Has the Administrative Court’s Reversal of the IAA Decision in Pfizer Got It Right?

Daniela Ampollini, Oct 15, 2012

In my article, Looking for Sense in the Italian Antitrust Authority Decision in the Pfizer Xalatan Case, which appeared in the July (2) issue of the CPI Antitrust Chronicle, I discussed the reasons the Italian Antitrust Authority (“IAA”) found Pfizer liable of abuse of dominant position from a patent law perspective. I attempted to reconcile-without succeeding, in fact-the reasoning of the IAA with the meaning and function of the various patent law categories involved. In conclusion, I noted that the real reason, albeit not explicitly stated, behind the decision of the IAA seemed to lie in the fact that divisional patent EP ‘168-which had served as the basic patent for the Italian Xalatan SPC which Pfizer had enforced against various generic companies-had been found invalid in the first instance by the EPO as a result of opposition proceedings.

This may have explained, from a political rather than legal point of view, the finding against Pfizer by the IAA. From all perspectives the finding seemed to be the result of a clear “stretch” of the applicable antitrust provisions, and a disputable interpretation of relevant community law. As I wrote, after having noted that in Italian law there is no such thing as objective liability in cases where patent rights are enforced under patents that are later found invalid, and that the legal test in these cases is such that substantial damages are rarely awarded to a wrongfully enjoined party, I proposed an interpretation of the IAA decision as a (surely not justifiable) example of the (mis)use of competition law by a state agency in an attempt to safeguard the generic industry-and therefore state finances-in view of allegedly unsatisfactory tools in other areas of the law. I then concluded that the interesting thing was that divisional patent EP ‘168 had, however, been found valid in the second (and last) instance by the EPO after the publication of the IAA decision, a pertinent development to consider as the IAA decision was under appeal.

In fact, the IAA decision has now been fully reversed by the Regional Administrative Court sitting in Rome. The reasoning of this latter decision, which was published on September 3, 2012, was on solid ground. The issue of the relevance or not of the validity of Pfizer’s divisional patent remains, however, somewhat unanswered.

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