When a pharmaceutical company discovers a new drug, it invariably patents the drug. The patent gives the company the legal right to be the only producer for a number of years—typically, 20 years after the company filed the patent. Generic drug companies, however, often file lawsuits seeking to invalidate the patent so that they also can produce the drug. The generic drug company Actavis (at the time called Watson) filed suit against Solvay Pharmaceuticals, seeking to invalidate Solvay’s patent on AndroGel. On average, generic drug companies win slightly less than half of the lawsuits they file. Solvay’s patent still had 16 years left before it expired. Rather than litigate the suit, Actavis’s managers agreed to a settlement that allowed the firm to market the drug after 9 years. As a manager at Actavis, why would you accept a settlement that provides your company with no immediate gain?