Training for UPC technical judges - Antitrust Law

On the last day of the first block of the CEIPI Training Program for Future Technical Judges of the UPC, Nicolas Petit (Univ. Liège) gave a very dynamic and lively talk about the interface between competition law and IP rights. He expects that the UPC will have to establish case-law on antitrust-based defences in patent litigation (FRAND, Standard essential patents ...) as explicitly laid down in Art. 32(1) UPCA.

Prof. Petit

The question whether or not, in case of dubious settlements between the parties, the court will have a duty to raise a motion on breach of competition, was answered by analogy to what is considered to be applicable to mediation procedures: Such a duty exists only where the breach is very glaring and manifest.

He further emphasizes that a source of misunderstanding between lawers and scholars on both fields lies in the different use of the word "monopoly" in IP and antitrust law. While patents are permanently qualified as "monopolies" by IP lawyers, this is not true based on the understanding of this expression in the world of antitrust law. Actually, the patent alone does not confer the sufficient market power to the patentee because there may be lots of competing technologies around. "The patent grants an exclusive right to use a technology but typically does not exclude third parties market" (roughly Quoted from Hovenkamp).

The case law of the FRAND defence is put in analogy to the "essential facilities" case law in the field of antitrust law because the CJEU qualifies intellectual property merely as yet another kind of "raw material" to be processed in secondary markets. Requirement of the admissibility of such a defence would be that the parties are competing in at least a secondary market, which is not the case for Non-Practicing Entities in dispute with potential licensees of their patents. In other words, the FRAND defence will never be applicable to "trolls".

CEUJ Judgement July 2015 (Huawei / CTE C‑170/13) develops a sort of "good faith" test for the behavoir of both the holder of the standard essential patent (SEP) and the implementer who have to respect "certain conditions" in the course of negotiations and when bringing an action to the court.  These new conditions will replace the BGH Orange Book Standard in the future case-law and will be discussed in a separate post.

New book, with sample chapter on patent infringement

Note: this book notice substantially reproduces the content of a post earlier this morning on The SPC Blog here, since its subject matter is of interest to readers of PatLit too.  Apologies are offered to the small number of readers who are email subscribers to both weblogs.

Pharmaceutical, Biotechnology and Chemical Inventions: World Protection and Exploitation is the title of a blockbuster of a book, edited by Duncan Bucknell.  Divided into two volumes, this work covers a lot of ground that is of clear and immediate interest to readers of this weblog who hail from pharma companies, as well as the lawyers and patent attorneys who represent them.

According to the publisher, Oxford University Press, the work is "written by a handpicked team of expert practitioners" from each of the 12 jurisdictions which it spans. "Handpicked" makes it sound rather as though they grew on trees, which conjures up some delightful imagery.  You can check the identities of the authors here.  Anyway, as OUP says:

"This book highlights the special issues arising in obtaining, commercialising, enforcing or attacking intellectual property rights (including protection of regulatory data) in the pharmaceutical, biotechnology and chemical industries across the world's key jurisdictions. It is unique in presenting topic matter horizontally by subject to facilitate comparison between country practices. 

The first two chapters give a general introduction to the differences between the jurisdictions and an overview of some of the key concepts in patent law. The remainder of the book is dedicated to a detailed analysis of the major legal issues arising in these areas of technology. 

Each component chapter has a comparative introduction, looking at the variances in the laws of different domains, followed by side-by-side analysis of the relevant regimes, including tables and flow-charts which summarise and explain the key legal concepts. The jurisdictions covered are the United States, Europe (UK, Germany, Netherlands, France and Italy), Japan, Canada, Australia, India and China".

As is only to be expected, the book deals extensively with patent litigation issues. In particular, readers are treated to the following:

Part G. Invalidity proceedings and strategy
1: Overview
2: Third part intervention during prosecution
3: Opposition proceedings
4: Re-examination
5: Revocation/nullification proceedings
6: Declarations of validity 

Part H. Infringement
1: Overview
2: Literal infringement
3: Infringement equivalents
4: Contributory infringement
5: Infringement proceedings & strategy
6: Remedies for patent infringements
7: Restrictions on remedies 

Part I. Defences to infringement
1: Overview
2: Prior secret use
3: Experimental use and clinical trials
4: The Bolar exemption
5: Contributory infringement
6: Parallel importing and exhaustion of rights 

Part J. Patent litigation strategies
1: Overview
2: Court hierarchies
3: Overview of litigation
4: Preliminary injunctions
5: Split trials
6: Summary judgments
7: Multi-jurisdictional strategy
8: Practicalities of litigation
9: Settlement of litigation

The publishers offer a sample chapter, this being the one on Infringing Acts and 'Literal Infringement', which you can peruse here at your leisure.

PatLit readers may be excited to discover that The SPC Blog is running a competition, for which the prize is a copy of this giant book.  The rules are as follows: your task is to state which country should be included in the second edition as the 13th jurisdiction, in addition to the 12 key jurisdictions analysed in this work, explaining in not more than 30 words why it should be included. Please email your answer to The SPC Blog here, with the subject line "Bucknell Book". Entries should be received by not later than midnight (BST) on Sunday 24 July. So far, some very curious suggestions have been received, a sign that the summer vacations are imminent ...

Bibliographical data.  Hardback, 2 volumes, 2,536 pages. ISBN 978-0-19-928901-1. Price £295.00. Book's web page here.

Be careful what you use your patents for

Last month we made reference to the investigation started by the Italian Antitrust Authority to verify possible abuse of dominant position by Pfizer using patent system, artificially extendeding the patent protection of an active principle in order to prevent new generic drugs entering the market (here).


Now is the turn of the European Commission to continue investigating violation of EU antitrust rules to delay generics entering the market.

At the beginning of December some websites (i.e. Businessweek, Reuters) made reference to several raids at the premises of AstraZeneca and Nycomed in the course of an investigation regarding suspected anticompetitive practices. The European Commission published a quite short Press Release (here), informing that:

“The European Commission can confirm that on 30 November 2010 Commission officials carried out unannounced inspections at the premises of a limited number of companies active in the pharmaceutical sector in several Member States. The Commission has reason to believe that the companies concerned may have acted individually or jointly, notably to delay generic entry for a particular medicine. If confirmed, this could be a potential violation of EU antitrust rules that prohibit restrictive business practices and/or the abuse of a dominant market position (Articles 101 and 102 of the EU Treaty)”.

There may be a link between this raids and the Executive Summary of the Pharmaceutical Sector Inquiry Report by the EU Commission we have talked about in this Blog (here). As we said, we are living strange times, being patent system used to prevent competition.

This would not be the first time AstraZeneca is investigated by EC for this reason. On 15 June 2005, the EC fined that company €60 million for misusing patent system to delay market entry of competing generic drugs (text of the decision (text of the decision here). A short summary of the decision was provided by the EC (here):

From 1993 to 2000 AstraZeneca infringed EC and EEA competition rules by blocking or delaying market access for generic versions of Losec and preventing parallel imports of Losec. AstraZeneca did this by:
• giving misleading information to several national patent offices in the EEA resulting in AstraZeneca gaining extended patent protection for Losec through so-called supplementary protection certificates (SPCs). In this specific case, the patent offices essentially relied on information supplied by AZ and they were not obliged – as in normal patent assessments – to consider whether the products were innovative. AZ’s misleading conduct amounted to an abuse in Belgium, Denmark, Germany, the Netherlands, Norway and the United Kingdom.
• misusing rules and procedures applied by the national medicines agencies which issue market authorisations for medicines by selectively deregistering the market authorisations for Losec capsules in Denmark, Norway and Sweden with the intent of blocking or delaying entry by generic firms and parallel traders. At the time, generic products could only be marketed and parallel importers only obtain import licenses if there was an existing reference market authorisation for the original corresponding product (Losec). The purpose of a market authorisation is the right to sell a medicine and not to exclude competitors. Unlike patents, SPCs and data exclusivity, market authorisations are not intended to reward innovation and the finding of an abuse cannot therefore affect incentives to innovate. Subsequent changes in the applicable EU legislation have made it impossible to repeat this specific conduct.
Losec pioneered a new generation of medicines to treat stomach ulcers and other acid-related diseases – so-called proton pump inhibitors. Losec initially received patent protection in Europe in 1979. During part of this period, Losec was the world’s best-selling prescription medicine.
The Commission’s decision does not prohibit AstraZeneca’s dominant position on the proton pump inhibitor market but the company’s abuse of that position. The fine takes into account that some features of the abuses can be considered as novel.

On 1 July 2010 The General Court essentially upholded the decision of the Commission, reducing the fine to €52,5 million, since “the Commission failed to prove that the deregistrations of the marketing authorisations were capable of preventing parallel imports of Losec in Denmark and Norway, and, a fortiori, that the cessation or the sharp decline of parallel imports of Losec in those two countries was caused by AstraZeneca’s conduct” (Press release of the GC here and the Ruling here). This Ruling has been recently appealed by AstraZeneca (here).