Sophie Lawrance and Edwin Bond on ‘Reverse-payment’ patent settlement agreements: non-cash value transfers are not immune from competition law scrutiny’ (2018) Journal of Intellectual Property Law & Practice 13(7) 552

This article – which can be found here – argues that a non-cash value transfer – particularly commitments by the producer of a branded drug not to launch a generic version of its drug – is able to bring a pay-for-delay agreement within the scope of the antitrust prohibition of reverse-payment patent settlement agreements. It does so as follows: The paper first looks at the law in the US as regards non-cash value transfer settlements. In its landmark 2013 FTC v, Actavis decision, the US Supreme Court held that pharmaceutical patent settlements which involve ‘large’ and ‘unexplained’ reverse payments may breach the antitrust rules. However, and as a result of the Supreme Court’s lack of detailed guidance, the lower US courts have in the last few years found themselves considering a fairly basic question: what constitutes a ‘payment’? While a couple of US district courts concluded that patent settlements that do not involve a cash transfer could not constitute unlawful…

Rennato Nazzini ‘Fresh evidence on appeal in two-tier administrative enforcement systems’ and Despoina Mantzari ‘Navigating the admission of evidence on appeal’ (2018) Journal of Antitrust Enforcement 6(2) 281

A second and third paper contain a discussion between two scholars – Rennato Nazzini and Despoina Mantzari – on whether an appellant should be able to introduce fresh evidence during a judicial review before a court. The discussion concerns a decision by the UK’s Competition Appeal Tribunal (CAT) in Ping Europe Ltd v Competition and Markets Authority (CMA) – the CAT’s first decision on the admission of new evidence in appeal proceedings on the basis of rule 21(2) of the CAT Rules 2015. This was a ruling on an application by the CMA to exclude certain evidence adduced by Ping that, in the CMA’s view, Ping could and should have adduced during the administrative proceedings. The facts were as follow. The CMA claimed that Ping had infringed the Chapter I prohibition and Article 101 TFEU by prohibiting online sales of its golf equipment. In response to the statement of objections (SO), Ping argued, among other things, that its prohibition on…

Michael J. Frese ‘Civil Liability for Single and Continuous Infringements’ (2018) World Competition 41 (2) 179

Infringement decisions by competition authorities in Europe provide irrefutable, or at least prima facie evidence of antitrust violations in follow-on cases brought before national courts. This binding effect of infringement decisions is meant to ease the burden on injured parties seeking to obtain damages. Evidentiary rules applicable to investigations thus have a bearing on the outcome of civil litigation and the scope of potential damages exposure. The single and continuous infringement (SCI) is an example of such an evidentiary rule. This legal construct alleviates the burden on competition authorities to prove individual details of cartels whose membership and activities may have evolved over time. However, appropriate limiting principles are required to ensure that defendants are not paying for harm they have not caused or could not have prevented. This article, available here, discusses the evidentiary value of single and continuous infringement findings in follow on damages litigation, and explores the available limiting principles. It is structured as follows: After the introduction,…

How to define two-sided markets? Ohio v American Experess

A recent US Supreme Court decision is  likely to have an impact on antitrust practice: Ohio v American Express 585 U. S. [to be determined] (2018), available here. In short, the case is about the correct antitrust treatment of anti-steering provisions introduced by American Express (Amex) into its contracts with merchants. The United States and several States (collectively, the plaintiffs) sued Amex, claiming that its anti-steering provisions violate §1 of the Sherman Act. The District Court agreed, finding that the credit-card market should be treated as two separate markets—one for merchants and one for cardholders—and that Amex’s anti-steering provisions are anticompetitive because they prevent competition in the merchant side of the market and results in higher merchant fees. The Second Circuit reversed; it determined that the credit-card market is a single market, not two separate ones; and that Amex’s anti-steering provisions did not infringe the Sherman Act. You may remember that I reviewed the Circuit court decision almost two years…

Anne C. Witt ‘The Enforcement of Article 101 TFEU: What has happened to the Effects Analysis’ (2018) Common Market Law Review (55) 417

This paper – which You can find here – focuses on the role that priority setting and institutional dynamics can have on public competition enforcement. It argues that, while the Commission has developed an impressive theoretical framework for assessing the effects of agreements on competition, there has in fact been very little effects analysis in the Commission’s decisional practice since 2005. Instead, most cases have been decided as ‘object restrictions’. The paper is structured as follows: A first section briefly retraces how the Commission came to endorse a more effects-based approach to EU competition law generally, and to Article 101 TFEU in particular. By the late 1990s, commentators had been long criticising the Commission for relying too heavily on form-based presumptions of legality and illegality in its assessments under Articles 101 and 102 TFEU. Commentators pressed the Commission to scale back the use of form-based presumptions in favour of more individual assessments in line with contemporary US antitrust law. The Commission…

Markus Reisinger ‘Asics vs Coty: Competitive effects of selective distribution systems in light of diverging court decisions’

Selective distribution systems are usually put in place in place to ensure that authorized distributors fulfil a certain quality standard, thereby avoiding losses in consumers’ brand valuation. Selective distribution systems often include clauses that allow manufactures to achieve better channel coordination in terms of prices, advertising, services, etc. A common way to do so is to restrict their selective retailers in advertising or pricing practices (e.g. to ensure that advertising campaigns or sales are coordinated). The paper – which can be found here – looks at recent German and EU cases on selective distribution systems, and tries to understand the differences between them. In the Asics case, the German Bundeskartellamt (BKartA) ruled that a selective distribution system by sport shoe manufacturer Asics, which included restrictions regarding online advertisement and price search engines, infringed competition law. By contrast, in the Coty case the European Court of Justice ruled that relatively similar clauses in the selective distribution system of a beauty products manufacturer were…

Maria José Schmidt-Kessen ‘Selective Distribution Systems in EU Competition and EU Trademark Law: Resolving the Tension’ (2018) Journal of European Competition Law & Practice 9(5) 304

The basic argument of this paper – which can be found here – is that the ECJ in Coty reversed its earlier judgment in Pierre Fabre as regards luxury products, in order to ensure that the treatment of selective distribution systems under EU trademark and competition law was aligned. A first section provides an overview of the treatment of online selling restrictions under European competition law. Some luxury brands fear that retailers might damage their valuable brands’ reputation by offering branded goods in an inadequate online environment, e.g. without adequate costumer service; and that allowing online sales by retailers could lead to an increase in trade of counterfeited goods over the internet. As such, they have imposed on their retailers considerable restrictions on the possibility of using the internet as a selling channel, often in the context of selective distribution systems. These restrictions have led to competition law cases being brought against manufacturers who impose them. These cases build on…

Giuseppe Colangelo and Valerio Torti, looks at ‘Selective Distribution and Online Marketplace Restrictions under EU Competition Rules after Coty Prestige’ (2018) European Competition Journal 14 (1) 81

This paper – which can be found here – looks at the Coty decision, and it structured as follows: Section 2 provides an overview of how EU competition law dealt with selective distribution systems pre-Coty. It begins by looking at the Metro decisions. In Metro I, the CJEU decided that the maintenance of a certain price level for specialist retailers and wholesalers was a legitimate goal. In this decision, the CJEU recognised that that selective distribution agreements are compatible with competition rules if they fulfil three cumulative conditions: (i) the characteristics of the product in question necessitate such a distribution scheme in order to preserve its quality or to ensure its proper use; (ii) resellers are chosen on the basis of objective criteria of a qualitative nature relating to the technical qualifications of the reseller and his staff and the suitability of his trading premises, laid down uniformly for all potential resellers and not applied in a discriminatory fashion; (iii) the…

The CAT’s Paroxetine decision (Paroxetine GSK v CMA [2018] CAT 4)

This post contains a fairly long discussion, so those who are familiar with the case may want to skip it. This decision – which can be found here – concerns  a pay for delay case and identifies a number of interesting questions regarding this type of conduct – some of which were referred to the Court of Justice of the European Union (CJEU). I do not propose to summarise the decision (it is 180 pages long). Instead, I will merely review the parts that I found most interesting. In particular, the judgment contains a very clear discussion of how the law stands as regards pay-for delay agreements in Europe. It also reviews EU law, particularly in the context of the Tribunal’s decision to make a preliminary reference to the CJEU. These questions flow mostly from the debate, apparent in my earlier posts, regarding whether pay-for-delay agreements should be treated as restrictions by object or by effect under EU law following…

Sven Gallasch ‘Activating Actavis in Europe – the proposal of a ‘structured effects-based’ analysis for pay for delay agreements’ (2016) Legal Studies 36(4) 683

This article – which can be found here – criticises the adoption of a ‘by-object’ approach in the EU for pay-for-delay agreements, and argues that Europe should instead adopt a test along the lines of the rule of reason approach delineated by the US Supreme Court’s decision in Actavis. This paper is structured as follows: Section 2 compares the EU and US regulatory frameworks. While broadly consistent with the papers above, this paper emphasises two points which merit attention. First, it is pointed out that the existence of a period of exclusivity for the first generic entry can, when coupled with the possibility of the generic supplier settling a patent validity claim with the branded drug originator, skew the incentives of the parties in favour of settlement to the disadvantage of final consumers. Instead of solving the patent dispute in court, the parties settle their dispute. The generic company is nonetheless granted the 180 days of generic exclusivity. The parties…