European Commission Imposes Heavy Fine on Teva for Misuse of Patent System and Disparaging Rival's Product
- 31/10/2024
- News
Today, the European Commission (the Commission) fined Teva EUR 462.6 million for abusing its dominant position to delay the market entry of rival medicines for the treatment of relapsing forms of multiple sclerosis (see, attached press release and statement). The Commission established that Teva artificially delayed competition and extended the patent protection of its product Copaxone® (glatiramer acetate) by (i) misusing the patent system and playing what is referred to as the “divisional game”; and (ii) spreading misleading and disparaging information about a competing product to hinder its market entry and uptake (see, Van Bael & Bellis Life Sciences News and Insights of 5 March 2021 and 11 October 2022).
- Divisional game – According to the Commission, Teva artificially extended the basic patent protection for glatiramer acetate through the filing and subsequent withdrawal of divisional patent applications, which derive from an earlier patent application in that they claim similar subject matter. This practice is known as the “divisional game”. In this specific case, the Commission maintains that Teva filed multiple divisional patent applications in a staggered way, which were then challenged by competitors. Pending review of the patents by the European Patent Office, Teva sought interim injunctions against alleged infringers. When the patents seemed likely to be revoked, Teva allegedly withdrew them to avoid a formal ruling and precedent of invalidity. All of Teva's divisional patents reportedly have now been annulled.
- Disparagement campaign – Teva disseminated misleading and disparaging information about a competing product’s safety, efficacy and therapeutic equivalence with Copaxone®. Teva did so even though the competing medicine had obtained a marketing authorisation which confirmed these attributes. Teva's disparagement campaign not only targeted physicians but also national public and private decision-makers for the pricing and reimbursement of medicines with the objective of slowing down or blocking the entry of the rival product in several Member States. On this point, the Commissioner in charge of competition matters, Margrethe Vestager, was keen on drawing a parallel between the Teva case and the recent Vifor matter, even though the Commission did not establish a violation of the competition rules by Vifor and Vifor’s binding behavioural commitments only concerned its relationship with physicians (see, Van Bael & Bellis Life Sciences News and Insights of 22 July 2024).
The Commission considered these practices to be complementary and lumped them together as a single and continuous infringement of Article 102, Treaty on the Functioning of the European Union. The Commission predicated its findings on a definition of the relevant markets as those for glatiramer acetate in 7 EU Member States, namely Belgium, Czechia, Germany, Italy, the Netherlands, Poland and Spain.
The pharmaceutical industry will want to study carefully the non-confidential version of the Commission decision when it becomes publicly available, because it is at present unclear what distinguishes lawful from unlawful conduct when it comes to obtaining, enforcing and withdrawing divisional patents. For its part, the Commission sought to create the impression of possessing a solid file that includes documents from Teva's in-house counsel who the Commission maintains were involved in the design of its strategy to protect Copaxone®. In-house counsel communications are generally not protected from competition scrutiny under EU law. By contrast, Teva published a statement expressing its disagreement with the Commission decision which it qualified as “based on legal theories that the company believes are extreme, untested, and factually unsupported”.
