Patent Settlements as an endangered species: DG Comp’s latest Monitoring Exercise on Patent Settlements in Europe

Executive Summary -

On 9 December 2013, DG Comp published its fourth report on the monitoring in Europe of patent settlements. Like its predecessors, the report welcomes the continuously low level of settlements that may give rise to antitrust concerns and trumpets that the overall number of settlements has increased, which it says demonstrates that criticisms of DG Comp’s enforcement policy against patent settlements are unfounded.

A critical review of the report and its predecessors shows however a completely different reality. By promising the “highest antitrust scrutiny” to settlements containing any limitation on the generic’s freedom and a value transfer, the monitoring exercises have not surprisingly had a chilling effect -- deterring companies from entering into settlements containing any form of real compromise. The only two significant categories of settlements that remain are so-called “surrenders”, in which either the originator (A-type settlements) or the generic company (B.I settlements) gives up. These are in truth not real settlements and DG Comp’s announcement that the number of “settlements” has increased is thus meaningless. To the contrary, the monitoring exercise displays a picture that is concerning both from an IP litigation and a competition standpoint.

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