In a judgment of 6 December 2012, the CJEU dismissed AstraZeneca’s (“AZ”) appeal of the GC’s judgment that concerned an abuse of the undertaking’s dominant position. The case deals with strategies adopted by AZ in relation to its blockbuster, Losec, which is a PPI (proton pump inhibitor) drug for ulcer. Among other things, AZ was accused of using misleading statements to obtain extension of patent protection for Losec through a supplementary protection certificate (“SPC”). While the judgment covers many interesting legal issues, this post will focus only on two: the market definition for Losec and the misleading statements abuse.
In relation to market definition, the CJEU followed the Commission and the GC and adopted a very narrow approach. PPIs (like Losec) were not considered to be in the same product market as H2 blockers, even though the latter were the leading treatment for ulcer when PPIs were launched. This approach can be dangerous: pharma companies entering the market with innovative drugs are always likely to be considered dominant. The CJEU excluded H2 blockers from the relevant product market because allegedly they were not truly competing with PPIs. According to the CJEU, the only reason why doctors continued to prescribe H2 blockers was not their efficacy but the uncertainty concerning the side-effects of PPIs. The Court’s argument is based on a theoretical distinction and fails to engage with the logic of drug markets, where therapeutic efficacy and absence of side-effects are seen as the two sides of the same coin.
The part of the judgment dealing with misleading statements as an abuse of a dominant position was the one practitioners awaited the most. In the past, the GC had set the bar very low and provided that any objectively misleading statement to a patent office would be an abuse. Had this been upheld, it would change fundamentally the way patent processes work. In fact, according to EPO’s Facts and Figures, less than 50% of patent applications result in a patent being granted. In all the other cases, inventions are presented by the companies as patentable, but are eventually found not to be so. Would this always amount to an abuse in case the applicant is a company holding a dominant position? The CJEU assuaged these fears, by noting that “the assessment of whether representations… are misleading must be made in concreto”. It clarified that each objectively wrong representation made to a patent authority will not automatically constitute an abuse. For example, in AZ’s case, the CJEU looked specifically at the deliberateness and duration of the alleged misrepresentations, to establish their abusive character. However, the CJEU then set a very low bar when examining the conduct’s effects on competition. It found that the misleading representations in question had a “potential” effect on competition, even though in certain jurisdictions the misleading statement was detected and corrected before any competitor learned of the possible grant of an SPC. If this qualifies as a “potential” effect, what would then be a case of “unlikely” or “no effect” on competition?
The recent AstraZeneca judgment is not the only, and certainly not the last, case touching upon the competitive relations of originators and generic manufacturers. The ongoing Commission investigations on reverse payment agreements (involving e.g., Lundbeck or Servier) are related to the exact same issue. Although the legal issues are different there (these investigations are run under Article 101 TFEU), the underlying policy and business considerations are the same. More headaches to come…
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