Decrease in problematic pay-for-delay patent settlements in the EU, says Commission

The European Commission's second monitoring exercise of patent settlements in the pharmaceutical sector shows a continuing decline of settlements potentially problematic under European Union antitrust rules.

This highlights an increased awareness of originator and generic companies of which types of settlements can give rise to antitrust scrutiny – generally the so-called pay-for-delay settlements - and is good news for consumers who will benefit from cheaper pharmaceuticals, the Commission said. The number of patent settlements increased in 2010, however, showing that the Commission's vigilance does not prevent firms from settling disputes successfully within the boundaries of the EU rules.

Problematic patent settlements are those where typically an originator company pays to delay entry of a generic drug. Cases where the two sides stop litigation without payment and the restrictions are within the scope of the contested patent or patent settlements where the generic company can enter without delay and restrictions are normally not problematic under antitrust law, the Commission explained.