LS&HC Horizons 2022 - Flipbook - Page 41
Hogan Lovells | 2022 Life Sciences and Health Care Horizons
41
Patents, Litigation, and Beyond
Patent settlements in the pharmaceutical sector: The Court of Justice refines the applicable legal test
In the pharmaceutical sector, originators and generics producers may
frequently litigate over patent infringements which can be resolved
with patent settlements (PS).
However, the European Commission considered in several cases
that some PSs amounted to market-sharing agreements violating
competition law “by object” i.e., an agreement that by its very nature is
anti-competitive.
Last, pro-competitive effects may rebut the presumption of a violation
by object if they are demonstrated, relevant, specific and sufficiently
significant to create a reasonable doubt as to the purpose of the PS.
Such a rebuttal would force antitrust authorities to go through a
detailed assessment of the effects of the PS.
Further developments on this interesting question are to be expected in
2022 when the Court of Justice rules on another PS in the Servier case.
In 2020 and 2021, the Court of Justice provided clarifications on the
legal test applicable to such analyses.
First, a PS does not restrict competition if the parties are not
competitors or potential competitors. For instance, if the generics
manufacturer has not taken preparatory steps to enter the market or is
not a credible new entrant on the market because of insurmountable
barriers to entry, there is no potential competition. However, the mere
existence of a patent is not sufficient to create insurmountable barriers.
Second, payment should not compensate for the absence of market
entry and should be directly proportionate to the purpose of the
dispute. For instance, the amount cannot be set by reference to the
expected benefit that a manufacturer could have expected, had it
entered the market.
Victor Levy
Counsel, Paris
Pierre Chellet
Associate, Paris
