The General Court of the EU has upheld the European Commission decision fining Lundbeck and a number of generic companies in relation to patent settlement agreements. At the time of writing, the full text of the decisions has not been published.
What we do know
• The Commission’s Lundbeck decision found a restriction of competition by object only. The recent trend towards a more restrictive interpretation of the ‘object’ category (which we discussed in the context of patent settlements here) has not prevented this novel finding being upheld by the General Court.
• Would-be generic entrants are therefore held to be potential competitors of the patentee (Lundbeck), despite the existence of patent protection held by Lundbeck. The fact that they had possibilities for entering the market, including through an at-risk launch, is regarded as a form of potential competition. (Having been brought up to respect the blocking power of patents, this is something I expect to find troubling for some time to come…)
• The fine has been upheld in full – no credit has been given for the novelty of the decision.
It is still unclear how closely the General Court has followed the Commission’s reasoning – to judge by the press release, it appears likely that the legal analysis is closely aligned. (See our discussion of the decision itself here.) Other than for the parties themselves, the judgment will be of immediate interest for the parties to the Paroxetine litigation in the UK: as reported here, an appeal of the CMA’s decision in that matter is due to take place before the Competition Appeal Tribunal early next year. This decision is likely to be welcome news to the CMA… Meanwhile, companies entering into agreements settling patent litigation will need to continue to pay very careful heed to the competition rules when deciding on the terms of market access for generic products.
The General Court’s press release is available here.