Judgments nº T-467/13 of The General Court, September 08, 2016

• Resolution Date: September 08, 2016
• Issuing Organization: The General Court
• Decision Number: T-467/13

(Competition - Agreements, decisions and concerted practices - Market for antidepressant medicinal products containing the active pharmaceutical ingredient citalopram - Concept of restriction of competition ‘by object’ - Potential competition - Generic medicinal products - Barriers to market entry resulting from the existence of patents - Agreements concluded between a patent holder and a generic undertaking - Fines - Legal certainty - Principle that penalties must have a proper legal basis - Duration of the Commission’s investigation - Rights of the defence - Single and continuous infringement)

In Case T-467/13,

Arrow Group ApS, established in Roskilde (Denmark),

Arrow Generics Ltd, established in London (United Kingdom),

represented by S.D. Kon, C. Firth and C. Humpe, Solicitors,

applicants,

v

European Commission, represented by F. Castilla Contreras and B. Mongin, acting as Agents, and by G. Peretz, Barrister,

defendant,

APPLICATION for annulment in part of Commission Decision C(2013) 3803 final of 19 June 2013 relating to a proceeding under Article 101 [TFEU] and Article 53 of the EEA Agreement (Case AT.39226 - Lundbeck) and for reduction of the amount of the fine imposed on the applicants by that decision,

THE GENERAL COURT (Ninth Chamber),

composed of G. Berardis (Rapporteur), President, O. Czúcz and A. Popescu, Judges,

Registrar: S. Spyropoulos, Administrator,

having regard to the written procedure and further to the hearing on 15 October 2015,

gives the following

Judgment

Background to the dispute

1. The companies involved in the present case

   1 H. Lundbeck A/S (‘Lundbeck’) is a company governed by Danish law which controls a group of companies specialising in the research, development, manufacture, marketing, sale and distribution of pharmaceuticals for the treatment of disorders in the central nervous system, including depression.

   2 Lundbeck is an ‘originator’ undertaking, namely an undertaking whose activities are focused on researching new medicinal products and bringing them to the market.

   3 Arrow Group A/S, which was renamed Arrow Group ApS in August 2003 (hereinafter referred to without distinction as ‘Arrow Group’), is a company governed by Danish law at the head of a group of companies present in several Member States, which since 2001 has been active in the development and sales of generic medicinal products.

   4 Arrow Generics Ltd is a company incorporated in the United Kingdom, a subsidiary owned at first as to 100% and then as to 76% by Arrow Group.

   5 Resolution Chemicals Ltd is a company incorporated in the United Kingdom specialising in the production of active pharmaceutical ingredients (‘APIs’) for generic medicinal products. Until September 2009 it was controlled by Arrow Group.

2. The relevant product and the applicable patents

   6 The relevant product for the purposes of the present case is the antidepressant medicinal product containing an API called citalopram.

   7 In 1977, Lundbeck filed a patent application in Denmark for the citalopram API and two processes -an alkylation process and a cyanation process - to produce that API. Patents for that API and those processes (‘the original patents’) were issued in Denmark and in a number of western European countries between 1977 and 1985.

   8 As regards the European Economic Area (EEA), the protection afforded by the original patents and, where appropriate, the supplementary protection certificates (‘SPCs’) provided for in Council Regulation (EEC) No 1768/92 of 18 June 1992 concerning the creation of a supplementary protection certificate for medicinal products (OJ 1992 L 182, p. 1), expired between 1994 (for Germany) and 2003 (for Austria). In particular, in the case of the United Kingdom, those patents expired in January 2002.

   9 Over time, Lundbeck developed other, more effective, processes for the production of citalopram, in respect of which it applied for and often obtained patents in several EEA countries and also from the World Intellectual Property Organisation (WIPO) and the European Patent Office (EPO).

   10 First, on 13 March 2000 Lundbeck filed a patent application with the Danish authorities relating to a process for the production of citalopram which envisaged a method of purification of the salts used by means of crystallisation. Similar applications were filed in other EEA countries and also with the WIPO and the EPO. Lundbeck obtained patents protecting the crystallisation process (‘the crystallisation patents’) in a number of Member States during the first half of 2002, in particular on 30 January 2002 in the case of the United Kingdom and on 11 February 2002 in the case of Denmark. The EPO granted a crystallisation patent on 4 September 2002. In addition, in the Netherlands, Lundbeck had already obtained, on 6 November 2000, a utility model for that process (‘Lundbeck’s utility model’), that is to say, a patent valid for six years, granted without a prior examination.

   11 Secondly, on 12 March 2001, Lundbeck filed a patent application with the United Kingdom authorities for a citalopram production process using a salt purification method by film distillation. The United Kingdom authorities granted Lundbeck a patent for that film distillation method on 3 October 2001 (‘the film distillation patent’). However, that patent was revoked on 23 June 2004 for lack of novelty by comparison with another Lundbeck patent. Lundbeck obtained a similar patent in Denmark on 29 June 2002.

   12 Lastly, Lundbeck planned to launch a new antidepressant medicinal product, Cipralex, based on the API known as escitalopram (or S-citalopram), by the middle of 2002 or the beginning of 2003. That new medicinal product was designed for the same patients as those who could be treated by Lundbeck’s patented medicinal product Cipramil, based on the citalopram API. The escitalopram API was protected by patents valid until at least 2012.

3. The agreements concluded by Lundbeck with Arrow Group, Arrow Generics and Resolution Chemicals, and other background factors

   13 During 2002, Lundbeck entered into six agreements concerning citalopram (‘the agreements in question’) with undertakings active in the production and/or sale of generic medicinal products (‘the generic undertakings’), including Arrow Group, Arrow Generics and Resolution Chemicals (together ‘Arrow’).

   14 For the purposes of the present case, two agreements are relevant, namely:

   - first, the agreement concluded on 24 January 2002 between Lundbeck, on the one hand, and Arrow Generics and Resolution Chemicals (together ‘Arrow UK’), on the other hand, concerning the territory of the United Kingdom (‘the UK agreement’);

   - secondly, the agreement concluded on 3 June 2002 between Lundbeck and Arrow Group, concerning the territory of Denmark (‘the Danish agreement’).

   15 The initial term of the UK agreement was until 31 December 2002 or, if earlier, until the date on which a final decision had been delivered in the action which Lundbeck intended to bring against Arrow UK before the United Kingdom courts concerning Arrow UK’s alleged infringement of its patents (‘the UK infringement action’) (Article 4.1 of the UK agreement). Next, that agreement was extended on two occasions by the signing of addenda. The first extension covered the period from 1 January until 31 March 2003 (Article 3.1 of the first addendum to the UK agreement), while the second extension provided that the agreement was to end either on 31 January 2004 or seven days after signature of the court decision determining the dispute between Lundbeck and Lagap Pharmaceuticals Ltd (‘the Lagap litigation’), another undertaking active in the production of generic citalopram (Article 4.1 of the second addendum to the UK agreement). As that litigation was settled on 13 October 2003, the UK agreement terminated on 20 October 2003. It follows that the overall duration of that agreement was from 24 January 2002 until 20 October 2003 (‘the term of the UK agreement’).

   16 The Danish agreement, which was not extended, was concluded for a period from the date of signature until 1 April 2003 or, if earlier, until the date on which a final decision had been delivered in the UK infringement action. As no such decision was delivered, the agreement was in force from 3 June 2002 until 1 April 2003 (‘the term of the Danish agreement’).

   17 As regards the content of the UK agreement, it should be observed that:

   - the first recital in the preamble to that agreement (‘the UK preamble’) refers, inter alia, to the fact that Lundbeck is the holder of crystallisation and film distillation patents (‘Lundbeck’s new patents’);

   - the fourth recital in the UK preamble states that ‘… Arrow [UK] has obtained a licence from a third party to import into the [United Kingdom] citalopram not manufactured by Lundbeck or with the consent of Lundbeck (“the said Citalopram”, which definition shall for the avoidance of doubt comprise only Citalopram for marketing and sale in the [United Kingdom] and shall exclude citalopram for marketing and sale in other countries)’;

   - the sixth recital in the UK preamble states that Lundbeck performed a laboratory analysis of ‘the said Citalopram’ which gave it substantial reason to believe that that citalopram infringed, in particular, the patents referred to in the first indent above;

   - the seventh recital in the UK preamble states that Arrow UK does not consider that it has infringed those patents or consider that they are valid, but accepts that Lundbeck has a reasonable belief that they may be valid and have been infringed, which Arrow UK is unable to disprove by incontrovertible evidence;

   - the eighth recital in the UK preamble observes that Lundbeck has threatened to seek an interim injunction and that it intends to initiate the UK infringement action;

   - Article 1.1 of that agreement (‘Article 1.1 UK’) provides that ‘Arrow [UK] on its own behalf and on behalf of all associated and related entities undertakes during the [term of...