European Commission Publishes Eighth Report on Monitoring of Patent Settlements
- 12/03/2018
- Articles
On 9 March 2018, the European Commission (the “Commission”) published its eighth report on the monitoring of patent settlements which covers the 107 patent settlement agreements concluded in 2016 between originator and generic companies in the pharmaceutical sector (see attached).
As was the case in previous years, the Commission seems pleased with the results of its monitoring exercise. It notes that its enforcement activities have not discouraged companies from settling their patent disputes. At the same time, it considers that the number of settlements that might attract competition law scrutiny has stabilised at a low level of 11%. That percentage represents patent settlement agreements that restrict generic market entry and provide for a transfer of value from an originator to a generic firm. According to the Commission, the value transfers flowing to generic companies in the potentially problematic settlement agreements took different forms, sometimes in various combinations: early entry and a licence or payment. In 2016, 6 cases (50%) provided for early entry without a licence or a distribution agreement, 4 (34%) combined early entry with a licence to the generic company, 1 (8%) combined early entry with a payment to the generic company to compensate for legal costs, and 1 (8%) only provided for a licence. The Commission stresses that these findings do not prejudge enforcement activity on its part and even less the outcome of any such activity.
The Commission expressly indicates that it cannot rule out continuing the monitoring exercise in future.