Search

The article explores the phenomenon of "litigating the fix" (LTF) in merger cases, where merging firms seek judicial approval of remedy proposals rejected by antitrust agencies. It outlines recent trends in LTF cases and discusses various outcomes, including deal abandonment, failed LTF attempts, and successful LTF with or without additional relief. The agencies mixed track record in LTF trials is also highlighted.

Multidistrict litigation has become an increasingly important tool for aggregating claims. Whether an MDL is created in the first place is decided by a seven-member panel of federal judges, the Judicial Panel on Multidistrict Litigation (“JPML”). But the JPML decides not only whether to create an MDL; it decides also where and before whom to centralize MDLs for coordinated or consolidated pretrial proceedings. In deciding where and to whom to transfer cases arising under federal law, the JPML can consider the choice-of-law rule applicable in the transferee court. Under the dominant rule among federal courts, the MDL court applies its own law. As a practical matter, this means that the JPML has the power to steer an MDL to a particular court and to a particular judge, mindful of the law that will apply and how that law will affect the outcome of the case. Such a practice is not only contrary to a well-established norm against “matching” judges and cases. It also endows the JPML with an outsized power over these suits. This Article uncovers this largely ignored and considerable power of the JPML that enables it to achieve substantive ends through the nation’s MDL dockets. It evaluates two alternative choice-of-law rules. But, more importantly, it proposes that federal judges be randomly assigned to preside over MDLs—a solution that is more likely to be effective. [ABSTRACT FROM AUTHOR]

In FTC v. Actavis, the Supreme Court declined to adopt a rule making reverse payment settlements per se unlawful under the antitrust laws. Instead, the Court concluded that such settlements could be unlawful under the rule of reason. The Court's decision further fueled an already-existing debate about the proper treatment of various elements of reverse payment settlements under the antitrust laws. This debate suggests that the Actavis decision has not fully resolved the "turducken" problem presented by these sorts of cases. Difficult questions of antitrust law remain contained within what ultimately began as a patent lawsuit. In addition, the debate suggests that settlements will not necessarily become any less likely, but instead may become more complex in order to obfuscate the purpose and value of the settlement. As a result, the public will continue to be deprived of the benefit of having a determination as to the validity of the underlying patent claims. And consumers will continue to be harmed by sustained and illegitimate monopoly prices. This Article finds hope in the new inter partes review (IPR) procedure before the Patent Trial and Appeal Board (PTAB) introduced as a part of the America Invents Act (AIA). The IPR procedure offers a few benefits. It can deliver a faster determination; the procedure can proceed in parallel to district court litigation, which can effect competition among tribunals as well as competition among generic drug manufacturers seeking FDA approval; it discourages settlement; and it applies a more favorable standard for interpreting patent claims. But these features alone are not enough to deter settlement and effect earlier generic entiy, so this Article proposes a few additional changes. First, I propose that the PTO issue a rule requiring that, whenever the patent claims at issue are also the subject of district court litigation precipitated by a generic drug manufacturer's application for marketing approval by the FDA, the PTAB be required to proceed to a final written decision, regardless of whether the parties settle. Second, I propose that the Hatch-Waxman Act be amended to make the 180-day exclusivity period contestable, such that it may be awarded to the applicant for FDA approval that first obtains a determination, whether before a federal district court or the PTAB. Third, and finally, I propose that the Hatch-Waxman Act be amended so that determinations by the PTAB invalidating patent claims effect the same consequences as a federal district court determination invalidating patent claims. [ABSTRACT FROM AUTHOR]

Consistent with its goals of encouraging innovation and enhancing consumer welfare, antitrust law generally does not compel afirm to give access to the very assets that are the source of a firm's competitive advantage, including a firm's intellectual property, unless a firm has illegitimately gained some edge in the market. And yet, in the context of merger review, compulsory licenses are a fairly common remedy. The Federal Trade Commission and Department ofJustice do not impose a compulsory license in every case, but the principles guiding the decision are not entirely clear. This Article is suspicious of the benefits of a compulsory license and concerned about the costs. Ultimately, the agencies use compulsory licenses as a remedial tool to change the post-merger market dynamics. Although a remedial compulsory license may achieve the goal of restoring competition lost as a result of the merger, it may also undermine the merged firm's incentives to innovate. This may undo the very benefits and efficiencies the merger hoped to achieve. To take account of the uncertain effects of a compulsory license, this Article suggests the agencies adopt a decision-theoretic approach to the remedy phase of a merger analysis. The Horizontal Merger Guidelines issued in 2010 adopt an approach for reviewing mergers consistent with a decision-theoretic approach. But that process stops short of considering the potential effects of a proposed remedial mechanism. This Article recommends that the agencies extend the decision-theoretic analysis implicit in the revised Merger Guidelines and include consideration of the possible outcomes that can result of a potential remedy is chosen, the likelihood of those outcomes, as well as the magnitude of harm and benefits that will follow of those outcomes should come to pass. A decision-theoretic approach will enable the reviewing agency to take better account of the potential, but uncertain, outcomes of a potential remedy. Moreover, such an approach will discipline the agencies' decisionmaking processes, ensuring that remedies are imposed only when they are actually likely to benefit consumers. [ABSTRACT FROM AUTHOR]