bilski confusion.

scholarly journals Antitrust Arbitration and Merger Approval

2016 ◽  
Author(s):  
Mark Lemley
Keyword(s):  
Supreme Court ◽  
Antitrust Law ◽  
Department Of Justice ◽  
Class Actions ◽  
Injunctive Relief ◽  
American Express ◽  
Antitrust Case ◽  
The Supreme Court ◽  
The Right ◽  
Appeals Process

In a string of recent opinions, the Supreme Court has made it harder forconsumers to avoid arbitration clauses, even when businesses strategicallyinsert provisions in them that effectively prevent consumers from beingable to bring any claim in any forum. In American Express Co. v. ItalianColors Restaurant, an antitrust case, the Court held that class-actionwaivers embedded in mandatory arbitration clauses were enforceable evenwhen they had the effect of making it economically irrational for thevictims of antitrust violations to pursue their claims.Courts have long considered antitrust claims to be too complex and tooimportant to trust to private arbitrators. By the 1980s, the Supreme Courtpermitted federal statutory rights, including antitrust claims, to bearbitrated so long as the plaintiffs could effectively vindicate theirrights in the alternative forum. In 2013, the Supreme Court in ItalianColors fundamentally weakened the Effective Vindication Doctrine when itheld that arbitration clauses that precluded class actions and classwidearbitration were enforceable even when they effectively prohibited allindividual plaintiffs from bringing a case.Arbitration differs from litigation in ways that harm the interests ofconsumer antitrust plaintiffs. For example, arbitration limits discoveryand has no meaningful appeals process. Furthermore, defendants use theterms in arbitration clauses to prevent class actions and to undercut thepro-plaintiff features of antitrust law, including mandatory trebledamages, meaningful injunctive relief, recovery of attorneys’ fees, and alengthy statute of limitations. With the Court’s undermining of theEffective Vindication Doctrine in Italian Colors, defendants’ efforts todismantle these pro-plaintiff components of antitrust law may prove moresuccessful in the future.The problems associated with antitrust arbitration are magnified inconcentrated markets. Supporters of enforcing arbitration clauses assumethat they these contractual provisions are the result of an informed,voluntary bargain. But when a market is dominated by a single supplier or asmall group of firms, consumers often find it impossible to purchase anecessary product while retaining the right to sue, especially sincearbitration clauses are generally embedded in contracts of adhesion. Thismeans that in the markets most likely to be affected by antitrustviolations, consumers are least likely to be able to avoid mandatoryarbitration clauses. Furthermore, when mergers result in concentratedmarkets, they can increase the problems explored in Part Two.Antitrust authorities can address the problem of proliferating arbitrationclauses. When evaluating mergers, officials at the Federal Trade Commissionand the Antitrust Division of the Department of Justice can threaten tochallenge the merger unless the merging parties agree to specifiedconditions, such as the divestiture of certain assets. Because thosemergers that pose the greatest risk of anticompetitive effects also magnifythe problems associated with mandatory arbitration clauses, antitrustofficials would be wise to condition merger approval on the mergingparties’ agreement to not require arbitration of antitrust claims.

Us Antitrust Law: Central, but Unique

2020 ◽  
pp. 91-102
Author(s):  
David J. Gerber
Keyword(s):  
Practical Importance ◽  
Competition Law ◽  
Antitrust Law ◽  
Basic Principles ◽  
Judicial Decisions ◽  
Rule Of Reason ◽  
Institutional Structures ◽  
Per Se ◽  
Substantive Law

US antitrust law has long influenced all who deal with competition law—sometimes as a model, sometimes as a source of experience and insights, and sometimes as a surrogate for an “international standard.” It also has great practical importance in international business. This chapter provides information and insights necessary for understanding its roles and engaging with its rules and procedures. The chapter explains its institutional structures, basic principles of substantive law, and the central role of economic analysis in deciding cases. In particular, it throws light on the unique way in which judicial decisions (case law) guide decisions in all institutions and on the central significance of the categories of “rule of reason” and “per se treatment.” It also provides insights into the dynamics of the regime—the factors that drive antitrust decisions. It also sketches the ways in which it exercises influence on other competition law regimes.

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