What the Servier judgment teaches us about market definition under Article 102 and patent settlement agreements under Article 101

February 2019

CPI EU News Column edited by Thibault Schrepel, Sam Sadden & Jan Roth (CPI) presents:

What the Servier judgment¹ teaches us about market definition under Article 102 and patent settlement agreements under Article 101 By James Killick, Jérémie Jourdan & Pierre Pêcheux (White & Case)²

For the first time in many years, the General Court has annulled a European Commission decision finding of abuse of dominance. By highlighting a series of errors in the way the market was defined, the judgment shows that market definition remains a sine qua non of Article 102 cases. The Court also confirms that certain patent settlement agreements entered into between patent owners and manufacturers of generics may be restrictive of competition by object – though the Court also concluded that one of the patent settlement agreements was not illegal by object or by effect.

Background

Servier had settled with five manufacturers of generic drugs (Niche, Matrix, Teva, Krka, and Lupin) over litigation regarding the infringement and/or validity of patents held by Servier. The Commission found the settlements unlawful because they included a value transfer to the generics that induced the latter to settle and agree not to enter the market for a certain period of time. The settlements were qualified as restrictions of competition by object and (unusually) effect under Article 101 TFEU.

Regarding the abuse of dominant position, the Commission objected to Servier’s