What is a value transfer and why does it matter?

Value transfers are a common feature of patent settlement agreements. For example, under a patent settlement agreement, the alleged infringer (often a generic company) may agree to pay damages and/or future royalties to the patentee (if the settlement also results in a licence). Other forms of payment, such as a contribution to the litigation costs of either party, may be made to enable a settlement to be reached. In the context of pay-for-delay agreements, the competition authorities are particularly interested in what are sometimes known as ‘reverse payments’ where value is transferred from the patentee to the alleged infringer.In the second episode of our podcast series discussing patent settlement agreements and competition law, Pat Treacy and Olivia Henry consider the impact of the Court of Justice’s broad interpretation of what might constitute a value transfer. With an eye on the recent case law emerging from the Court of Justice and the Commission, they explore when and why different types of value transfers are likely to be of interest to the competition authorities.For more information on the work we do, see our patent litigation and competition litigation practice area pages.