Competition Law and Intellectual Property Go Another Round

Article by Gillian Sproul , Nathalie Jalabert-Doury , Kiran S. Desai and Jens Peter Schmidt

Originally published 2 July 2010

Keywords: competition law, intellectual property rights, AstraZeneca, abuse of market dominance, Losec, patent, EU Treaty, misleading representations,

In a new judgment that further explores the application of competition law to intellectual property rights, the EU General Court has upheld a 2005 Commission decision finding that AstraZeneca1 abused a market-dominant position by blocking or delaying the entry of generic versions of its ulcer drug Losec2. However, the Court has also reduced to €52.5 million the €60 million fine originally imposed on AstraZeneca, reflecting the Commission's failure to prove one element of its case.

Dominance

The Court endorsed the Commission's finding that the product market relevant to Losec was the market for proton pump inhibitors ("PPIs"), since these were substantially superior to other products with the same therapeutic use. Losec's very high share of the market for PPIs gave AstraZeneca a dominant market position in the territories in which it engaged in the conduct challenged by the Commission.

The Abuse

The Court's decision establishes that conduct relating to patent applications and extensions, and to marketing procedures, may constitute an abuse of market dominance, within the meaning of Article 102 of the Treaty on the Functioning of the European Union ("TFEU"), where that conduct blocks or delays competitors' market entry.

The conduct at the centre of the case involved:

a pattern of misleading representations made by AstraZeneca to patent attorneys, national patent offices and national courts in a number of Member States with a view to gaining extended patent protection for omeprazole, the active substance in Losec, through supplementary protection certificates ("SPCs")3 and a marketing strategy combining three elements: selective requests by AstraZeneca for deregistration of market authorizations for Losec capsules in Denmark, Norway and Sweden, withdrawal by AstraZeneca of Losec capsules from those markets and the launch by AstraZeneca of Losec multiple unit pellet system ("MUPS") tablets. The Appeal

AstraZeneca appealed on the basis that it had not intentionally provided misleading information in order to obtain SPCs for Losec; and that the introduction of a new Losec formulation and the withdrawal of Losec capsules amounted to a legitimate commercial policy designed to...