The General Court of the EU yesterday dismissed appeals by Lundbeck, the leading pharmaceutical company, and a number of manufacturers of generic products, against a Commission decision finding that they were party to agreements that infringed EU competition rules and imposing fines.

The case concerned citalopram, a widely-used treatment for mental health conditions.  The agreements were entered into at a time when various generic manufacturers had been taking steps to start supplying citalopram, but Lundbeck had also launched, or was threatening to launch, patent infringement proceedings against those manufacturers in the UK and EEA.  Under the agreements, the generic manufacturers received payment from Lundbeck and also agreed not to supply citalopram for a period of time.

The General Court dismissed the companies’ claim that, because of the position in relation to patents, the generic manufacturers could not be regarded as potential competitors of Lundbeck.  It also rejected the companies’ argument that, because Lundbeck had a patent claim, an agreement not to sell citalopram in potential breach of that claimed patent could not be regarded as an ‘object restriction’ for the purposes of Article 101(1) of the Treaty on the Functioning of the EU.  It agreed with the Commission that, despite the patent claims: (i) the generic companies should be regarded as potential entrants, and (ii) the agreement was a restriction by object.

The case is the first judgment by the European Courts on the “pay for delay” issue, and is a very important decision for the pharmaceutical sector, as well as being the latest word on the category of object restrictions.

A link to the judgments is here.

Please click here to view the full case note.

George Peretz QC acted for the European Commission in T-467/13 Arrow v Commission; Ben Rayment acted for the European Commission in T-471/13 Xellia and Alpharma v Commission; Ronit Kreisberger and Ligia Osepciu acted for Merck in T-470/13 Merck KGaA v Commission; James Bourke acted for the European Commission in Case T-472/13 Lundbeck v Commission, Case T-469/13 Generics (UK) v Commission and Case T-470/13 Merck KGaA v Commission.

Stephen Cragg QC and Nikolaus Grubeck, instructed by Kate Harrison at Harrison Grant, acted for Labour Party members excluded from an automatic right to vote in the forthcoming leadership election, on the basis that they have not been members of the Party for more than six months (Evangelou and others v The Labour Party).

In the High Court of Justice on the 4th August Mr Justice Hickinbottom decided that, under the Labour Party rules, the Labour Party’s National Executive Committee does not have the power to disenfranchise 150,000 members, including the claimants.

This means that all members who joined the party before 12th July 2016 have equal rights to vote in the leadership election.

Imogen Proud was instructed for hand down and consequentials.

A copy of the judgment is available here.

See The Guardian website.

The High Court has determined a series of preliminary issues arising out of claims brought by three individuals whose family members were murdered by unknown third parties in the immediate aftermath of the withdrawal of Slobodan Milosovic’s forces from Kosovo in June 1999. Milosovic’s withdrawal followed Nato operations to which the UK contributed. Following the promulgation of UN Security Council Resolution 1244, the UK provided forces to the Kosovo Force (or KFOR) which was given various security taskings. The murders took place within the area for which UK forces had lead responsibility. The Claimants brought (i) claims under the Human Rights Act and (ii) tort claims under local Kosovan law in the Queen’s Bench Division. They were seeking, amongst other things, the establishment of a public enquiry in relation to the alleged breach of the investigative obligations alleged to have arisen under Articles 2 and 3 ECHR, and damages. Preliminary issues were heard on, amongst other issues, (i) whether the alleged acts or omissions of UK forces were to be attributed to the UK or the UN; (ii) whether the claimants where within the jurisdiction of the UK for the purposes of Article 1 of the ECHR; (iii) whether an investigative obligation arose or continued under Articles 2 or 3 of the ECHR; and (iv) whether the UK could avail of any operative immunity in relation to such claims. In a long and detailed judgment, Irwin J determined all of the preliminary issues in favour of the MoD. The Claims will therefore be dismissed.

Brendan McGurk was led by James Eadie QC. The judgment, whose neutral citation is [2016] EWHC 2034 (QB), can be found here.

Case T-66/14 Bredenkamp & Ors v Council, 21st July 2016

The General Court of the CJEU has rejected an application for damages brought by Zimbabwean businessman John Bredenkamp, and 3 companies owned by him, for damages for loss caused by their listing on the EU’s Zimbabwe sanctions list.

The court held that the applicants’ listing was not unlawful wherefore the applicants were not entitled to the damages claimed, so that the Court did not go on to consider the arguments on causation and loss. The Court found that listing a businessman on the basis of strong ties to the Government was a sufficiently clear statement of reasons, with a valid legal basis. Although the Council had not communicated the evidence forming the basis for the designation, the applicants had been given the bulk of the evidence justifying their listing, albeit by way of obtaining them in national proceedings against the UK government and the Court found that this would not therefore have made any difference to the applicants’ rights of defence.

A link to the judgment is here.

Philip Moser QC acted for Mr Bredenkamp and his companies

In a judgment handed down today, Mrs Justice Whipple rejected an attempt by Napp to assert a period of data exclusivity for “bridging data” provided by it in support of its application for a marketing authorisation (MA) for its product BuTrans®/Norspan® under the “hybrid-abridged” procedure laid down in Article 10(3) of the Medicines Directive (Directive 2001/83).

The “hybrid-abridged” procedure can be used where a manufacturer seeks to obtain an MA for a product that differs in certain respects, such as in the route of administration or therapeutic indication, from another manufacturer’s product that already has an MA (known as the “reference medicinal product” or “RMP”). The RMP in this case was an analgesic developed by another manufacturer in the form of a pill placed under the tongue: Napp then developed BuTrans®, which used the same analgesic in the form of a skin patch. Under the hybrid-abridged procedure, which requires the provision of “appropriate” pre-clinical tests and trials, it could and did obtain an MA by relying on the original documentation for the RMP combined with “bridging data” in the form of test results showing that the skin patch method was safe and effective.

Some 11 years later, Sandoz applied for MAs in a number of EU countries, including the UK, for its own analgesic skin patch. In its application, it referred to the RMP, the bridging data provided by Napp for BuTrans® and to its own studies demonstrating bioequivalence between its product and BuTrans®.

The UK Medical and Healthcare Products Regulatory Agency (“MHRA”), along with the equivalent authorities in other EU Member States, granted Sandoz an MA on that basis. Napp sought judicial review of the MHRA’s grant of an MA to Sandoz, claiming that the Medicines Directive did not permit the MHRA, in assessing Sandoz’s application for MAs, to allow it to rely on the “bridging data” provided by Napp. Napp also brought equivalent proceedings in other EU countries. At the hearing, Napp sought a reference for a preliminary ruling to the Court of Justice of the EU, arguing that there was a “lacuna” in the Directive to the extent that it did not lay down a period of exclusivity for “bridging data”: it pointed out that Article 10(1) provided for a period of exclusivity for the manufacturer of the RMP so as to prevent generic manufacturers relying on those data to secure an MA for their own product.

Whipple J observed that, as a matter of language, the reference in Article 10(3) to “appropriate” pre-clinical tests or clinical trials did not preclude the MHRA from accepting as “appropriate“ the data provided by Sandoz, namely the bridging data originally provided by Napp for BuTrans® together with Sandoz’s own studies demonstrating bioequivalence between its product and BuTrans®. That approach did not conflict with the purpose of the Directive of ensuring that medicines were safe and effective. Moreover, the Court of Justice’s case-law had refused to allow periods of exclusivity where the company in Napp’s position also held the MA for the RMP – had Napp also held the MA for the RMP in this case, BuTrans® would, under Article 6(1), have been held to be a “line extension” of the RMP and would not have had any additional period of exclusivity beyond that granted in relation to the RMP under Article 10(1): but there could be no reason for distinguishing the case where Napp held the MA for the RMP from the actual case, where it did not. She further noted that the Commission had expressed the same view in its Notice to Applicants. So she dismissed Napp’s challenge, holding that the MHRA had been correct to grant the MA, and refused to make a reference to the Court of Justice.

George Peretz QC acted for the MHRA.

To read the judgment, please click here.

The Court of Appeal has dismissed Delta’s appeal against the ruling of Mrs Justice Rose last June, so that Delta is precluded from resisting IMI’s contribution claim on the basis of a limitation defence. The judgment is the latest in a series of ground breaking rulings arising from the Copper Tubes and Copper Fittings claims, in which IMI has now twice been successful in the Court of Appeal.

The judgment concerns section 1(4) of the Civil Liability (Contribution) Act 1978, which applies where the main claim against the contribution claimant (in this case, Travis Perkins’s claim against IMI) has been the subject of a bona fide settlement. Under section 1(4), the liability of the contribution claimant (IMI) to the main claimant (Travis Perkins) cannot be re-opened by the contribution defendant (Delta) if the conditions of a proviso are satisfied – that is, if IMI would have been liable “assuming that the factual basis of the claim against him could be established”. Where section 1(4) applies, the contribution defendant cannot resist the contribution claim on the basis that the contribution claimant was never liable in the first place.

In the present case, Delta sought to resist IMI’s claim for contribution on the basis that the main claim against IMI by Travis Perkins was time barred.　 　Rose J rejected that argument, holding that, under section 1(4), Travis Perkins’ plea in Reply that the cartel was deliberately concealed is assumed to be true; as a result the limitation argument failed.

The Court of Appeal upheld a different interpretation of section 1(4), advanced by IMI, that the proviso only involves an inquiry into whether the Particulars of Claim disclose a cause of action. This new interpretation offers settling parties greater protection from attempts by the contribution defendant to re-open the claim which has been settled. However, the Court also upheld Rose J’s application of the section as a secondary and alternative view.

Please click to view a copy of the IMI PLC & anr -v- Delta LTD & ors judgment.

Paul Harris QC and Rob Williams acted for the successful party IMI.

In a judgment handed down today, 28 July 2016, the Court of Appeal has decided to refer questions to the EU Court of Justice on whether limitations on the compensation paid by the Pension Protection Fund (PPF) to former employees of insolvent employers are consistent with Directive 2008/94/EC (the Insolvency Directive).

The PPF is the industry-funded statutory “lifeboat” fund responsible for insolvent pension schemes. While most pensioners whose schemes fall within the PPF initially receive compensation of 90% or 100% of their original pension, a small percentage (around 0.2%) of PPF members have their compensation capped, which results in some cases in a loss of more than half of their pension. The cap is imposed on those who are below their scheme’s normal pension age at the time of the employer’s insolvency. The impact of the cap is exacerbated by restrictive provisions in the Pensions Act 2004 on annual increases, which further reduce the value of PPF compensation over time.

In today’s judgment a majority of the Court of Appeal have accepted the argument of the Appellant, Mr Hampshire, that (except in cases of abuse) EU member states must ensure that every employee of an insolvent employer receives at least half of their accrued pension benefits, and that the provisions of the 2004 Act imposing a cap on compensation and limiting annual increases at a level below that minimum 50% guarantee therefore do not comply with EU law. The majority of the Court has rejected the argument of the PPF and the Secretary of State that EU law only requires member states to put in place a suitable ‘system of protection’ but does not provide an individual right to a minimum level of compensation in every case.

The case arises out of a challenge by Mr Hampshire and 15 other former employees of Turner & Newall (“T&N”) to the PPF’s valuation of the T&N pension scheme. The scheme entered PPF assessment in 2006 and although the scheme has been valued as having a surplus of around £50m, under the 2004 Act Mr Hampshire and around 40 other members of the scheme are subject to the compensation cap, which in some cases has resulted in a loss of over 75% of the pension those employees were entitled to receive, and were receiving prior to 2006, under the scheme rules. Mr Hampshire and his former colleagues appealed to the High Court from the PPF Ombudsman on the basis that compensation amounting to less than 50% of accrued pension benefits is inconsistent with Article 8 of the Insolvency Directive as interpreted by the Court of Justice in cases C-278/05 Robins and C-398/11 Hogan. In December 2014 the High Court rejected Mr Hampshire’s appeal.

Today’s provisional finding by the Court of Appeal in Mr Hampshire’s favour, and the reference to the EU Court, represents a significant victory for him and the hundreds of pensioners who have campaigned against the compensation cap and its unfair impact on employees with a significant pension pot who happen to be below normal pension age when their employer goes insolvent.

Of potentially even greater significance than the impact of the ruling on the cap is the potential impact of any ruling that pensioners in receipt of PPF compensation must receive at least half of any entitlements to annual increases in their pension. Such a ruling will potentially benefit thousands of PPF members, including those who were initially in receipt of 90% or 100% of their original pension but who have lost any rights they had to index-linked or guaranteed annual increases.

While the majority of the Court of Appeal agreed with Mr Hampshire, the Court considered that the point was not free from doubt and decided to ask the EU Court of Justice for a ruling. The Court also decided to ask the EU Court whether Article 8 of the Insolvency Directive is directly effective, meaning that it can be invoked directly against the PPF to override the terms of the 2004 Act.

Gerry Facenna QC and James Bourke, instructed by Ivan Walker of Walkers Solicitors, are acting for Mr Hampshire.

A copy of the Court of Appeal’s judgment is available here.

 

The High Court of the British Virgin Islands (“BVI”) has just handed down judgment in a claim brought by Cable & Wireless (BVI) Ltd (“LIME BVI”) for judicial review of the decision of the BVI Telecommunications Regulatory Commission (“TRC”) finding that LIME BVI had engaged in an anti-competitive margin squeeze in breach of the requirements of the BVI Telecommunications Act 2006. The TRC had received a complaint from CCT, a competitor of LIME BVI, to the effect that LIME BVI (by certain “All Talk Calling Plans”) was charging average retail prices to its mobile customers for calls to LIME affiliates in other Caribbean jurisdictions which were below the wholesale charges available to CCT from those LIME mobile network operators. The TRC investigated the complaint and issued a decision on 1 June 2012 to the effect that LIME BVI had engaged in an anti-competitive margin squeeze during the period January 2009 to August 2010 which, had it continued, would likely have had anti-competitive effects contrary to the public interest and would have been detrimental to consumers in the BVI in the long term. The TRC ordered LIME BVI not to engage in such conduct and fined it USD$493,665.

The Court held that the TRC’s decision was ultra vires the 2006 Act and that it should be set aside. The Court held that the relevant section of the Act under which the TRC proceeded against LIME BVI applied only to present and future conduct, and not to past conduct. The Court agreed with the submission of LIME BVI that the TRC’s decision could only have been limited to offending conduct which ceased before the decision was issued. It agreed with LIME BVI’s argument that “the tenor of the Act lends itself to ex ante regulation of operators” only. The Court therefore found that the TRC had acted ultra vires the Act and that this warranted the decision being set aside. The Court also agreed with LIME BVI’s argument that the TRC acted ultra vires the 2006 Act by applying it to LIME affiliates outside the jurisdiction of BVI law (i.e. those LIME affiliates responsible for the setting of prices in the wholesale or upstream markets). However, the court held that this illegality alone would not have been sufficient to set aside the TRC’s decision.

Kassie Smith QC acted for LIME BVI in the proceedings before the High Court of the BVI.

To read the judgment, please click here.

 

Stephen Cragg QC and Nikolaus Grubeck, instructed by Kate Harrison at Harrison Grant, are acting for Labour Party members excluded from an automatic right to vote in the forthcoming leadership election, on the basis that they have not been members of the Party for more than six months (Evangelou and others v The Labour Party).

The case has been listed for a final hearing before a High Court judge in London on 4 August 2016 with judgment expected shortly afterwards.

The Claimants dispute that the Labour Party rulebook allows such a restriction, and the outcome of the case should determine rights of tens of thousands of new members to take part in the election and the nomination process to be held shortly by constituency parties.