Decisions on the Relationship between Competition Law and Intellectual Property
Decision by the Swiss Competition Commission (COMCO) in its investigation against Novartis regarding alleged patent abuse
At the request of the pharmaceutical company Eli Lilly, the Swiss Competition Commission (COMCO) investigated whether Novartis had abused its patent rights (Case 32-0278). The case concerned a drug marketed by Novartis under the brand name Cosentyx® for the treatment of psoriasis, as well as a patent portfolio that Novartis had acquired from the U.S. biotechnology company Genentech. Eli Lilly alleged that Novartis was using this patent portfolio to keep Eli Lilly’s competing product, Taltz®, off the market.
According to the COMCO decision of October 7, 2024, Novartis’ primary objective in acquiring the patent portfolio was to secure freedom to operate, i.e., the ability to manufacture and sell the drug Cosentyx®. COMCO found that Novartis had not abused its patent rights and closed the case without examining the issues of market definition and Novartis’ position in that market.
Decision of the Swiss Federal Supreme Court in the investigation by the Competition Commission (COMCO) against Galenica (Vifor Pharma Participations AG and HCI Solutions AG) concerning drug information
In the investigation by the Swiss Competition Commission (COMCO) against Galenica (Vifor Pharma Participations AG and HCI Solutions AG) concerning electronic drug information, the Swiss Federal Supreme Court, in its decision of January 23, 2025 (2C_244/2022) overturned the sanctions imposed by COMCO and the Federal Administrative Court on the grounds that the restrictions on competition resulted from copyright law and that competition law was therefore not applicable. The court held that competition law does not apply to competitive practices whose restrictive effect results directly and immediately from intellectual property law, in this case from copyright law. The contractual clause at issue in this case did not go beyond the restriction of competition resulting from copyright law, which is why competition law did not apply to it.
Comments
When the question arises as to whether the exercise of intellectual property rights constitutes a violation of competition law, the first step is to determine whether competition law is applicable at all. If it is not, the competition authorities lack the legal basis to initiate proceedings and impose sanctions. Even in civil or criminal proceedings, allegations of competition law violations in the exercise of intellectual property rights may be unfounded, as competition law does not apply.
This information does not constitute legal advice. Each case must be reviewed individually for this purpose.