TEVA’s cassation appeal of FAS decision is dismissed

On 12 March 2015, the Federal Arbitration Court of the Moscow District (Cassation Court) upheld the ruling of the 9th Arbitration Appeal Court of 23 September 2014 and dismissed the cassation appeal on FAS decision filed by of TEVA PHARMACEUTICAL INDUSTRIES LIMITED.

In December 2013, the Federal Antimonopoly Service (FAS Russia) found that TEVA PHARMACEUTICAL INDUSTRIES LIMITED violated Clause 5 Part 1 Article 10 of the Federal Law “On Protection of Competition” by refusing to conclude a contract without any economic or technological justification with “BIOTEK” MFPDK” CJSC for supplying “Kopakson” medicinal drug. The company also failed to fulfill a warning issued by the antimonopoly authority.

The Antimonopoly Service issued a determination to TEVA to support competition, particularly, by giving access to counteragents to the goods on non-discriminatory conditions.

TEVA was fined for committing the antimonopoly violation.

TEVA disagreed with FAS decision, determination and order to impose a fine and filed a lawsuit.

Moscow Arbitration Court allowed the claim, accepting TEVA’s arguments that Article 10 of the Federal Law “On Protection of Competition” should not be applied at all to the goods with patent protection.

The 9th Arbitration Appeal Court, however, reversed the judgment of the Court of First Instance and supported FAS position that actions of the company with the dominant market position must not violate the antimonopoly law irrespective of patent rights.

“A new judicial act confirmed FAS conclusions that exceptions for exercising exclusive rights on the results of intellectual activity under Part 4 Article 10 of the Federal Law “On Protection of Competition” should not be applied to refusals of an economic entity to supply monopolistic goods without any economic or technological justification since such refusals are irrelevant to the issues of concluding licensing contracts for use of intellectual property and other issues regulated under Part IV of the Civil Code of the Russian Federation”, pointed out the Head of FAS Department for Control over Social Sphere and Trade, Timophei Nizhegorodtsev.