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Dolores Utrilla
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30th January 2020
Competition & State Aid

CJEU clarifies competition law rules in settlement agreements between holders of pharmaceutical patents and manufacturers of generic medicines

Today, the Court of Justice has released its judgment in Generics (UK) and Others (C-307/18), a case on patent settlement agreements and the application of EU competition rules (in particular, Articles 101 and 102 of the Treaty on the Functioning of the European Union, TFEU). The judgment comes only one week after publication of Advocate General Kokott’s Opinion on the case (read here Tom Pick’s Op-Ed on the Opinion).

In this judgment, the Court clarifies the criteria applicable to the characterisation of settlement agreements with respect to disputes between the holder of pharmaceutical patents, on the one hand, and manufacturers of generic medicines, on the other, having regard to the prohibition on practices or agreements that have as their object or effect the restriction of competition (Article 101 TFEU) and the prohibition on abuse of a dominant position (Article 102 TFEU).

In particular, the Court considered that an agreement between undertakings is prohibited by Article 101(1) TFEU only if it has a negative and appreciable effect on competition within the internal market, which presupposes that those undertakings are at least in a relationship of potential competition. If one operator has not yet entered the market at the time when such agreements were concluded, it must be demonstrated that there are real and concrete possibilities to access to the market. According to the Court, patent rights do not constitute barriers to such access, because their validity can be disputed.

The Court also clarified the requirements that must be fulfilled by the aforementioned agreements for a ‘restriction of competition by object’ to be characterised as a ‘restriction of competition by effect’, and to constitute a case of ‘abuse of a dominant position’ under the TFEU.

The judgment is available here.

An Op-Ed on the ruling will be published soon on EU Law Live. We will keep you posted!

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