For decades now, there has been a pronounced trend away from adjudication and toward settlement in civil litigation. This settlement phenomenon has spawned a vast critical literature beginning with Owen Fiss’s seminal work, Against Settlement. Fiss opposes settlement because it achieves peace rather than justice, and because settlements often are coerced due to power and resource imbalances between the parties. Other critics have questioned the role that courts play (or ought to play) in settlement proceedings, and have argued that the secondary effects of settlement – especially the lack of decisional law – are damaging to our judicial system. Still, despite these criticisms, settlement remains the norm in civil litigation today.
This Article considers the settlement phenomenon in the context of patent litigation. In recent years, courts have seen an explosion of patent litigation. Consistent with the general trend in civil litigation, most of those patent suits have been resolved through settlement. While scholars have studied and debated “reverse payment” or “pay for delay” patent settlements in depth, what is missing from the literature is a comprehensive treatment of the normative questions raised by the widespread settlement of conventional patent cases. Do conventional patent settlements necessarily promote the public good? Should courts be encouraging these patent disputes to settle? Are there certain types of patent cases that should be adjudicated rather than settled?
This Article sets out to answer these questions. It begins by contextualizing the anti-settlement arguments of Fiss and other scholars within a patent litigation framework. The Article then identifies some of the unique problems created by patent settlements, namely that settlement allows potentially invalid patents to remain in force in contravention of the public good. Next the Article canvasses the caselaw and literature and concludes that the judiciary systematically encourages patent litigants to settle. The final part of the Article argues that settlement is not the best way to resolve all patent disputes from a social welfare perspective, and proposes that trial judges serve as protectors of the public interest. It then recommends various factors to inform the decision whether a particular patent case should settle or be adjudicated, and offers suggestions for how trial courts might influence patent litigation outcomes.
Megan M. La Belle, Against Settlement of (Some) Patent Cases, 67 VAND. L. REV. 375 (2014).