Provisional text

OPINION OF ADVOCATE GENERAL

KOKOTT

delivered on 14 July 2022 ( )

Case C‑176/19 P

European Commission

v

Servier SAS,

Servier Laboratories Ltd,

Les Laboratoires Servier SAS

(Appeal – Competition – Agreements, decisions and concerted practices – Abuse of a dominant position – Market for perindopril, a medicinal product for the treatment of cardiovascular diseases – Patent dispute settlement agreements concluded between a patent-holding originator company and generic companies – Settlement agreement linked to a licence agreement – Restriction of competition by object – Restriction of competition by effect – Definition of the relevant market)





Table of contents





I. Introduction

II. Background to the dispute

A. Facts

1. Operators concerned by the present case

2. Product and patents at issue

(a) Servier’s perindopril

(b) Krka’s perindopril

3. Disputes relating to perindopril and launch of generic versions

(a) Disputes before the EPO

(b) Disputes before the national courts

4. Disputes and agreements between Servier and Krka

B. The decision at issue

C. The judgment under appeal

III. The procedure before the Court and the forms of order sought

IV. Assessment

A. The appeal

1. Article 101 TFEU

(a) Restriction of competition by object (first to sixth grounds of appeal)

(1) Analysis of the object of the Krka agreements in the decision at issue and in the judgment under appeal

(i) Decision at issue

(ii) Judgment under appeal

(2) The grounds of appeal relating to the object of the Krka agreements

(i) The competitive pressure exerted by Krka on Servier (first ground of appeal)

– Admissibility and effectiveness of the ground of appeal

– Substance

– Interim conclusion

(ii) The licence as an inducement for Krka to accept the restrictions of the settlement (second ground of appeal)

– The licence as quid pro quo for the commitment not to compete

– The licence as an inducement

– The quantification of the value transferred to Krka by means of the licence

– Interim conclusion

(iii) The application of the concept of a ‘restriction of competition by object’ (third ground of appeal)

– The lack of a ‘hermetic’ division of the markets

– The parties’ intentions and their beliefs vis-à-vis the validity of the 947 patent

– The de facto duopoly established by the licence

– A statement made by Lupin

– The 2004 Guidelines on technology transfer agreements and Regulation No 772/2004 on the application of Article [101(3) TFEU] to categories of technology transfer agreements

– Interim conclusion

(iv) The parties’ intention (fourth ground of appeal)

– The account taken of the parties’ intention

– The application of the principles relating to the production of evidence

– The credibility of evidence according to the date on which it was drawn up

– The probative value of subsequent statements

– Interim conclusion

(v) The account taken of the procompetitive effects of the licence (fifth ground of appeal)

(vi) The Krka assignment and licence agreement (sixth ground of appeal)

(3) Conclusion on the object of the Krka agreements

(b) The restriction of competition by effect (seventh ground of appeal)

(1) The analysis of the effects of the Krka agreements in the decision at issue and the judgment under appeal

(i) Decision at issue

(ii) Judgment under appeal

(2) The ground of appeal relating to the effects of the Krka agreements

(i) The counterfactual analysis

(ii) The relevant time for the counterfactual analysis

(iii) The irrelevance of the distinction between implemented and non-implemented agreements

(3) Conclusion on the effects of the Krka agreements

(c) Conclusion on the existence of an infringement under Article 101(1) TFEU with regard to the Krka agreements

2. Article 102 TFEU

(a) The findings relating to Article 102 TFEU in the decision at issue and the judgment under appeal

(1) Decision at issue

(2) Judgment under appeal

(b) The grounds of appeal relating to Article 102 TFEU

(1) The significance of price when determining the relevant finished product market (eighth ground of appeal)

(i) The price-related factors in the determination of the relevant market (first and second parts of the eighth ground of appeal)

(ii) The lack of price-sensitivity of prescribing doctors (third and fourth parts of the eighth ground of appeal)

(iii) The competition exerted by the perindopril generics (fifth and sixth parts of the eighth ground of appeal)

(iv) Interim conclusion

(2) The account taken of therapeutic substitutability in determining the relevant finished product market (ninth ground of appeal)

(i) The role of therapeutic substitutability in the determination of the relevant finished product market (first part of the ninth ground of appeal)

(ii) The account taken or the analysis of certain evidence (second to sixth parts of the ninth ground of appeal)

(iii) Interim conclusion

(3) The inadmissibility of certain annexes produced at first instance (tenth ground of appeal)

(4) The relevant technology market (eleventh ground of appeal)

(c) Conclusion on the grounds of appeal relating to Article 102 TFEU

B. The action before the General Court

V. Costs

VI. Conclusion





I. Introduction

1. Just like the parallel case of Servier v Commission (C‑201/19 P), in which I am also delivering my Opinion today, this case follows in the wake of the cases of Generics (UK) and Others ( ) and Lundbeck v Commission, ( ) in which the Court established the criteria for a dispute settlement agreement between the holder of a pharmaceutical patent and a manufacturer of generic medicinal products to be regarded as contrary to EU competition law.

2. The background to the present case, to the case of Servier v Commission and to the seven other appeals making up this group of nine appeals lodged against eight judgments of the General Court ( ) is formed by a number of patent dispute settlement agreements concluded by the manufacturer of originator medicines Servier with generic companies.

3. As in the cases of Generics (UK) and Others and Lundbeck v Commission, those agreements were concluded in a situation in which the patent for the active substance of the medicinal product at issue (here: perindopril) had already entered the public domain, although Servier still held ‘secondary’ patents for certain procedures for the manufacturing of that medicinal product.

4. The contested agreements ensured, in essence, that generic companies which wanted to enter the market with generic versions of the medicinal product undertook to delay their entry in return for transfers of value from Servier.

5. In the decision at issue, ( ) the Commission considered, first, that the contested agreements, concluded by Servier with Niche/Unichem, Matrix, Teva, Krka and Lupin, constituted restrictions of competition by object and by effect and, therefore, infringements of Article 101 TFEU.

6. Second, it took the view that their conclusion, together with other actions such as the acquisition of technologies for the manufacture of the active pharmaceutical ingredient (API) of perindopril, constituted a strategy, on the part of Servier, intended to delay the entry of generic perindopril companies on the market for that medicinal product, on which Servier held a dominant position. The Commission therefore penalised that conduct as an abuse of a dominant position under Article 102 TFEU.

7. In the judgment under appeal and in its other judgments in the group of cases in question, the General Court confirmed the Commission’s analysis that the four agreements concluded by Servier with Niche/Unichem, Matrix, Teva and Lupin constituted restrictions of competition by object. Those findings of the General Court are contested by Servier in the case of Servier v Commission and by those generic companies in their respective appeals lodged against the judgments of the General Court concerning them.

8. However, the General Court annulled the decision at issue as far as concerns the classification of the agreements concluded by Servier with Krka as a restriction of competition by object and by effect, and in relation to the finding of abuse of a dominant position by Servier, on the ground that the Commission had made errors when defining the relevant market.

9. Those annulments are challenged by the Commission in the present case and in the case of Commission v Krka (C‑151/19 P). Those cases raise novel issues concerning the classification as a restriction of competition by object of a licence agreement concluded at the same time as a patent dispute settlement agreement, the classification of such a series of agreements as a restriction of competition by effect and the definition of the relevant market in the pharmaceutical field.

II. Background to the dispute

A. Facts

10. The General Court refers to the background to the dispute in paragraphs 1 to 73 of the judgment under appeal which, for the purposes of these appeal proceedings, can be summarised as follows.

1. Operators concerned by the present case

11. The Servier group, which is composed inter alia of Servier SAS, its parent company established in France, Les Laboratoires Servier SAS and Servier Laboratories Ltd (together, ‘Servier’), brings together pharmaceutical companies at the global level. Les Laboratoires Servier is a French pharmaceutical company specialised in the development of originator medicines, inter alia for the treatment of cardiovascular diseases. ( ) Biogaran is a wholly owned generic subsidiary of Les Laboratoires Servier. ( )

12. The Krka pharmaceutical group, which is registered in Slovenia and specialised in the development, production and sale of generic medicines, includes the parent company, Krka Tovarna Zdravil d.d., and a number of subsidiaries in Slovenia and in other countries (‘Krka’). ( )

2. Product and patents at issue

(a) Servier’s perindopril

13. Servier developed perindopril, a medicinal product used in cardiovascular medicine, primarily intended for the treatment of hypertension and heart failure. The API of perindopril takes the form of a salt. The salt used initially was erbumine (or tert-butylamine), which is in its crystalline form on account of the synthesis process applied by Servier. ( )

14. Perindopril compound patent EP0049658 was filed with the European Patent Office (EPO) on 29 September 1981. That patent was due to expire on 29 September 2001, but its protection was prolonged in a number of EU Member States, including the United Kingdom, until 22 June 2003. ( ) In France, protection under the patent was prolonged until 22 March 2005 and, in Italy, until 13 February 2009. ( ) Perindopril erbumine tablets (2 and 4 mg) for the treatment of hypertension obtained marketing authorisation in Europe between 1988 and 1989. ( )

15. After filing the compound patent, Servier filed a number of patents relating to the process for the manufacture of perindopril before the EPO. The patents relevant to these proceedings are, inter alia, patents EP0308339, EP0308340 and EP0308341 (respectively, ‘the 339 patent’, ‘the 340 patent’ and ‘the 341 patent’), filed in 1988 and due to expire in 2008, and, in particular, patent EP1296947 (known as ‘the alpha patent’ – ‘the 947 patent’), filed in 2001. The 947 patent covered the alpha crystalline form of perindopril erbumine and the methods for its manufacture and was granted on 4 February 2004. ( )

16. Servier also filed national patent applications in several EU Member States, for example in Bulgaria, the Czech Republic, Estonia, Hungary, Poland and Slovakia. Patents were thus granted on 16 May 2006 in Bulgaria, on 17 August 2006 in Hungary, on 23 January 2007 in the Czech Republic, on 23 April 2007 in Slovakia and on 24 March 2010 in Poland. Those patents corresponded, in essence, to the patents filed before the EPO. ( )

17. From 2002, Servier began developing a second-generation perindopril product, manufactured using a new salt (arginine), for which it filed a patent application (EP1354873B) on 17 February 2003. That patent was granted on 17 July 2004 with an expiry date of 17 February 2023. The introduction of perindopril arginine in the EU markets started in 2006. That product is a bioequivalent generic version of the first-generation product, but is sold in different dosages due to the different molecular weight of the new salt. ( ) Perindopril arginine received marketing authorisation in France in 2004 and was subsequently authorised via the mutual recognition procedure in other Member States. ( )

(b) Krka’s perindopril

18. Krka began its own development of perindopril from 2003 onwards. Over the period 2005-2006, it received marketing authorisations for a number of EU markets and launched its perindopril on the market in several central and Eastern European Member States, including Poland and Hungary. During that period, it was also preparing to place its product on the market in other Member States, including France, the United Kingdom and the Netherlands, either alone or in cooperation with other companies. ( )

3. Disputes relating to perindopril and launch of generic versions

19. Between 2003 and 2009, Servier was party to a series of disputes concerning perindopril, both before the EPO and before national courts. Those disputes essentially concerned applications for injunctions and proceedings relating to the 947 patent, initiated in various Member States between Servier and a series of generic companies preparing to launch a generic version of perindopril. ( )

(a) Disputes before the EPO

20. First of all, 10 generic companies, including Krka, filed opposition proceedings against the 947 patent before the EPO in 2004, seeking the revocation in full of that patent on grounds of lack of novelty, lack of inventive step and insufficient disclosure of the invention. ( )

21. On 27 July 2006, the Opposition Division of the EPO confirmed the validity of the 947 patent after Servier made some minor amendments to its original claims (‘the EPO decision of 27 July 2006’). Nine companies brought an appeal against that decision, but Krka and Lupin gave notice of the withdrawal of their appeals on 11 January and 5 February 2007, respectively, further to their agreements with Servier. By decision of 6 May 2009, the EPO’s Technical Board of Appeal annulled the EPO decision of 27 July 2006 and revoked the 947 patent (‘the EPO decision of 6 May 2009’). Servier’s request for a revision of that decision was rejected on 19 March 2010. ( )

(b) Disputes before the national courts

22. The validity of the 947 patent has also been challenged by generic companies before the courts of certain Member States, and Servier has made applications for interim injunctions, some of which were successful. ( ) However, the majority of those disputes ended before a final decision was given on the validity of the 947 patent on account of the settlement agreements concluded between Servier and generic companies.

23. Nevertheless, two disputes between Servier and Apotex, the only generic company party to a dispute with Servier in the United Kingdom with which Servier did not conclude a settlement agreement, were not interrupted and subsequently led to the invalidation of the 947 patent.

24. Thus, first, on 1 August 2006, Servier brought an action for infringement of the 947 patent against Apotex, which had launched a generic version of perindopril ‘at risk’ on the UK market, before the UK courts and obtained an interim injunction on 8 August 2006. However, following a counterclaim for annulment of the patent brought by Apotex, the 947 patent was declared invalid on 6 July 2007, the injunction was lifted and Apotex entered the market with generic perindopril, which opened the market to generics in the United Kingdom. On 9 May 2008, the decision invalidating the 947 patent was confirmed on appeal. ( )

25. Second, on 13 November 2007, Katwijk Farma, an Apotex subsidiary, brought an action before the Netherlands courts for annulment of the Dutch part of the 947 patent and, on 13 December 2007, launched its generic perindopril, whilst an application for an interim injunction made by Servier was rejected. On 11 June 2008, the Netherlands courts annulled the 947 patent for the Netherlands on completion of concurrent judicial proceedings initiated by Pharmachemie, a subsidiary of Teva. ( )

26. From May 2008, Sandoz, another generic company, launched its generic perindopril in a number of Member States. ( )

4. Disputes and agreements between Servier and Krka

27. Between 2005 and 2007, Servier concluded settlement agreements with the generic companies Niche/Unichem, Matrix, Teva, Krka and Lupin. The agreements concerned by this appeal are those concluded by Servier with Krka.

28. On 30 May 2006, Servier applied for an interim injunction in Hungary to prevent the marketing of a generic version of perindopril placed on the market by Krka, invoking the infringement of the 947 patent. That application was dismissed on 13 October 2006. ( )

29. In the United Kingdom, on 28 July 2006, Servier brought an action for infringement of the 340 patent against Krka. On 2 August 2006, Servier also brought an action for infringement of the 947 patent against Krka and applied for an interim injunction. On 1 September 2006, Krka brought a counterclaim for annulment of the 947 patent and an application for summary judgment. On 8 September 2006, Krka brought another counterclaim for annulment of the 340 patent.

30. On 3 October 2006, the High Court of Justice (England & Wales), Chancery Division (Patents Court) (United Kingdom), granted Servier’s application for an interim injunction and dismissed the application for summary judgment brought by Krka on 1 September 2006 seeking the invalidation of the 947 patent, ordering that a full trial be held. On 1 December 2006, the pending proceedings were discontinued as a result of the settlement reached between the parties and the interim injunction was lifted. ( )

31. On 27 October 2006, Servier and Krka signed a settlement agreement (‘the Krka settlement agreement’) and a licence agreement (‘the Krka licence agreement’), supplemented by an amendment made on 2 November 2006. In addition, those parties entered into an assignment and licence agreement (‘the Krka assignment and licence agreement’) on 5 January 2007 (together, ‘the Krka agreements’).

32. The Krka settlement agreement provided that the 947 patent also covered the equivalent national patents. In accordance with that settlement agreement, in force until the expiry or the revocation of the 947 or 340 patents, Krka undertook to withdraw any existing claim against the 947 patent worldwide and against the 340 patent in the United Kingdom, and not to challenge either of those two patents worldwide in the future. Moreover, Krka and its subsidiaries were not authorised to launch or to market a generic version of perindopril which would infringe the 947 patent for the duration of the validity of that patent and in the country in which it was still valid, unless expressly authorised by Servier. Similarly, Krka could not supply to any third party a generic version of perindopril that would infringe the 947 patent, unless expressly authorised by Servier. In return, Servier was required to withdraw the proceedings pending worldwide against Krka based on the infringement of the 947 and 340 patents, including its applications for interim injunctions. ( )

33. Pursuant to the Krka licence agreement, concluded for a period corresponding to the validity of the 947 patent, Servier granted Krka an ‘exclusive’, irrevocable licence on the 947 patent to use, manufacture, sell, offer for sale, promote and import its own products which contain the alpha crystalline form of erbumine in the Czech Republic, Latvia, Lithuania, Hungary, Poland, Slovenia and Slovakia.

34. In return for the licence, Krka was required to pay Servier 3% royalties on its net sales prices throughout those territories. Servier was entitled, in those same States, to use the 947 patent directly or indirectly (that is to say, for one of its subsidiaries or for one third party per country). ( )

35. When the agreements were concluded, the national equivalents of the 947 patent had not yet been granted to Servier in some of those seven markets, whereas Krka was already marketing its product on them. ( )

36. Pursuant to the Krka assignment and licence agreement, Krka assigned two patent applications to Servier, one concerning a process for the synthesis of perindopril (WO 2005 113500) and the other the preparation of formulations of perindopril (WO 2005 094793). The technology protected in those patent applications was used for the production of Krka’s perindopril. Krka undertook not to challenge the validity of any patents granted on the basis of the applications at issue. In return for that assignment, Servier paid Krka EUR 15 million for each of the applications at issue. Servier also granted Krka a non-exclusive, irrevocable, non-assignable, royalty-free licence, with no right to sub-license (other than to its subsidiaries) on the applications or resulting patents, that licence being unrestricted in time, territory or scope of use. ( )

B. The decision at issue

37. In the decision at issue, adopted on 9 July 2014, ( ) the Commission considered that Servier had infringed, first, Article 101 TFEU, by participating in four patent settlement agreements with reverse payments with Niche/Unichem, Matrix, Teva and Lupin, and in three agreements, constituting a single and continuous infringement, with Krka.

38. Second, the Commission considered that Servier had infringed Article 102 TFEU by drawing up and implementing, by means inter alia of technology acquisition and those settlement agreements, an exclusionary strategy covering the market for formulations of perindopril in France, the Netherlands, Poland and the United Kingdom and the market for perindopril API technology. ( )

39. The Commission considered that Servier and Krka had infringed Article 101 TFEU in the 18/20 Member States ( ) in which Krka undertook, under the Krka settlement agreement, to withdraw from competition with Servier with its existing products in exchange for a licence in the other seven Member States. The object of those agreements was thus to divide and allocate the EU markets between those two operators. The Commission also found that the Krka agreements had constituted a restriction of competition by effect and examined in that regard the effects of those agreements on the French, Netherlands and UK markets. ( ) The Commission did not find an infringement in the seven Member States for which the licence had been granted. ( )

40. In addition, the Commission considered that Servier and Krka had infringed Article 101 TFEU in so far as Krka had stopped competing as an existing source of perindopril technology by transferring its technology to Servier in return for payment of a total of EUR 30 million. ( )

41. The Commission imposed fines on Servier for those infringements of Articles 101 and 102 TFEU. ( )

C. The judgment under appeal

42. By application lodged at the Court Registry on 21 September 2014, Servier brought an action against the decision at issue. Before the General Court, the form of order sought by Servier was supported by the European Federation of Pharmaceutical Industries and Associations (EFPIA).

43. By the judgment under appeal, the General Court, in its extended composition, first, annulled 1) Article 4 of the decision at issue (which found that Servier had infringed Article 101 TFEU on account of the Krka agreements), 2) Article 6 of the decision at issue (which found that Servier had infringed Article 102 TFEU), and 3) Article 7(4)(b) and (6) of the decision at issue (which imposed fines on Servier in respect of those two infringements).

44. Second, the General Court 4) reduced the amount of the fine imposed on Servier in respect of the agreement with Matrix, to which reference is made in Article 2 of the decision at issue, by Article 7(2)(b) of that decision. Third, it 5) dismissed the remainder of the application and, fourth, it 6) and 7) ordered Servier, the Commission and the EFPIA to each bear their own costs.

III. The procedure before the Court and the forms of order sought

45. By document of 22 February 2019, the Commission lodged an appeal against the judgment under appeal.

46. At the same time, the Commission also lodged an appeal against the judgment of the General Court in Krka v Commission, whilst Servier and the other addressees of the decision at issue who had been unsuccessful before the General Court lodged appeals against the dismissal of their actions against that decision. ( )

47. By document of 22 May 2019, the United Kingdom sought leave to intervene in support of the form of order sought by the Commission. Leave was granted by decision of the President of the Court of 16 June 2019.

48. The Commission claims that the Court should:

– set aside paragraphs 1, 2 and 3 of the judgment under appeal which annul (i) Article 4 of the decision at issue in so far as it finds that Servier participated in the agreements concluded between Servier and the company Krka, (ii) Article 7(4)(b) of the decision at issue which sets the fine imposed on Servier for concluding those agreements, (iii) Article 6 of the decision at issue which finds that Servier infringed Article 102 TFEU and (iv) Article 7(6) of the decision at issue which sets the amount of the fine imposed on Servier in relation to that infringement;

– set aside the judgment under appeal in so far as it declares Annexes A 286 and A 287 to the application and Annex C 29 to the reply admissible (paragraphs 1461, 1462 and 1463 of the judgment);

– give final judgment on Servier’s action for annulment of the decision at issue and dismiss Servier’s application for annulment of Article 4, Article 7(4)(b), Article 6 and Article 7(6) of the decision at issue and uphold the Commission’s claim that Annexes A 286 and A 287 to the application before the General Court and Annex C 29 to the reply before the General Court should be declared inadmissible (paragraphs 1461 to 1463 of the judgment under appeal);

– order Servier to bear all the costs of the appeal.

49. The United Kingdom claims that the Court should

– grant the form of order sought by the Commission.

50. Servier contends that the Court should

– dismiss the appeal in its entirety; and

– order the Commission to pay the costs.

51. The EFPIA contends that the Court should

– dismiss the appeal; and

– order the Commission to pay the costs of the appeal proceedings and of the proceedings at first instance.

52. On 13 September 2021, the Court asked the parties to submit their comments on the judgment in Generics (UK) and Others and on the judgments of the group Lundbeck v Commission. ( )

53. On 20 and 21 October 2021, the parties to the nine appeals brought against the eight judgments of the General Court concerning the decision at issue presented oral argument and answered the questions put to them by the Court of Justice at a joint hearing.

IV. Assessment

A. The appeal

54. In support of its appeal, the Commission relies on 11 grounds, the first 7 of which concern the General Court’s considerations relating to the assessment of the Krka agreements from the perspective of Article 101 TFEU (1), whereas the last 4 concern the General Court’s considerations on the definition of the relevant market for the purposes of applying Article 102 TFEU (2). ( )

1. Article 101 TFEU

55. By its first to sixth grounds of appeal, the Commission claims that the General Court erred in law in finding that the Krka agreements did not constitute a restriction of competition by object (a). By its seventh ground of appeal, the Commission submits that the General Court also erred in law in finding that nor had the Commission established that those agreements constituted a restriction of competition by effect (b).

(a) Restriction of competition by object (first to sixth grounds of appeal)

56. Before examining the Commission’s grounds of appeal concerning the General Court’s analysis of the anticompetitive object of the Krka agreements (2), it is useful to summarise how that object was analysed by the Commission in the decision at issue and by the General Court in the judgment under appeal (1).

(1) Analysis of the object of the Krka agreements in the decision at issue and in the judgment under appeal

(i) Decision at issue

57. In section 5.5 (recitals 1670 to 1812 of the decision at issue), the Commission examined the three agreements concluded between Servier and Krka and considered that they constituted a single and continuous activity, the object of which was to restrict competition by sharing the markets for perindopril in the European Union between those two operators. ( )

58. According to the Commission, first, the object of the Krka settlement agreement and of the Krka licence agreement was to divide and allocate the EU markets between Servier and Krka as follows: the Krka licence agreement allowed Krka to continue marketing or launching generic perindopril as part of a de facto duopoly with Servier in seven Member States which constituted Krka’s core markets. That authorisation was granted in return for Krka’s commitment, under the Krka settlement agreement, to desist from competing with Servier in the remaining 18/20 EU markets. ( ) The Commission therefore considered that the licence agreement represented the inducement offered by Servier to Krka for the latter to accept the restrictions agreed in the settlement agreement. ( )

59. Second, the Commission found that the Krka assignment and licence agreement, concluded two months after the Krka settlement and Krka licence agreements, had made it possible for Servier and Krka to strengthen their competitive position, which stemmed from the division of markets established by the latter agreements, by preventing Krka from assigning its competing technology for the production of perindopril to other generic companies. Since the payment of the sum of EUR 30 million under that agreement was unconnected with Servier’s expected or actual earnings from the commercial exploitation of the technology assigned by Krka, that payment was viewed by the Commission as a form of sharing of the rent brought about by the market sharing arrangement between Servier and Krka. ( )

(ii) Judgment under appeal

60. The General Court stated, in the first place, in paragraphs 255 to 274 of the judgment under appeal, the conditions under which, in its view, the insertion of non-challenge clauses in respect of patents and non-marketing clauses in respect of generic products into patent dispute settlement agreements was to be regarded as anticompetitive. According to the General Court, this is the case if the insertion of such clauses in such an agreement is based not on the parties’ recognition of the validity of the patent and of the infringing nature of the generic products concerned, but on a significant and unjustified reverse payment made by the patent holder to the generic company, which induces the latter to agree to those clauses. The General Court found (paragraph 271 of the judgment under appeal) that, where they involve such an inducement, the agreements in question must be regarded as market exclusion agreements, in which the ‘stayers’ are to compensate the ‘goers’.

61. In the second place, the General Court explained, in paragraphs 797 to 810 of the judgment under appeal, that, where a normal commercial agreement is linked to a patent dispute settlement agreement including non-challenge and non-marketing clauses, such a contractual arrangement must be regarded as anticompetitive if the value transferred by the patent holder to the generic company under the commercial agreement exceeds the value of the asset transferred by that company pursuant to that agreement. In other words, such a contractual arrangement must be regarded as anticompetitive if the normal commercial agreement linked to the settlement agreement serves, in reality, to mask a value transfer from the patent holder to the generic company, for which there is no quid pro quo other than that company’s commitment not to compete.

62. In the third place, the General Court assessed, in paragraphs 943 to 1032 of the judgment under appeal, in the context of its examination of the ninth plea in law raised by Servier at first instance, alleging that there is no restriction of competition by object as far as concerns the Krka agreements, the situation of the linking of a settlement agreement with a licence agreement, which exists in the present case given the linking of the Krka settlement and Krka licence agreements.

63. In the General Court’s view, in such a situation, the considerations summarised in point 61 above concerning the linking of a settlement agreement with a normal commercial agreement do not apply. The reason for this is that the linking of a settlement agreement to a licence agreement is an appropriate means of resolving a dispute, allowing the generic company to enter the market and satisfying the wishes of both parties. In addition, the presence, in a settlement agreement, of non-marketing and non-challenge clauses is legitimate where that agreement is based on the parties’ recognition of the validity of the patent. Yet a licence agreement, which is meaningful only if the licence is actually used, is necessarily based on the parties’ recognition of the validity of the patent (paragraphs 943 to 947 of the judgment under appeal).

64. In order to establish that a licence agreement linked to a settlement agreement in fact masks a reverse payment from the patent holder to the generic company, the Commission must therefore demonstrate that the royalty paid by that company to that patent holder under that licence agreement is abnormally low (paragraphs 948 and 952 of the judgment under appeal).

65. In addition, the anticompetitive object of the non-marketing and non-challenge clauses of the settlement agreement is mitigated by the procompetitive effect of the licence agreement, which encourages the market entry of the generic company (paragraphs 953 to 956 of the judgment under appeal).

66. Accordingly, where there is a genuine dispute involving litigation between the parties concerned and a licence agreement that is directly connected with the settlement of that dispute, the linking of that agreement to the settlement agreement does not constitute a strong indication of the existence of a reverse payment. In such circumstances, the Commission must therefore demonstrate, on the basis of other evidence, that the licence agreement does not constitute a transaction concluded at arm’s length and thus masks a reverse payment, such that the contractual framework must be regarded as a restriction of competition by object (paragraph 963 of the judgment under appeal).

67. It was in the light of those criteria that the General Court examined, in paragraphs 964 to 1032 of the judgment under appeal, the Krka settlement and licence agreements, ultimately concluding that the Commission had not shown that those agreements had an anticompetitive object. The General Court based that finding, for the most part, on the following considerations:

– There were genuine, non-fictitious patent disputes ongoing and both the Krka settlement agreement and the Krka licence agreement were connected to those disputes (paragraphs 965 to 969 of the judgment under appeal).

– When those agreements were concluded, the parties were convinced of the validity of the 947 patent, in particular on account of the EPO decision of 27 July 2006. ( ) The fact that Krka continued to challenge that patent before the courts and to market its product after that decision is not evidence to the contrary. By so doing, Krka, whilst being persuaded that the patent was valid, simply wanted to strengthen its position in the negotiations with Servier with a view to concluding the settlement agreement. A subsequent reply by Krka to a request for information from the Commission supports that interpretation (paragraphs 970, 971, 999, 1000, 1010, 1011 and 1026 to 1028 of the judgment under appeal).

– The amount of the royalty payable by Krka to Servier under the licence agreement was not abnormally low and the Commission failed to demonstrate that that agreement did not constitute a transaction concluded at arm’s length. The Commission therefore failed to establish the existence of a reverse payment constituting an inducement (paragraphs 975 to 984 of the judgment under appeal).

– The implementation of a duopoly between Servier and Krka on the seven markets covered by the Krka licence agreement did not result from that agreement, but from the choices made by Servier and Krka subsequently, which were unforeseeable at the time of the conclusion of the agreement (paragraphs 987 to 991 of the judgment under appeal).

– There was no hermetic sharing of markets between Servier and Krka, because Servier was allowed to remain active on the seven markets covered by the licence (paragraphs 1003 to 1006 of the judgment under appeal).

– The Krka licence agreement had a positive effect on competition on those seven markets, even though the national equivalents of the 947 patent had not yet been granted on some of those markets, and therefore Krka did not need a licence to enter or remain on them. However, the licence had the beneficial effect that Krka avoided a subsequent legislation risk in the event that patents were granted to Servier on those markets in the future (paragraphs 1007 to 1009 and 1027 of the judgment under appeal).

– The contemporaneous documentary evidence furnished by the Commission to establish that Krka did not believe in the validity of the 947 patent and that Servier was pursuing a strategy of excluding generics is fragmentary, ambiguous, unconvincing or contradicted by a subsequent response by Krka to a request for information from the Commission (paragraphs 1010 to 1025 of the judgment under appeal).

68. Lastly, in the fourth place, the General Court considered, in paragraphs 1041 to 1060 of the judgment under appeal, that the classification of the Krka assignment and licence agreement as a restriction of competition by object was also erroneous because it had been based on the incorrect prior assumption of a market sharing arrangement established by the Krka settlement and licence agreements.

(2) The grounds of appeal relating to the object of the Krka agreements

69. In the Commission’s view, the considerations of the General Court summarised in points 62 to 68 above are vitiated by several errors of law.

70. By its first ground of appeal, the Commission claims that the General Court erred in law in relying on Krka’s alleged recognition of the validity of the 947 patent as part of its analysis of the object of the Krka agreements, whilst failing to examine the plea in law raised at first instance regarding the potential competition between Krka and Servier (i).

71. By its second ground of appeal, the Commission submits that the General Court’s analysis is vitiated by errors because it considered that the licence did not constitute an inducement for Krka to accept the restrictions in the Krka settlement agreement (ii).

72. By its third ground of appeal, the Commission argues that the General Court misapplied the concept of a ‘restriction of competition by object’, in particular, by finding that there was no market sharing arrangement between Servier and Krka because that allocation was not ‘hermetic’, distorting the evidence as regards the parties’ beliefs and considering that the duopoly established was the result of subsequent choices made by those parties and not of the agreements (iii).

73. By its fourth ground of appeal, the Commission claims that the General Court erred in law in its analysis of the documentary evidence relating to the parties’ intention (iv).

74. By its fifth ground of appeal, the Commission considers that the General Court erred in law by taking into account the procompetitive effects of the licence (v).

75. By its sixth ground of appeal, the Commission submits that the judgment under appeal is vitiated by an error in law because the General Court refused to acknowledge the anticompetitive nature of the Krka assignment and licence agreement (vi).

(i) The competitive pressure exerted by Krka on Servier (first ground of appeal)

76. By its first ground of appeal, the Commission claims that the General Court made several errors of law and distorted evidence in finding, after providing an insufficient statement of reasons, that Krka no longer represented, de facto, a source of competitive pressure on Servier when the Krka agreements were concluded.

– Admissibility and effectiveness of the ground of appeal

77. First of all, Servier’s objections that this ground of appeal is both inadmissible and ineffective must be rejected.

78. In the first place, contrary to Servier’s allegation, the Commission specifies the paragraphs of the judgment under appeal to which its criticisms relate.

79. In the second place, nor is it the Commission’s goal, as Servier claims, to have the Court of Justice reassess the facts. The Commission claims that the General Court did not comply with the rules governing the burden of proof and the adducing of evidence under EU law, that it distorted evidence and that the explanations it gave in that regard are vitiated by defective reasoning. Such errors may be relied on before the Court of Justice in the context of an appeal. In addition, the Commission’s criticisms concern the legal characterisation of the facts examined by the General Court and the legal conclusions drawn from them by the General Court, which also falls within the scope of the review by the Court of Justice in appeal proceedings. ( )

80. In the third place, nor can Servier’s arguments that this ground of appeal is ineffective be accepted.

81. According to Servier, the fact that the General Court did not examine the existence of potential competition between Servier and Krka cannot call into question the conclusions of the judgment under appeal regarding the lack of restriction of competition by object, which are based on grounds other than the classification of Krka as a potential competitor of Servier.

82. That objection by Servier echoes the General Court’s finding, set out in paragraph 1234 of the judgment under appeal, that the fact that it had been found that the Krka agreements did not constitute, according to the General Court’s analysis, a restriction of competition by object or a restriction of competition by effect meant that there was no need for the General Court to examine the plea in law regarding the potential competition between Servier and Krka.

83. However, contrary to what that paragraph appears to suggest and to what Servier claims, the General Court did not reject the classification of the Krka agreements as a restriction of competition by object (or the classification of those agreements as a restriction of competition by effect ( )) for reasons unconnected with the classification of Krka as a potential competitor of Servier.

84. As is apparent from the summary of the General Court’s reasoning contained in points 60, 63 and 67 above, the General Court relied on Krka’s alleged recognition of the validity of the 947 patent to reject the classification of the Krka agreements as a restriction of competition by object. The General Court considered, in essence, that, contrary to what the Commission had found (point 58 above), Krka had agreed not to compete with Servier on the 18/20 EU markets covered by the settlement not because Servier offered it a licence on the seven other markets but because it believed in the validity of the 947 patent.

85. According to the General Court, a patent dispute settlement agreement containing non-challenge and non-marketing clauses is to be regarded as a restriction of competition by object only if it is based not on the recognition of the validity of the patent by the parties but on an inducement paid by the patent holder to the generic company (paragraphs 262 to 265 of the judgment under appeal).

86. Accordingly, Krka’s alleged recognition of the validity of the 947 patent was – together with the alleged lack of inducement inherent in the value transfer to Krka represented by the Krka licence agreement ( ) – the underlying basis for the General Court’s reasoning when analysing the anticompetitive object of the Krka agreements (paragraphs 970, 971, 999, 1000, 1010 to 1012 and 1026 to 1028 of the judgment under appeal).

87. However, in the context of its first ground of appeal, the Commission claims precisely that the General Court could not take a view on Krka’s recognition of the validity of the 947 patent without first examining the question of the existence of potential competition between Krka and Servier. In support of the argument that Krka was a potential competitor of Servier, the Commission produced evidence, which was disregarded by the General Court, demonstrating that Krka was not in fact convinced of the validity of that patent. In addition, the General Court distorted the evidence adduced by the Commission, which the General Court opted to consider selectively and upon which it based its belief as regards Krka’s alleged recognition of the validity of the patent, and put forward alternative, manifestly flawed explanations when interpreting that evidence.

88. It follows from those arguments that the Commission not only claims that the General Court should have examined whether Servier and Krka were potential competitors when the Krka agreements were concluded, but also, and primarily, that the General Court based its analysis concerning the anticompetitive object of those agreements on a partial, if not selective, assessment and a distortion of the evidence in the file.

89. There can be no doubt that such a criticism is relevant to the examination of the substance of the General Court’s finding that the Krka agreements are not anticompetitive, since it could, if it were to prove well founded, indicate that that finding is erroneous and result in the judgment under appeal being set aside. ( )

90. It follows that the plea of inadmissibility based on the alleged ineffectiveness of the first ground of appeal must be rejected.

– Substance

91. According to the Commission, the General Court erred in law in finding, in particular in paragraphs 970, 1026, 1028, 1154 and 1162 of the judgment under appeal, that Krka recognised the validity of the 947 patent and that the steps taken by it further to the EPO decision of 27 July 2006 ( ) did not demonstrate that it was determined to continue its efforts to enter the market despite that decision.

92. As a preliminary point, it is useful to recall that the question whether the rules of competition have been infringed can only be correctly determined if the evidence upon which the decision at issue is based is considered, not in isolation, but as a whole, account being taken of the specific features of the market of the products in question. ( ) The scope of judicial review provided for in Article 263 TFEU extends to all elements of Commission decisions relating to proceedings applying Articles 101 TFEU and 102 TFEU which are subject to in-depth review by the General Court, in law and in fact, in the light of the pleas raised by the parties. ( )

93. Next, it must be borne in mind that the prevailing principle in EU law is that evidence may be freely adduced and that the only relevant criterion for the purpose of assessing the evidence adduced is its credibility. ( ) In order to satisfy the burden of proof incumbent on it, the Commission must gather sufficiently precise and consistent evidence to support the firm conviction that the alleged infringement took place. ( )

94. However, it is not necessary for every item of evidence produced by the Commission to satisfy those criteria in relation to every aspect of the infringement. It is sufficient if the body of evidence relied on by the institution, viewed as a whole, meets that requirement. ( ) The evidence available to the Commission must be capable of being supplemented by inferences and the existence of an anticompetitive practice or agreement may be inferred from a number of coincidences and indicia which, taken together, may, in the absence of another plausible explanation, constitute evidence of an infringement of the competition rules. ( )

95. If the Commission finds that the established facts cannot be explained other than by the existence of anticompetitive behaviour, the finding of an infringement cannot be accepted where the undertakings concerned put forward arguments which cast the facts established by the Commission in a different light and thus allow another plausible explanation of the facts to be substituted for the one adopted by the Commission. ( )

96. Lastly, a distortion of evidence exists where, without recourse to new evidence, the assessment of the existing evidence is manifestly incorrect, ( ) since the General Court has manifestly exceeded the limits of a reasonable assessment of that evidence. ( )

97. Contrary to the view taken by the General Court in paragraph 1016 of the judgment under appeal, those principles, in particular those summarised in point 94 above, apply not only where the Commission must infer the actual existence of an anticompetitive agreement, decision or concerted practice or anticompetitive contacts from fragmentary and sparse evidence. Those principles are also relevant in a situation such as that of the present case, in which the content of the agreements at issue was available to the Commission. ( )

98. In such a situation, it is not, of course, the actual content of those agreements which has to be reconstructed by means of inferences. However, the answer to the question whether the object of that content was to divide the market unlawfully must be deduced not only from that content, but also from the context of the agreements and, where appropriate, the parties’ intention. ( ) The abovementioned principles remain entirely relevant to the interpretation of those contextual elements.

99. In the present case, the Commission examined such contextual elements in order to determine whether Krka was a potential competitor of Servier before the Krka agreements were concluded. In that regard, the Commission explained, in recitals 1680 to 1700 of the decision at issue, that Krka was by far the main generic competitor to challenge Servier’s competitive position as regards the supply of perindopril, that Servier and Krka were already actual competitors vis-à-vis the supply of perindopril in the Czech Republic, Hungary, Lithuania, Poland and Slovenia, and that Krka was a potential competitor on the other EU markets because, first, its product was ready to be launched there, second, the patent-related barriers were not insurmountable, third, it had a number of cooperation partners for several markets and, fourth, it was endeavouring to enter those markets.

100. With regard, more specifically, to Krka’s assessment of the validity of Servier’s patents, the Commission found, first, that there was ample documentary evidence predating the EPO decision of 27 July 2006 to show that Krka was convinced of winning its invalidation action (recital 1685 of the decision at issue).

101. Second, the Commission considered that Krka’s claim that the EPO decision of 27 July 2006 prompted it to cease its efforts to market the alpha form of perindopril erbumine cannot be accepted and that the evidence produced by Krka in that regard was unconvincing in the light of certain evidence that showed that Krka did not accept that decision and remained determined to enter the market with its product (recitals 1686 to 1691 of the decision at issue).

102. The Commission claims that, if the General Court had taken account of the evidence and reasoning contained in the recitals of the decision at issue summarised in points 99 to 101 above, it could not have concluded, in paragraphs 971, 1010, 1011 and 1017 of the judgment under appeal, that Krka recognised the validity of the 947 patent and was dissuaded from continuing its efforts to enter the market further to the EPO decision of 27 July 2006 and the interim injunction of 3 October 2006 ordered in the United Kingdom against Krka. ( )

103. The General Court simply stated, in paragraphs 970 and 1154 of the judgment under appeal, that ‘there were, at the time the settlement and licence agreements were concluded, consistent indications capable of leading the parties to believe that the 947 patent was valid’, and made reference in that regard to paragraphs 967 and 968 of that judgment. In those paragraphs, it summarised certain facts regarding the opposition proceedings relating to the 947 patent before the EPO and the litigation between Krka and Servier before the English courts. ( )

104. However, amongst those facts, the General Court took into account only the EPO decision of 27 July 2006 and the interim injunction ordered against Krka by the High Court of Justice (England & Wales), Chancery Division (Patents Court), on 3 October 2006. In so doing, the General Court failed to consider the following factors, to which the Commission draws attention in this appeal, which are relevant to Krka’s assessment of the validity of the 947 patent on the eve of the signature of the Krka settlement and licence agreements on 27 October 2006:

– Documentary evidence of Krka’s assessment of the EPO decision of 27 July 2006 shows that Krka viewed that decision as ‘shocking’, ‘dreadful’ and biased, that it did not accept the decision’s reasoning and that it was determined not to resign itself to it (recital 1688 of the decision at issue).

– Krka not only continued to challenge the validity of the 947 patent before the EPO after the EPO decision of 27 July 2006, ( ) but, in September 2006, it filed counterclaims for invalidity of the 947 and 340 patents and it applied for summary judgment before the High Court of Justice (England & Wales), Chancery Division (Patents Court) ( ) (recitals 1687 and 1688 of the decision at issue).

– The High Court order made on 3 October 2006 as part of that litigation, granting Servier an interim injunction against Krka and ordering a full trial, ( ) stated that Krka had a solid basis for challenging the validity of the 947 patent (recitals 904 and 1689 of the decision at issue).

– In Hungary, on 13 October 2006 Krka was successful in the legal proceedings brought against an application for interim injunction made by Servier, which was rejected ( ) (recital 1687 of the decision at issue).

– A body of evidence shows that the possible invalidation of the 947 patent was perceived by Servier not as a marginal risk but as a real, concrete possibility (recital 1691 of the decision at issue).

– Krka informed the Commission that Servier believed that Krka had one of the best and most comprehensive pieces of evidence in the opposition before the EPO and the revocation in the United Kingdom (recitals 912, 1688 and 1690 of the decision at issue).

105. The General Court neither explained why it did not take that evidence into account nor a fortiori how, in its view, that evidence is compatible with the finding of Krka’s alleged recognition of the validity of the patent further to the EPO decision of 27 July 2006 and the interim injunction ordered by the UK court on 3 October 2006.

106. First, the General Court did not put forward any evidence that would rebut the Commission’s claim that there was no document contemporaneous to the agreements stating that that decision or that interim injunction altered Krka’s perception of the 947 patent.

107. The Commission acknowledged, in recitals 1688 and 1690 of the decision at issue, that Krka was certainly no longer fully convinced of its case following the EPO decision of 27 July 2006 and that that decision and the injunctions granted in the United Kingdom against Krka and Apotex ( ) had certainly influenced Krka’s assessment of the patent situation. However, according to the Commission’s analysis, Krka was far from giving up on insisting that the 947 patent was invalid, and enjoyed the support of its partners. Nothing precluded a real, concrete possibility of Krka invalidating the 947 patent in a full trial.

108. As the Commission claims, the evidence mentioned in point 104 above confirms that analysis, whereas the evidence in the file does not support the opposing view taken by the General Court.

109. Second, in paragraphs 1010 and 1011 of the judgment under appeal, the General Court relied on a reply by Krka to a request for information from the Commission, contained in recital 913 of the decision at issue, in which Krka had claimed, inter alia, that ‘getting a license and withdrawing oppositions was considered as the best option for Krka at that time’, and that, ‘according to all other scenarios, a launch was not possible earlier than in at least 2 years after July 2006, and even after such period a launch was not warranted (risk that 947 is maintained, development risks for non-alpha)’. The General Court found that that extract ‘support[ed] the conclusion that Krka considered that, without the licence agreement, it would be impossible to enter or remain on the market in the seven Member States covered by that licence agreement because of the 947 patent’.

110. However, by thus attributing greater weight to a statement made by Krka in the course of the procedure before the Commission than to evidence of Krka’s beliefs prior to the conclusion of the Krka agreements, the General Court infringed the principles governing the production of evidence before the Courts of the European Union. In accordance with those principles, subsequent statements made for the purposes of the procedure before the Commission have a lower probative value than contemporaneous evidence and documents concerning the anticompetitive conduct at issue, which were drawn up in tempore non suspecto and directly connected with the facts at issue. ( )

111. Third, in that same vein, it is difficult to understand how Krka’s claim, made during the Commission’s investigation and cited in recital 1738 of the decision at issue, that ‘the opportunity cost of not concluding the Krka Settlement Agreement would amount to “in 3 years well above €10 [million]” of lost profits’ could constitute, as the General Court stated in paragraph 1000 of the judgment under appeal, ‘an additional indication of the fact that it considered the 947 patent was valid’. Those profits corresponded to those expected if it entered or remained on the seven markets covered by the Krka licence agreement, and therefore to an estimate of the commercial value of the licence.

112. However, the Commission is right to claim that it is not possible to infer, as the General Court does, from the fact that Krka estimated the value of the licence thus in the course of the procedure before the Commission that it considered, when the Krka agreements were concluded, that the 947 patent was valid. The General Court appears to infer that interpretation from the notion that that statement by Krka meant that it was convinced, at the time of the conclusion of the agreements, that it was going to lose that amount if it did not obtain a licence from Servier because it would be unable to enter or remain on those markets without such a licence.

113. However, as the Commission points out, there was no evidence to support such an interpretation and, on the contrary, there are strong indications to show that Krka would have remained on the markets covered by the licence without any agreements with Servier, in particular the fact that Krka continued to sell its product in Hungary after the EPO decision of 27 July 2006 and that it successfully defended itself against the application for an interim injunction made by Servier in Hungary (recital 1675 of the decision at issue).

114. Fourth, it is similarly difficult to understand why the General Court gave such paramount importance to the injunction obtained by Servier against Krka before the UK court on 3 October 2006, but did not even mention, in the relevant part of the judgment under appeal devoted to the object of the Krka agreements, that a similar application for an injunction by Servier against Krka had been rejected in Hungary on 13 October 2006. ( )

115. In paragraph 1155 of the judgment under appeal, in the part devoted to the effects of the Krka agreements, the General Court disregarded that fact on the ground that it was a procedure which did not concern any of the countries in which the Commission had found a restriction of competition by effect (France, the Netherlands and the United Kingdom) (see point 39 above). However, that argument is not relevant to an explanation why such a success in litigation by Krka did not influence its perception of the validity of the 947 patent or of its case as regards that patent, whereas, in the General Court’s view, the injunction obtained by Servier in the United Kingdom had such a decisive impact on Krka’s perception. As the Commission explained, using examples, in recitals 1690 and 1697 of the decision at issue, a successful challenge in one jurisdiction could entail a series of challenges in other jurisdictions. This is confirmed by the proceedings brought by Apotex and by its Netherlands subsidiary described in points 23 to 25 above.

116. Furthermore, the statement by the General Court in paragraph 968 of the judgment under appeal that, by the order of 3 October 2006, the UK court ‘granted Servier’s application for an interim injunction and denied the motion brought by Krka on 1 September 2006’ is misleading. The General Court merely mentions in that paragraph the fact that, on 1 September 2006, Krka brought a counterclaim for annulment of the 947 patent, which suggests that that was the claim that was rejected on 3 October 2006. That was not however the case. The General Court fails to clarify in the paragraph that Krka also applied for summary judgment on 1 September 2006. It was only that application which was dismissed by the UK court in its order of 3 October 2006, because in its view the examination of the patent required a full trial. By contrast, the court did not, at that stage, by any means reject the counterclaim for annulment of the 947 patent made by Krka, which remained pending until the proceedings were discontinued as a result of the Krka settlement agreement (paragraph 23 of the judgment under appeal and recitals 904 and 1689 of the decision at issue). As the Commission stated in its pleadings and at the hearing in these appeal proceedings, the judge had recommended that the substantive examination of the patent take place swiftly and ordered that expedited proceedings be held, and the trial was to begin on 21 February 2007.

117. Fifth, as the Commission explains, the interpretation put forward by the General Court to the effect that the EPO decision of 27 July 2006 and the interim injunction granted to Servier against Krka by the UK court on 3 October 2006 were decisive factors that convinced Krka of the validity of the 947 patent and to abandon its efforts to enter the market independently is at odds with other findings by the General Court.

118. For instance, in paragraphs 366 to 370 of the judgment under appeal, the General Court explained that, in view of their provisional nature, such injunctions did not preclude the operation of potential competition, that even judgments on the merits were provisional as long as the possible remedies have not been exhausted, and that a decision confirming the validity of a patent, such as the EPO decision of 27 July 2006 (apart from the fact that it was also still open to appeal and, furthermore, was subsequently annulled ( )), did not in any way prejudge whether or not the generic products, which the patent holder alleged infringed that patent, constituted infringements.

119. Sixth, the alternative explanations provided by the General Court to justify that the evidence that it took into account in the course of its analysis does not rebut the finding of Krka’s alleged recognition of the validity of the 947 patent are unconvincing.

120. In paragraphs 1026 and 1162 of the judgment under appeal, the General Court considered that ‘the fact that Krka continued to challenge Servier’s patents and to market its product even though the validity of the 947 patent had been upheld by the EPO Opposition Division [was] not a decisive factor for the purpose of establishing the existence of a restriction of competition by object, since the fact that Krka continued to exert competitive pressure on Servier can be explained by Krka’s desire, despite the expected litigation risks, to strengthen its position in the negotiations that it was likely to have with Servier with a view to reaching a settlement’.

121. The Commission is right to claim that, by reaching such a conclusion, the General Court made a manifest error of assessment of a point of fact, namely that Krka continued to challenge the 947 patent after the EPO decision of 27 July 2006, without taking account of the abovementioned body of evidence gathered by the Commission and without considering the plausibility of its alternative explanation having regard to that evidence.

122. However, in the light of the evidence gathered by the Commission, which is summarised in point 104 above, there is no basis for the General Court’s belief that Krka was convinced of the validity of the 947 patent and continued to challenge the validity of that patent before the courts solely in order to improve its negotiating position with Servier, and the General Court does not point to any fact from which it could have deduced that interpretation.

123. In addition, as the Commission rightly observes, the General Court contradicted itself when it explained, on the one hand, in paragraphs 963 and 965 to 968 of the judgment under appeal, that the disputes between Servier and Krka were genuine, whilst taking the view, on the other hand, in paragraph 1026 of that judgment, that Krka’s continuation of those disputes was merely a strategic stance adopted in order to improve its position in its negotiations with Servier with a view to a settlement agreement.

124. Seventh, after providing a further unconvincing explanation, the General Court dismissed the Commission’s objection, contained in recitals 1747 to 1756 of the decision at issue and repeated by the Commission in the context of this appeal, that the contents of the Krka settlement and licence agreements did not reflect the patent situations and risks in the countries covered by those agreements. The national equivalent of the 947 patent had not been granted in Poland, the Czech Republic and Slovakia, ( ) but Servier nevertheless wanted to grant a licence for those countries. According to the Commission, this shows that the objective of those agreements was not to reach a compromise based on the merits of that patent, but rather to divide and allocate the markets solely in the economic interest of the parties. The agreements were therefore not based ‘on the difference in patent-related risks for Krka, but on the economic zones of interest, as Latvia and Slovakia belonged to Krka’s “core markets”’.

125. The General Court did not take that objection into account and addressed this issue only in paragraphs 1007 to 1009 and 1027 of the judgment under appeal, in which it considered that the Krka licence agreement had a positive effect on competition on those seven markets, even though the national equivalents of the 947 patent had not yet been granted on some of those markets, and therefore Krka did not need a licence to enter them. In the General Court’s view, the licence nevertheless had the beneficial effect that Krka avoided a subsequent litigation risk, in the event that patents were granted to Servier on those markets in the future. However, that line of argument is insufficient not only to establish the alleged procompetitive effects of the licence, ( ) but also to rebut the Commission’s interpretation that the Krka agreements were not based on the parties’ perception of the patent-related risks on the various markets concerned.

126. Finally, eighth, the General Court’s finding, contained in essence in paragraphs 943 to 947, 963, 965 to 972, 1030 and 1157 of the judgment under appeal, that the actual conclusion of the Krka licence agreement confirmed that Krka recognised the validity of the 947 patent, cannot be accepted.

127. The General Court gave reasons for that conclusion in paragraphs 947, 1030 and 1157 of the judgment under appeal, stating that the conclusion of a licence agreement, which has no purpose for any licensee unless the licence is actually used, is based on the parties’ recognition of the validity of the patent. However, inferring from the fact that a licence agreement is based, in principle or as a general rule, on the recognition of the underlying patent, that, in a specific case, the parties to such an agreement necessarily recognise the validity of the patent at issue, has echoes of a circular line of reasoning. In addition, the implementation of EU competition law would be seriously jeopardised if the parties to anticompetitive agreements could evade the application of Article 101 TFEU simply by giving such agreements a particular form. ( )

128. Since the form taken by an agreement cannot be a determining factor, it therefore falls, as is clear from the case-law cited in points 92 to 96 above, pursuant to the relevant rules on the production of evidence, to the Commission and to the Courts of the European Union to rely on a body of relevant, consistent and convincing evidence to show that, in the specific case, the agreement at issue is to be regarded as a restriction of competition by object.

129. However, in the present case, contrary to the General Court’s findings in paragraphs 1018, 1019 and 1025 of the judgment under appeal, it follows from the examination above that the Commission had in fact gathered such a body of evidence to show that, on the date on which the Krka settlement and licence agreements were concluded, Krka was not convinced of the validity of the 947 patent and was, on the contrary, determined to continue challenging that patent and to enter or remain on the market despite that patent. The General Court was wrong to find, in those paragraphs, that the evidence gathered by the Commission was fragmentary and ambiguous, without having examined that evidence in its entirety and by conducting a manifestly flawed assessment of the evidence examined by it, which it chose selectively.

– Interim conclusion

130. In those circumstances, the Commission is justified in claiming that the General Court infringed the principles governing the production of evidence and its review by the EU judicature. As has been observed, in accordance with those principles, evidence must be assessed as a whole and consistently and the review of that evidence must extend to all elements of Commission decisions relating to proceedings applying Articles 101 and 102 TFEU. ( )

131. In the present case, the General Court’s assessment of the evidence in the file was manifestly selective, as it failed to take account of a significant volume of relevant evidence and proposed interpretations of the evidence considered by it which have no foundation in the file and are unconvincing. The different light which the General Court sought to cast on the facts established by the Commission cannot therefore replace the Commission’s explanation of those facts with an alternative plausible explanation.

132. It follows from the foregoing considerations that the first ground of appeal must be upheld.

133. In view of the significance attributed by the General Court to the finding – which has proved to be unfounded – of Krka’s alleged recognition of the validity of the 947 patent when analysing the anticompetitive object of the Krka agreements, the merits of the first ground of appeal are sufficient on their own for the judgment under appeal to be set aside in so far as it found that it was not established that those agreements constituted a restriction of competition by object.

134. It is, however, appropriate also to consider the other grounds of appeal put forward by the Commission relating to the General Court’s analysis of the anticompetitive object of the Krka agreements, in particular with a view to the disposal of the case by the Court of Justice once the judgment under appeal has been set aside.

(ii) The licence as an inducement for Krka to accept the restrictions of the settlement (second ground of appeal)

135. In the context of its second ground of appeal, the Commission claims that the General Court made several errors of law, distorted evidence and provided insufficient and contradictory reasons when it set about analysing the content and the objectives of the Krka licence agreement as an inducement made to Krka to accept the restrictions contained in the Krka settlement agreement.

136. In recital 1738 et seq. of the decision at issue, the Commission considered that the licence granted to Krka by Servier on the seven markets of Central and Eastern Europe had been a significant inducement for Krka to agree, by means of the settlement agreement, to refrain from competing with Servier on the remaining 18/20 EU markets.

137. In the Commission’s view, the licence constituted a significant inducement for Krka to accept those restrictions because, first, it covered the markets on which Krka had traditionally been present in the European Union, where it achieved its highest margins; second, it gave it the guarantee that Servier would cease threatening it with the implementation of the 947 patent; and, third, it was a sole licence establishing a de facto duopoly between Servier and Krka on the seven markets concerned. The licence thus afforded Krka the certainty of guaranteeing its sales and the limited commercial pressure on those markets ensured that it generated high profits. Krka estimated the value in monetary terms of the advantages granted to be in excess of EUR 10 million (recitals 1738 to 1742 of the decision at issue).

138. For its part, the General Court considered, in paragraphs 948 to 952 of the judgment under appeal, that, as it is justified, in principle, to link a licence agreement, which is based on the recognition of the validity of the patent, to a settlement agreement containing non-marketing and non-challenge clauses, such a link does not constitute a ‘strong indication’ of a reverse payment. It is therefore for the Commission, in order to demonstrate that a licence agreement linked to a settlement agreement actually masks a reverse payment from the patent holder to the generic company, to show that the royalty paid by that company to the patent holder under that licence agreement is abnormally low and that that agreement was not concluded at arm’s length.

139. In paragraphs 975 to 984 of the judgment under appeal, the General Court found that, in the present case, the amount of the royalty payable by Krka to Servier under the Krka licence agreement was not abnormally low and that the Commission had not demonstrated that that agreement did not constitute a transaction concluded at arm’s length. According to the General Court, the Commission therefore failed to establish the existence of a reverse payment constituting an inducement within the context of the Krka settlement and licence agreements.

140. As a preliminary point, it is important to clarify that, contrary to what Servier suggests, the question of whether the General Court was right to conclude that the contractual framework formed by the Krka settlement and licence agreements did not involve a transfer of value from Servier to Krka, the sole quid pro quo for which was Krka’s commitment not to compete, does not concern assessments of facts which, unless they are distorted, fall solely under the jurisdiction of the General Court. On the contrary, that question concerns the legal characterisation of the relevant facts by the General Court and the legal conclusions which it has drawn from them, which comes under the review conducted by the Court of Justice in the context of an appeal. ( )

141. As the Court has found, ( ) settlement agreements such as that in question in the present case constitute restrictions of competition by object if it is clear from all the information available that the net gain from the transfers of value, whether monetary or not, by the manufacturer of originator medicines in favour of the generic company can have no other explanation than the commercial interest of those parties not to engage in competition on the merits. In order to examine whether that is the case, it is necessary to assess whether the net gain arising from the transfers of value by the manufacturer of originator medicines in favour of the generic company may be justified by the existence of any quid pro quo other than refraining from engaging in competition. If that is not the case, it has to be determined whether the net gain is sufficiently large actually to act as an incentive for the generic company concerned to refrain from entering or attempting to enter the market concerned.

142. Contrary to what the General Court held in the judgment under appeal, the Commission demonstrated in the decision at issue that that was indeed the case with the contractual framework formed by the Krka settlement and licence agreements.

143. As the Commission essentially observes, the General Court’s analysis in that regard is vitiated by three errors. First, the General Court did not draw the conclusion that it should have drawn in the light of the fact that the licence offered by Servier to Krka on the seven markets of central and Eastern Europe constituted the quid pro quo for Krka’s commitment not to compete with Servier on the remaining 18/20 EU markets. Next, the General Court focused on the royalty rate of the licence and the fact that the licence was allegedly concluded at arm’s length, without taking account of the contractual arrangement formed by the Krka settlement and licence agreements in its entirety, its objectives and its context. Finally, in so doing, the General Court did not recognise that the licence entailed a significant transfer of value from Servier to Krka.

144. As the Commission states, those errors stem inter alia from the fact that the General Court’s analysis is based on the fiction of a settlement agreement based on the merits of the underlying patent and of a separate licence agreement concluded at arm’s length. However, by – implicitly – taking such a fiction as a basis, the General Court infringed the principles, which are in fact set forth in the judgment under appeal, that, in order to determine whether an agreement has an anticompetitive object, regard must be had to the content of its provisions, its objectives and the economic and legal context of which it forms part. ( )

– The licence as quid pro quo for the commitment not to compete

145. In the first place, the General Court’s analysis contains a contradiction in paragraph 1029 of the judgment under appeal. In that paragraph, the General Court considered that the undisputed fact that the licence was a condition of Krka’s acceptance of the non-marketing and non-challenge clauses in the settlement agreement (as Krka had stated that it had ‘sacrificed’ the markets in Western Europe in favour of the central and Eastern European markets (recital 1748 of the decision at issue)) ‘[did] not establish that the licence agreement was not a transaction concluded at arm’s length’.

146. However, an agreement under which a patent holder grants a generic company a licence on certain markets, the quid pro quo of which is not (or not only) the royalty paid by that generic company for the grant of that licence but rather the commitment by that company not to compete with the patent holder on other markets, cannot be characterised as a transaction concluded at arm’s length. It is not in line with normal market conditions for the quid pro quo for a licence on certain markets to take the form of a commitment not to compete on other markets, particularly where such an arrangement is not justified by differences related to the underlying patent situation.

147. A contractual arrangement of that kind, which involves a transfer of value from the patent holder to the generic company, taking the form of the grant of the licence on certain markets, on the one hand, and a commitment on that company’s part not to engage in competition with that patent holder on other markets, on the other hand, must be examined through the analytical lens established by the Court, as set out in point 141 above, in order to determine whether the transfer of value from the patent holder to the generic company has a quid pro quo from that company other than its commitment not to compete.

148. As the Commission rightly argues, contrary to what is suggested, inter alia, in paragraphs 943, 956, 963 and 974 of the judgment under appeal, there is no reason not to use that analytical lens in the present case on the ground that the agreement concluded took the form of a licence and the transfer of value a non-monetary form, namely the assignment by Servier to Krka of a proportion of its market shares on the markets covered by the licence. As I have already stated in points 127 and 128 above, the implementation of EU competition law would be seriously jeopardised if the parties to anticompetitive agreements could evade the application of Article 101 TFEU simply by giving such agreements a certain form. The determining factor is not the form taken by an agreement, but rather whether the content, objectives and context of an agreement reveal that its object is to restrict competition.

149. Therefore, the facts, referred to in paragraphs 943 to 948, 953 and 963 to 969 of the judgment under appeal, that there were genuine patent disputes pending between Servier and Krka and that the licence was connected with those disputes did not prevent such an agreement from being anticompetitive in nature, as the Commission rightly explained in recital 1709 of the decision at issue. That is all the more true because it has already been shown, in points 124 and 125 above, that the content of the Krka settlement and licence agreements did not reflect the patent situations and risks in the countries covered by those agreements. It does not appear therefore that those settlement and licence agreements reflected a compromise related to the underlying patent situation. ( )

– The licence as an inducement

150. In the second place, if the General Court’s analysis of the Krka settlement and licence agreements is viewed through the analytical lens and in the light of the principles set out in points 141 and 144 above, the Commission appears justified in claiming that, in paragraphs 963, 973 to 984 and 1029 of the judgment under appeal, the General Court gave too much weight to the question of whether the licence itself, viewed independently from the settlement agreement, was in line with normal market conditions and whether the royalty rate was abnormally low.

151. As the Commission rightly argues, analysis of that question in isolation is meaningless. The reason for this is that, on the basis of an overall analysis of the settlement and licence agreements, it appears that the grant of the licence itself (regardless of the royalty rate and the question of whether the licence was granted in line with normal market conditions) was the quid pro quo offered by Servier to Krka for the latter’s commitment not to engage in competition on the 18/20 Western European markets covered by the settlement. The Krka settlement agreement does not mention any other specific costs or performance on Krka’s part for the benefit of Servier which could explain why Servier granted Krka a licence (recitals 1706 and 1735 of, and footnote 2354 to, the decision at issue).

152. The context of the Krka settlement and licence agreements, which were intrinsically linked (recitals 1701 to 1704, 1710, 1745 and 1746 of the decision at issue), the objectives of those agreements and the parties’ intentions, as set out by the Commission in recitals 1670 to 1763 of the decision at issue, reveal the real reasons and show how Servier and Krka divided up the EU markets and how those two operators established a duopoly in the seven markets covered by the licence. Those factors, of which the General Court took insufficient account, demonstrate that the licence granted to Krka was the quid pro quo for the commitment not to compete contained in the settlement.

153. Krka was Servier’s most advanced potential competitor in the supply of perindopril in the European Union, in particular on Servier’s largest global markets, such as France and the United Kingdom. In addition, Krka was already an actual competitor on some of the seven markets covered by the licence which represented its traditional markets and on which it enjoyed a significant commercial presence (recitals 1673, 1674, 1676, 1681, 1716, 1721, 1738 and 1740 of the decision at issue). Hence, it does not appear plausible that Krka would have relinquished its presence on those markets and its determination to attempt to enter the other EU markets in return for a monetary payment, like the other generic companies with which Servier concluded settlement agreements.

154. As I have already had occasion to point out, a value transfer taking the form of a presence on a market permitted by the patent holder gives added value to a generic company by comparison with a simple monetary transfer. That added value consists of the possibility of distributing its own product and of building up or retaining its customer base, its distribution networks and its brand image. ( ) This is especially important on a ‘branded generic’ market, where doctors’ prescriptions do not refer to the international non-proprietary name of a medicinal product, that is to say, not to its compound or its active ingredient but rather to the brand of medicinal products, and therefore generic companies need to promote their own brands. This was the case on the markets concerned by the Krka licence agreement (recital 1726 of the decision at issue).

155. Since it was unable to eliminate Krka entirely from the market, as it did with the other generic companies with which it concluded agreements, Servier therefore offered Krka a share of the monopoly revenues generated precisely by the elimination of the other potential generic competitors and the risk of the opening of the market to generics, which would have resulted in a significant fall in prices. By eliminating that risk and ensuring Krka’s controlled entry to only part of the market, Servier and Krka were able to maintain higher prices and far higher margins than if the market were opened to generics (recitals 1721, 1724, 1728 to 1730 and 1819 of the decision at issue). As the Commission notes, without the quid pro quo of the commitment not to compete on the markets not covered by the licence, Servier had no reason to grant a licence to Krka which it had refused in the past.

156. For Krka, entry to just part of the market, as agreed with Servier, coupled with the certainty that Krka and Servier would remain the only operators on the market and that there would be no other generic entrants, ( ) was ultimately preferable to continuing to challenge Servier’s position throughout the European Union. One particular reason for this was that a victory in the patent litigation and an independent entry to the market would have opened the market to all generic companies, which would have led to a dramatic fall in prices and competition between those different companies. This is why, in Krka’s internal communications from August/September 2005 and April 2006, to which the Commission refers in these appeal proceedings and which were not taken into account by the General Court, it was stated that the annulment of the 947 patent ‘[would] unfortunately open the market for everybody’ and that ‘a successful opposition namely opens the market to everybody’ (recitals 844, 874, 914, 1759 and 1763 of the decision at issue).

157. Ultimately, the option offered by Servier of being the first and only generic company to remain on or enter part of the market was therefore preferable to Krka, particularly since, by virtue of the agreements with Servier, that entry was certain, whereas continuing with litigation and plans for an independent entry to the markets on which it was not yet present entailed risks and necessitated investments and resources. ( ) The fact that the profits that Krka was able to make from the licence corresponded to the profits that it could have expected on the three largest markets in Western Europe, which it opted to forgo, confirms that interpretation (recitals 1733, 1739 to 1744, 1748, 1753 to 1756 and 1760 of, and footnotes 2348 and 2368 to, the decision at issue).

158. An overall analysis of the Krka settlement and licence agreements and of their context, formed inter alia by the agreements concluded by Servier with the other generic companies and Servier’s global anti-generics strategy (see inter alia recitals 4 to 9, 1819, 2774, 2919, 2929 and 2932 of the decision at issue), therefore confirms that the Krka agreements were a ‘joint activity [by Servier and Krka] to control the market’, in the words used in an email from Krka dated 29 September 2005. Moreover, Krka contemplated the conclusion of an agreement with Servier concerning the 947 patent in internal communications of April 2006, to which the Commission refers in these appeal proceedings (recitals 849, 853, 873, 874, 1759, 1760 and 1763 of the decision at issue). These elements were likewise disregarded by the General Court.

159. It follows that the Commission could rightly conclude, in recital 1745 of the decision at issue, that, whilst a licence could be a legitimate means for a patent holder to grant other market players the right to use the know-how protected by the patent, the Krka licence agreement had been problematic as it had served as an inducement to secure restrictions on competition in the 18/20 markets not covered by the licence as part of the market sharing arrangement. The examination of the evidence put forward by the Commission, contained in points 145 to 158 above, has demonstrated that the Commission found that there had been a transfer of value from Servier to Krka under the Krka licence agreement, in the form of the market shares assigned by Servier to Krka, and that the quid pro quo for that value transfer was Krka’s commitment not to compete with Servier on the remaining EU markets not covered by that licence agreement.

– The quantification of the value transferred to Krka by means of the licence

160. In this regard, in the third place, the Commission is also justified in claiming that, by focusing, in paragraphs 963, 973 to 984 and 1029 of the judgment under appeal, on whether or not the royalty payable under the Krka licence agreement was abnormally low, the General Court failed to examine whether the net gain from the transfer of value made by Servier to Krka under that agreement was sufficiently large to have actually induced Krka not to enter or attempt to enter the markets not covered by the licence.

161. It should be recalled that Krka estimated the commercial value of the licence, that is to say, the value of its presence on the duopolistic markets covered by the licence, at more than EUR 10 million in three years (recitals 1738 and 3162 of, and footnote 4112 to, the decision at issue). The Commission estimated that the operating margin that Servier sacrificed for Krka’s benefit under the licence was even higher still (recital 1739 of the decision at issue).

162. The level of the royalty payable by Krka to Servier to use the licence was fixed at 3% of Krka’s net sales on the markets covered by the licence (recital 910 of the decision at issue). The royalties came to approximately EUR 1.1 million over a period of four years for a turnover of around EUR 30 million (recital 1739 of, and footnote 2350 to, the decision at issue).

163. It is clear from those figures that the net gain from the value transferred by Servier to Krka under the Krka licence agreement came to approximately almost EUR 9 million at least in terms of the value of the licence for Krka, assuming that the EUR 10 million in profits estimated excluded the cost of the royalties. As for the margin sacrificed by Servier, a margin higher than Krka’s profits on account of Servier’s higher prices (recital 1739 of the decision at issue), the amount of the net gain from the value transferred by Servier to Krka under the licence would be even higher.

164. In paragraphs 977 to 981 of the judgment under appeal, the General Court considered that it is not necessarily abnormal that the rate of an operating surplus greatly exceeds the royalty rate of a licence, that the royalty represents only a small proportion of the licensee’s margins and that that rate is calculated on the basis of the sales price of that licensee’s product. In addition, the licence was not exclusive, which limited its advantageousness to Krka.

165. However, such general considerations cannot override the finding that, specifically, in the present case, the almost EUR 9 million (in terms of the value of the licence for Krka (see point 163 above)) transferred by Servier to Krka cannot be explained by any other quid pro quo from Krka than its commitment not to engage in competition with Servier on the 18/20 EU markets not covered by the Krka licence agreement. The General Court, whilst mentioning, at various points in the judgment under appeal, the royalty rate of 3% (paragraphs 975, 977, 983 and 1029 of the judgment under appeal), on the one hand, and Krka’s estimate of the profits under the licence to be EUR 10 million (paragraph 1000 of the judgment under appeal), on the other hand, clearly did not relate those figures to one another in order to determine the net gain from the value transferred by Servier to Krka and to examine whether that gain could be explained other than by Krka’s commitment not to compete under the Krka settlement agreement.

166. Contrary to the view taken by the General Court in paragraph 983 of the judgment under appeal, the finding that the transfer of value made by Servier to Krka under the licence agreement could not be explained by considerations limited to the economic value of the patent to which the licence relates was therefore not called into question. The General Court did not invalidate the finding made by the Commission in recital 1739 of the decision at issue that if the Krka licence agreement had been negotiated without any additional considerations related to the non-licensed markets, a rational patent-holding licensor established on the market would have at least asked for a royalty close to the forgone profit margins on the sales captured by the licensee.

167. As the Commission rightly observes, the General Court’s considerations do not take into account that Servier’s forgone margin constituted a net value transfer from Servier to Krka, that the fact that the royalty represented a small fraction of Krka’s profits in the countries covered by the licence shows that the value of the licence was sufficiently great to convince Krka to abandon the other 18/20 EU markets, and that the fact that the licence was legally non-exclusive did not prevent it from offering Krka a de facto duopoly with Servier, thus guaranteeing a significant competitive advantage and a share of the profits ( ) (recitals 913 and 1738 to 1742 of the decision at issue).

168. By failing to take due account of the objectives of the Krka settlement and licence agreements in their entirety, as revealed by the context of those agreements, which is set out in points 145 to 158 above, the General Court not only refused to recognise that the value transferred by Servier to Krka under the licence consisted of the margins sacrificed by Servier for the benefit of Krka on the markets covered by that licence. In addition, the General Court also refused to recognise that that value likewise stemmed from the fact that Servier guaranteed that Krka could retain its high prices by virtue of the duopoly established between those two operators and the closure of the market to other generic competitors. The value transferred by Servier to Krka therefore also consisted in the preservation of that situation. Under the contractual arrangement between Servier and Krka, Krka allowed Servier to retain its monopoly on the markets not covered by the licence and, in exchange, Servier shared the revenues of its monopoly with Krka on the markets covered by that licence.

169. It follows that the complaints made by the Commission against the considerations of the General Court set out in paragraphs 992 to 997 of the judgment under appeal must likewise be upheld.

170. In those paragraphs, the General Court explained that the Commission’s analysis to the effect that the licence granted to Krka on the seven central and Eastern European markets constituted an inducement for it to commit not to compete with Servier on the remaining 18/20 EU markets cannot be accepted. In the General Court’s opinion, agreeing with that view would mean that the wider the scope of a licence agreement, the greater the inducement and thus the easier it would be to find there to be a restriction by object. Yet, this would be at odds with the fact that a licence is, by definition, procompetitive. Furthermore, accepting the Commission’s analysis would mean that, when linking a settlement agreement to a licence agreement, a patent holder would be obliged to grant a licence over the entire territory covered by the settlement agreement. This would not, however, respect that patent holder’s patent rights.

171. Such general considerations are incapable of revealing an error on the Commission’s part in its analysis of the Krka agreements. That analysis is focused on the specific and concrete objectives and conditions of those agreements, which indicate that, in the circumstances of the present case, the Krka licence agreement constituted the quid pro quo for the commitment not to compete under the Krka settlement agreement. The sole consequence of that finding for future agreements is that such agreements will be anticompetitive if analysis of them reveals that there is a significant transfer of value by the patent holder to a potential generic competitor which cannot be explained other than by the latter’s commitment not to compete with the former.

172. Finally, in this regard, the Commission’s last complaint under this ground of appeal, which is directed against the General Court’s findings in paragraph 998 of the judgment under appeal, must also be upheld. In that paragraph, the General Court considered that an ‘asymmetric’ licence agreement such as that at issue here, which did not cover the entire territory covered by the settlement agreement, did not constitute a sufficient inducement for the generic company to agree to the restrictions under that settlement agreement. In the General Court’s view, for such an ag