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 right applies is not an abuse of a dominant position. If this approach is maintained in the final judgment it will be a significant victory for intellectual property rights holders against the attempts by the Commission in recent years to limit the scope of IP rights where they are owned by a market leader.
It seems to us reasonable that an intellectual property right owner should be able to enforce his rights in a particular market without at the same time being compelled to license them. To adopt any other course would constitute an unjustified assault on the whole system of intellectual property rights ownership.
© Herbert Smith 2002
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