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Who can compete? Analysing the concept of potential competition in reverse patent settlements

Olovsson, Sofie LU (2017) JAEM01 20171
Department of Law
Abstract
After the General Court’s (GC) decision in case T-472/13 H. Lundbeck A/S and Lundbeck Ltd v Commission it seems the concept of potential competition in the context of so-called ‘pay-for-delay’ agreements, or reverse patent settlements, might have been altered; that the bar in order for an undertaking to qualify as a potential competitor might have been lowered. This thesis aims to examine whether this is true, and if so to what extent. Starting with an introduction to competition law and the concept of patent settlements, followed by a description of the specifics of Article 101 TFEU, and the relationship between competition law and intellectual property rights, this essay aims to provide enough knowledge that the reader will have no... (More)
After the General Court’s (GC) decision in case T-472/13 H. Lundbeck A/S and Lundbeck Ltd v Commission it seems the concept of potential competition in the context of so-called ‘pay-for-delay’ agreements, or reverse patent settlements, might have been altered; that the bar in order for an undertaking to qualify as a potential competitor might have been lowered. This thesis aims to examine whether this is true, and if so to what extent. Starting with an introduction to competition law and the concept of patent settlements, followed by a description of the specifics of Article 101 TFEU, and the relationship between competition law and intellectual property rights, this essay aims to provide enough knowledge that the reader will have no trouble following the analysis of the case and its potential implications.

In 2010, the Commission launched formal proceedings against Lundbeck, a Danish pharmaceutical company, which in 2002 and 2003 had entered into agreements with four generic pharmaceutical undertakings concerning the anti-depressant citalopram. The four companies undertook to not enter the market with generic versions of citalopram for a certain period of time. In exchange, Lundbeck paid each sums which largely corresponded to the profits that the generic firms expected to make had they entered the market, or to the damages they would have obtained if they had been successful in litigation against Lundbeck. The agreements were all separately found, by the Commission and later also the GC, to infringe Article 101(1) TFEU by object as they restricted potential competition. At time the agreements were concluded Lundbeck’s original compound patents had expired, however they still held a number of process patents. Had any of the four generic undertakings chosen to enter the market they might have done so at risk of infringing one of Lundbeck’s patents. The Commission and the GC however still regarded the four companies to be potential competitors to Lundbeck, thus paying them to stay off the market was a restriction on competition.

Comparing the ruling in Lundbeck to previous case-law dealing with the concept of potential competition, and relying on comments and opinions by legal scholars and practitioners the analysis centres around whether the GC did right in defining potential competition as it did, and what the implications of the case might be in that regard. Many questions remain without answer in the GC’s judgement, hopefully clarification will be provided for when the European Court of Justice reviews the case, which is currently under appeal. (Less)
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author
Olovsson, Sofie LU
supervisor
organization
course
JAEM01 20171
year
type
H1 - Master's Degree (One Year)
subject
keywords
Competition, Intellectual Property, Pay-for-delay, Patent Settlements, Lundbeck
language
English
id
8912355
date added to LUP
2017-06-19 13:36:41
date last changed
2017-06-19 13:36:41
@misc{8912355,
  abstract     = {After the General Court’s (GC) decision in case T-472/13 H. Lundbeck A/S and Lundbeck Ltd v Commission it seems the concept of potential competition in the context of so-called ‘pay-for-delay’ agreements, or reverse patent settlements, might have been altered; that the bar in order for an undertaking to qualify as a potential competitor might have been lowered. This thesis aims to examine whether this is true, and if so to what extent. Starting with an introduction to competition law and the concept of patent settlements, followed by a description of the specifics of Article 101 TFEU, and the relationship between competition law and intellectual property rights, this essay aims to provide enough knowledge that the reader will have no trouble following the analysis of the case and its potential implications. 

In 2010, the Commission launched formal proceedings against Lundbeck, a Danish pharmaceutical company, which in 2002 and 2003 had entered into agreements with four generic pharmaceutical undertakings concerning the anti-depressant citalopram. The four companies undertook to not enter the market with generic versions of citalopram for a certain period of time. In exchange, Lundbeck paid each sums which largely corresponded to the profits that the generic firms expected to make had they entered the market, or to the damages they would have obtained if they had been successful in litigation against Lundbeck. The agreements were all separately found, by the Commission and later also the GC, to infringe Article 101(1) TFEU by object as they restricted potential competition. At time the agreements were concluded Lundbeck’s original compound patents had expired, however they still held a number of process patents. Had any of the four generic undertakings chosen to enter the market they might have done so at risk of infringing one of Lundbeck’s patents. The Commission and the GC however still regarded the four companies to be potential competitors to Lundbeck, thus paying them to stay off the market was a restriction on competition.

Comparing the ruling in Lundbeck to previous case-law dealing with the concept of potential competition, and relying on comments and opinions by legal scholars and practitioners the analysis centres around whether the GC did right in defining potential competition as it did, and what the implications of the case might be in that regard. Many questions remain without answer in the GC’s judgement, hopefully clarification will be provided for when the European Court of Justice reviews the case, which is currently under appeal.},
  author       = {Olovsson, Sofie},
  keyword      = {Competition,Intellectual Property,Pay-for-delay,Patent Settlements,Lundbeck},
  language     = {eng},
  note         = {Student Paper},
  title        = {Who can compete? Analysing the concept of potential competition in reverse patent settlements},
  year         = {2017},
}