Brick Wall Stands Firm

Author:Ms Rachel Montagnon
Profession:Herbert Smith
 
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ECJ maintains position

against Commission's imposition of compulsory licence of intellectual

property rights

Summary

The European Court of Justice has confirmed that in

the context of intellectual property rights the Commission does not have

an automatic right to impose interim measures when it considers that there

may have been a breach of competition law.

In its ruling last week the ECJ rejected an appeal against the European Court

of First Instance's decision to suspend an interim measure

previously imposed by the Commission. The Commission had ordered copyright

owner IMS Health ("IMS") to licence its "1860 brick structure" system to

two companies wishing to compete with IMS in the German market.

Background

IMS is the world's leading supplier of information

on sales and prescriptions of pharmaceutical products. Until 1999, IMS was

the only supplier of such services in Germany. The brick structure

reflects the division of pharmacies in Germany into small geographical

units. Sales reports and prescription details were provided by IMS on the

basis of this structure and were seen as essential for the pharmaceutical

industry to assess sales and trends.

Two new entrants to the German market tried to sell data using other

structures but the industry would not accept any other format. IMS's

structure had become the industry standard for Germany. Because of this

the Commission thought that IMS's refusal to licence it to competitors was

a breach of competition law and ordered IMS to licence its structure to

the two competitors NDC and AzyX. (See

IPnewsflash 9 July 2001).

IMS had appealed against this ex parte imposition of the compulsory

licence order and succeeded in having the order suspended by the European Court

of First Instance pending a full hearing of the case. (See

IPnewsflash 15 November 2001).

Comment

Now the highest European court has rejected NDC's

appeal against the suspension of this order. The ECJ confirmed that a

compulsory licence order is not a suitable interim measure to impose on

IMS. The court ordered that the costs of the appeal hearing be borne by

NDC.

We look forward with interest to the actual trial of this matter. At

first instance in the interim hearings the court appeared to criticise the

Commission's approach and seemed attracted by IMS's argument that

assertion of exclusive rights within the main operating market to which

the...

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