Patent Settlements in Europe and the Lundbeck Case: A Competition Law and Economics Perspective

Patent Settlements in Europe and the Lundbeck Case: A Competition Law and Economics Perspective

By Jonas Severin Frank (University of Marburg)

Abstract:      The paper studies the Lundbeck patent settlement antitrust case of the European Commission from an economic perspective. The Commission concludes that the agreements in Lundbeck involving reverse payments from the originator to generics have violated competition law. The paper shows that this decision is the correct one. More broadly the paper analyzes problem areas of patent settlement assessment in Europe. It assesses what we can learn from the U.S. patent settlement debate with particular focus on the differences in regulatory frameworks of the pharmaceutical sector which are relevant for patent settlement assessment. The recommendation is presented that, instead of taking into account the wide range of factors and effects which are important for the correct assessment of these agreements, we should rather aim at a more pragmatic approach. The paper suggests that a presumption of the illegality of reverse payments in patent settlements and a safe harbor rule for agreements without
reverse payments can be a feasible approach.

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