Antitrust and Competition Law Update: F. Hoffman-La Roche Ltd. v. Empagran: Supreme Court Restricts Extraterritorial Reach of U.S. Antitrust Laws

On June 14, the U.S. Supreme Court issued an important opinion on the extraterritorial reach of U.S. antitrust laws in F. Hoffmann-La Roche Ltd. v. Empagran, S.A.1 The opinion, written by Justice Breyer, restricts the extraterritorial application of the antitrust laws under the Foreign Trade Antitrust Improvements Act of 1982 (FTAIA). The Court unanimously held that purchasers in overseas markets claiming injury from price fixing (or other antitrust violations) cannot sue in U.S. courts by alleging that they were harmed by conduct that also injured consumers in the United States, at least absent allegations that injury to U.S. consumers facilitated the harm to them. The decision, however, leaves open some questions whether such antitrust claims can be redressed in U.S. courts in limited circumstances

antitrust and trade regulation bulletin FTC Releases Report on Intellectual Property and Antitrust

Last year the FTC and the Department of Justice jointly held hearings focused on the current balance of competition and patent law and policy. (See our December, 2001 Antitrust and Trade Regulation Bulletin at www.haledorr.com/antitrust.) The hearings spanned more than 24 days, involving more than 300 panelists and 100 separate written submissions. The first tangible by-product of those sessions came on October 28, 2003, with the release of a 266-page FTC report containing specific recommendations for changes in the existing patent system (the Patent Report)(http://www.ftc.gov/opa/2003/10/creport .htm). A second, joint report with DOJ, containing specific recommendations for antitrust, is promised for the future

The Antitrust Duty to Deal and Intellectual Property Rights

This Article discusses how courts have addressed so-called ‘ duty-to-deal antitrust claims involving intellectual property, and what they should do in those circumstances to ensure appropriate deference to the competition goals of intellectual property doctrine. Part II discusses duty-to-deal principles in the general case, where intellectual property rights are not at issue, noting that hard and fast rules have yet to emerge. Part III discusses the approaches courts have taken in the intellectual property context and contends that, although many courts have conducted their analyses with a view to the objectives of patent law, at least two have not, with potentially detrimental consequences for the preservation of patent rights. Part IV discusses two recent cases involving significant antitrust and intellectual property issues—In re Intel Corp. and United States v. Microsoft. Each of the cases highlights a different facet that courts must consider as they confront an increasing number of cases with intellectual property and antitrust implications. The Article concludes by suggesting that any doctrine endeavoring to navigate the waters of intellectual property/antitrust cases must devote considerable attention to patent law and its objectives. When that attention is given, there are only a few circumstances (involving intellectual property rights) in which a duty to deal should be imposed

PHARMABULLETIN Issue 3, Fall 2005

On August 15, 2005, the Food and Drug Administration (FDA) and the Association of American Medical Colleges released a joint report that examines possible steps to accelerate drug discovery and development. The report, entitled Drug Development Science: Obstacles and Opportunities for Collaboration Among Academia, Industry and Government, is the product of a two-day conference among leaders from the pharmaceutical industry, academia, and FDA. The goal of the conference and the report was to explore means of overcoming the high failure rate for tentative drug candidates

Pharma Bulletin - Spring 2005

FDA to Create Drug Safety Board In February 2005, the Food and Drug Administration (FDA) announced that it will create a new independent Drug Safety Oversight Board (DSB) to oversee the management of drug safety issues within the Center for Drug Evaluation and Research (CDER). The FDA Commissioner will appoint individuals from the FDA and medical experts from other Health and Human Services agencies and government departments to the DSB, which also will consult with other medical experts and patient and consumer group representatives. Additionally, the FDA is proposing a new “Drug Watch” web page for emerging data and risk information, and anticipates an increased use of information sheets written for healthcare professionals and patients. Because of the potential concerns associated with disseminating emerging information prior to regulatory action, the agency has stated it will solicit public input. The FDA will issue draft guidance on procedures and criteria for identifying drugs and information for the Drug Watch web page

PHARMABULLETIN Issue 2, Summer 2005

In May 2005, the Food and Drug Administration (FDA) issued draft guidance on the type of information to be posted on its new “Drug Watch” website—a site intended to identify drugs for which it is actively evaluating early safety signals. At this time, the FDA plans only to post information on drug products regulated by the Center for Drug Evaluation and Research, therefore vaccines, blood products and medical devices shall be excluded

The Article 82 EC Abuse Concept: What Scope is There for Modernization?

On 30 September 2004, Wilmer Cutler Pickering Hale and Dorr LLP, the University of Nyenrode, and Global Competition Review co-sponsored a seminar on the reform of Article 82 EC by the European Commission. The seminar raised a great deal of interest amongst members of the legal community and attracted a large attendance. The speakers included some of the most well-known top-level policy makers, academics, and practitioners in the field of competition law. Over the last two years, there have been numerous calls for modernization of the way in which Article 82 of the EC Treaty is applied by the European Commission and, with decentralization in mind, by 25 national competition authorities and many more national courts. Modernization in other areas has involved a greater focus on the economic effects of the relevant practice. In Article 82 EC cases, enforcement has, however, been more based on the perceived object of a criticized practice with the effect being inferred from market power. Classic positions on fidelity market power. Classic positions on fidelity rebates and the special responsibilities of dominant companies have also been reaffirmed recently by the European Court in judgments such as Michelin II, Masterfoods II, and BA/Virgin. The aim of the seminar was to look at the concepts underlying the current law in relation to rebates and tying and bundling to compare how EU and US enforcers deal with such issues and to make suggestions for possible European Commission guidelines on Article 82 EC enforcement practice

Antitrust and Competition Law Update: Tetra Laval--A landmark judgement on EC Merger Control

On 15 February 2005, the European Court of Justice (ECJ) dismissed the European Commission’s appeal in the Tetra Laval/Sidel merger case.2 The ECJ’s judgment establishes two significant principles that apply beyond the facts of this particular case:The judgment confirms that the Court of First Instance (CFI) for all practical purposes will continue to be the ultimate arbiter of disputes about the Commission’s use of evidence and economic assessment in merger control proceedings. The ECJ has signaled that it will generally not entertain appeals asserting that the CFI engaged in excessive scrutiny of the Commission’s assessment and therefore overstepped the permissible boundaries of judicial review. Had the ECJ upheld the arguments raised by the Commission, this may well have had a chilling effect on the CFI’s willingness to subject the Commission’s merger decisions to strict scrutiny. This in turn would have severely limited the effectiveness of judicial review, in particular in the age of the Commission’s “more economicsbased approach” and the increasing importance of complex factual and economic evidence in merger cases. • While the judgment does not preclude prohibition of conglomerate mergers under the Merger Regulation, it imposes stringent legal and practical constraints on the Commission’s ability to challenge such mergers on the basis of “leveraging”- type theories of competitive harm: Finding that “the chains of cause and effect [underlying leveraging theories] are dimly discernible, uncertain, and difficult to establish”, the ECJ required a particularly high quality of evidence to support a conclusion that the leveraging developments will occur following the merger. By requiring that the Commission examine on a case-by-case basis whether behavioral commitments (such as not to bundle different products) might be effective, the ECJ’s judgment makes it less likely that the Commission will pursue leveraging theories in merger review. The judgment effectively compels the Commission to reassess its method of evaluating commitments, which currently calls for the rejection of even the most carefully crafted long-term behavioral commitments that adequately address conglomerate concerns

Schering-Plough Corp. v. Federal Trade Commission: Eleventh Circuit Rejects the FTC’s Position on “Reverse Payments” in Patent Suit Settlements

In recent years, the Federal Trade Commission (“FTC” or the “Commission”) has investigated several settlement agreements between pioneer and generic drug manufacturers involving “reverse payments.” In the view of the FTC, reverse payments are cash that a pioneer drug manufacturer pays to a generic manufacturer who has challenged the patent(s) protecting the pioneer drug, in exchange for the generic manufacturer’s agreement to delay market entry. Such payments sometimes occur in the settlement of patent infringement actions. The Commission has been extremely skeptical of reverse payments, viewing them as objective indicia of intent to illegally share monopoly profits that the delayed generic entry perpetuates. It has successfully challenged settlement agreements that included reverse payments involving the market entry of generic Cardizem (hypertension treatment) and generic Hytrin (hypertension and angina treatment)