Significant Victory for Rights Holders in Battle with Commission

Profession:Herbert Smith
 
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In July we reported how the European Commission had ordered IMS Health in Germany to license use of its copyright

"1860 brick structure for collecting pharmaceutical data."

IMS appealed against this ex parte imposition of the compulsory licence order and, at the end of last month, succeeded in having the order suspended by the European Court of Justice pending a full hearing of the case. Although this was only an interim decision the ECJ appeared critical of the Commission's approach and attracted by IMS's argument that assertion of exclusive rights within the main operating market of the right owner to which the rights apply is not an abuse of a dominant position (although attempting to extend a dominant position into a "downstream" market by using such rights maybe).

If this attitude is reflected in the final judgment it will be a significant victory for rights holders against the increasingly oppressive approach of the Commission in recent years. In the context of intellectual property rights it must be possible to enforce one's rights in a particular market and not be compelled to license them, since without exclusivity there can be no value in a right which is by its nature supposed to be monopolistic.

History

The Commission had found that the failure to license the structure to potential new entrants to the German market constituted an abuse of dominant position. IMS supplies information on sales and prescriptions of pharmaceutical products and had devised a "brick" structure reflecting the divisions of pharmacies in Germany into small geographical units with which to present its data. IMS was the only provider of such information in the German market and this brick structure had become the industry standard. When competitors tried to enter the same data market in 1999 using different structures potential customers were not prepared to do business with them because they were not using the IMS structure.

The Commission had concluded that the IMS structure had been tailored to the pharmaceutical industry's needs so as to become the industry standard and in such a way that no other structure could be viable. Further any attempt to create an alternative structure which could be acceptable would be likely to infringe IMS's copyright. IMS's refusal to license its structure could not be justified, stated the Commission, but was aimed at eliminating competition in Germany and this was therefore an abuse of dominant position (contrary to...

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