# C_2017030EN.01002201.xml

| 30.1.2017 | EN | Official Journal of the European Union | C 30/22 |
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30.1.2017

EN

Official Journal of the European Union

C 30/22

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Appeal brought on 17 November 2016 by Sun Pharmaceutical Industries Ltd, formerly Ranbaxy Laboratories Ltd, Ranbaxy (UK) Ltd against the judgment of the General Court (Ninth Chamber) delivered on 8 September 2016 in Case T-460/13: Sun Pharmaceutical Industries Ltd, formerly Ranbaxy Laboratories Ltd, Ranbaxy (UK) Ltd v European Commission

(Case C-586/16 P)

(2017/C 030/27)

Language of the case: English

Parties

Parties

Appellants: Sun Pharmaceutical Industries Ltd, formerly Ranbaxy Laboratories Ltd, Ranbaxy (UK) Ltd (represented by: R. Vidal, A. Penny, Solicitors, B. Kennelly QC, Barrister)

Appellants:

Other party to the proceedings: European Commission

Other party to the proceedings:

Form of order sought

Form of order sought

The appellants claim that the Court should:

| — | Set aside the General Court’s Judgment in Case T-460/13 insofar as it dismisses their application to annul the decision of the European Commission of 19 June 2013 in Case COMP/39226 — Lundbeck (citalopram), which found an infringement by object of Article 101(1) TFEU and Article 53 EEA, insofar as it concerns the Appellants; |
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Set aside the General Court’s Judgment in Case T-460/13 insofar as it dismisses their application to annul the decision of the European Commission of 19 June 2013 in Case COMP/39226 — Lundbeck (citalopram), which found an infringement by object of Article 101(1) TFEU and Article 53 EEA, insofar as it concerns the Appellants;

| — | Annul Article 1(4) of the Decision insofar as it concern the Appellants; |
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Annul Article 1(4) of the Decision insofar as it concern the Appellants;

| — | Annul Article 2(4) of the Decision insofar as it imposes fines on the Appellants or, in the alternative, reduce the amount of the fine; and |
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Annul Article 2(4) of the Decision insofar as it imposes fines on the Appellants or, in the alternative, reduce the amount of the fine; and

| — | Order the Commission to pay the Appellants’ legal and other costs and expenses in relation to this matter and any other measures that this Court considers appropriate. |
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Order the Commission to pay the Appellants’ legal and other costs and expenses in relation to this matter and any other measures that this Court considers appropriate.

Pleas in law and main arguments

Pleas in law and main arguments

| 1. | The General Court misapplied the test for demonstrating an infringement of Article 101(1) ‘by object’ established by the Court of Justice of the European Union (‘CJEU’) in Cartes Bancaires v Commission C-67/13 P, ECLI: EU:C:2014:2204 (‘Cartes Bancaires’). The agreement between the Appellants and H. Lundbeck A/S (‘Lundbeck’) which took effect on 16 June 2002 (the ‘Agreement’2) was not by its very nature harmful to competition. Its purpose was prima facie to settle a patent dispute between the Appellants and Lundbeck. Whether the Agreement was in fact harmful to competition required the Commission to examine its effects. |
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1.

The General Court misapplied the test for demonstrating an infringement of Article 101(1) ‘by object’ established by the Court of Justice of the European Union (‘CJEU’) in Cartes Bancaires v Commission C-67/13 P, ECLI: EU:C:2014:2204 (‘Cartes Bancaires’). The agreement between the Appellants and H. Lundbeck A/S (‘Lundbeck’) which took effect on 16 June 2002 (the ‘Agreement’2) was not by its very nature harmful to competition. Its purpose was prima facie to settle a patent dispute between the Appellants and Lundbeck. Whether the Agreement was in fact harmful to competition required the Commission to examine its effects.

| 2. | In finding that there was material ‘potential competition’ in existence between the Appellants and Lundbeck at the time of the Agreement, the General Court manifestly distorted the evidence in the Court’s file. The Commission was required to demonstrate objectively that the Appellants had a real concrete possibility of entering the market in an economically viable manner. The evidence demonstrated that (a) such entry was not a real or concrete possibility, either objectively or in terms of economic viability, prior to the expiry of the Agreement; and (b) in the negotiations leading to the Agreement, the Appellants had no incentive to be truthful regarding their readiness to enter the market and tricked Lundbeck into agreeing both to supply its own product to the Appellants at a discounted price and making a payment to the Appellants. This in fact allowed the Appellants to enter the market immediately which crucially they could not otherwise have done. The General Court failed to take account of the key distinction between the Appellants and the other generic manufacturers who entered into agreements with Lundbeck, which is the Appellants had no realistic and concrete possibility of obtaining an marketing authorization within the timeframe of the Agreement. |
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2.

In finding that there was material ‘potential competition’ in existence between the Appellants and Lundbeck at the time of the Agreement, the General Court manifestly distorted the evidence in the Court’s file. The Commission was required to demonstrate objectively that the Appellants had a real concrete possibility of entering the market in an economically viable manner. The evidence demonstrated that (a) such entry was not a real or concrete possibility, either objectively or in terms of economic viability, prior to the expiry of the Agreement; and (b) in the negotiations leading to the Agreement, the Appellants had no incentive to be truthful regarding their readiness to enter the market and tricked Lundbeck into agreeing both to supply its own product to the Appellants at a discounted price and making a payment to the Appellants. This in fact allowed the Appellants to enter the market immediately which crucially they could not otherwise have done. The General Court failed to take account of the key distinction between the Appellants and the other generic manufacturers who entered into agreements with Lundbeck, which is the Appellants had no realistic and concrete possibility of obtaining an marketing authorization within the timeframe of the Agreement.

| 3. | In any event, no penalty should have been imposed on the Appellants. At the time of the Agreement, the Commission’s Guidelines did not treat such an agreement as constituting an infringement ‘by object’. It was a novel case in which Lundbeck had prima facie protection from competition in the form of its patents and regulatory barriers where the Appellants in fact improved their ability to compete with Lundbeck on the relevant market, by obtaining discounted supplies of Lundbeck’s product which the Appellants could label as their own. The Appellants' penalty ignored the novelty of the infringement and the Commission's unreasonable delay: notice of the investigation could easily have been provided to the Appellants more than five years prior to the actual notice. |
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3.

In any event, no penalty should have been imposed on the Appellants. At the time of the Agreement, the Commission’s Guidelines did not treat such an agreement as constituting an infringement ‘by object’. It was a novel case in which Lundbeck had prima facie protection from competition in the form of its patents and regulatory barriers where the Appellants in fact improved their ability to compete with Lundbeck on the relevant market, by obtaining discounted supplies of Lundbeck’s product which the Appellants could label as their own. The Appellants' penalty ignored the novelty of the infringement and the Commission's unreasonable delay: notice of the investigation could easily have been provided to the Appellants more than five years prior to the actual notice.

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