Article 82 EC prohibits a dominant undertaking from eliminating a competitor and thereby strengthening its position by using methods other than those which come within the scope of competition on the merits.
An undertaking in a dominant position, which considers that it can lay claim to a right, may not use all means to obtain that right, including recourse to highly misleading representations with the aim of leading public authorities into error, as such is manifestly not consistent with competition on the merits and the specific responsibility on such an undertaking not to prejudice, by its conduct, effective and undistorted competition within the EU.
Misleading representations designed to obtain exclusive rights unlawfully constitute an abuse only if it is established that, in view of the objective context in which they are made, those representations are actually liable to lead the public authorities to grant the exclusive right applied for. Such is the case when (unlawful) SPCs are filed five to six years before their entry into force and the applicant’s rights are protected by lawful patents, as such leads to a significant exclusionary effect after the expiry of the basic patents and is also liable to alter the structure of the market by adversely affecting potential competition even before that expiry.
The preparation by an undertaking, even in a dominant position, of a strategy whose object it is to minimize the erosion of its sales and to enable it to deal with competition from generic products is legitimate and is part of the normal competitive process, provided that the conduct envisaged does not depart from practices coming within the scope of competition on the merits, which is such as to benefit consumers. However, conduct consisting in the deregistration, without objective justification and after the expiry of the exclusive right to make use of the results of the pharmacological and toxicological tests and clinical trials granted by Directive 65/65, of the MAs of a certain drug, in order to hinder the introduction of generic products and parallel imports, does not come within the scope of competition on the merits.
The primary purpose of Directive 65/65 is to safeguard public health while eliminating disparities between certain national provisions which hinder trade in medicinal products within the Union, and it therefore does not pursue the same objectives as Article 82 EC in such a way that the application of the latter is no longer required for the purposes of ensuring effective and undistorted competition within the internal market.
An undertaking which holds a dominant position has a special responsibility in that latter regard and it cannot therefore use regulatory procedures in such a way as to prevent or make more difficult the entry of competitors on the market, in the absence of grounds relating to the defence of the legitimate interests of an undertaking engaged in competition on the merits or in the absence of objective justification.
The possibility provided for in Directive 65/65 of deregistering a MA is not equivalent to a property right. Consequently, the fact that, in the light of its special responsibility, an undertaking in a dominant position cannot make use of such a possibility in such a way as to prevent or render more difficult the entry of competitors on the market, unless it can, as an undertaking engaged in competition on the merits, rely on grounds relating to the defence of its legitimate interests or on objective justifications, does not constitute either an “effective expropriation” of such a right or an obligation to grant a licence, but a straightforward restriction of the options available under the EU law.
The fact that the exercise of such options by an undertaking in a dominant position is limited or made subject to conditions in order to ensure that competition already weakened by the presence of that undertaking is not subsequently undermined is in no way an exceptional case and does not justify a derogation from Article 82 EC, unlike a situation in which the unfettered exercise of an exclusive right awarded for the realization of an investment or creation is limited.
Directive 65/65 created a limitation to those alleged rights by establishing, in point 8(a)(iii) of the third paragraph of Article 4 thereof, an abridged procedure which, after the expiry of a period of exclusivity of six or ten years, allows the national authorities to rely on the clinical data in the file and the manufacturers of essentially similar medicinal products to benefit from its existence for the purposes of being granted a MA.
Moreover, in so far as the national authorities do not disclose that data to applicants in the context of the abridged procedure, the finding of the existence of abuse does not result in competitors being granted access to the clinical data and does not prejudice its confidentiality.
The fact that the regulatory framework offers alternative means, which are longer and more costly, to obtain a MA does not prevent the conduct of an undertaking in a dominant position from being abusive where that conduct, considered objectively, has the sole purpose of rendering the abridged procedure provided for by the legislator in point 8(a)(iii) of the third paragraph of Article 4 of Directive 65/65 unavailable and therefore of excluding the producers of generic products from the market for as long as possible and of increasing the costs incurred by them in overcoming barriers to entry to the market, thereby delaying the significant competitive pressure exerted by those products.
Although the mere possession of intellectual property rights cannot be considered to confer a dominant position, their possession is nonetheless capable, in certain circumstances, of creating such a position, in particular by enabling an undertaking to prevent effective competition on the market.
The taking into account of intellectual property rights for the purposes of finding that an undertaking has a dominant position does not mean that companies introducing innovative products on the market should refrain from acquiring a comprehensive portfolio of intellectual property rights or from enforcing those rights. A dominant position if not prohibited – only its abuse – and a finding that an undertaking has such a position is not in itself a criticism of the undertaking concerned.
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Decision of the European Court of Justice (First Chamber) 6 December 2012 – Case No. C-457/10 P. ‘‘AstraZeneca’’. IIC 45, 117–119 (2014). https://doi.org/10.1007/s40319-013-0155-x