IN WHICH BOTH FIRMS WERE TO HOLD SHARES AND APPOINT DIRECTORS . THE FORMATION OF THESE JOINT SUBSIDIARIES WOULD HAVE HAD THE EFFECT OF BRINGING THE PRODUCTION OF RAW PENICILLIN AND 6-APA AND INVESTMENT UNDER JOINT CONTROL . SINCE EACH FIRM WAS TO BE EQUALLY REPRESENTED , BOTH IN THE MANAGEMENT OF THE SUBSIDIARY AND ON THE COORDINATING COMMITTEE , EITHER WOULD HAVE BEEN ABLE TO VETO ANY MANAGEMENT DECISION WITH WHICH IT DID NOT AGREE . THE RESULT WOULD INEVITABLY HAVE BEEN THAT OUTPUT WOULD HAVE BEEN DETERMINED BY JOINT AGREEMENT ; NEITHER FIRM WOULD HAVE BEEN ABLE , WITHOUT THE OTHER'S APPROVAL , TO INCREASE THE QUANTITIES AVAILABLE TO IT FOR RESALE TO OTHER FIRMS OR FOR PROCESSING , AND HENCE TO INCREASE , TO THE DETRIMENT OF THE OTHER , THE QUANTITIES SUPPLIED TO THE MARKET BY IT .
IT WAS NOT POSSIBLE TO REGARD SUCH AN EXTENSIVE COMPETITIVE RESTRICTION ON INVESTMENT AND PRODUCTION AS INDISPENSABLE TO THE SPECIALIZATION AGREEMENT .
( C ) THE NO-CHALLENGE CLAUSE IN THE LICENSING AGREEMENT HAS ALSO BEEN REMOVED AS AN UNNECESSARY RESTRICTION . IF GIST-BROCADES AND BAYER , TWO OF THE WORLD'S LARGEST 6-APA MANUFACTURERS , HAD CONTINUED TO AGREE NOT TO CONTEST THE VALIDITY OF EACH OTHER'S PATENTS , THE RESULT MIGHT HAVE BEEN THAT THIRD PARTIES WOULD HAVE BEEN PREVENTED FROM EXPLOITING FREELY FOR THE BENEFIT OF THE CONSUMER PROCESSES WHICH DID NOT IN FACT MERIT THE PROTECTION OF A PATENT .
( D ) ON THE OTHER HAND , THE REQUIREMENT ON THE PARTIES TO ISSUE LICENCES BOTH IN RESPECT OF IMPROVEMENTS TO THE EXISTING PROCESSES AND OF NEW 6-APA MANUFACTURING PROCESSES IS AN INDISPENSABLE PART OF THE SPECIALIZATION SCHEME , SINCE IT PERMITS THE OPTIMUM USE OF PLANT FOR THE LATEST AND MOST ECONOMIC PROCESSES . SINCE THE LICENCES ARE NOT TO BE EXCLUSIVE , THEY CAN BE ISSUED TO OTHER FIRMS . AN OBLIGATION SHOULD BE IMPOSED WHICH WILL ENABLE THE COMMISSION TO SUPERVISE THE OPERATION OF THIS CLAUSE .
( E ) THUS AGREEMENTS , AS AMENDED , NO LONGER CONTAIN ANY RESTRICTIONS WHICH ARE NOT ECONOMICALLY INDISPENSABLE . THE DECISIVE FACTOR IS THAT NEITHER ON PAPER NOR IN PRACTICE IS EITHER FIRM IN A POSITION TO PREVENT OR HINDER FREE TRADE WITHIN THE COMMUNITY IN 6-APA , WHETHER IT BE MANUFACTURED BY GIST-BROCADES' , BAYER'S , OR ANY OTHER PROCESS .
4 . THE AGREEMENTS DO NOT AFFORD THE UNDERTAKINGS CONCERNED THE POSSIBILITY OF ELIMINATING COMPETITION IN RESPECT OF A SUBSTANTIAL PART OF THE PRODUCTS IN QUESTION .
( A ) IN CONSIDERING THE QUESTION OF EXEMPTION THE MARKET SITUATION WITHIN THE COMMON MARKET CANNOT BE TAKEN IN ISOLATION , BECAUSE IT IS SO CLOSELY ASSOCIATED WITH THE SITUATION ON THE WORLD MARKET . BOTH RAW PENICILLIN AND 6-APA ARE MARKETED WORLDWIDE WITHOUT REGARD TO ORIGIN . TRANSPORT COSTS ARE NOT SIGNIFICANT . MANUFACTURERS FROM THIRD COUNTRIES OFFER THEIR PRODUCTS FOR SALE WITHIN THE COMMON MARKET AND MANUFACTURERS FROM WITHIN THE COMMUNITY ARE