H. Lundbeck A/S and Lundbeck Ltd v European Commission.

• Jurisdiction: European Union
• Date: 25 March 2021
• Court: Court of Justice (European Union)

JUDGMENT OF THE COURT (Fourth Chamber)

25 March 2021 (*)

(Appeal – Competition – Agreements, decisions and concerted practices – Pharmaceutical products – Market for antidepressants (citalopram) – Settlement agreements relating to disputes concerning process patents concluded by a manufacturer of originator medicines who is the holder of those patents and manufacturers of generic medicines – Article 101 TFEU – Potential competition – Restriction by object – Characterisation – Calculation of the amount of the fine – Sales directly or indirectly related to the infringement)

In Case C‑591/16 P,

APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 18 November 2016,

H. Lundbeck A/S, established in Valby (Denmark),

Lundbeck Ltd, established in Milton Keynes (United Kingdom),

represented initially by R. Subiotto QC and T. Kuhn, Rechtsanwalt, and subsequently by R. Subiotto QC,

appellants,

the other parties to the proceedings being:

European Commission, represented by F. Castilla Contreras, T. Vecchi, B. Mongin and C. Vollrath, acting as Agents, B. Rayment and D. Bailey, Barristers, and G. Peretz QC and S. Kingston, Senior Counsel,

defendant at first instance,

supported by:

United Kingdom of Great Britain and Northern Ireland, represented initially by D. Guðmundsdóttir, Z. Lavery and D. Robertson, acting as Agents, J. Turner QC, J. Holmes QC and M. Demetriou QC and T. Sebastian, Barrister, and subsequently by D. Guðmundsdóttir, acting as Agent, J. Turner QC, J. Holmes QC and M. Demetriou QC and T. Sebastian, Barrister,

intervener in the appeal,

European Federation of Pharmaceutical Industries and Associations (EFPIA), established in Geneva (Switzerland), represented by F. Carlin, Barrister, and N. Niejahr, Rechtsanwältin,

intervener at first instance,

THE COURT (Fourth Chamber),

composed of M. Vilaras, President of the Chamber, D. Šváby (Rapporteur), S. Rodin, K. Jürimäe and P.G. Xuereb, Judges,

Advocate General: J. Kokott,

Registrars: M. Aleksejev, Head of Unit, and C. Strömholm, Administrator,

having regard to the written procedure and further to the hearing on 24 January 2019,

after hearing the Opinion of the Advocate General at the sitting on 4 June 2020,

gives the following

Judgment

1 By their appeal, H. Lundbeck A/S and Lundbeck Ltd ask the Court of Justice to set aside the judgment of the General Court of the European Union of 8 September 2016, Lundbeck v Commission (T‑472/13, EU:T:2016:449; ‘the judgment under appeal’), by which the General Court dismissed their action seeking, first, 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) (the decision at issue’) and, second, reduction of the amount of the fines imposed on them by that decision.

Legal context

Regulation (EC) No 1/2003

2 Article 23(2)(a) of Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles [101 and 102 TFEU] (OJ 2003 L 1, p. 1) provides:

‘The Commission may by decision impose fines on undertakings and associations of undertakings where, either intentionally or negligently:

(a) they infringe Article [101 or Article 102 TFEU] …’

The 2006 Guidelines on the method of setting fines

3 Points 6, 13 and 22 of the Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation No 1/2003 (OJ 2006 C 210, p. 2; ‘the 2006 Guidelines’), state as follows:

‘6. The combination of the value of sales to which the infringement relates and of the duration of the infringement is regarded as providing an appropriate proxy to reflect the economic importance of the infringement as well as the relative weight of each undertaking in the infringement. Reference to these factors provides a good indication of the order of magnitude of the fine and should not be regarded as the basis for an automatic and arithmetical calculation method.

…

13. In determining the basic amount of the fine to be imposed, the Commission will take the value of the undertaking’s sales of goods or services to which the infringement directly or indirectly relates in the relevant geographic area within the [European Economic Area (“EEA”)]. It will normally take the sales made by the undertaking during the last full business year of its participation in the infringement (hereafter “value of sales”).

…

22. In order to decide whether the proportion of the value of sales to be considered in a given case should be at the lower end or at the higher end of that scale, the Commission will have regard to a number of factors, such as the nature of the infringement, the combined market share of all the undertakings concerned, the geographic scope of the infringement and whether or not the infringement has been implemented.’

The 2014 Guidelines on technology transfer agreements

4 Point 29 of the Guidelines on the application of Article 101 [TFEU] to technology transfer agreements (OJ 2014 C 89, p. 3; ‘the 2014 Guidelines’) reads as follows:

‘In principle, the parties to an agreement are not considered competitors if they are in a one-way or two-way blocking position. A one-way blocking position exists where a technology right cannot be exploited without infringing upon another valid technology right, or where one party cannot be active in a commercially viable way on the relevant market without infringing the other party’s valid technology right. This is, for instance, the case where one technology right covers an improvement of another technology right and the improvement cannot be legally used without a licence of the basic technology right. A two-way blocking position exists where neither technology right can be exploited without infringing upon the other valid technology right or where neither party can be active in a commercially viable way on the relevant market without infringing the other party’s valid technology right and where the parties thus need to obtain a licence or a waiver from each other. However, in practice there will be cases where there is no certainty whether a particular technology right is valid and infringed.’

Background to the dispute and the decision at issue

5 The present appeal is one of six related appeals brought against six judgments of the General Court that were delivered following actions for annulment brought against the decision at issue, namely, in addition to the present appeal: the appeal lodged in Case C‑586/16 P (Sun Pharmaceutical Industries and Ranbaxy (UK) v Commission) against the judgment of 8 September 2016, Sun Pharmaceutical Industries and Ranbaxy (UK) v Commission (T‑460/13, not published, EU:T:2016:453); the appeal lodged in Case C‑588/16 P (Generics (UK) v Commission) against the judgment of 8 September 2016, Generics (UK) v Commission (T‑469/13, not published, EU:T:2016:454); the appeal lodged in Case C‑601/16 P (Arrow Group and Arrow Generics v Commission) against the judgment of 8 September 2016, Arrow Group and Arrow Generics v Commission (T‑467/13, not published, EU:T:2016:450); the appeal lodged in Case C‑611/16 P (Xellia Pharmaceuticals and Alpharma v Commission) against the judgment of 8 September 2016, Xellia Pharmaceuticals and Alpharma v Commission (T‑471/13, not published, EU:T:2016:460), and the appeal lodged in Case C‑614/16 P (Merck v Commission) against the judgment of 8 September 2016, Merck v Commission (T‑470/13, not published, EU:T:2016:452).

6 The background to the dispute was set out in paragraphs 1 to 75 of the judgment under appeal as follows:

‘I – The companies involved in the present case

1. H. Lundbeck A/S … is a company governed by Danish law which controls a group of companies, including Lundbeck Ltd, established in the United Kingdom, 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. [H. Lundbeck] is an “originator” undertaking, namely an undertaking whose activities are focused on researching new medicinal products and bringing them to the market.

3. Merck KGaA (“Merck”) is a company governed by German law specialising in the pharmaceutical sector which, at the time the agreements concerned were concluded, indirectly held 100% – through the group Merck Generics Holding GmbH (“Merck Generics”) – of its subsidiary Generics UK Limited (“GUK”), a company responsible for the development and marketing of generic pharmaceutical products in the United Kingdom.

4. The Commission regarded Merck and GUK as constituting a single undertaking for the purpose of competition law at the time of the infringements (“Merck (GUK)”).

5. 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.

6. Arrow Generics Ltd is a company incorporated in the United Kingdom, a subsidiary owned at first as to 100% and then, from February 2002, as to 76% by Arrow Group.

7. 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.

8. The Commission regarded Arrow Group, Arrow Generics Ltd and Resolution Chemicals Ltd as constituting a single undertaking (“Arrow”) at the time of the infringements.

9. Alpharma Inc. was a company incorporated in the United States of America active in the pharmaceutical sector on a worldwide scale, in particular in generic medicinal products. Until December 2008 it was controlled by A.L. Industrier AS, a company governed by Norwegian...