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David Hull, Feb 25, 2009
Much of the discussion at the time of the Report’s release and since has revolved around the European regime governing the recognition and enforcement of patents. Intellectual property experts are troubled by inaccuracies in the Report as well as by suggestions that practices that are common not just in the pharmaceutical sector, but all high-tech sectors, such as taking out numerous patents around an invention, are incompatible with the competition rules. Innovative pharmaceutical companies are concerned that practices that are critical to the protection of their patents and that are permissible under the intellectual property regime are being called into question. These concerns will undoubtedly be discussed in-depth in many of the submissions that were made to DG Competition at the end of January and that will be posted on its website. Somewhat ironically, given that the Preliminary Report was issued by the competition directorate, it says virtually nothing about the assessment under EC competition law of the various practices described as comprising the nefarious “tool-box” of instruments used by innovative pharmaceutical companies to delay the entry of generics. Instead, DG Competition presents the Preliminary Report as a set of neutral findings that will form the factual basis for a decision on whether further action is needed. It goes out of its way to disavow any intent to opine on the legality of the practices described in the Report, stating that [i]t is not the purpose of this report to identify wrongdoing of individual companies or provide guidance on the compatibility of certain behavior with EC competition law. DG Competition’s silence on the relevant competition analysis is troubling because a core issue raised by the Sector Inquiry is whether the competition rules may be used to place limits on the ability of pharmaceutical companies to exercise and defend their patent rights, which is one of the most complex and controversial areas of competition law. As discussed in this short comment, unless DG Competition breaks this silence and offers some guidance that will help innovative pharmaceuticals navigate the sometimes hazardous intersection of intellectual property and competition law, it will be fostering an unhealthy climate of legal uncertainty. DG Competition will also be creating more work for itself in the future as it attempts to clear out the litigation logjam caused by the lack of any clear guidance.
