Settlement Agreement Antitrust

Beyond the EU, the ECJ`s test for an «object-by-object» finding resembles in many ways the test conducted by the US Supreme Court in FTC v. Actavis in 2013. At Actavis, the court ruled that there were «reasons to be concerned that [Pay-for-Delay] … Negative effects on competition tend to have a considerable negative impact on competition», as a consequence of the elimination of the most likely source of competition and should therefore be analysed according to the rule of reason (similar to the «By Effect» analysis in the EU). Like the ECJ, the Supreme Court held that the likelihood of a settlement having anti-competitive effects necessarily depends on «its size, its volume in relation to the future legal costs expected of the payer, its independence from other services for which it could constitute a payment and the absence of another convincing justification». The Court of Justice has been asked to rule on whether the patent holder for a medicinal product and a generic medicine company wishing to enter the market with a generic version of that medicinal product should be regarded as a potential competitor when they are involved in a bona faith patent infringement dispute. However, agreements between undertakings only fall within the scope of the prohibition of anti-competitive agreements if they have negative and tangible effects on competition in the EU. The Court of Justice of the European Union (ECJ) has ruled for the first time on the issue of settlement agreements involving a transfer of value (monetary or otherwise) between the holder of a pharmaceutical patent and the manufacturers of generic medicines (so-called «pay for Delay» agreements). It clarified the criteria according to which accession to this type of agreement may infringe EU anti-cartel rules, either on the grounds that it is an anti-competitive agreement or an abuse of a dominant position on the market by the manufacturer of the initiating medicinal product (the author). The judgment confirms that the fact that the relevant settlement agreements do not exceed the scope and duration of the patent to which they relate is not essential to the iniquited assessment. The ECJ has argued that while a patent is an intellectual property right that allows its owner to oppose any infringement of that right, it does not have for its holder to enter into anti-competitive agreements.

. . .