Michael A. Carrier ‘Sharing, Samples, and Generics: An Antitrust Framework’ (2017) Cornell Law Review 103(1) 1

This paper – which you can find here – looks at a specific type of obstacle to generic entry: refusals by originators to share samples of branded medicines. As is often the case in this sector, this practice takes advantage of the existing regulatory scheme, in this case in the US. This strategy involves risk-management programs known as Risk Evaluation and Mitigation Strategies (“REMS”). Pursuant to legislation, REMS are required when a drug’s risks (such as death or injury) outweigh its rewards. According to the author, brands have used this regime, intended to bring drugs to the market, to block generic competition. The paper is structured as follows: Part I provides a background on REMS, offering a history and overview of these programs before examining the concerns they raise regarding blocking generic entry. The FDA has defined REMS as “required risk management plans that use risk minimization strategies beyond the professional labeling to ensure that the benefits of certain prescription drugs outweigh…

Fiona M. Scott Morton and Lysle T. Boller “Enabling Competition in Pharmaceutical Markets’ Hutchins Center Working Paper #30 (May, 2017)

This paper – which you can find here – argues that the pharmaceutical industry in the US has managed to disable many of the regulatory mechanisms that promote competition. The paper focuses on the incentives’ structure that enables the persistence of high prices, and its goal is to identify measures that will make US pharmaceutical markets competitive again. The author identifies three major barriers to effective competition in U.S. pharmaceutical marketsi. I. Obstacles to entry of biosimilars Over the past two decades, pharmaceutical innovation has shifted from chemically-synthesized small molecule drugs toward more complex, bioengineered treatments grown from living tissue that are known as biologics. While biologics carry a high price tag, many were licensed in the 1990s or early 2000s – which means that prices are high despite the relevant patents having expired. It is held that this is a consequence of regulatory barriers to competition being higher in biologic drug markets than elsewhere, resulting in fewer competitors and allowing…

Mark Anderson and Max Huffman, ‘The Sharing Economy Meets the Sherman Act: Is Uber a Firm, a Cartel, or Something in Between?’ (2017) Columbia Business Law Review 859

This is a rather long piece – which you can find here – that tries to understand how antitrust should be applied in the context of the sharing economy. I think the spur for this piece is the recent price-fixing case brought against Uber in New York. Regardless of the incentives for writing the paper, it tries to identify the various approaches that antitrust can adopt regarding digital platforms and to determine which one is better suited. The paper also argues that: “Unique to sharing economy enterprises is a structure that approaches a single entity while remaining a set of agreements among individual actors. This structure results in a sharing of economic risks among the participants in a sharing economy enterprise which can incentivize efficiencies in operation that ordinarily are found in a single entity. The article concludes that those efficiencies can overcome anticompetitive concerns about coordination on competitively sensitive matters.” The paper begins by observing that: “antitrust law has…

Frank Pasquale “When Antitrust Becomes Pro-Trust: The Digital Deformation of US Competition Policy” CPI ANTITRUST CHRON. (May 2017).

This paper – which can be found here – argue that “in digital industries in particular — such as search engines and social networks — U.S. merger review has been lax”. According to the author: “Massive digital platforms have exacerbated an old problem in American antitrust law — the tension between the efficiencies that mergers achieve in theory, and the pressure they inevitably create for firms in, or adjacent to, the industry of the merged firms, to themselves combine in order to better compete.” Problems are said to arise from adherence by antitrust enforcers to three myths that rationalize market power online: The Myth of Easy Platform Switching – This theory holds that consumers can and will easily shift from Google to Yahoo, or from Amazon to Barnes & Noble, or from Uber to Lyft. In reality, however, a long history of personalisation of results (through machine learning algorithms), network effects and lock-in make it hard to switch providers. The Myth of the…

Richard A. Epstein and Kayvan B. Noroozi ‘Why Incentives for “Patent Holdout” Threaten to Dismantle FRAND, and Why It Matters’ IP² Working Paper No. 17006

This paper – which can be found here – argues that existing regulatory and judicial activity has unduly protected implementers (i.e. potential licensees) against SEP holders. In particular, the authors: “stress that implementers owe a significant duty to negotiate FRAND licenses in good faith, which courts have largely overlooked and underenforced. We demonstrate that implementers’ good faith obligations are a critical component of basic FRAND architecture that is strictly necessary to the development of innovation-driven standards. (…) [FRAND enables] the standards development effort to yield commercial benefits that would not exist absent innovators’ voluntary participation. We show both theoretically and empirically that courts’ failure to appreciate these aspects of the FRAND bargain, combined with their over-reliance on liability rules, i.e., damages over injunctions, incentivizes the very patent holdout problem FRAND was intended to avoid. That outcome, in turn, has motivated innovators to reduce their participation in FRAND bargains, threatening to unravel a massive innovation-commercialization marketplace, and its innumerable positive externalities to…

Koren W. Wong-Ervin, Evan Hicks, and Ariel Slonim ‘Tying and Bundling Involving Standard-Essential Patents’ (2017) George Mason Law Review 24 1091

This paper – which can be found here –  slooks at whether it is “unfair” (and therefore unlawful) for a SEP holder to license its patents, including both SEPs and non-SEPs, on a portfolio basis. The basic argument is that “SEP and non-SEP portfolio theories of harm” advanced thus far are not economically sound (this is unsurprising, given that the very first sentence of the article is: “Competition agencies around the world have taken the unwarranted position that antitrust enforcement involving standard-essential patents (SEPs) upon which a patent holder has made an assurance to license on fair, reasonable, and nondiscriminatory (FRAND) terms should be subject to special rules or unique presumptions and burdens of proof” (emphasis is mine)). Instead, for these portfolios to infringe competition law there: “would have to be an exclusionary effect on other sellers because bundling thwarts buyers’ desire to purchase substitutes for one or more of the goods in the bundle from those other sellers to an…

Sandra Marco Colino, Niamh Dunne, Knut Fournier, Sofia Pais, Derek Ritzmann ‘The Lundbeck case and the Concept of Potential Competition’ (2017) Concurrences n° 2-2017

This paper – which can be found here – contains the reflections of a number of legal scholars about European decisions regarding reverse settlement payments (also known as “pay for delay” agreements). Reverse settlement payments consist of payments by the owner of IP rights to entities that are challenging such rights in court – and they are particularly important in the pharmaceutical sector, where producers of generic drugs may challenge the IP of branded drugs, and the owner of the drug may pay the generics’ company not to challenge his/her/its IP (and, thus, not to enter the market). As noted in the introduction: “Schemes of this nature are bound to set off alarm bells in the mind of the antitrust erudite. Delaying the entry of would-be competitors would almost certainly entail pushing back the benefits typically derived from a competitive market, the very ones that competition law was designed to protect. And yet the fact remains that, when reverse payment agreements are entered…

Matthew Sipe ‘Patent Privateers and Antitrust Fears’ (2016) 22 Mich. Telecomm. & Tech. L. Rev. 191

this paper – which can be found here – deals with the relationship between patent assertion entities (a.k.a. patent trolls) and antitrust. This relates to privateering,  a practice through which a firm sponsors the assertion of IP claims by third parties (so-called patent assertion entities (“PAEs”)) with the ultimate objective of raising competitors’ costs without disclosing who is ultimately behind this practice. However,  PAEs act for themselvesin most cases, and their actions are not necessarily anti-competitive. PAEs are merely entities that acquire and enforce patents without actually practicing them – their business model is predicated on acquiring licensing fees from entities that actually provide goods and services (so-called “operating entities”). PAEs have been severely criticised, and it has been suggested that antitrust be deployed against them.  At first glance, the nexus between antitrust law and PAEs seems clear: if litigious patent trolls are unfairly deteriorating the markets for various patented goods, antitrust law can step in and reassert the proper rules…

C. Scott Hemphill ‘Intellectual Property and Competition Law’ in Rochelle C. Dreyfuss & Justine Pila eds., Oxford Handbook of Intellectual Property Law (OUP, 2018))

This recent chapter – which can be found here –  provides an overview of the IP-antitrust field. It begins by noticing that Government enforcers and private plaintiffs have recently advanced a wide range of antitrust claims against IP rights holders. These include, among others, the alleged abuse of a standard setting process by a patentee, joint price setting by means of a blanket license for copyrighted musical works, and anticompetitive settlements of patent litigation. The author notes that: “These examples arise distinctively in the context of IP. They can be viewed as a kind of special-purpose antitrust law, although the principles applied are more general.” The paper seeks to provide an overview of the interaction between IP and antitrust. While excluding some sectors – e.g. mergers and vertical licenses – it covers most relevant examples of such interactions. The paper’s ultimate argument is that, beyond its core right to exclude rivals from the scope of an IP right, IP restricts…

Paul R. Michel & Matthew J. Dowd ‘The Need For “Innovation Certainty” At The Crossroads Of Patent And Antitrust Law’ Antitrust Chronicle (2017) Vol. 1(1)

This paper – which we can find here – looks at the impact that antitrust can have on the legal, regulatory and political context in which innovation occurs. The argument, while focusing on the US, is simple and stark. Patent and antitrust law are crucial to create an optimal innovation environment: patent law incentivises innovation by awarding exclusive rights that encourage investment while requiring the public disclosure of inventions. Antitrust law incentivises innovation by maximizing competition in a free marketplace and allowing innovators to disrupt markets and existing market power. Working within these legal regimes, private firms innovate and commercialize their products. They also create efficient transaction mechanisms, such as standard setting organizations (“SSOs”) and FRAND (“fair, reasonable, and non-discriminatory”) licensing agreements for standard essential patents (“SEPs”), so that innovators and their investors can efficiently obtain a return on their capital. However, during the past ten years, innovation certainty in the United States has decreased dramatically, and the decrease is…