No-challenge and pay-for-delay agreements in patent licence and settlement agreements under European competition law

Abstract

... In a world that seems to grow increasingly litigious and complex, one can hardly deny the benefits of amicable settlements. At the very least, such settlements lessen the burden on infringement and validity courts. However, any kind of agreement relating to the validity and/or enforceability of a patent goes to the heart of the relationship between IP and competition law. In the European Union those agreements have to be reviewed carefully under Article 101 of the Treaty on the Functioning of the European Union (TFEU), to evaluate whether they are compatible with the internal market and do not in any way encumber research and development (R&D), by overextending the temporarily limited monopoly granted by a patent in exchange for the disclosure of an invention. Accordingly, any agreement limiting or prohibiting a party from challenging a patent or providing for a de facto extension of the 20-year monopoly right granted by a patent entails by nature a potential conflict with antitrust. Since patent and antitrust law coexist and both serve legitimate interests, the tension between them is intentional and finding the right balance serves the purpose of driving technological development and fostering technological progress.