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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> The Secretary of State for Health & Anor v Servier Laboratories Ltd [2019] EWHC 1004 (Ch) (17 April 2019) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2019/1004.html Cite as: [2019] EWHC 1004 (Ch), [2019] 5 CMLR 6 |
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HC-2012-000189 HC-2012-000188 |
BUSINESS AND PROPERTY COURTS
OF ENGLAND AND WALES
COMPETITION LIST (ChD)
London, EC4A 1NL |
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B e f o r e :
____________________
THE SECRETARY OF STATE FOR HEALTH AND ANOTHER |
English Claimants |
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- and – |
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(1) SERVIER LABORATORIES LIMITED (2) SERVIER RESEARCH AND DEVELOPMENT LIMITED (3) LES LABORATOIRES SERVIER SAS (4) SERVIER SAS |
Defendants |
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And between |
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THE SCOTTISH MINISTERS AND OTHERS |
Scottish/NI Claimants |
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- and – |
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(1) SERVIER LABORATORIES LIMITED (2) SERVIER RESEARCH AND DEVELOPMENT LIMITED (3) LES LABORATOIRES SERVIER SAS (4) SERVIER SAS |
Defendants |
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And between |
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THE WELSH MINISTERS AND OTHERS |
Welsh Claimants |
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- and – |
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(1) SERVIER LABORATORIES LIMITED (2) SERVIER RESEARCH AND DEVELOPMENT LIMITED (3) LES LABORATOIRES SERVIER SAS (4) SERVIER SAS |
Defendants |
____________________
Julian Gregory, (instructed by RPC LLP) for the Scottish / NI Claimants
Josh Holmes QC, (instructed by Geldards LLP) for the Welsh Claimants
Kelyn Bacon QC, Daniel Piccinin (instructed by Sidley Austin LLP) for the Defendants
Hearing dates: 6-7 March 2019
____________________
Crown Copyright ©
Mr Justice Roth:
INTRODUCTION
THE EUROPEAN PROCEEDINGS
"… the Commission wrongly and artificially restricted the relevant market for finished products to the single molecule of perindopril, by excluding fifteen other enzyme conversion inhibitors available on the market."
The 15th plea challenges the finding of dominance on the basis that this rested on the erroneous definition of the market challenged by the 14th plea.
THE ENGLISH PROCEEDINGS
"49. ACE inhibitors are typically prescribed on a long-term basis and NHS clinicians will take different considerations into account on the one hand when deciding which ACE inhibitor to prescribe at the outset of treatment, and on the other hand when deciding whether to continue treatment with the same ACE inhibitor or to switch the patient to another ACE Inhibitor. Factors which influence NHS clinicians in choosing whether to prescribe a particular ACE Inhibitor at the outset of treatment include the following:
49.1 NHS clinicians will take into account the extent, quality and specificity of the evidence base for the following:
49.1.1 the therapeutic benefit of using an ACE Inhibitor to treat the particular indication for which the prescription is being written;
49.1.2 the presence or absence of relevant side-effects and interactions with drugs used for other conditions;
49.1.3 reasons why a drug should not be prescribed for particular groups of patients or patients suffering from particular conditions ("contra-indications").
49.2 NHS prescribers will prescribe ACE inhibitors for which the evidence base in respect of the matters set out at paragraph 49.1 is more substantial and/or of higher quality and/or more specific in preference to ACE inhibitors for which the evidence base is less substantial and/or of lower quality and/or less specific. In assessing the quality and specificity of the evidence base, NHS prescribers will prefer to prescribe ACE inhibitors for which there have been large-scale randomized controlled trials showing a beneficial therapeutic effect specifically in respect of relevant indications, the absence of any relevant contra-indications, and an acceptable or manageable level of side-effects and will take into account the facts and matters set out at paragraph 49A below.
49.3 NHS prescribers will prescribe ACE inhibitors in respect of which the starting and/or target doses for the particular indication for which the prescription is being written have been determined from large-scale randomized controlled trials in preference to other ACE inhibitors in respect of which the starting and/or target doses have not been similarly determined for that particular indication. In that regard NHS prescribers will take into account the facts and matters at paragraphs 48 and 49A.
49.4 NHS prescribers will take into account the extent to which NICE and/or other NHS bodies recommend the use of particular drugs for the treatment of particular indications as set out at paragraph 54 below.
49.5 NHS prescribers may be influenced by the marketing activity of pharmaceutical companies, in particular through the funding of research into particular drugs in order to develop the evidence base for those drugs, and through the active dissemination of information as to the evidence base for prescribing particular drugs.
49A. When deciding whether to continue treatment with the same ACE Inhibitor or to switch the patient to another ACE Inhibitor (or another anti-hypertensive drug), an NHS clinician will consider the matters set out above, but in addition will take into account (i) the experience of the patient with the existing ACE inhibitor: and/or the risk that switching the patient to a different ACE inhibitor will cause undesirable side-effects: and/or (ii) the risk that switching the patient to a different ACE inhibitor will cause a loss of adequate control of blood-pressure, whether temporary or permanent. For long-term patients, ACE inhibitors are therefore an 'experience good', i.e. products for which exact information concerning the qualities of the product is acquired through consumption and in respect of which consumers are typically inclined to continue using the product for which the valuation (here efficacy and side-effects) is known rather than switching to another product for which the respective valuation is uncertain, (See Decision ¶2434)."
"that either (i) ACE inhibitors other than Perindopril or (ii) ARBs would have at any material time been a clinically inappropriate choice for prescribers in most circumstances in which Perindopril has been prescribed."
That plea was subsequently clarified by way of a response to a request for further information, as follows:
"The Defendants do not accept that there are any circumstances in which it would not have been clinically appropriate to prescribe another ACE inhibitor instead of Perindopril, except where the patient was allergic to or intolerant of all alternative ACE inhibitors."
i) "ACE inhibitors exert a 'class effect' and there was no clinical difference between Perindopril and the other ACE inhibitors already available in generic form. NHS prescribers could therefore prescribe these ACE inhibitors as an alternative to Perindopril";
ii) the claimants should therefore have taken all reasonable steps to encourage switching from the prescription of perindopril to the prescription of cheaper alternative ACE inhibitors in generic form, but failed to do so, or to take sufficient steps to ensure that the various specified measures of encouragement were complied with;
iii) accordingly, the claimants failed to mitigate their loss and/or those events broke the chain of causation and/or rendered any damage too remote; and
iv) as regards the claim in tort for unlawful means, the claimants were contributorily negligent.
THE GENERAL COURT JUDGMENT
"… as regards Article 102 TFEU, the Court considers that it has not been established that the relevant finished goods market was limited to perindopril. Since Servier's dominant position is not demonstrated in that market or in the technology market, the existence of an abuse of that position is called into question, so that Article 6 of the contested decision, relating to the finding of this infringement, must be annulled."
"1368 First, by their first complaint, the applicants criticise the Commission for having disregarded the peculiarities of the pharmaceutical sector in that it based its analysis of the relevant market mainly on the price of medicinal products and not on therapeutic substitutability. That complaint is based on two limbs, the first being that the Commission did not take into account all the elements of the economic context, the second that the Commission attaches excessive importance to the price factor.
1369 Next, by their second complaint, they challenge the Commission's argument that the ACE inhibitors were not sufficiently substitutable from a therapeutic point of view. They challenge the distinction between perindopril and other ACE inhibitors in terms of efficacy and side effects, the phenomenon of "inertia" of physicians concerning new patients, the low propensity to change patients in continuous treatment and the Commission's analysis of promotional efforts.
1370 Finally, by their third complaint, the applicants contest, in the alternative, the methodological shortcomings of the Commission's econometric analysis of natural events in order to demonstrate that the ACE inhibitors did not exercise significant competitive constraints on perindopril."[4]
"1418 By their second complaint, the applicants maintain, in essence, that the Commission disregarded the therapeutic substitutability between the ACE inhibitors. They argue, firstly, that the Commission wrongly considered that perindopril was differentiated from other ACE inhibitors by particular qualities, secondly that competition between the ACE inhibitors was keen with regard to new patients, thirdly that the Commission underestimated the propensity to change drugs of patients treated with perindopril and, finally, that promotional actions are one of the essential dimensions of competition in the relevant market."[5]
(i) Distinction between Perindopril and other ACE inhibitors in terms of efficacy and side effects
a) basic information regarding mode of action, main indications, contraindications and side effects;
b) the ATC classification system;
c) medical recommendations;
d) medical studies;
e) policies implemented by local health authorities in the UK;
f) Servier's internal documents;
g) the Commission's survey of prescribers;
h) replies from manufacturers of other ACE inhibitors to questions put by the Commission.
"1481 In the light of all the documents in the file, it must be concluded that there is no significant difference between perindopril and other ACE inhibitors in therapeutic terms, including in terms of efficacy and side effects. There is no evidence in the record of objective scientific evidence of the therapeutic superiority of perindopril over other ACE inhibitors. ACE inhibitors are widely perceived as substitutable by prescribers and there are many medications considered by physicians as therapeutic equivalents to perindopril. Therefore, the Commission erred in considering that the class of ACE inhibitors was heterogeneous and that perindopril exhibited particular therapeutic characteristics within this class of drugs."[6]
(ii) The phenomenon of 'inertia' of doctors with regard to new patients
a) the absence of heterogeneity of ACE inhibitors;
b) the relative position of Perindopril in terms of patient numbers compared to other ACE inhibitors;
c) the significance of growth in Perindopril sales compared to other ACE inhibitors;
d) the fluctuations in sales of Perindopril in the 2000s;
e) a study of prescribers in France of Perindopril and the Commission's survey of prescribers;
f) the responses of three manufacturers of other ACE inhibitors.
"1513 In the light of the foregoing, it must be concluded that the Commission has not established that a phenomenon of "inertia" of doctors and the existence of a growing group of prescribers "faithful" to perindopril had significantly restricted the competitive pressure on perindopril by other ACE inhibitors for new patients." [7]
(iii) The propensity for change of patients in continuing treatment
a) the absence of heterogeneity of ACE inhibitors;
b) a study of prescribing habits of GPs in France and the UK relied on by the Commission;
c) two further studies on the propensity of perindopril treated patients to change their treatment;
d) policies of a number of PCTs in the UK to encourage change of treatment from perindopril to other ACE inhibitors;
e) the Commission's reliance on its prescribers' survey;
f) the Commission's reliance on a reply from the manufacturer of another ACE inhibitor.
"1540 It follows from the foregoing that the Commission underestimated the propensity to change patients treated with perindopril, further relying on the erroneous assumption of the heterogeneity of drugs in the class of ACE inhibitors. The evidence in the file shows that the changes in treatment of patients starting treatment with perindopril are significant over a period of five years, which calls into question the average duration of treatment assessed by the Commission and the significance of the effect of foreclosure of the patient base." [8]
(iv) Promotional efforts
"1565 Therefore, it follows from the foregoing that the Commission did not give due consideration to the promotion efforts of the laboratories and their importance in the analysis of the competitive relationship between perindopril and the other ACE inhibitors."[9]
"1589 In the present case, at the end of the overall assessment of the factors on which the Commission based its assessment and the examination of the applicants' complaints, it must be concluded that the Commission committed a series of errors in the analysis of the definition of the relevant market. Indeed, the Commission:
- wrongly considered, with regard to therapeutic use, that ACE inhibitors were a class of heterogeneous drugs and that perindopril had particular characteristics within this class of drugs;
- wrongly concluded that a mechanism of "inertia" of physicians had significantly restricted the competitive pressure exerted on perindopril by other ACE inhibitors for new patients;
- underestimated the propensity of patients treated with perindopril to change treatment;
- did not give due consideration to laboratory promotion efforts and their importance in the analysis of competitive relationships;
- disregarded the particular characteristics of competition in the pharmaceutical sector, erroneously inferring from an analysis of natural events based primarily on price changes that perindopril was not subject to significant competitive pressures from other ACE inhibitors.
1590 On the basis of an analysis tainted by the above-mentioned errors, the Commission restricted the relevant market to the single molecule of perindopril, while the evidence shows that perindopril could be exposed to significant non-tariff competitive pressures from the other ACE inhibitors. In those circumstances, it must be held that the errors committed by the Commission are such as to vitiate the result of its analysis.
1591 It must therefore be concluded, following an assessment made by the Court, in compliance with the limits of the judicial review referred to in paragraphs 1587 and 1588 above, that it has not been established that the relevant product market relevant is limited to only branded and generic perindopril.
1592 In the light of the foregoing, the fourteenth plea in law, directed against the definition of the finished product market market as being that of branded and generic perindopril, is accepted."[10]
CONSEQUENCES FOR THE ENGLISH PROCEEDINGS
a. Would it have been reasonable or appropriate in the period between 2003 and 2009 for a clinician to prescribe another ACE inhibitor instead of perindopril in all circumstances, except where the patient was allergic to or intolerant of all alternative ACE inhibitors?
b. If not, in what circumstances would that have been unreasonable or inappropriate?
c. Was it unreasonable for either the present three sets of claimants (collectively "Claimants") or the various relevant predecessor organisations (including PCTs and SHAs) to fail to take any (and if so, which) of the steps set out in paragraph 83C of the Defendants Re-Re-Amended Defence to the English Claimants' claim or identified in the Defendants' Further Information dated 29 September 2017?
"(a) There was no significant difference between perindopril and other ACE inhibitors in therapeutic terms, including in terms of efficacy and side effects, mode of action, main indications and contraindications (Judgment §§1425, 1429, 1481, 1519, 1589).
(b) ACE inhibitors were widely perceived as substitutable by prescribers and there were many medications considered by physicians as therapeutic equivalents to perindopril (Judgment §§1481, 1489).
(c) There was no element that limited the discretion available to physicians to prescribe ACE inhibitors other than perindopril for new patients (Judgment §1489).
(d) Switching between ACE inhibitors for existing patients did not raise particular fears on the part of physicians (Judgment §1519).
(e) The prescribing behaviour of physicians was not characterised by a high degree of "inertia" and treatment changes in patients undergoing continuous treatment were significant (Judgment §1544).
(f) At least some PCTs considered, as from 2005, that perindopril was no more effective than any other ACE inhibitor and recommended, for cost reasons, the use of other ACE inhibitors than perindopril, or even the substitution of another ACE inhibitor for perindopril, in particular lisinopril or ramipril (Judgment §1464).
(g) At least some PCT policies had a real negative effect on perindopril sales at local level (Judgment §1534).
(h) Servier's promotional activities did not sufficiently differentiate perindopril from other ACE inhibitors for it to be recognised for particular therapeutic qualities by physicians (Judgment §§ 1472, 1473).
a) The first half of this proposition is a direct quotation from para 1481: see para 36 above. The second half is derived in particular from paras 1425 and 1429 which expresses the Court's conclusion on sub-head (a) of Servier's first argument: para 35.a) above. The Judgment actually states that the mode of action, main indications and contraindications are "similar" ("similaires"), which seems to me a less strong characterisation than "no significant difference". But this is not a material point and, overall, I consider that the proposition reflects what is said in the Judgment.
b) This is a direct quotation from para 1481: see above.
c) This is derived from and reflects what is said in discussion of the first head under Servier's second argument concerning prescribers' "inertia": para 37.a) above.
d) This proposition is said to come from para 1519 of the Judgment, where the General Court discusses the first head under Servier's third argument concerning the switching of patients in continuing treatment. However, the relevant sentence in that paragraph states:
"In the absence of differences in efficacy and tolerance between ACE inhibitors, it has not been established that the change in treatment between ACE inhibitors raised particular fears on the part of physicians"[11] [my emphasis].
In my view, that does not support the absolute proposition asserted by Servier. It concerns the Commission's failure to meet the necessary standard of proof on this point, which is a different matter.
e) This proposition is a direct quotation from para 1544 of the Judgment. However, that comes in the discussion of the promotional efforts (Servier's fourth argument) and when read in context the statement is clearly intended as a convenient summary of the conclusions under the second and third arguments. Hence para 1544 begins, "As previously stated,…" The first part of this proposition thus relates back to para 1513 and the second part relates back to para 1540. As regards the inertia factor for new patients, that was expressed in terms that "the Commission has not established that….": see para 1513 at para 38 above. Accordingly, I consider that the proposition would require this qualification if it was more accurately to reflect the Judgment.
h) The eighth proposition is based on part of the discussion of the meaning of Servier's documents under the sixth head of analysis of Servier's first argument: para 35.f) above. The Decision had stated that according to Servier's internal documents, the purpose of its promotional campaigns was to differentiate perindopril from other ACE inhibitors. In its argument that perindopril was not to be distinguished from other ACE inhibitors in terms of efficacy and side-effects, Servier challenged the Commission's reliance on its internal documents for that purpose. Examining the documents, the General Court stated at paras 1472-1473:
"1472… However, it is clear from these documents that communication campaigns have not sufficiently differentiated, from the point of view of physicians, perindopril from other ACE inhibitors. These documents mention for example a qualitative study conducted in July 2007 with general practitioners and cardiologists that perindopril and ramipril were perceived as similar. The 2009-2010 orientation plan highlights, at the end of the period examined, the lack of differentiation with respect to ramipril. With regard to the Netherlands, the 2006-2007, 2007-2008 and 2008-2009 orientation plans indicate that many GPs considered lisinopril equivalent to perindopril.
1473 Therefore, Servier's internal documents do not demonstrate that perindopril was recognized for particular therapeutic qualities that differentiated it from other ACE inhibitors. While the company, like other companies marketing ACE inhibitors, has tried to positively promote and differentiate perindopril through complimentary communication, this strategy has not, according to these documents, been able to differentiate sufficiently perindopril other ACE inhibitors."[12]
Accordingly, the Court's finding concerned what could properly be concluded from Servier's internal documents, and in effect set aside the conclusion which the Commission had drawn from them in the Decision. I do not read this passage as a wider or conclusive assessment of the nature or effect of Servier's promotional efforts.
RES JUDICATA
The arguments of the parties
"41 Contrary to the view taken by the Court of First Instance, the BAI v Commission judgment did not only have relative authority preventing merely new actions from being brought with the same subject-matter, between the same parties and based on the same grounds. That judgment was invested with the force of res judicata with absolute effect and prevented legal questions which it had already settled from being referred to the Court of First Instance for re-examination.
42 In the BAI v Commission judgment the Court of First Instance annulled the decision of 7 June 1995 in which the Commission held that the new agreement did not constitute State aid and consequently decided to terminate the review procedure which had been initiated in respect of the aid granted to [P&O Ferries].
43 That annulment led retroactively to the disappearance of the decision of 7 June 1995 with regard to all persons. An annulling judgment of that nature thus has authority erga omnes, which gives it the force of res judicata with absolute effect (see, in particular, Case 1/54 France v High Authority [1954] ECR 1, or p. 17, 34; Case 2/54 Italy v High Authority [1954] ECR 37, at p. 55; Case 3/54 Assider v High Authority [1955] ECR 63; and Case C-310/97 P Commission v AssiDomän Kraft Products and Others [1999] ECR I-5363, paragraph 54).
44 That authority is not attached only to the operative part of the BAI v Commission judgment. It is also attached to the ratio decidendi of that judgment which is inseparable from it (see, to that effect, Joined Cases 97/86, 193/86, 99/86 and 215/86 Asterisand Others v Commission [1988] ECR 2181, paragraph 27, and Commission v AssiDomän Kraft Products and Others, paragraph 54).
45 In addition, the question of the force of res judicata with absolute effect is a matter of public policy, which must, consequently, be raised by the Court of its own motion.
46 In the present case, in order to annul the decision of 7 June 1995 the Court of First Instance based itself, in particular, in paragraph 80 of the BAI v Commission judgment, on the conclusion that the new agreement 'is not a normal commercial transaction' and, in paragraph 81, on the fact that 'the cultural and social aims pursued by the Spanish authorities play no part in the characterisation [of the new agreement] in the light of Article 92(1) of the Treaty [now, after amendment, Article 87(1) EC]'. Finally, the Court of First Instance found, in paragraph 82 of the judgment, that 'the Commission's conclusion that [the new agreement] does not constitute State aid is based on a misinterpretation of Article 92(1) of the Treaty' and that '[c]onsequently, the decision terminating the review procedure initiated in relation to aid granted to [P&O Ferries] is vitiated by an infringement of that provision and must be annulled'.
47 No appeal was lodged against the BAI v Commission judgment, and its operative part and ratio decidendi therefore became final.
48 It is clear from the grounds of that judgment that the Commission should have classified the aid at issue as State aid for the purposes of Article 87(1) EC and that, following the annulment, it would have to reopen the review procedure in respect of that aid.
49 In order to comply with that judgment the Commission, as it was required to do, reopened the review procedure on the compatibility of the aid in dispute with the Treaty. In the contested decision it, first, confirmed the classification as State aid acknowledged by the Court of First Instance in the BAI v Commission judgment and, second, considered that the aid in dispute was incompatible with the Treaty. The Commission therefore gave its decision on the same measures as those which were classified as State aid in the BAI v Commission judgment.
50 In those circumstances, when the Diputación brought its application against the contested decision before the Court of First Instance that court could not re-examine the pleas alleging that the aid at issue did not amount to State aid without disregarding the scope of the BAI v Commission judgment. Consequently, in finding as it did, the Court of First Instance failed to have regard to the force of res judicata with absolute effect of its previous judgment."
"… the Court has held, firstly, that res judicata extends only to the matters of fact and law actually or necessarily settled by the judicial decision in question (Commission v Luxembourg paragraph 27; and Thyssenkrupp Nirosta v Commission paragraph 123) and, secondly, that the force of res judicata attaches not only to the operative part of that decision, but also to the ratio decidendi of that decision which is inseparable from it (Joined Cases C-442/03 P and C-471/03 P P & O European Ferries (Vizcaya) and Diputación Foral de Vizcaya v Commission [2006] ECR I-4845, paragraph 44)."
"100. In that regard, it should be noted that, in finding that the Board of Appeal had erred in its assessment of the similarity of the signs at issue and in annulling the decision of 28 November 2013, the General Court inter alia relied, in paragraphs 33 and 40 of the annulling judgment, on the dual fact, first, that 'sports shoes' were everyday consumer goods and, second, that the relevant public, made up of the average consumer, who is reasonably well informed and reasonably observant and circumspect, had an average degree of attention when purchasing those 'sports shoes'. The applicant attempted to dispute those factual assessments before the Court of Justice, but that Court rejected its argument as being, in part, inadmissible and, in part, manifestly unfounded (order on the appeal, paragraphs 11 to 18). It follows that the judgment annulling the decision of 28 November 2013 is final.
After referring to P&O Ferries, the Court continued:
"103. In the present case, it must be stated that the grounds of the annulling judgment, recalled in paragraph 100 above, relating to the degree of attention of the relevant public, constitute the necessary support for the operative part of that judgment. Therefore, those grounds themselves have the authority of res judicata with absolute effect and the Board of Appeal was required to comply with them."
"That finding, in turn, depended on the Court's conclusions on the key factual issues set out above about the extent to which ACE inhibitors were, and were perceived to be, substitutable, and indeed the extent to which they were substituted in practice through PCT switching programmes. None of the eight findings above can be characterised as obiter dicta which fall outside the scope of the res judicata. All eight formed part of the core of the Court's analysis of the market definition issue."
On that basis, Servier argued that the findings encapsulated in its propositions were binding erga omnes, and thus also in the national courts of the Member States.
"In order to comply with the judgment and to implement it fully, the institution is required to have regard not only to the operative part of the judgment but also to the grounds which led to the judgment and constitute its essential basis, in so far as they are necessary to determine the exact meaning of what is stated in the operative part. It is those grounds which, on the one hand, identify the precise provision held to be illegal and, on the other, indicate the specific reasons which underlie the finding of illegality contained in the operative part and which the institution concerned must take into account when replacing the annulled measure."
"… although the authority erga omnes exerted by an annulling judgment of a court of the Community judicature attaches to both the operative part and the ratio decidendi of the judgment, it cannot entail annulment of an act not challenged before the Community judicature but alleged to be vitiated by the same illegality.
The only purpose of considering the grounds of the judgment which set out the precise reasons for the illegality found by the Community Court is to determine the exact meaning of the ruling made in the operative part of the judgment. The authority of a ground of a judgment annulling a measure cannot apply to the situation of persons who were not parties to the proceedings and with regard to whom the judgment cannot therefore have decided anything whatever."
Discussion
"It is clear from the grounds of that judgment that the Commission should have classified the aid at issue as State aid for the purposes [of the relevant Treaty provision]."
"… even if the appeals against infringement by alleged cartel members other than the appellant had succeeded, that would in European law have made no difference to the findings as to the existence and scope of the 'complex of agreements and concerted practices' in the relevant sector to which the Commission had found the appellant to have been party."
I do not consider that Assidöman can be distinguished, as Ms Bacon suggested, on the basis that a Commission decision in a cartel case addressed to several parties constitutes in law a series of decisions addressed to each of them separately. That is true, but if that were the entire basis of this approach, it would have no relevance to the general principle articulated in P&O Ferries, where the ECJ significantly relied on Assidöman.
"Upon opposition by the proprietor of an earlier trade mark, the trade mark applied for shall not be registered:
…
(b) if because of its identity with, or similarity to, the earlier trade mark and the identity or similarity of the goods or services covered by the trade marks there exists a likelihood of confusion on the part of the public in the territory in which the earlier trade mark is protected; the likelihood of confusion includes the likelihood of association with the earlier trade mark."
Accordingly, the ratio of the annulling judgment was the finding that there was a likelihood of association by the relevant public between the two marks because of the degree of attention given by the average consumer when buying sports shoes. This finding led directly, and was inseparable from, the operative part of that judgment annulling the decision of the Board of Appeal. It followed that this finding was res judicata with absolute effect when the Board of Appeal was required to reconsider adidas' opposition following the annulment of its previous decision. I should add that since Shoe Branding had been an intervener in the first set of proceedings, the parties in the second proceedings were in fact the same, so that the only real distinction was that the action concerned the subsequent, and therefore different, decision of the EUIPO Board of Appeal.
ABUSE OF PROCESS
"As Gloster LJ made clear in JSCBTA Bank v Ablayazov [2017] 1 WLR 603, §§54–6, the common law doctrine of abuse of process is not limited to a situation where the relevant litigant was party to the previous decision (or the privy of such a party). Rather, it will depend upon the particular circumstances of the case, and in particular the questions whether it would be manifestly unfair to a party to the later proceedings that the same issues should be relitigated, and whether to permit such relitigation would bring the administration of justice into disrepute."
"Fifth, there is the principle first formulated by Wigram V-C in Henderson v Henderson (1843) 3 Hare 100, 115, which precludes a party from raising in subsequent proceedings matters which were not, but could and should have been raised in the earlier ones. Finally, there is the more general procedural rule against abusive proceedings, which may be regarded as the policy underlying all of the above principles with the possible exception of the doctrine of merger."
"In all the circumstances of this case should the complainant and investigatee be allowed to open up and dispute in these proceedings the final conclusions of fact or law reached in competition proceedings in Brussels and Luxembourg? If the answer to that is in the negative, it does not matter whether it is categorised as a part of the law of res judicata — i.e. that the complainant and investigatee are bound by those conclusions—or as part of the law of abuse of process— i.e. that any attempt by either of them to challenge the conclusions is improper. In either case the same public policy considerations are at work."
"… in large part the European proceedings involved a head to head dispute between the plaintiff and the defendants as to whether or not the defendants had abused their dominant position and, if so, whether that was likely to, and did in fact, distort competition. In particular it was said that a compelling example of such distortion was the harm allegedly inflicted on the plaintiff's import trade. An informal indication of the reality of what was going on before the Commission is given by the title given by the Commission to the proceedings, namely "Case IV/31.900 Iberian Trading U.K. Ltd v. British Plasterboard Plc " . As far as I can tell, no quarter was given by either side. A layman who said that the plaintiff and the defendants were engaged in a major antitrust battle with each other in front of the Commission could not be accused of misunderstanding what was going on. He would be just as accurate if he said the same thing about the proceedings before the CFI and the ECJ."
"71. … If English and other national courts are encouraged to stay proceedings pending the resolution of European competition proceedings, but then are obliged by national rules of procedure to take no notice of the results in Europe, the only result will be to add years to the duration of the litigation here for no good reason. As I put it earlier in this judgment, in many cases the result will be to subject the litigant to a decade or more of litigation for no benefit. It seems to me that this course would be contrary to public policy. Indeed the whole rationale of staying national proceedings to await the outcome in Europe must be that the result of the proceedings there should have a major impact in the proceedings before the national court. Absent this, I can see no point in there being a stay.
72. These cases suggest that the courts should not interpret our rules of procedure in a way which will give rise to an appreciable and unnecessary risk that courts here and the Commission will come to inconsistent results in relation to competition issues. Of course due regard has to be paid to the interests of justice to the parties. But where, as here, the parties have disputed the same issues before the Commission and have had real and reasonable opportunities to appeal from an adverse decision, there is no injustice in obliging them to accept the result obtained in Europe. The position is a fortiori when, as here, the opportunities of appeal have been used to the full. Therefore, whether expressed in terms of res judicata or abuse of process, it would be contrary to public policy to allow persons who have been involved in competition proceedings in Europe to deny here the correctness of the conclusions reached there. The parties are bound. …"
"…Although the Commission could have initiated and pursued the complaint against the defendants by itself, the fact is that in this case it did not. As [counsel for Iberian] put it, it was not possible for his client to be more fully involved. It initiated the procedure, it formulated the allegations of abuse (even if they were added to by the Commission), it presented written submissions, answered the plaintiff's responses and played a full part in the oral hearing before the Commission. Subsequently it played an equally full part before the CFI and the ECJ."
"a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before."
Lord Sumption went on to state, at [25]:
"Res judicata is a rule of substantive law, while abuse of process is a concept which informs the exercise of the court's procedural powers. In my view, they are distinct although overlapping legal principles with the common underlying purpose of limiting abusive and duplicative litigation."
CONCLUSION
i) of Servier's six propositions which are at issue, propositions (a)-(c) and a qualified version of (e) are findings made in the Judgment but propositions (d) and (h) are not;
ii) none of Servier's propositions are res judicata for the purpose of these proceedings; and
iii) it is not an abuse of process for the claimants to advance arguments and adduce evidence contrary to Servier's propositions.
Note 1 The quotation at para 20 above from the Particulars of Claim in the English action in part reflects amendments made in response to the prescribing argument. [Back]
Note 2 I was told that it was produced usingGoogle Translate, followed by some corrections. [Back]
Note 3 “… s’agissant de l’article 102 TFUE, le Tribunal considère qu’il n’est pas établi que le marché des produits finis pertinent était limité au périndopril. La position dominante de Servier n’étant démontrée ni sur ce marché ni sur le marché de la technologie, l’existence d’un abus de cette position est remise en cause, de sorte que l’article 6 de la décision attaquée, relatif au constat de cette infraction, doit être annulé.” [Back]
Note 4 “1368 Tout d’abord, par leur premier grief, les requérantes reprochent à la Commission d’avoir méconnu les spécificités du secteur pharmaceutique en ce qu’elle aurait fondé son analyse du marché pertinent principalement sur le prix des médicaments et non sur la substituabilité thérapeutique. Ce grief est fondé sur deux branches, la première étant tirée de ce que la Commission n’aurait pas pris en compte l’ensemble des éléments du contexte économique, la seconde de ce que la Commission aurait attaché une importance excessive au facteur prix. 1369 Ensuite, par leur deuxième grief, elles contestent la thèse de la Commission selon laquelle les IEC n’étaient pas suffisamment substituables d’un point de vue thérapeutique. Elles remettent en cause la distinction entre le périndopril et les autres IEC en termes d’efficacité et d’effets secondaires, le phénomène d’« inertie » des médecins s’agissant des nouveaux patients, la faible propension au changement des patients en traitement continu et l’analyse des efforts promotionnels effectuée par la Commission. 1370 Enfin, par leur troisième grief, les requérantes contestent, à titre subsidiaire, les lacunes méthodologiques de l’analyse économétrique des événements naturels de la Commission visant à démontrer que les IEC n’exerçaient pas de contraintes concurrentielles significatives sur le périndopril.” [Back]
Note 5 “1418 Par leur deuxième grief, les requérantes soutiennent, en substance, que la Commission a méconnu la substituabilité thérapeutique entre les IEC. Elles font valoir, premièrement, que la Commission a considéré à tort que le périndopril se différenciait des autres IEC par des qualités particulières, deuxièmement, que la concurrence entre les IEC était vive s’agissant des nouveaux patients, troisièmement, que la Commission a sous-estimé la propension à changer de médicament des patients traités au périndopril et, enfin, que les actions promotionnelles sont l’une des dimensions essentielles de la concurrence sur le marché en cause.” [Back]
Note 6 “1481 Au vu de l’ensemble des pièces du dossier, il convient de conclure qu’il n’existe pas de différence significative entre le périndopril et les autres IEC sur le plan thérapeutique, y compris en termes d’efficacité et d’effets secondaires. Il n’existe pas au dossier de preuve scientifique objective d’une supériorité thérapeutique du périndopril par rapport aux autres IEC. Les IEC sont très largement perçus comme substituables entre eux par les prescripteurs et il existe de nombreux médicaments considérés par les médecins comme des équivalents thérapeutiques au périndopril. Par conséquent, c’est à tort que la Commission a considéré que la classe des IEC était hétérogène et que le périndopril présentait des caractéristiques thérapeutiques particulières au sein de cette classe de médicaments.” [Back]
Note 7 “1513 Au vu de ce qui précède, il y a lieu de conclure que la Commission n’a pas établi qu’un phénomène d’« inertie » des médecins et l’existence d’un groupe croissant de prescripteurs « fidèles » au périndopril avaient restreint de façon significative la pression concurrentielle exercée sur le périndopril par les autres IEC pour les nouveaux patients.” [Back]
Note 8 “1540 Il résulte de ce qui précède que la Commission a sous-estimé la propension au changement des patients traités au périndopril, en se fondant, en outre, sur l’hypothèse erronée de l’hétérogénéité des médicaments de la classe des IEC. Il ressort des pièces du dossier que les changements de traitement des patients débutant un traitement au périndopril sont significatifs sur une période de cinq ans, ce qui remet en cause la durée moyenne de traitement évaluée par la Commission et l’importance des effets de verrouillage de la base de patients ”. [Back]
Note 9 “1565 Dès lors, il ressort de ce qui précède que la Commission n’a pas dûment pris en considération les efforts de promotion des laboratoires et leur importance dans l’analyse des rapports de concurrence entre le périndopril et les autres IEC.” [Back]
Note 10 “1589 En l’espèce, au terme de l’évaluation globale des éléments sur lesquels la Commission a fondé son appréciation et de l’examen des griefs formulés par les requérantes, il y a lieu de conclure que la Commission a commis une série d’erreurs dans l’analyse de la définition du marché pertinent. En effet, la Commission: – a considéré à tort, s’agissant de l’usage thérapeutique, que les IEC étaient une classe de médicaments hétérogènes et que le périndopril avait des caractéristiques particulières au sein de cette classe de médicaments; – a conclu à tort qu’un mécanisme d’« inertie » des médecins avait restreint de façon significative la pression concurrentielle exercée sur le périndopril par les autres IEC pour les nouveaux patients; – a sous-estimé la propension des patients traités au périndopril à changer de traitement; – n’a pas dûment pris en considération les efforts de promotion des laboratoires et leur importance dans l’analyse des rapports de concurrence; – a méconnu les caractéristiques particulières de la concurrence dans le secteur pharmaceutique, en déduisant à tort d’une analyse des événements naturels fondée essentiellement sur les variations de prix que le périndopril n’était pas soumis à des pressions concurrentielles significatives de la part des autres IEC. 1590 En se fondant sur une analyse entachée des erreurs qui viennent d’être rappelées, la Commission a restreint le marché pertinent à la seule molécule du périndopril, alors que les pièces du dossier montrent que le périndopril pouvait être exposé, de la part des autres IEC, à des pressions concurrentielles significatives d’ordre non tarifaire. Dans ces conditions, il y a lieu de considérer que les erreurs commises par la Commission sont de nature à vicier le résultat de son analyse. 1591 Il convient ainsi de conclure, à l’issue d’une appréciation opérée par le Tribunal dans le respect des limites du contrôle juridictionnel rappelées aux points 1587 et 1588 ci-dessus, qu’il n’est pas établi que le marché de produits pertinent est limité au seul périndopril princeps et générique. 1592 Compte tenu de ce qui précède, il convient d’accueillir le quatorzième moyen, dirigé contre la définition du marché des produits finis comme étant celui du périndopril princeps et générique.” [Back]
Note 11 “En l’absence de différences d’efficacité et de tolérance entre IEC, il n’est pas établi que le changement de traitement entre IEC suscitait des craintes particulières de la part des médecins.” [Back]
Note 12 “1472…Toutefois, il ressort de ces mêmes documents que les campagnes de communication n’ont pas suffisamment permis de différencier, du point de vue des médecins, le périndopril d’autres IEC. Ces documents mentionnent par exemple une étude qualitative réalisée en juillet 2007 auprès de médecins généralistes et de cardiologues selon laquelle le périndopril et le ramipril étaient perçus comme similaires. Le plan d’orientation des années 2009-2010 souligne, en fin de période examinée, le manque de différenciation à l’égard du ramipril. S’agissant des Pays-Bas, les plans d’orientation 2006-2007, 2007-2008 et 2008-2009 indiquent que beaucoup de médecins généralistes considéraient le lisinopril comme équivalent au périndopril. 1473 Par conséquent, les documents internes de Servier ne démontrent pas que le périndopril était reconnu pour des qualités thérapeutiques particulières le différenciant des autres IEC. Si l’entreprise a tenté, comme d’autres entreprises commercialisant des IEC, de promouvoir et de différencier de façon positive le périndopril au travers d’une communication élogieuse, cette stratégie n’a pas permis, selon ces mêmes documents, de différencier suffisamment le périndopril des autres IEC.” . [Back]