Generics (UK) Ltd v European Commission.

• Jurisdiction: European Union
• ECLI: ECLI:EU:C:2021:242
• Date: 25 March 2021
• Docket Number: C-588/16
• Celex Number: 62016CJ0588
• 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)

In Case C‑588/16 P,

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

Generics (UK) Ltd, established in Potters Bar (United Kingdom), represented by I. Vandenborre, advocaat, T. Goetz, Rechtsanwalt, and M. Brealey QC,

appellant,

the other parties to the proceedings being:

European Commission, represented by F. Castilla Contreras, T. Vecchi, B. Mongin and C. Vollrath, acting as Agents, 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 J. Holmes QC, and subsequently by D. Guðmundsdóttir, acting as Agent, and 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 its appeal, Generics (UK) Ltd (‘GUK’) asks the Court of Justice to set aside the judgment of the General Court of the European Union of 8 September 2016, Generics (UK) v Commission (T‑469/13, not published, EU:T:2016:454; ‘the judgment under appeal’), by which the General Court dismissed its 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 fine imposed by that decision.

Legal context

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] …’

3 Article 31 of that regulation provides:

‘The Court of Justice shall have unlimited jurisdiction to review decisions whereby the Commission has fixed a fine or periodic penalty payment. It may cancel, reduce or increase the fine or periodic penalty payment imposed.’

Background to the dispute

4 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‑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 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).

5 The background to the dispute was set out in paragraphs 1 to 36 of the judgment under appeal as follows:

‘I – 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 Merck KGaA … 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 … – of its subsidiary [GUK], a company responsible for the development and marketing of generic pharmaceutical products in the United Kingdom. The Commission regarded Merck and GUK as constituting a single undertaking for the purpose of competition law at the time of the infringement (“Merck (GUK)”).

II – The relevant product and the applicable patents

4 The relevant product for the purposes of the present case is the antidepressant medicinal product containing the active pharmaceutical ingredient (“API”) citalopram.

5 In 1977, Lundbeck filed a patent application in Denmark for the citalopram API and two processes – a cyanation process and an alkylation process – to produce that API. Patents for that API and those two processes (“[Lundbeck’s] original patents”) were issued in Denmark and in a number of Western European countries between 1977 and 1985.

6 As regards the European Economic Area (EEA), the protection afforded by [Lundbeck’s] 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 (as regards Germany) and 2003 (as regards Austria). In particular, in the case of the United Kingdom, [Lundbeck’s] original patents expired in January 2002.

7 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).

8 Thus, 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 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 … The EPO granted a crystallisation patent on 4 September 2002.

9 Lastly, Lundbeck planned to launch a new antidepressant medicinal product, Cipralex, based on the escitalopram API (or S-citalopram), by the end 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.

III – The agreements [in question]

10 During 2002 Lundbeck entered into six agreements concerning citalopram (“the agreements in question”) with four undertakings active in the production and/or sale of generic medicinal products ([“the manufacturers of generic medicines”]), including Merck (GUK).

11 The first agreement between Lundbeck and Merck (GUK) came into effect on 24 January 2002, for a period of one year, and covered only the territory of the United Kingdom (“the UK agreement”). That agreement was subsequently extended for a period of six months, ending on 31 July 2003. Next, after Merck (GUK) briefly entered the United Kingdom market between 1 and 4 August 2003, a second extension of the agreement was signed by the parties on 6 August 2003, for a maximum period of six months, which could be reduced if Lundbeck failed to initiate legal proceedings against other [manufacturers of generic medicines] which attempted to enter the market or on determination of the litigation between Lundbeck and Lagap Pharmaceuticals Ltd, [one of the other manufacturers of generic medicines].

12 According to the terms of the UK agreement:

– there was a risk that certain actions envisaged by GUK in respect of the marketing, distribution and sale of the “Product” might constitute an infringement of Lundbeck’s intellectual property rights and could give rise to claims on the part of Lundbeck (Article 2.1 of the UK agreement), the “Products” being defined in Article 1.1 of the agreement as “the citalopram products developed by GUK in raw material, bulk product and finished pack form as set out in the Schedule and manufactured in accordance with the specification for Products as supplied by GUK at the date of signature. Attached to Schedule 2”;

– Lundbeck would pay GUK the sum of 2 million pounds sterling (GBP), in consideration for the delivery of the “Products”, in the quantities set out in the agreement, on 31 January 2002 (Article 2.2 of the UK agreement);

– GUK also undertook, in consideration of a further payment of GBP 1 million, to deliver...