Patent Baristas

Professors are a dedicated lot who are, if nothing else, passionate about their work.  This is especially true of research professors who come up with the seeds of a new technology.  Universities welcome and encourage research that can be commercialized and actively engage in technology transfer to put new inventions in the hands of companies that can fully exploit the technology.  The universities — and the professors themselves — receive money by way of royalty payments.  It’s pretty routine and occurs every day.

Last year, the University of Missouri spent $1.4 million commercializing intellectual property while bringing in $6.2 million in licensing income.  Now, the university has filed a lawsuit in district court against chemical engineering professor Galen Suppes to regain rights to his research relating to renewable energy.

Suppes, along with Dr. Rusty Sutterlin, co-founder and CEO, formed Renewable Alternatives, LLC to develop technology related to products that are an alternative to petroleum-based feedstock materials. Research activities focus on the synthesis of phase change materials, high-performance diesel fuel additives from vegetable oils and fats, development of advanced/integrated reactor systems, new uses for glycerin and glycerin conversion products and regenerative fuel cell technology.

According to the Associated Press, Suppes and Sutterlin formed Renewable Alternatives to commercialize their work on fuel cells and other fuel-related technologies because they thought the university had a poor track record in pursuing patents on professors’ research. Suppes said university officials had shown no interest in his efforts until he “informed them that royalties had been paid.”

“The Missouri tech transfer program is totally broken and basically beyond repair.” ~ Professor Suppes

The actions that led up to this case are quite convoluted but basically, Suppes, as a professor and university employee, is required under the university rules to assign to the the University of Missouri “all domestic and foreign rights to any invention made by the employee within the general scope of her/his duties as employee of the University, unless such requirement is waived in writing by the University.”

The complaint now alleges that since 2001, Suppes has invented several inventions within the scope of his duties at the University. But, “rather than disclose and assign those inventions as required, Suppes has on approximately 31 occasions submitted invention disclosure forms that were altered, usually by deleting or substantially modifying the specific assignment language contained in the forms such that Suppes did not in fact assign any meaningful rights to the University. On these occasions Suppes submitted the forms without bringing his alterations to anyone’s attention.”

In addition, Suppes has on other occasions denied that certain inventions were within the scope of his duties and services, asserting that they were conceived and reduced to practice without use of University facilities or resources or while Suppes was not working for the University, and Suppes and Sutterlin have since filed multiple patent applications, without acknowledging the University’s ownership.  Suppes has since refused to execute assignment documents. The university is now suing in order to get rights more to than 30 inventions and 11 potential patents it says were developed in his Columbia campus labs.

See the entire complaint here.

• US published application 20050008904, Regenerative fuel cell technology.
• US Patent No. 6,574,971, Fatty-acid thermal storage devices, cycle, and chemicals.

From the Missouri Innovation Center Newsletter:

Q: What roadblocks have you encountered in starting your company here at the University of Missouri, and what improvements have been made?

Dr. Galen Suppes (GS): I initially met some resistance within the University when I sought permission to pursue my own company. However, that worked out. I found that clear advice regarding University procedures was somewhat lacking. For instance, I was not aware of the importance of the “Potential Conflict of Interest” form. I would strongly recommend that anyone starting their own business here at the University look into this form right away. Renting space for my company here on campus has been somewhat difficult, but the College of Engineering and MIC helped me in breaking ground. A thorough understanding of how the Office of Technology and Special Projects works would also be of great benefit in getting approved in a timely manner. At this point, it is becoming more clear that the University is supportive of faculty entrepreneurship and see that the commercialization of technology will create jobs for the community and the state. SBIR and STTR grants are now seen as quality funding mechanisms, and the University tends to be supportive of faculty spin-off companies, especially if this allows SBIR and STTR funds to be acquired.

Earlier, a District Court ordered Nobel Prize winner and former Yale University professor John Fenn, 87, to pay Yale $545,000 in royalties and penalties, and pay their legal bills of almost $500,000 for what the court called “fraud” and “civil theft” when he licensed the rights to U.S. Patent No. 5,130,538 to a company he partly owned.  More on the Fenn case here.

In one of the few cases where the inventor went to jail, Petr Taborsky, a former student at the University of South Florida, went to jail as a result of a dispute over technology ownership. In that case, Taborsky was convicted of grand theft and theft of trade secrets and sentenced to probation.  Read about the tale of Taborsky here.

More at IPBiz.

Just in case you didn’t know how I feel: patent trolls are a tax on innovation and are evil of the highest order.  ~ A VC

In a post entitled “How Patent Trolls Are A Tax On Innovation,” venture capitalist Fred Wilson states that “after 22 years in the venture capital business and countless hours discussing this issue, I come out on the side of less patent protection in information technology, no patent protection for software and business methods, and first and foremost the elimination of patent trolls.”

Like the troll of lore who lived under a bridge and extorted money from travelers, the so-called “patent trolls” are patent holders that do not make products but only threaten other companies with patent infringement lawsuits in order to extract money. (Ironically, Peter Detkin, former assistant general counsel at Intel is credited with coining this term and he now works for Intellectual Ventures LLC, a company that has been spending millions to buy up patents for licensing.)

It’s easy to see why Wilson feels strongly against patents.  He notes that there are currently three lawsuits pending against portfolio companies of his VC firms that are being brought by so-called patent trolls.  I think anyone under such attack would rightly feel that something must be amiss.  The article certainly garnered a lot of comments, mostly from people who agree with Wilson.  But are patents really so bad?  Aren’t patents what protect the markets of thousands of companies every day?

While Wilson makes the case for trying to protect the small inventor, he shows disdain for the solo inventor who does not commercialize a given technology because he/she “does not bring nearly as much economic value (and jobs) to our society as the entrepreneur who actually takes the risk, starts the company, hires people, commercializes the technology, raises the necessary capital, and builds lasting sustainable value.”   Thus, small inventors are not trolls if they are successful in commercializing the technology, raising capital, and building a lasting ACME company.  This leaves an awful lot of grey area full of companies that try but fail at commercialization.

In a convoluted bit of logic, Wilson concludes that the small inventor “can still get economic value from his/her patent, but it must be sold to an operating company that will use the patent to defend an operating business, not a financial investor who is just going to run around suing companies with impunity.”  Therefore, patent trollism is OK as long as it is performed by the inventor and not an intermediary.

Such an approach has some merit but what of companies and research institutes that exist primarily for research purposes?  Commercialization is not their mission.  Often, people do not realize that many of the important scientific advances came out of research institutions with no intentions of making commercial products.  Mosaic, the web browser credited with popularizing the World Wide Web, was created at the National Center for Supercomputing Applications (NCSA) is a state-federal partnership to develop and deploy national-scale cyberinfrastructure that advances science and engineering. NCSA operates as a unit of the University of Illinois at Urbana-Champaign.  Are universities then patent trolls?

Mark Lemley, Professor of Law at Stanford Law School, seems to distinguish universities from trolls on the premise that universities (generally) do not lie in wait until an industry has developed around a technology and then demanding a disproportionate share of royalties based on irreversible investments.  Having run a university technology transfer office, I can assure you that these offices generally are not even aware of how a technology is developing.  This is not to slight universities, it’s just that universities can have inventions from a thousand different technology areas.  No one could keep track of every industry.  That’s not to say that universities don’t sue others for patent infringement.  [As IPBiz points out, what about the University of Rochester Cox-2 infringement case?  Or Columbia University’s co-transformation patent-extending attempt?]

Lemley also points to the fact that most university licenses give the licensee not just protection from lawsuits but also provide valuable know-how. He sums this up as “University patent owners aren’t trolls in my view when they contribute previously unknown technology to society, rather than just imposing costs on others by obtaining and asserting legal rights over inventions independently developed by others.”

Ultimately, Lemley makes the point that it doesn’t matter what the entity is but, instead, we should focus on the bad acts and the laws that make them possible. Universities should use licensing for good instead of evil.  Note, however, that university patents are generally for very early stage technology. While universities account for 1% of patents on average across all fields, they account for 12% of all patents in nanotechnology and 18% of all patents in biotechnology.  This means that the early creators are critical to the development of new technologies even though they themselves do not make products.

Apart from creating what seems to be a two-tiered system of worthy and unworthy companies, Wilson makes the his legislative reform proposal as follows:

1.  Make the plaintiff pay the defendant’s legal fees if a patent infringement case is lost. This is similar to the English law system where the loser pays. The problem with this approach is that an individual with a valid claim against a large corporation can not afford to run the risk of losing despite any perceived validity to the claim.

2.  Patents and copyright should have a “use it or lose it” clause like trademarks.  This would presumably stop trolls by insisting that the patent holder make a product.  Wilson does not say how much “use” would be needed to prevent loss.

The fundamental error in most arguments against patents is the belief that anyone can sue anyone else for patent infringement based solely on a meritless patent and immediately get an injunction.  The plaintiff is thus able to immediately hold up the accused infringer for ransom.  This argument neglects the fact a preliminary injunction is proper if the plaintiff can demonstrate that it is likely to succeed on the merits at trial and that a combination of equitable factors favors granting the injunction.

It’s no question that patents (and so-called trolls) can be a problem in certain technology areas like high-tech where a single product might have thousands of individual parts covered by multiple and often overlapping patent claims.  In such a market, it can seem like a product can never escape litigation.  But we don’t want to throw out a system that has propelled the technological economy to amazing heights for the last 200 years.  We need to remember that in 20 years — a mere blink in human history — everything that is patented today will be freely available for everyone to use.  Forever.

It is likely that Wilson’s proposals are unworkable.  Perhaps a better solution then is to provide even stricter controls over the grant of preliminary injunctions.  A preliminary injunction is a remarkable power that can stop a competitor dead.  But, like weapons of mass destruction, should only be used in extreme cases.

The Su­preme Court’s decision in eBay Inc. v. MercExchange has already changed the standard for granting injunctions in patent infringement cases, increasing the bar and making it tougher for trolls to get them.  Let’s ensure it gets applied.

In addition, the best scenario would also ensure that patents are (mostly) valid to begin with.  This could be accomplished through a two-pronged approach at the level of the patent office.

First, raise the level of quality of examination at the patent office.  Despite the fact that the PTO claims it cannot hire its way out of a backlog, I’ve never seen an organization where hiring an appropriate number of high quality employees didn’t matter.  Just ask Circuit City.

Second, provide for better post-allowance review and challenge at the PTO level.  Currently, the validity of patents is handled primarily at the district court level.  While one can challenge patents through re-examination, the fear that the limited process will still allow the patent to issue keeps many companies from using this approach.  Allowing more third-party participation along with more complete elements of discovery could prevent many lawsuits.  Preferably, this would be coupled with a system that would stay any preliminary injunctions where the PTO finds a substantial question of patentability.

Many commentators have recommended that certain classes of inventions, like software and business methods, should be given a separate type of protection.  Suggestions range from a shorter patent period, e.g., 3-5 years, to a different class of protection like Creative Commons — perhaps with compulsory licensing.  Part of the problem with this approach is that it can be difficult to tell one type of technology from another.  Also, we are currently witnessing a convergence of biotechnology, nanotechnology and computer technology where neatly dissecting one technology from another will be quite impossible.  The inventions coming out of these new fields will give rise to patent claims dealing with blended and overlapping technologies.

Clearly, one person’s patent troll is another person’s champion of patent rights.

More at TPile.  See also patent economics.  Otherwise, consider if you even need a patent.

Related:   Injunctive Relief: A Charming Betsy Boomerang

Next came the Patent laws. These began in England in 1624; and, in this country, with the adoption of our constitution. Before then [these?], any man might instantly use what another had invented; so that the inventor had no special advantage from his own invention. The patent system changed this; secured to the inventor, for a limited time, the exclusive use of his invention; and thereby added the fuel of interest to the fire of genius, in the discovery and production of new and useful things.  ~ Abraham Lincoln, “Second Lecture on Discoveries and Inventions.”

As we honor our past leaders this Presidents today, It is especially noteworthy that Abraham Lincoln recognized the importance of technology in society.  He is the only U.S. president to hold a patent (No. 6469, granted May 22, 1849).  The patent was for a device to lift riverboats over shoals.

Jason Emerson, author of Lincoln the Inventor, noted that the 16th president was as much a product of an American age of invention and expansion as war and slavery.  He was intensely inquisitive and was said to have come across  “a machine or invention or scientific idea that he did not stop to investigate, both physically and mentally.”  According to Emerson, “He not only created his own invention but had ideas for other inventions, such as an agricultural steam plow and a naval steam ram, [and] was fascinated by patent cases as an attorney and also by new innovations during the Civil War.”

More importantly,  Lincoln changed the face of modern warfare though his use of the telegraph. The book “Mr. Lincoln’s T-Mails: The Untold Story of How Abraham Lincoln Used the Telegraph to Win the Civil War“, notes that when Lincoln took office the White House had no telegraph connection.  According to author Tom Wheeler, Lincoln “developed the modern electronic leadership model” in 1862 when he began using the telegraph to give orders for troop movements.

Lincoln moved the hub of the telegraph network from Army headquarters to the civilian-run War Department next to the White House.  Lincoln was then able to receive unfiltered messages.  He used the telegraph to monitor progress in the war and to use the information to his advantage and Lincoln personally sent out 1,000 telegrams during the course of the Civil War.

But Lincoln offers much more than an example of how a great leader embraces technology.  Leadership comes from embracing all of the elements necessary to grasp the unfamiliar and the uncomfortable.  If you want to look at Lincoln as a leader, Doris Kearn Goodwin’s book “Team of Rivals: The Political Genius of Abraham Lincoln” provides great lessons that leaders — and wannabe leaders — should strive to grasp.

Lincoln’s leadership genius is found in his ability to to draw assistance from any source, including political rivals.  His cabinet was full of his opponents for the Republican nomination in 1860, including William H. Seward, Salmon P. Chase (an Ohioan), and Edward Bates. Anyone wanting to guide an organization through tough times will need to surround him or herself with those who do not always think the same.  This means embracing rivals as they may be in the best position to point out the flaws we so easily ignore.

Only those who have the wisdom and confidence to select and work with the best people, regardless of stance, can one lead the way in times of crisis.

As if a global economic meltdown were not enough for newly-President Obama, more than 130 non-pharma manufacturing companies signed a joint letter to the President detailing their concerns about the economic impact of adopting apportionment of damages legislation.

Last month, the Manufacturing Alliance on Patent Policy (MAPP) released an economic analysis that showed how adopting apportionment of damages legislation would could put at risk 298,000 manufacturing jobs and reduce R&D investment by up to $66 billion.

MAPP members are advocating for non-controversial patent reform proposals that have broad support.

Excerpts from the letter:

Recent Patent Reform Proposals

In the 110th Congress, legislation was introduced to make fundamental changes to the U.S. patent system.  Proponents of the legislation were primarily large information technology and financial services companies.  The legislation passed the House of Representatives in September 2007, but did not pass the Senate.

While we shared the desire to improve the patent system, we voiced concern that a number of provisions would have weakened rather than strengthened patent protection.  In our view, those provisions could have harmed the competitiveness, investment and employment of our sector.

We feel strongly that the prosperity of a few companies within two industries should not come at the expense of a larger group of stakeholders.  Therefore, we applauded the decision of Senate leaders to delay action on the legislation until consensus was developed.  Now, as the proponents of the legislation introduced in the 110th Congress begin to lobby again for their proposals, we feel it is important to discuss again our concerns.

Flawed Justifications

At the outset, it is important to note that the justifications offered for the legislation are faulty.  For example, there is no explosion in patent litigation.  In 1993, lawsuits were 1.45% of patents granted.  In 2007, lawsuits were 1.48% of patents granted.  The number fluctuates from year to year, but it has never indicated a system out of control. (Source:  USPTO Annual Reports, Federal Judicial Statistics)

Moreover, there is no explosion in patent damage awards.  Adjusting for inflation, the median annual patent damages award has actually dropped slightly over the last 13 years. In constant dollars, the median was $3.9 million from 1995 through 2000, and $3.8 million from 2001 through 2007. (Source: 2008 Patent Litigation Study, PriceWaterhouseCoopers.)

One claim certainly is true – that the number of patent applications has increased significantly in recent years.  We view increased patent applications as a good thing, representing increased innovation that is crucial for American prosperity.  It would be a terrible mistake to allow the increase in patent applications to become an excuse to undermine patent protections.  Rather, Congress should take advantage of Americans’ growing desire to invent by ensuring that the U.S. Patent and Trademark Office (“USPTO”) has the resources and management to handle the increased number of applications in a thorough and timely manner.

Reducing Penalties for Patent Infringement – The Top Goal of the Proponents of Legislation Introduced in the 110th Congress

The top goal of those proposing the legislation introduced in the 110th Congress was to reduce penalties for patent infringement by changing the law of damages.  This change would have elevated the importance of one of the fifteen Georgia-Pacific factors now considered in calculating patent damages.  By giving this one factor – apportionment – a preeminent position in damage calculations, proponents could achieve the goal of reducing damage awards.

It is crucial to remember that patent damages are imposed only after patent validity and infringement are determined on the merits.  In other words, those paying damages have been found to have unlawfully used intellectual property belonging to someone else.

 See the entire MAPP Letter here.

Today is National Inventors’ Day in the United States. It is celebrated on the birthday of Thomas Alva Edison and for good reason.  Edison had 1,093 U.S. Patents issued in his name covering not just the incandescent light bulb but the phonograph, the motion picture camera, and an early printing telegraph, among other things.

The U.S. patent system has long been known to be an innovation engine and a proven catalyst of prosperity and jobs.  From its creation, the U.S. has built its economy on the foundation of intellectual property and this point is particularly relevant in economic down times.

Abraham Lincoln remarked in 1859 that the U.S. Constitution set out patents as a fundamental right, the only time that the word “right” was used in the document.

“To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” (Article 1, Section 8, clause 8.)

Lincoln knew that innovation was the most powerful driver to the country’s well-being.  Lincoln remarked, “The patent system changed this … and thereby added the fuel of interest to the fire of genius in the discovery and production of new and useful things.”

Proclamation 5013 by President Ronald Reagan:

Almost two hundred years ago, President George Washington recognized that invention and innovation were fundamental to the welfare and strength of the United States. He successfully urged the First Congress to enact a patent statute as expressly authorized by the U.S. Constitution and wisely advised that “there is nothing which can better deserve your patronage than the promotion of science . . .” In 1790, the first patent statute initiated the transformation of the United States from an importer of technology to a world leader in technological innovation.

Today, just as in George Washington’s day, inventors are the keystone of the technological progress that is so vital to the economic, environmental, and social well-being of this country. Individual ingenuity and perseverance, spurred by the incentives of the patent system, begin the process that results in improved standards of living, increased public and private productivity, creation of new industries, improved public services, and enhanced competitiveness of American products in world markets.

In recognition of the enormous contribution inventors make to the nation and the world, the Congress, pursuant to Senate Joint Resolution 140 (Public Law 97 – 198), has designated February 11, 1983, the anniversary of the birth of Thomas Alva Edison, one of America’s most famous and prolific inventors, as National Inventors’ Day. Such recognition is especially appropriate at a time when our country is striving to maintain its global position as a leader in innovation and technology. Key to our future success will be the dedication and creativity of inventors.

Now, Therefore, I, Ronald Reagan, President of the United States of America, do hereby proclaim February 11, 1983, as National Inventors’ Day and call upon the people of the United States to observe this day with appropriate ceremonies and activities.

In Witness Whereof, I have hereunto set my hand this 12th day of Jan., in the year of our Lord nineteen hundred and eighty-three, and of the Independence of the United States of America the two hundred and seventh.

Ronald Reagan

Make it a point to celebrate National Inventors’ Day.  As Edison exclaimed: “There’s a way to do it better. Find it.”

The Licensing Executive Society (LES) 2009 Winter meeting will incorporate the professional aspects of licensing and how they exemplify licensing as a culture…a global culture.  Licensing opportunities exist on a global scale, and LES members are increasingly called up on to develop and manage Intellectual Property around the world.

Licensing professionals globally deal with the same product—intangible assets of Intellectual Property. Licensing professionals must be able to communicate across international borders, appreciate the impact of different languages, ethics and cultures. In addition, they must also be able to maneuver within the matrix of laws, policies and practices that exist in different nations, organizations and industries.

What:

“Detecting Patent Infringement” A Holistic, Global Approach,” a panel discussion at the LES 2009 Winter Meeting that will investigate the best practices and methodologies used by the most aggressive licensing companies to fully protect their patent portfolios.

Who:

• Julia Elvidge, Chipworks President, Chipworks
• Lisa Jorgensen, Vice President of Intellectual Property, STMicroelectronics
• Robert Rodriguez, Senior IP Licensing Counsel, Freescale Semiconductor

Where:

LES 2009 Winter Meeting
Westin Riverwalk Hotel
San Antonio, Texas

When:

Thursday February 26, 2009
2:00 – 3:15 p.m. Workshop Session 1

More Info:

Phyllis Grabot
Corridor Communications, Inc.
805.341.7269 or Phyllis@corridorcomms.com

Founded in 1966, the Licensing Executives Society (U.S.A. & Canada), Inc. is a professional society comprised of over 6,000 members engaged in the transfer, use, development, manufacture and marketing of intellectual property.

The 1984 Hatch-Waxman Act created a 180-day period of exclusivity to generic companies as an incentive to challenge patents on brand name drugs. However, there is a concern that some brand pharmaceutical companies have been circumventing the intent of the Act by using delay tactics such as authorized generics (where the brand product is repackaged as a generic and marketed either through a subsidiary or third party).

Authorized generics can lead to delaying generic competition by discouraging generic companies from challenging weak and potentially unenforceable patents.  Now, Representative Jo Ann Emerson (R-MO), along with Rep. Marion Berry (D-AR), Dennis Moore (D-KS) and Zach Wamp (R-TN), have re-introducing H.R. 573, which would prohibit the marketing of an authorized generic during the 180-day generic exclusivity period following a patent challenge.

The Act would amend the Federal Food, Drug, and Cosmetic Act to prohibit the marketing of authorized generic drugs. (Introduced in House).  The Act would amend Section 505 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355) by adding at the end the following:

Prohibition of Authorized Generic Drugs-

(1) IN GENERAL- Notwithstanding any other provision of this Act, no holder of a new drug application approved under subsection (c) shall manufacture, market, sell, or distribute an authorized generic drug, direct or indirectly, or authorize any other person to manufacture, market, sell, or distribute an authorized generic drug.

(2) AUTHORIZED GENERIC DRUG- For purposes of this subsection, the term `authorized generic drug’–

(A) means any version of a listed drug (as such term is used in subsection (j)) that the holder of the new drug application approved under subsection (c) for that listed drug seeks to commence marketing, selling, or distributing, directly or indirectly, after receipt of a notice sent pursuant to subsection (j)(2)(B) with respect to that listed drug; and

(B) does not include any drug to be marketed, sold, or distributed–

(i) by an entity eligible for exclusivity with respect to such drug under subsection (j)(5)(B)(iv); or

(ii) after expiration or forfeiture of any exclusivity with respect to such drug under such subsection (j)(5)(B)(iv).’.

As mentioned earlier, not only has the Federal Trade Commission has filed a complaint in federal district court challenging agreements by Solvay Pharmaceuticals, which paid generic drug makers to delay launching generic versions of Solvay’s brand name drug AndroGel (known as “reverse payments“), but Senate Judiciary Committee members Herb Kohl (D-WI) and Chuck Grassley (R-IA) have proposed the “Preserve Access to Affordable Generics Act (S.396).”

The Act would prohibit brand name drug companies from compensating generic drug companies to delay the entry of a generic drug into the market.  According to the Senate findings:

1. prescription drugs make up 10 percent of the national health care spending but for the past decade have been one of the fastest growing segments of health care expenditures;
2. 67 percent of all prescriptions dispensed in the United States are generic drugs, yet they account for only 20 percent of all expenditures;
3. generic drugs, on average, cost 30 to 80 percent less than their brand-name counterparts; and
4. the FTC found that 1/2 of the settlements made in 2006 and 2007 between brand name and generic companies, and over 2/3 of the settlements with generic companies with exclusivity rights that blocked other generic drug applicants, included a pay-off from the brand name manufacturer in exchange for a promise from the generic company to delay entry into the market.

The Act would amend the Clayton Act (15 U.S.C. 12 et seq.) by inserting after section 28 the following:

SEC. 29. UNLAWFUL INTERFERENCE WITH GENERIC MARKETING.

(a) It shall be unlawful under this Act for any person, in connection with the sale of a drug product, to directly or indirectly be a party to any agreement resolving or settling a patent infringement claim in which–

(1) an ANDA filer receives anything of value; and

(2) the ANDA filer agrees not to research, develop, manufacture, market, or sell the ANDA product for any period of time.

(b) Nothing in this section shall prohibit a resolution or settlement of patent infringement claim in which the value paid by the NDA holder to the ANDA filer as a part of the resolution or settlement of the patent infringement claim includes no more than the right to market the ANDA product prior to the expiration of the patent that is the basis for the patent infringement claim.

—————–

Violators would forfeit their 180-day exclusivity period:

Section 505 of the Federal Food, Drug and Cosmetic Act (21 U.S.C. 355(j)(5)(D)(i)(V)) is amended by inserting `section 29 of the Clayton Act or’ after `that the agreement has violated’.