Companies always want the longest patent protection possible for their products — and with good reason considering the immense costs of R&D. However, some companies go a little too far in seeking patent protection to the point that they may even try to mislead the regulators in order to extend the life of patents.
This is what drug giant AstraZeneca has recently been accused of doing. In June, the European Commission (EC) fined the company €60 million for misusing the patent system and marketing procedures to block or delay the market entry of generic competitors to its ulcer drug Losec from 1993 to 2000.
“It is not for a dominant company but for the legislator to decide which period of protection is adequate,” said Competition Commissioner Neelie Kroes in an EC press statement.
Since then AstraZeneca has unsurprisingly appealed the decision, but only succeeded in reducing the fine to €52.5 million. According to a July statement from the EC, the court rejected the company’s claims that “its conduct constituted normal competition and that it could be explained by errors or unauthorised behavior by AstraZeneca’s patent agents”.
However, the court did disagree with the EC on one issue relating to parallel trade. According to the EC, AstraZeneca had deregistered market authorizations in some EU countries with the intent of blocking or delaying entry by generic firms and parallel traders. At the time, generic products could only be marketed and parallel importers only obtain import licenses if there was an existing reference market authorization for the original product. The court agreed that the purpose of a marketing authorization is not to exclude competitors, but annulled the decision concerning the restrictions on parallel trade in two of the three countries concerned.
Despite this, a memorandum from law firm Skadden, Arps, Slate, Meagher & Flom LLP believes that the EC is viewing the AstraZeneca judgement as a “victory” and an “enforcement of its sector inquiry and the enforcement agenda derived therefrom.”