Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

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Friday, October 15, 2010

The AZ Judgment: A Green Light for Further Action on Pharma and IP

Posted by D. Daniel Sokol

Sean-Paul Brankin (Crowell & Moring) discusses The AZ Judgment: A Green Light for Further Action on Pharma and IP.

ABSTRACT: On July 1, 2010, the General Court issued its long awaited judgment in AstraZeneca v Commission, almost five years after AstraZeneca launched its appeal against the EUR 60 million fine imposed on it by the Commission for abuse of dominance in 2005.  The original Commission Decision was ground-breaking. It was the Commission's first abuse of dominance case in the pharmaceutical ("pharma") sector, a rare example of a case addressing the interaction between EU competition law and Intellectual Property ("IP") rights, and the types of abuse involved were novel. The decision launched the Commission on the path that eventually led to its 2009 pharmaceuticals sector inquiry; it also set the tone for a series of cases dealing with abuse of dominance in relation to the acquisition of IP rights, in particular patents, including Rambus and Qualcomm. The importance of the case is underlined by the persistent rumor that the Commission has delayed launching cases based on the results of the sector inquiry pending the outcome of the appeal. Many thought the Commission Decision would be overturned on appeal.

However, the General Court not only upheld the Commission's novel theories of abuse, it also appears to have extended their potential scope of application. And, in dismissing an appeal that challenged all aspects of the Commission Decision, the decision addresses a number of important issues, including the proper approach to market definition in the pharma sector, the scope for abuse in the context of applications for IP rights and litigation, and the circumstances in which prima facie legitimate behavior may be abusive-although it arguably leaves much scope for interpretation. This article discusses some of the issues raised in these important areas.

It should, however, be noted that the General Court's decision is itself under appeal to the European Court of Justice, so the law will remain uncertain for some time yet.

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