Exceeding the Scope of the Patent: Solving the Reserve Payment Settlement Problem through Antitrust Enforcement and Regulatory Reform

Reverse payment settlements in pharmaceutical patent litigation, also known as "pay for delay" settlements, are almost universally anticompetitive. Nonetheless, because of the current regulatory framework and a failure of courts to address the definition of patent scope, many of these settlements are upheld as legal, falling under a patent "exception" to antitrust liability. The patent "exception", however, does not apply to pay-for-delay settlements, because paying to protect a patent is inherently beyond the scope of that patent. This note addresses the problem of reverse payment settlements and proposes a new comprehensive solution.