Antitrust and Life Sciences Alert: EU Court of Justice Hears Appeal of Abuse of Dominance Finding Against AstraZeneca

by Orrick, Herrington & Sutcliffe LLP
Contact

On 12 January 2012, the Court of Justice of the European Union heard AstraZeneca's appeal [1] of the General Court's judgment [2] largely upholding the European Commission's decision [3] fining AstraZeneca €60 million for abuse of dominance by misusing the patent system and the procedures for the marketing of pharmaceutical products. According to the Commission, this had the result of delaying generic entry of omeprazole (marketed as Losec) in several European countries.

As previously reported, this is the first time the Commission has found a pharmaceutical company in violation of abuse of dominance legislation as a result of patent rights being exercised. The case covers issues of market definition, assessment of "dominance", and the meaning of "competition on the merits" and the scope of the "special responsibility" imposed by EU law on dominant companies in the pharmaceutical industry.

At the hearing, AstraZeneca's representatives challenged the Commission's "dominance" and "abuse" findings. Of particular interest, AstraZeneca questioned how the withdrawal of a marketing right, granted to it under EU law, could constitute an abuse. It argued that only in "exceptional circumstances" (as used in the EU's "essential facilities" doctrine) could a dominant company's exercise of a right violate competition law. The Commission's representatives argued that many acts which constitute an abuse of dominance are "legal" and it is not necessary for an act to be "illegal" for it to be an abuse. It was also pointed out that the exercise of intellectual property rights does not shield a dominant company from the application of competition law.

Judge Ilešic took interest in these issues and repeatedly asked the Commission to specify exactly in which circumstances a pharmaceutical company is obliged to maintain marketing authorisations. The Commission responded that an abuse cannot be defined in the abstract without reference to the specific facts of a case. It also emphasised the importance of "intent" and noted that AstraZeneca's conduct was part of a campaign to delay generic entry. Further, the Commission argued that the abuse was defined "very narrowly" and that a company which engages in "normal behaviour", or which does not reap any commercial advantage from certain conduct, was unlikely to abuse a dominant position.

To support that AstraZeneca was not an overly aggressive decision, the Commission referred to the U.S. Federal Trade Commission's enforcement actions and claimed that its more intensive scrutiny and actions against originator companies had not resulted in reduced pharmaceutical research activity in the U.S. This argument carries more than a little bit of irony, as many of the U.S. agency's enforcement actions against patent-holder pharmaceutical companies have not been upheld by U.S. courts.

On 15 May 2012, the Advocate General will make its non-binding recommendation to the Court of Justice. It is then likely to take several months before the Court of Justice hands down its judgment.

For a summary of the parties' arguments before the Court of Justice, see the Report for the Hearing here.

________________________________________

[1] Case C-457/10P - AstraZeneca v. Commission.

[2] Case T-321/05 - AstraZeneca v. Commission, 1 July 2010.

[3] Case COMP/A 37.507/F3 - AstraZeneca, 15 June 2005.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Orrick, Herrington & Sutcliffe LLP | Attorney Advertising

Written by:

Orrick, Herrington & Sutcliffe LLP
Contact
more
less

Orrick, Herrington & Sutcliffe LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.