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Focus on Regulation

EU ruling on when dealings with patent and other regulatory authorities can infringe competition rules

On 6 December 2012, the Court of Justice of the European Union (“CJEU”) handed down the final chapter in the long-running AstraZeneca case (Case C-457/10P, AstraZeneca v European Commission). Whilst the CJEU refrained from establishing a detailed test for when conduct before a patent office can constitute an abuse of a dominant position, it confirmed that misuse of regulatory procedures can in certain circumstances constitute an abuse of dominance under the EU competition rules and appeared to rule out the possibility that simple unintentional mistakes in a patenting process could be held to be an abuse. 

The abuse decision

In 2005, the European Commission fined AstraZeneca Euro 60 million for abuse of dominance. AstraZeneca was alleged to have committed two abuses: (i) making misleading representations before patent offices in order to obtain supplementary protection certificates, which extended patent protection for Losec (its anti-ulcer medicine); and (ii) using regulatory procedures (the deregistration of Losec’s capsule form) to delay the authorisation of competing generic products. AstraZeneca appealed the fine to the General Court. In 2010, the General Court dismissed most of AstraZeneca’s arguments, but reduced the overall fine to Euro 52.5 million on the grounds that the European Commission had not proved that AstraZeneca’s conduct had prevented parallel imports of Losec in Norway and Denmark.

The CJEU ruling

The CJEU upheld both abuses and the General Court’s earlier judgment in this case.

First abuse – Misleading statements to the patent office

AstraZeneca argued that the General Court was wrong when assessing whether its representations to the patent offices were objectively misleading to have dismissed as irrelevant the reasonableness of their interpretation of an EU Regulation and their “bona fides” in that regard. They argued that this strict interpretation meant that dominant undertakings had to be infallible in their dealings with regulatory authorities, and that even an error that was made unintentionally and immediately rectified could be considered an abuse of dominance. The CJEU held that “the assessment whether representations made to public authorities for the purposes of improperly obtaining exclusive rights are misleading must be made in concreto and may vary according to the specific circumstances of each case”. The CJEU set out that there were a number of objective reasons why AstraZeneca’s conduct was consciously motivated by the desire to mislead public authorities. The CJEU noted that if AstraZeneca’s interpretation of the relevant EU regulation had been reasonable, it should have disclosed the relevant information which informed its interpretation. Furthermore, it stated that where a dominant company has a “legally defensible interpretation” this is not an excuse which can allow it to make highly misleading representations with the aim of leading public authorities into error. The CJEU noted that the General Court’s judgment had been confined to the specific circumstances of the case. It stated that the General Court did not hold that a company faces liability merely for ordinary fallibility or because the subject matter of a patent application is ultimately found not to have met the patentability criteria.

Second abuse – Misuse of regulatory procedures

AstraZeneca argued that its withdrawal of the market authorisation for Losec was the exercise of a right conferred upon it by EU law, and that the exercise of a right cannot be both prohibited and granted at the same time. The CJEU upheld the General Court in finding that the use of a regulatory procedure to exclude competitors infringes Article 102, unless it can be shown that there is a legitimate reason or objective justification for that regulatory act. The Court held that there was no objective justification for AstraZeneca to have withdrawn the market authorisations, that AstraZeneca was not in any way legitimately protecting an investment which came within the
scope of competition within the merits, and that the “illegality of abusive conduct …is unrelated to its compliance or non-compliance with other legal rules and, in the majority of cases, abuses of dominant positions consist of behaviour which is otherwise lawful under branches of law other than competition law”.


This judgment is a reminder to dominant companies in the pharmaceutical sector of the need for extreme caution in dealing with regulatory authorities, including patent offices. Whist this judgment clarifies that competition law does not require dominant companies to be infallible, it demonstrates that there nevertheless remains a significant burden on these companies to ensure that their dealings do not mislead regulatory authorities.