EU Pharma Patent Settlements

These points are from a talk given by John Cassels at fieldfisher’s Pharma Patents Seminar on 16 October 2014.

1. Anticompetitive behaviour can arise either due to agreements between parties or from unilateral behaviour, and patent settlements are agreements that may be anticompetitive. Anticompetitive behaviour can be approached either through looking at the ‘object’ of the agreement or through the ‘effect’. The EU normally analyses the ‘object’ as this is easier to prove.

2. Pay for delay (or ‘reverse settlement’) agreements are where a patent holder pays a competitor to not enter the market and not to challenge the validity of the patent. See TaylorWessing comments on pay for delay here.

3. EU case law is still evolving in this area and decided cases so far focus on individual bad behaviour of the parties, rather than developing principles to guide which pay for delay settlements are anticompetitive. However in the recent Servier case it was relevant that the ‘product’ patent had expired and Servier was relying on a ‘process’ patent. Servier was also found guilty of abusing its dominant position over a particular ‘molecule’. See Law360’s report here.

4. In the Lundbeck decision the internal documents of the parties were very damaging, referring to a ‘club’ being formed and ‘piles’ of cash being made.

5. The EU fining guidelines can be found here. The fines increase for repeat offending and refusal to cooperate.

 You may also wish to see related articles Evergreening in the Pharma Sector and Mazzucato’s ‘Innovation as Growth Policy’.