Anyone with an interest in competition law has a view on the work of Robert H Bork. His work has been undeniably influential; even for those, like me, who were never entirely convinced by the Chicago School way of thinking. In the introductory Chapter of our text book Barry Rodger and I refer on a number of occasions to Bork’s work, as it would be impossible to introduce readers to the differing schools of antitrust thought without talking of his seminal 1978 book The Antirust Paradox: I think it remains the only book we refer to by name in the main text (all other authors only get full credit in the footnotes).That book was probably the high point of his antirust work, and his 1990s epilogue that appears in later editions indicates that he felt vindicated in the way US antitrust changed after its publication.
The antitrust tide has changed somewhat in the 1st decade of this century, and Bork and the rest of the Chicago School may not have the influence in the way they once did, but they did fundamentally change the debate. Even if you do not agree with their conclusion it is now only possible to properly engage in antitrust scholarship but taking on their ideas and challenging the conclusions they reach. It is arguable the Bork was the most technically impressive antitrust thinker of the time, but it is, as I have stated elsewhere in my work, undeniable that he was the most readable and the most quotable. We, of course, use a Bork quote to lead out the ‘Discussion’ section in the relevant Chapter of our text, and I imagine many competition law tutors have reached for their copy of the Antitrust Paradox when they are struggling for inspiration for an exam question (I know I have). The way he wrote about the topic was interesting, dare I say exciting, in a way that very few manage.
I haven’t talked about Bork unsuccessful nomination to the Supreme Court, but a useful account is set out in the Guardian’s obituary, where his politics ultimately led to the more liberal Senate blocking his appointment. This episode led to the most surprising legacy that Robert Bork leaves us; the concept of ‘borking’ which stems from the media campaign attacking him at the time. The phrase has been picked up by the techie community, but I doubt very few understand the genesis of the term. Bork also played an important role in the development or ‘originalism’ in US constitutional law, but I leave others, who are far more knowledgeable, to discuss the significance of that.
For another interesting view of his work see Damien Geradin’s blog.
Robert Bork’s work will live on notwithstanding his passing, and he will no doubt grace many future exam papers and textbooks as he has done so often in the past.
AstraZeneca AB v Commission (Case C-457/10 P)
The Court of Justice of the EU delivered its judgment on 6 December 2012 on the appeal against the General Court’s judgment in Case T-321/05.
This cases stems from a number of practices that AstraZeneca had adopted in the market for Proton Pump Inhibitors (‘PPIs’), a class of pharmaceutical products used to treat gastrointestinal conditions linked with hyperacidity. AZ’s product ‘Losec’ was the first PPI to market, but was nearing the end of its IP protection. Complaints were made in 1999 about behaviour which hampered the introduction of generic versions of the product to the market. The Commission adopted a Decision (C(2005) 1757 final) in June 2005 finding that AZ has committed two abuses: (1) making misleading representations to patent offices as part of a strategy to keep generic products away from the market by extending Supplementary Protection Certificates (‘SPCs’) for the product to which it was not entitled, and (2) deregistering Market Authorisations (‘Mas’) for Losec capsules and withdrawing the product from several markets to ensure the abridged registration route for generic products would not be available. The General Court partially annulled the Commission Decision in relation to the second abuse, but upheld the majority of the Decision.
The Court of Justice dismissed the appeal and upheld the findings of the General Court. All of AZ’s arguments, and those of the cross appeals, were rejected by the CJEU; who largely approved the reasoning of the General Court without the need for significant further comment. The Court’s approach highlights the fact the CJEU’s role is not to re-evaluate the evidence presented to, or supplement the findings of the GC; unless it finds real flaws in the approach adopted by the GC .
Points of Interest
The CJEU did have some interesting comments on market definition. PPIs were defined as being in a market of their own, due to their clinical efficacy, notwithstanding the fact that there were other drugs, known as ‘H2 blockers’, that could also be used to treat similar conditions. AZ had argued that the gradual uptake of PPIs, and the corresponding reduction in usage of H2 blockers, indicated that H2 blockers were acting as a constraint on the prescription of PPIs and they were therefore part of the same market. The GC and CJEU both rejected that proposition. The CJEU confirmed that while there was a gradual substitution of PPIs for H2 blockers this was not substitution within a market, but the gradual development of new market as clinicians’ natural conservatism about new treatments was overcome through greater experience with the new drug .
AZ argued that EU law specifically allows a drug company to withdraw a Market Authorisation, and that it should not be denied that ability by competition law. Maintenance of a MA imposes costs and obligations, which may lead to public liability, which it should not be required to continue to benefit others. The CJEU concluded that deregistration without objective justification could amount to abuse. It stressed, as it has done in several recent cases, that an undertaking which holds a dominant position has a ‘special responsibility’ to the market and that it could not use regulatory procedures to make entry more difficult, in the absence of the defence of legitimate interests or objective justification . The reduction in costs or liabilities associated with a MA may, however, amount to an objective justification . The CJEU noted that there was no evidence from AZ that the costs of the MA were relevant to its internal decision making, and the issue was first raised on appeal.
The GC’s findings in relation to the deregistration of the MA were also challenged on the basis that it should be treated in the same way as an ‘essential facility’ style case looking at compulsory licensing. It was argued the relevant test should not have been was entry ‘more difficult’ but ‘substantially eliminated’. The CJEU rejected the characterisation of a MA as being similar to a property right, as the exercise of an ‘option’ by a dominant undertaking was ‘unlike a situation in which the unfettered exercise of an exclusive right awarded for the realisation of an investment or creation is limited’ .
Although there is nothing particularly new in AstraZeneca it is a good example of the way in which the CJEU handles its role reviewing the judgements of the GC. It takes a wide view of review, rejecting several attempts by the Commission to have arguments struck out as inadmissible, but it will not substitute its own view for that of the Commission or GC; concentrating on whether the GCs reasoning adequately supported its findings.
Pharmaceutical products are highly regulated and bound up with a plethora of IP issues. They are very likely to be a source of competition concerns. It appears that the winding down of IP protections and the introduction of generic drugs has led to a number of recent cases (see, for example, Reckitt Benckiser in the UK). It is unsurprising that the CJEU, and competition law, is taking a strong stance facilitating the entry of competition from generics and limiting a dominant undertakings ability to chill increased competition beyond the strict limits of their initial IP protection.
This is the 1st Step in developing a new Competition Law blog primarily to support my teaching at Lancaster University Law School and the users of my Textbook, Competition Law and Policy in the EU and UK, published by Routledge and about to go into its 5th ed.
I’ll be using the blog to discuss developments in competition law that I haven’t talked about in class or impact on the issues discussed in the book.
Initially I’ll be developing content during a ‘soft launch’ phase, but I’ll begin publicising what is being published on Twitter, via @AngusMacCulloch, and encouraging anyone interested in Guest Posting.
Let’s see how this goes …