Articles by mjlst

How Far is Too Far?: Some Patents Border on the Absurd

May 16, 2014
Intellectual Property, Patents

Michael Burke, MJLST Staff

Most people are not up to date on the latest and greatest patents. Most wait for the idea to be reported in the media, or see the idea’s physical manifestation at their favorite technology store. But this past week, Stephen Colbert made a point to inform his late night audience–and the public at large–about the latest patent filed by Amazon: taking photos against a white background. On March 18th, The U.S. Patent and Trademark Office awarded Amazon with their “Studio Arrangement” patent numbered U.S. 8,676,045. Amazon’s filing essentially gives the company the intellectual rights to taking any picture in front of seamless white backgrounds.

Michael S. Mireles, Jr.’s book review, The United States Patent Reform Quagmire: A Balanced Proposal, helps to provide a framework of why weak patent ideas unfortunately receive the blessing of the United States government, and how patent reform efforts can help resolve this problem. Mireles provides a two-tiered approach to solving the problems of the patent system by attacking the current system at its weakest points: the issuance of weak patent grants from the USPTO and the liberal upholding of the validity of weak patents.

Allowing weak patents to exist undermines the genuine purpose of assigning ownership of intellectual property. The result has been a “dangerous and expensive arms’ race, which now undermines rather than fosters the crucial process of technological innovations.” Most certainly, someone needs to develop and implement a quality idea for change. Who knows, under the current system, maybe he or she could patent it?

Are Warrantless Cell Phone Searches Constitutional?

May 16, 2014
Criminal Law, Law Enforecement

Jennifer Warfield, MJLST Staff

In “Constitutionalizing Email Privacy by Information Access” from Volume 9, Issue 1 of the Minnesota Journal of Law, Science, & Technology, Manish Kumar discussed the unique Fourth Amendment issues raised by governmental access to electronic communications, specifically emails. Similar privacy issues are now being analyzed and reviewed by the Supreme Court in the context of warrantless searches of cell phones by law enforcement in two cases: Riley v. California, No. 13-132 and United States v. Wurie, No. 13-212.

The courts have traditionally allowed warrantless searches pursuant to the Search of Person Incident to Arrest (SPIA) exception to the Fourth Amendment. Under this doctrine a police officer may search an arrestee’s person incident to the arrest and seize and search any personal property in his or her possession at the time of the arrest. Such searches are justified under the theory that they protect officers by allowing them to search for weapons and preserve evidence. The Fourth, Fifth, Seventh, and Tenth Circuits have upheld warrantless searches of cell phones under the SPIA doctrine on the grounds that a cell phone is analogous to a container like a backpack or wallet, which the Supreme Court has long deemed searchable. Other courts have held that modern cell phones cannot be compared to traditional containers given the vast amount of sensitive data contained within them, and that less intrusive measures can be used in the name of data preservation such as Faraday Bags or “airplane mode,” which both prevent internet signals from reaching a phone to prevent remote wiping.

The specific issues before the Supreme Court in Riley and Wurie are respectively: 1) whether the Defendant’s Fourth Amendment rights were violated when he was convicted for attempted murder based on the police’s search of his smartphone after he was pulled over for having an expired auto registration; and 2) whether evidence gathered after the police inspected a drug dealer’s call log should have been thrown out by the federal appeals court in Boston. These cases provide the Supreme Court an opportunity to clarify the meaning of the Fourth Amendment in the age of smartphones, and will shed light on how similar devices like tablets and laptops will be treated by courts and police officers in the future.

An Eyedropper’s Worth of Juice

April 29, 2014
FDA, Food and Agriculture

Nihal Parkar, MJLST Notes and Comments Editor

Coca Cola’s Minute Maid Pomegrenate Blueberry Juice Blend contains about an eye-droppper’s worth of pomegranate and blueberry juices, with apple and grape juices constituting 99.4% of the blend. POM Wonderful, a competitor that mainly markets pomegranate juice, filed a false advertising suit against Coca Cola under the Lanham Act. The Ninth Circuit held that federal food regulations preclude private actions challenging food product labels.

Specifically, the federal Food, Drug, and Cosmetic Act grants the FDA authority over food labeling. However, it is not quite clear if the FDA has exclusive authority over potentially deceptive food labeling. Coca Cola has argued that exclusive authority was granted to the FDA so that food manufacturers could rely on a uniform set of standards for food naming and labeling. POM has countered by saying that the FDCA and FDA regulations only provide a minimum floor for food regulations, while other laws intended to protect consumers and competition are still applicable to food manufacturers.

The Supreme Court granted cert and recently heard oral arguments. Coca Cola has continued to argue that its labeling meets all federal regulations. However, various Justices expressed skepticism, and asked why meeting federal labeling regulations, while necessary, would be sufficient to grant Coca Cola immunity even if the labeling did mislead consumers. The following exchange from the oral arguments is indicative of the tenor of the hearings:

Kathleen M. Sullivan (for Coca Cola): Because we don’t think that consumers are quite as unintelligent as POM must think they are. They know when something is a favored blend of five juices, non-min — the non-predominant juices are just a flavor.
Justice Anthony Kennedy: Don’t make me feel bad, because I thought that this was pomegranate juice.

It remains to be seen though, if the Supreme Court ultimately agrees with POM. A decision is expected later this year.

Minnesota’s ‘Safe and Supportive Schools Act’ Passes (and a Brief Response to Mr. Fleury’s Counterpoint)

April 29, 2014
Internet

Bryan Morben, MJLST Managing Editor

On April 9, many students, parents, teachers, and school administrators rejoiced as Minnesota Governor Mark Dayton signed the Safe and Supportive Schools Act (the 7th engrossment of House Bill 826) into law. Senator Dibble, author of the bill in the Senate, recognized that “[n]o young person should be forced to choose between going to school or being safe. But today, far too many are put in that position.” At the same time, however, many others disapprove of the Act as a solution to the bullying and cyberbullying crisis in Minnesota.

Without offering any recommendation to address the problem themselves, opponents of the Act continue to shoot it down on, what seems to me, to be mostly baseless grounds. I address a number of these in my article “The Fight Against Oppression in the Digital Age: Restructuring Minnesota’s Cyberbullying Law to Get with the Battle,” which can be found here. In that article, I recommended that the Minnesota adopt HF 826 (6th engrossment) to drastically improve Minnesota’s antibullying law at the time. Since publication of the article, the bill went through one more engrossment before becoming law.

In a recent blog post, a fellow member of MJLST, Erin Fleury, made a couple counterpoints against adoption of the bill as recommended in my article. Specifically, Mr. Fleury argues that the definition of “bullying” was still overly broad and could encompass behavior not intended by the legislature. The definition Mr. Fleury quotes, however, is not found in the text of the 6th engrossment that I recommended. In fact, the Senate’s amended version of the bill, which Mr. Fleury says “remedies these defects by requiring that all bullying conduct be ‘objectively offensive,'” is the same in the prior version of the bill that I suggested (with a small change from “harassing conduct” to “harming conduct”).

Mr. Fleury also contends that the prior bill could include “class clown” behavior as bullying because it would routinely interrupt and interfere with the learning environment. Again, I think this argument is without merit. First, it is unlikely that this conduct would arise to the “material and substantial” level of interference required by the bill (and interpreted by student-speech case law). And second, both the 6th engrossment and the amended version signed into law specifically state that the school bullying policy, including what constitutes bullying, “applies to bullying by a student against another student . . . .” (See Section 3, Subdiv. 1, emphasis added). Therefore, a class clown not directing his conduct towards any other specific student would not fall under the bullying definition.

As noted in my article, antibullying legislation like the Safe and Supportive Schools Act has been thoroughly reviewed and recommended by experts like the U.S. Department of Education and the MN Task Force on the Prevention of School Bullying. The MN Task Force was composed of parents, community members, health care professionals, education experts, school administrators, and policymakers. I believe that they have crafted a well-balanced law that should help curtail the bullying problems occurring in Minnesota schools without infringing on students’ rights.

A KISS Principle for the Right of Publicity

April 22, 2014
Intellectual Property

Alexander Vlisides, MJLST Staff

The right of publicity tort is meant to balance two rights: a person’s limited right to control uses of their name or likeness and the right of artists and content creators to exercise their First Amendment rights. Unfortunately, courts have not addressed the First Amendment rights at stake in right of publicity cases with the deference or clarity that is required in other First Amendment contexts.

In Volume 14 of the Minnesota Journal of Law, Science and Technology, Micheal D. Murray argued that content creators should navigate right of publicity issues through common sense and an ethical approach to appropriating another’s likeness. In “DIOS MIO–The KISS Principle of the Ethical Approach to Copyright and Right of Publicity Law” Murray advises content creators to avoid legal issues by following the DIOS MIO acronym: “Don’t Include Other’s Stuff or Modify It Obviously.” In recent right of publicity decisions, courts have not conformed with this common sense approach.

Ryan Hart and Sam Keller are former NCAA quarterbacks. EA sports made a video game called NCAA Football, which features players that look and play exactly like Hart and Keller. Each of them sued EA sports, the makers of NCAA football, and the NCAA for violations of their right of publicity. In Hart v. Electronic Arts and In re NCAA Student Athlete Name and Likeness Litigation, the U.S. Courts of Appeals for the Third and Ninth Circuits, respectively, both found that EA had violated the players right of publicity, meaning that they would need to pay to use players’ likenesses in the video games. In many ways this seems like a very equitable outcome. These college athletes receive none of the profits while EA and the NCAA make hundreds of millions of dollars from these games.

However these cases give too little weight to the First Amendment rights at stake and provide little clarity for content producers to know what is protected from suit. When applied outside the sympathetic facts of this case, there is little to distinguish this video game from other works traditionally thought to be protected by the First Amendment, such as biographical books and films. The dissent in In re NCAA concluded that “[t]he logical consequence of the majority view is that all realistic depictions of actual persons, no matter how incidental, are protected by a state law right of publicity regardless of the creative context.”

In addition, the fundamentally unclear nature of right of publicity analysis is demonstrated by a paradox within the Hart decision. In the NCAA football games there are two uses of Ryan Hart’s likeness. One is the digital avatar that EA artists and designers created to look like him and operate in the interactive world of the game. Another is a simple photograph of him that is used as part of an introductory montage with other football players. The court found the avatar was not protected, but the photograph was. In other words, the court concluded that an animation of Hart, produced by artists, designers and engineers and placed into an interactive virtual world, is a “literal” depiction of Hart and thus unworthy of First Amendment protection, while a photograph of Hart, shown in a montage with other football players, has been transformed to be predominately the creative expression of its designers. A failure to clearly identify criteria and values informing right of publicity analysis led to this paradoxical result.

First Amendment protected creative content should not be subject to so inscrutable a standard. Courts should attempt to give content producers a more workable right of publicity standard by following Murray’s advice to KISS: Keep It Simple, Stupid.

Localized Climate Change: A Glance at the Minneapolis Climate Action Plan

April 22, 2014
Environment

Matt Mason, MJLST Staff

Historically, the climate change mitigation arena has centered almost exclusively on traditional national and supra-national actors. However, persistent failures in seeking widespread agreement among many nations with diverging interests have recently given rise to experiments in climate change mitigation by nontraditional actors at the sub-national and sub-state level.

Myanna Dellinger recently wrote an excellent and informative article advocating for the need to implement local climate change initiatives. Dellinger examined a number of recently adopted local climate change initiatives, arguing that bottom-up methods can indeed be an effective alternative to the more traditional top-down approaches. With nontraditional local government and non-government actors becoming more involved in climate change mitigation due to lack of effective action of the traditional climate change actors, Dellinger concluded that “local initiatives currently present the most promising course of action for effective climate change solutions.” Effective local climate change solutions should focus on a number of factors, according to Dellinger, including carbon reduction, public participation, improved energy infrastructure, and the mobilization of private entities. Additionally, Dellinger found that city programs with some degree of enforcement, such as exclusion for non-compliance and public disclosure of progress, tend to be more effective.

The City of Minneapolis has a history of implementing climate change initiatives at the local level, starting with the Minneapolis – St. Paul CO2 Reduction Projection in 1993. In 2004, then Mayor R.T. Rybak signed the U.S. Conference of Mayors Climate Protection Agreement pledging to take action to reduce greenhouse gas emissions. Most recently, the City of Minneapolis adopted the Minneapolis Climate Action Plan this past June.

The overall goals of the Climate Action Plan are to reduce emissions by 15% in 2015, and 30% by 2025. The Plan seeks to achieve collaboration between local government, businesses, civic organizations, and residents alike to not only reduce emissions, but also improve public health, shift to a more energy efficient economy, generate more electricity from local and renewable sources, and to promote cleaner fuel use throughout the public transit system. To achieve these goals, the Plan itself focuses on three key sectors: buildings and energy (with commercial and residential buildings being the largest source of emissions in 2010 totaling 65% of all emissions), transportation and land use (with transportation representing the second largest emitter at 29% of total emissions in 2010), and waste and recycling (including the goal of increasing the recycling rate to 50% by 2025).

While we often do not think about the impacts of climate change at the local level, the Climate Action Plan highlights a number of localized effects of recent climate change. For example, since 1970 the average annual precipitation in the Minneapolis area has increased by 20%. Additionally, average air temperatures are increasing, with the greatest warming trend at night and in the winter months, which is consistent with higher concentrations of greenhouse gasses in the atmosphere. If the current climate trends continue, the Plan projects difficult summers ahead with increasingly common heat waves and “extreme heat events.” Not to mention to projected increase in days with low air quality and a general increase in the level of ozone pollution.

While it remains to be seen just how effective the Minneapolis Climate Action Plan will be, it appears to be relatively in line with the localized climate change policies advocated for by Dellinger. The Plan requires progress to be reported annually, and provides that climate reduction goals and strategies must be revisited at a minimum of every three years. In addition, the Plan seeks to improve the energy infrastructure by making environmental and infrastructural benefits more equitable between low-income communities and elsewhere in Minneapolis. Furthermore, the Plan seeks the involvement of private entities and the public at-large. On a broad policy level, the Plan prioritizes “high impact, short timeframe,” and cost effective strategies, while attempting to implement strategies with multiple benefits to the climate change problem. Time will tell whether Minneapolis’s own localized climate action plan will see effective results such as those analyzed by Dellinger, but hey, you have to start somewhere.

ABC v. Aereo: Television on the Internet!?

April 15, 2014
Intellectual Property, Internet

Elliot Ferrell, MJLST Staff

American Broadcasting Companies v. Aereo, Inc. has seen a surge in the news as the parties head in for arguments next Tuesday, and Justice Alito has no longer recused himself. The case involves copyright issues in streaming television over the internet, specifically asking “Whether a company ‘publicly performs’ a copyrighted television program when it retransmits a broadcast of that program to thousands of paid subscribers over the internet.”

Some of the arguments revolve around the technology used. Aereo maintains that their streaming service is not a “public performance” in violation of copyright law because the DVR’d copy of customer’s television content, saved to the cloud, comes from an “individual antenna” accessing “free-to-air broadcasts.” However, others counter that Aereo’s technology does not save them from violating the law because, when it comes to down to it, they are simply taking a signal, repackaging it, and selling it to their customers without compensating those who produce the content.

Personally, I can see the appeal of such a service. I catch my Game of Thrones on HBOGO, and whatever else I feel like watching on Netflix or the free section on Hulu. A few years ago, if there were a way to watch Lost immediately on the internet, then I may have questioned whether it was worth owning a television at all. However, none of this makes for a particularly compelling legal argument.

Perhaps the most relevant issue that will come out of this for the average person is what will happen to the consumer experience. If Aereo is successful than it could lead to cheaper prices cable bills, as Aereo’s service costs a mere $8 per month while the average cable bill is over $100. However, this argument is complicated by the fact that a typical cable package includes a bit more than just the free-to-air broadcasts (but how much of that does the consumer really care about/want to pay for?), and Aereo’s service is available in only a few regions. Additionally, one option broadcasters have in the event of an Aereo victory is to remove free-to-air content and sell it instead, perhaps with a streaming service of their own.

The consumer experience has been enriched by the options presented by television streaming services, and Aereo’s service seems to supplement the current trend nicely. However, with the proliferation of sites like Netflix and Hulu and individual content producers providing their own similar services, access to free-to-air broadcasts over the internet seems kind of like an inevitability.

Alice Corporation: Is Software That Implements an Abstract Idea Patentable?

April 10, 2014
Intellectual Property, Patents

Nathan Peske, MJLST Staff

On March 31, 2014 the Supreme Court heard oral arguments in the case CLS Bank International v. Alice Corporation Pty. Ltd. This case examines patents held by the Alice Corporation for software that implements an abstract scheme for managing settlement risk in the series of transaction banks make back and forth over the course of the day. The question before the court is whether the software is patent-eligible subject matter under §101 of the Patent Act.

Section 101 sets out the initial statutory requirements for patent-eligible subject matter. An invention must be a “new and useful process, machine, manufacture, or composition of matter” or an improvement to one of those categories. Supreme Court jurisprudence has repeatedly affirmed that there are three judicial exceptions to these categories. These exceptions are laws of nature, natural phenomena, and abstract ideas. Einstein’s famous theory of relativity E = mc^2 is often cited in court opinions as an example of unpatentable subject matter. If patents this broad were granted they would foreclose any other innovation using the abstract idea. This would ultimately stifle innovation rather than encouraging it.

When an implementation of an abstract idea is patentable has proved a very difficult standard to establish, particularly when software is involved. In Gottschalk v. Benson a computer program implementing a mathematical formula was ruled unpatentable because simply incorporating an abstract idea into a software program is not sufficient to render it patent-eligible subject matter. In Diamond v. Diehr a software program that calculated the cook time for curing rubber was ruled patent-eligible subject matter because it also controlled the cook time and opened the mold when the rubber was done. Subsequent cases have generally been decided on narrow factual grounds and have failed to establish a general test.

The Federal Circuit en banc rehearing of Alice Corporation continued this trend. In a thoroughly fractured decision seven of the ten Federal Circuit judges held the Alice patents invalid and wrote five concurring and dissenting opinions to justify their reasoning. Chief Judge Rader also penned a series of Reflections discussing the current state of patent law. Since the Supreme Court granted Alice’s petition for certiorari it has the opportunity to establish a clear standard that will settle some of the continuing uncertainty over software and business method patents.

This decision has sweeping implication for the future of software patents. A broad interpretation of the patentability of software would open the door for endless patent litigation and reduced the patent system to dueling patent lawyers. A narrow interpretation would have the benefit of reducing the ability of “patent trolls” to harass other companies. Patent trolls acquire patents, often cheaply from struggling companies, and sue or threaten to sue other companies for infringing them. Rather than face years of expensive patent litigation many companies will settle even spurious claims. At the same time a narrow interpretation could drastically limit the abilities of software inventors to patent their inventions. Thus discouraging the innovation the patent system was designed to encourage.

Justice Breyer summarized the situation during oral arguments when he said “There is a risk that you will take business in the United States or large segments and instead of having competition on price, service and better production methods, we’ll have competition on who has the best patent lawyer. And if you go the other way and say never, then what you do is you rule out real inventions with computers.” The justices’ questions seemed to indicate they were unsure if and how to address this question.

There is ample precedent for the Supreme Court to issue a narrow ruling on the merits. Rather than attempting to issue a sweeping decision to establish a precedent for future cases. Indeed, they seem poised to do exactly this. Observers can only watch and wait to see how the Supreme Court will decide this time.

Lies, Damn Lies, and Facts

April 10, 2014
Bioethics

David B. Tibbals, MJLST Staff

Apparently Daniel Patrick Moynihan wasn’t referring to the legal profession when he argued that “everyone is entitled to his own opinions, but not his own facts.”

This past week, the U.S. Court of Appeals for the Fifth Circuit issued its ruling in Planned Parenthood v. Abbott, taking exception to the district court’s version of the facts. The court’s ruling upheld some provisions of House Bill 2, the Texas law that inspired the hours-long filibuster by Texas state senator Wendy Davis.

In an opinion authored by Judge Edith Jones, the court ruled as constitutional the law’s requirement of doctors to have admitting privileges at a hospital within thirty miles of wherever they perform an abortion procedure. With a critical view of the district court’s factual assessment, the court held that the thirty-mile admitting-privileges requirement does not “affect a significant (much less “large”) fraction of . . . women, and it imposes on other women in Texas less of a burden than the waiting-period provision upheld in Casey.”

Likewise, the court upheld the law’s proscription of off-label usage of abortion-inducing prescription drugs. Despite a claim that this represented the complete embargo of what may be the only safe abortion procedure for some women, the court characterized this as speculation, cautioning that courts “must base decisions on facts, not hypothesis and speculation.” And, as has been noted in this journal, “while FDA-approved indications cannot be construed to limit medical judgment, states . . . may enact legislation forcing compliance with such indications.”

Given the general awareness of the case, an arguable circuit split, and the torrent of recent state abortion legislation, surely this case seems destined for the Supreme Court. But how can the nine justices possibly reach a conclusion if the two lower courts couldn’t even agree on the facts? Didn’t the Roe Court argue that abortion law must be “free of emotion and of predilection,” premised on factual objectivity? Shouldn’t these questions be easy to answer?

The disagreement within this particular case reflects a greater problem within the nation’s abortion law canon. In the forty years since Roe, courts have struggled to consistently define just what virtues ought to guide abortion law.

Although the Court placed great emphasis on “now-established medical fact” from the outset, a closer look suggests that medical facts haven’t been treated nearly as sacred as one might believe. Indeed, as Forsythe and Kehr note, the factual record in Roe was very much abbreviated and curated: The Court’s ruling “was based on no factual record and no reliable medical data. The Justices did not analyze, let alone regulate, the contrary data; they simply ignored them.”

Over the last forty years, the Court has bandied about terms such as “advanced knowledge” and “substantial medical authority,” suggesting the primacy of medical facts. But regardless of how it has treated the particular facts it has examined, the Court has also failed to consistently adhere to the fundamental objectivity professed in Roe. Although the Court felt its ruling in Casey reaffirmed Roe’s objectivity, its “undue burden” standard introduced a great deal of subjectivity into abortion law. As Justice Scalia articulated in Stenberg, what qualifies as an “undue burden” “cannot be demonstrated true or false by factual inquiry or legal reasoning.”

It is yet unclear whether Abbott will indeed make it to the Supreme Court. No matter your view on the legal status of abortion, this fundamental inconsistency in the application of factual standards ought to be distressing. It is vital that the Supreme Court clarify a jurisprudence once labeled by former Chief Justice Rehnquist as “a virtual Procrustean bed.”

Why Antitrust Must Play a Role in Analyzing Drug Patent Settlements

March 28, 2014
Antitrust, Patents

Michael A. Carrier, Distinguished Professor, Rutgers School of Law, MJLST Guest Blogger

Think back several years to, say, 2006 or 2008. The world of drug patent settlements, by which brand-name drug companies pay generics to delay entering the market, was a far different place. A string of appellate courts–the Second, Federal, and Eleventh Circuits–had essentially immunized these agreements by applying a toothless framework based on the “scope of the patent.” The test applied by these courts assumed that the patent was valid and infringed and that a payment for delayed entry could not violate the antitrust laws.

In the landmark case of FTC v. Actavis, 133 S. Ct. 2223 (2013), the Supreme Court rejected such a narrow view. Writing for a majority of five, Justice Stephen Breyer concluded that these settlements “tend to have significant adverse effects on competition” and could violate the antitrust laws. The Court also found that such agreements could demonstrate market power and that the parties had ways to settle other than with payment.

In contrast, writing for three Justices in dissent, Chief Justice John Roberts downplayed antitrust law in contending that “the scope of the patent–i.e., what rights are conferred by the patent–should be determined by reference to patent law.” The claimed reason is that “a patent holder acting within the scope of its patent does not engage in any unlawful anticompetitive behavior” but “simply exercis[es] the monopoly rights granted to it by the Government.”

Roberts combined his exclusive preference for patent law with the position that activity within the nominal scope of the patent is immune from the antitrust laws. A patentee “acting within the scope of its patent has an obvious defense to any antitrust suit: that its patent allows it to engage in conduct that would otherwise violate the antitrust laws.” And even though he viewed “the question posed” as “fundamentally a question of patent law,” he lamented that “the majority declares that such questions should henceforth be scrutinized by antitrust law’s unruly rule of reason.”

My short article in the Minnesota Journal of Law, Science & Technology highlights three significant flaws with Roberts’ opinion. First, Roberts ignored the patent-law policy of challenging and eliminating invalid patents. Second, he downplayed the role of antitrust law. And third, he neglected the importance of the Hatch-Waxman Act, Congress’s resolution of the patent-antitrust intersection in the pharmaceutical industry.

First is patent law. Empirical studies have consistently shown that at least 40% of patents issued by the U.S. Patent and Trademark Office (PTO) that are litigated to decision are invalid. For that reason, the Actavis Court recognized the “patent-related policy of eliminating unwarranted patent grants so the public will not ‘continually be required to pay tribute to would-be monopolists without need or justification.'” Roberts’ suggestion to decide the issue solely on the grounds of patent law does not include this important aspect of patent policy.

Second is antitrust law. As the majority in Actavis recognized, reverse-payment settlements “tend to have significant adverse effects on competition.” Of all the types of business activity subject to the antitrust laws, agreements by which competitors divide markets could be the most dangerous since market division restricts all competition between the parties on all grounds.

Reverse-payment settlements result in generics dropping patent challenges and, in exchange for millions of dollars, agreeing to delay entry into the market. Because the brand makes more by keeping the generic out of the market than the two parties would receive by competing in the market, the parties have an incentive to cede the market to the brand firm and split the monopoly profits.

Third is the regulatory regime. As the Supreme Court has made clear, it is appropriate for courts applying antitrust law to “be attuned to the particular structure and circumstances of the industry at issue.” Congress resolved the tension between the patent and antitrust laws in the pharmaceutical industry by enacting the Hatch-Waxman Act.

The Act had a central purpose of encouraging challenges to invalid or not infringed patents during the term of the patent to encourage early market entry. Reverse-payment settlements directly contravene this goal by allowing brands to pay generics for delayed market entry. In short, not only does such conduct flout the patent policy of testing invalid patents and present significant antitrust harm, but it also disregards the Hatch-Waxman Act and important public-policy goal of increasing the number of affordable generic medicines.

As courts begin to interpret drug patent settlements in the wake of Actavis, they should not follow the approach to patent and antitrust law articulated by Chief Justice Roberts. For in addition to being rejected by the Supreme Court, it (1) shortchanges patent law, which includes a policy goal of testing invalid patents to ensure they do not block competition; (2) downplays antitrust law’s role in monitoring behavior that resembles market division between potential rivals; and (3) ignores the Hatch-Waxman Act’s encouragement of challenges to patents that are invalid and not infringed.

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