Novartis drops IP actions against competitor following competition law raids in Switzerland and questions from the European Commission
As we have previously reported (Van Bael & Bellis Life Sciences News and Insights, 15 September 2022), on 13 September 2022, the Swiss Competition Authority carried out an inspection at the premises of Novartis Pharma AG (Novartis). In parallel, Novartis received a request for information from the European Commission concerning the same matter.
According to Novartis’s latest quarterly financial report, the investigation concerns Novartis’s acquisition of certain patents from Genentech and the subsequent enforcement of such patents against Eli Lilly (Lilly) and other parties, in order to protect Novartis’s product Cosentyx® from competing products, such as Lilly’s Taltz®. A related US court judgment indicates that the investigations of Novartis were initiated in response to complaints by Lilly to the competition authorities.
Following the inspection and questions from the competition authorities, Novartis has now discontinued its litigation against Lilly. According to Lilly’s latest quarterly financial report, in October 2022, Novartis and Lilly reached a settlement to resolve the disputes and have agreed to mutual releases for past claims and mutual covenants not to sue each other in relation to Taltz® and the patents Novartis purchased from Genentech. It remains to be seen, however, whether the Swiss Competition Authority and the European Commission will also discontinue the investigation of Novartis.
This development, together with the recent decision against MSD in Spain (Van Bael & Bellis Life Sciences News and Insights, 25 October 2022), indicates that competition authorities in Europe are now willing to intervene in IP disputes between pharmaceutical companies. For companies initiating IP litigation, additional care is required when implementing IP litigation strategies and submissions, as defendants are increasingly likely to raise complaints and seek intervention by the competition authorities in IP disputes