FRANCE Trends and Developments Contributed by: Liliana Eskenazi and Pauline Lecrenais, Fréget Glaser & Associés
Before Patent Expiry: Originator Companies’ Options Constrained by Competition Law A few months before a patent expires, an originator company may consider several courses of action. While some – such as initiating a new R&D programme to develop a medicine addressing a different thera- peutic need – may not raise particular concerns, most must be implemented with caution so as not to hinder competitors’ entry into the market. Competition concerns may, for example, relate to the originator company’s conduct in relation to intellectual property rights and in its interactions with the health authorities. Limited exercise of intellectual property rights Divisional patents – innovation, yes; artificial extension of exclusivity, no Originator companies are entitled to file divisional pat- ent applications to protect their inventions. However, there is a risk that divisional patents, although lawful under patent rules, may be perceived as serving primarily to artificially extend the exclusivity period for an originator product rather than to protect an innovation. Such conduct may amount to an abuse of a domi- nant position under Article 102 of the Treaty on the Functioning of the European Union (TFEU) where strategic patenting hinders or delays generic entry – for example, by increasing litigation costs, securing injunctions or prolonging legal uncertainty for com- petitors. This concern was central to the recent Teva Copaxone case, in which the European Commission imposed a fine of EUR462.6 million on Teva for abuse of a dominant position in relation to its multiple sclero- sis medicine Copaxone by misusing divisional patents and other practices to delay competition (EU Com- mission, 31 October 2024, Teva Copaxone , AT.40588). Key competition law takeaways – before filing divi- sional patent applications, originator companies should ensure that: • the filing reflects real innovation, supported by robust documentation, and that the relevant parts
When originator pharmaceutical companies develop a new medicinal product and successfully navigate all the scientific and regulatory steps required for its approval, they benefit from a period of patent pro- tection during which they enjoy market exclusivity, designed to reward their research and development (R&D) efforts. Once this period expires, generic or bio- similar companies are free to enter the market with competing products. As patent expiry approaches, originator companies typically seek to anticipate the loss of exclusivity and the entry of generic or biosimilar competitors, and to plan their commercial strategy accordingly. In doing so, they must bear in mind that, as a result of the exclusivity they have enjoyed, they will frequently hold a “dominant position” within the meaning of compe- tition law. All the more so since the emergence of generic/biosimilar competition may lead to the defini- tion of a narrow, molecule-level relevant market limited to medicines containing the same active ingredient. Such a position comes with a “special responsibility” not to abuse it: originator companies can legitimately prepare for the arrival of competitors, provided that they refrain from conduct that does not constitute competition “on the merits” and that could impede or delay the entry of generic or biosimilar products, thereby amounting to an abuse under antitrust law and potentially resulting in the imposition of a sub- stantial financial penalty. When they design an action plan to prepare for generic or biosimilar entry, originator companies must there- fore factor the “umbrella effect” of competition law into every aspect of their strategy. Drawing on recent French decisions that have, in some instances, inspired European cases, this arti- cle aims to highlight key competition concerns that originator companies need to be aware of and to set out practical safeguards applicable both to strategies implemented before patent expiry and to conduct adopted after expiry.
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