Remedies

Remedies for violations of competition law involving IP

What sanctions or remedies can the competition authorities or courts impose for violations of competition law involving IP?

There are no special sanctions or remedies to resolve antitrust matters involving IP. Private civil antitrust matters in federal court may give rise to treble damages as well as injunctive relief. The Supreme Court has recognised compulsory licensing as an acceptable antitrust remedy in appropriate circumstances, though district courts have rarely required a compulsory licence in practice. More commonly, courts will refuse to enforce patent rights as a remedy for patent misuse. The FTC has the authority to seek a range of equitable remedies through administrative litigation and has ordered compulsory licensing at reasonable rates as a remedy to a section 5 violation. Both the DOJ and FTC may require a compulsory licence or divestiture of IP as part of settlement agreement resolving the potential anticompetitive effects of a merger. Though criminal antitrust matters involving IP are unusual, criminal matters can give rise to both fines and imprisonment.

Competition law remedies specific to IP

Do special remedies exist under your competition laws that are specific to IP matters?

Special remedies specific to IP matters do not exist under US competition laws.

Scrutiny of settlement agreements

How would a settlement agreement terminating an IP infringement dispute be scrutinised from a competition perspective? What are the key factors informing such an analysis?

As discussed in question 24, the Supreme Court held in FTC v Actavis that reverse payment patent settlements are subject to antitrust scrutiny under a rule of reason standard. The Court rejected the assertion that a settlement that fell within the legitimate scope of the patent owner’s rights should be immune from scrutiny, concluding that a large unexplained payment from the patent owner to the alleged infringer suggests that the patent would not survive challenge. As such, the presence of the reverse payment raises legitimate concerns that the settlement could be used primarily as a tool to restrain competition. No federal court has since applied the holding in Actavis outside the reverse-payment context.