Can a Refusal to License Intellectual Property Rights Constitute an Abuse of a Dominant Position?

IMS Health GmbH & Co v NDC Health GmbH & Co KG

Delivered on 2 October 2003, Advocate General Tizzano's opinion in the IMS case could mean that an intellectual property right holder in a dominant position may have to grant licences to its competitors.

The facts

IMS Health GmbH (IMS) compiles interprets and sells medical prescription and sales information for pharmaceutical products in Germany. Its presentation and analysis is based on a brick structure, which combines geographical parameters with structural factors.

In October 2000 NDC Health GmbH (NDC) began to offer services using a data structure based on the IMS structure. When sued by IMS in Germany, NDC offered to take a licence of the IMS structure, which IMS refused. NDC then filed a complaint of abuse of dominant position under Article 82 EC with the European Commission (Case Comp D3/38.044) in December 2000.

The Article 82 complaint

The Commission gave its preliminary view and, as an interim measure, ordered a compulsory licence on terms to be determined if not agreed. IMS appealed to the Court of First Instance (CFI), which found that IMS' prima facie case was stronger than NDC's, and so suspended the Commission's interim measure.

NDC appealed unsuccessfully to the ECJ against the CFI's ruling. The position under the Article 82 complaint remains unresolved; the Commission's final decision is awaited.

The German proceedings

In the infringement case before it, the Landgericht has proceeded on the basis that copyright subsists in the structure, although this remains to be determined. It has referred questions to the ECJ.

Opinion of Advocate General Tizzano

In response to the questions raised by the Landgericht, the Advocate General has concluded that if an intellectual property right holder in a dominant position in a secondary market refuses to grant a licence to a third party this constitutes abuse where:

there is no objective justification for such a refusal;

the third party's use of the intellectual property is indispensable for it to operate on the secondary market;

the refusal of licences eliminates all other competition in that market;

the product to be offered by the third party has different characteristics to the product of the right holder;

the third party product meets a need in the market which is unsatisfied.

He has also concluded that when assessing whether use of the protected data structure is necessary to compete in Germany, the participation of the...