Arrow Group ApS and Arrow Generics Ltd v European Commission.

• Jurisdiction: European Union
• ECLI: ECLI:EU:C:2021:244
• Docket Number: C-601/16
• Date: 25 March 2021
• Celex Number: 62016CJ0601
• 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 antidepressant medicines (citalopram) – Settlement agreements concerning process patents concluded between a manufacturer of originator medicines holding those patents and manufacturers of generic medicines – Article 101 TFEU – Potential competition – Restriction by object – Characterisation – Calculation of the amount of the fine )

In Case C‑601/16 P,

APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 24 November 2016,

Arrow Group ApS, established in Gentofte (Denmark),

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

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

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, and by B. Rayment and D. Bailey, Barristers, and by 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, and by J. Holmes QC, and subsequently by D. Guðmundsdóttir, acting as Agent, and by J. Holmes QC,

intervener in the appeal,

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,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

gives the following

Judgment

1 By their appeal, Arrow Group ApS and Arrow Generics Ltd seek to have set aside the judgment of the General Court of the European Union of 8 September 2016, Arrow Group and Arrow Generics v Commission (T‑467/13, not published, ‘the judgment under appeal’, EU:T:2016:450), by which the General Court dismissed their action which sought, first, the 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, a reduction of the amount of the fine imposed on them by that decision.

Legal context

2 Article 23(2) 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]

…

For each undertaking and association of undertakings participating in the infringement, the fine shall not exceed 10% of its total turnover in the preceding business year.

…’

Background to the dispute

3 The present appeal is one of six related appeals against six judgments of the General Court delivered following actions for annulment brought against the decision at issue, namely, in addition to the present appeal: the appeal 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 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 in Case C‑591/16 P (Lundbeck v Commission) against the judgment of 8 September 2016, Lundbeck v Commission (T‑472/13, EU:T:2016:449); the appeal 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 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).

4 The background to the dispute was set out in paragraphs 1 to 40 of the judgment under appeal as follows:

‘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” laboratory, 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 … 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 [Lundbeck] 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 [Lundbeck] 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 … 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 [of Great Britain and Northern Ireland] 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 … 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 [manufacturers of generic medicines]”), 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...