Ethan Ackerman was kind enough to respond to my recent post on ProCD v. Zeidenberg, in which I suggested that “the case for contracts somehow expanding copyright rights is vastly overstated, and perhaps illusory.” Sure, Ackerman’s post is critical, but I’m happy to generate even critical responses. Ackerman suggests that a recently filed case in the Virginia courts shows, allegedly contra me, that “there’s an open, ongoing and unsettled problem with parties attempting to reverse, by contract clause, an issue that is addressed and settled by federal copyright law.”

The problem is, that wasn’t my argument.

Earlier this week, I had the chance to participate together with Scott Hemphill and Dan Crane on an interesting conference panel devoted to the antitrust implications of settling a patent suit between rival drug makers. Here is a short version of the issue we discussed.

Imagine someone suing you and then offering to pay you a few million dollars if you agree to settle the case. Sound strange, impossible, or just plain crazy? Well maybe it is for the average citizen. But strange as it may sound, for generic drug manufacturers this is not merely possible; it actually occurs with some frequency, as is documented empirically in Scott’s excellent working paper and in Dan’s important earlier work on the subject.