On 12 February 2014, the Italian Council of State
("CoS"), the highest administrative court in Italy,
handed down its judgment upholding a fine of around
€ 10.6 million imposed by the Italian Competition
Authority ("ICA") on the pharmaceutical company Pfizer
for having abused its dominant position on the Italian market for
drugs used to treat glaucoma by delaying the market entry of
generic versions of its drug Xalatan.
In its January 2012 decision, the ICA found that Pfizer abused
its dominant position by adopting a strategy aimed at blocking or
delaying the ability of generic competitors of its drug Xalatan to
enter the market. According to the ICA, Pfizer's strategy
consisted of, among other things: (i) seeking to illegitimately
extend the patent protection of its drug Xalatan by filing for and
obtaining a divisional patent covering the same product as the
original patent for Xalatan, and by filing for and obtaining a
so-called "supplementary protection certificate"
("SPC") for this divisional patent, and (ii) conducting
an aggressive enforcement campaign against competitors that wanted
to enter the market with a generic version of Xalatan after the
expiry of Pfizer's original patent for Xalatan in September
2009 (instead of after the expiry of the SPC for the divisional
patent in July 2011). The ICA considered such conduct to be abusive
after concluding that Pfizer's divisional patent was not based
on novelty or any innovative step, but merely was sought to enable
Pfizer to file for an SPC and thereby delaying the entry of
generics onto the market
On appeal, the Lazio Administrative Court ("LAC")
overturned, in a judgment of 3 September 2012, the ICA's
decision on the grounds that Pfizer had lawfully exercised its
intellectual property rights. The LAC stated that Pfizer's
applications for the divisional patent and for the SPC were
entirely legal and that Pfizer's enforcement strategy against
generic producers was simply a way of Pfizer protecting its
intellectual property from exploitation.
In its judgment, the CoS set aside the ruling of the LAC and
upheld the ICA's finding that Pfizer had abused its dominant
position within the meaning of Article 102 TFEU. The CoS first
clarified that,in the context of an assessment under the
competition rules, it is irrelevant that the divisional patent and
the SPC were legitimately obtained. According to the CoS,
Pfizer's strategy was exclusively aimed at preventing the
entrance into the market of competing generic versions of its
product Xalatan. Thus, Pfizer was found to have abused its dominant
position on the relevant market by using its patent rights for
purposes other than what the legislation granting those rights was
intended to achieve. In reaching this conclusion, the CoS took into
consideration the fact that Pfizer's divisional patent did not
cover any additional innovation and did not lead to the launching
of new products on the market. Thus, the LAC's judgment was
overturned, and the ICA's finding was restored.
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