Arrow Group and Arrow Generics v Commission (Judgment) [2016] EUECJ T-467/13 (08 September 2016)

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(Competition — Agreements, decisions and concerted practices — Market for antidepressant medicinal products containing the active pharmaceutical ingredient citalopram — Concept of restriction of competition ‘by object’ — Potential competition — Generic medicinal products — Barriers to market entry resulting from the existence of patents — Agreements concluded between a patent holder and a generic undertaking — Fines — Legal certainty — Principle that penalties must have a proper legal basis — Duration of the Commission’s investigation — Rights of the defence — Single and continuous infringement)

European Commission, represented by F. Castilla Contreras and B. Mongin, acting as Agents, and by G. Peretz, Barrister,

APPLICATION for annulment in part of Commission Decision C(2013) 3803 final of 19 June 2013 relating to a proceeding under Article 101 [TFEU] and Article 53 of the EEA Agreement (Case AT.39226 — Lundbeck) and for reduction of the amount of the fine imposed on the applicants by that decision,

composed of G. Berardis (Rapporteur), President, O. Czúcz and A. Popescu, Judges,

having regard to the written procedure and further to the hearing on 15 October 2015,

1 H. Lundbeck A/S (‘Lundbeck’) is a company governed by Danish law which controls a group of companies specialising in the research, development, manufacture, marketing, sale and distribution of pharmaceuticals for the treatment of disorders in the central nervous system, including depression.

2 Lundbeck is an ‘originator’ undertaking, namely an undertaking whose activities are focused on researching new medicinal products and bringing them to the market.

3 Arrow Group A/S, which was renamed Arrow Group ApS in August 2003 (hereinafter referred to without distinction as ‘Arrow Group’), is a company governed by Danish law at the head of a group of companies present in several Member States, which since 2001 has been active in the development and sales of generic medicinal products.

4 Arrow Generics Ltd is a company incorporated in the United Kingdom, a subsidiary owned at first as to 100% and then as to 76% by Arrow Group.

5 Resolution Chemicals Ltd is a company incorporated in the United Kingdom specialising in the production of active pharmaceutical ingredients (‘APIs’) for generic medicinal products. Until September 2009 it was controlled by Arrow Group.

6 The relevant product for the purposes of the present case is the antidepressant medicinal product containing an API called citalopram.

7 In 1977, Lundbeck filed a patent application in Denmark for the citalopram API and two processes —an alkylation process and a cyanation process — to produce that API. Patents for that API and those processes (‘the original patents’) were issued in Denmark and in a number of western European countries between 1977 and 1985.

8 As regards the European Economic Area (EEA), the protection afforded by the original patents and, where appropriate, the supplementary protection certificates (‘SPCs’) provided for in Council Regulation (EEC) No 1768/92 of 18 June 1992 concerning the creation of a supplementary protection certificate for medicinal products (OJ 1992 L 182, p. 1), expired between 1994 (for Germany) and 2003 (for Austria). In particular, in the case of the United Kingdom, those patents expired in January 2002.

9 Over time, Lundbeck developed other, more effective, processes for the production of citalopram, in respect of which it applied for and often obtained patents in several EEA countries and also from the World Intellectual Property Organisation (WIPO) and the European Patent Office (EPO).

10 First, on 13 March 2000 Lundbeck filed a patent application with the Danish authorities relating to a process for the production of citalopram which envisaged a method of purification of the salts used by means of crystallisation. Similar applications were filed in other EEA countries and also with the WIPO and the EPO. Lundbeck obtained patents protecting the crystallisation process (‘the crystallisation patents’) in a number of Member States during the first half of 2002, in particular on 30 January 2002 in the case of the United Kingdom and on 11 February 2002 in the case of Denmark. The EPO granted a crystallisation patent on 4 September 2002. In addition, in the Netherlands, Lundbeck had already obtained, on 6 November 2000, a utility model for that process (‘Lundbeck’s utility model’), that is to say, a patent valid for six years, granted without a prior examination.

11 Secondly, on 12 March 2001, Lundbeck filed a patent application with the United Kingdom authorities for a citalopram production process using a salt purification method by film distillation. The United Kingdom authorities granted Lundbeck a patent for that film distillation method on 3 October 2001 (‘the film distillation patent’). However, that patent was revoked on 23 June 2004 for lack of novelty by comparison with another Lundbeck patent. Lundbeck obtained a similar patent in Denmark on 29 June 2002.

12 Lastly, Lundbeck planned to launch a new antidepressant medicinal product, Cipralex, based on the API known as escitalopram (or S-citalopram), by the middle of 2002 or the beginning of 2003. That new medicinal product was designed for the same patients as those who could be treated by Lundbeck’s patented medicinal product Cipramil, based on the citalopram API. The escitalopram API was protected by patents valid until at least 2012.

3. The agreements concluded by Lundbeck with Arrow Group, Arrow Generics and Resolution Chemicals, and other background factors

13 During 2002, Lundbeck entered into six agreements concerning citalopram (‘the agreements in question’) with undertakings active in the production and/or sale of generic medicinal products (‘the generic undertakings’), including Arrow Group, Arrow Generics and Resolution Chemicals (together ‘Arrow’).

– first, the agreement concluded on 24 January 2002 between Lundbeck, on the one hand, and Arrow Generics and Resolution Chemicals (together ‘Arrow UK’), on the other hand, concerning the territory of the United Kingdom (‘the UK agreement’);

– secondly, the agreement concluded on 3 June 2002 between Lundbeck and Arrow Group, concerning the territory of Denmark (‘the Danish agreement’).

15 The initial term of the UK agreement was until 31 December 2002 or, if earlier, until the date on which a final decision had been delivered in the action which Lundbeck intended to bring against Arrow UK before the United Kingdom courts concerning Arrow UK’s alleged infringement of its patents (‘the UK infringement action’) (Article 4.1 of the UK agreement). Next, that agreement was extended on two occasions by the signing of addenda. The first extension covered the period from 1 January until 31 March 2003 (Article 3.1 of the first addendum to the UK agreement), while the second extension provided that the agreement was to end either on 31 January 2004 or seven days after signature of the court decision determining the dispute between Lundbeck and Lagap Pharmaceuticals Ltd (‘the Lagap litigation’), another undertaking active in the production of generic citalopram (Article 4.1 of the second addendum to the UK agreement). As that litigation was settled on 13 October 2003, the UK agreement terminated on 20 October 2003. It follows that the overall duration of that agreement was from 24 January 2002 until 20 October 2003 (‘the term of the UK agreement’).

16 The Danish agreement, which was not extended, was concluded for a period from the date of signature until 1 April 2003 or, if earlier, until the date on which a final decision had been delivered in the UK infringement action. As no such decision was delivered, the agreement was in force from 3 June 2002 until 1 April 2003 (‘the term of the Danish agreement’).

– the first recital in the preamble to that agreement (‘the UK preamble’) refers, inter alia, to the fact that Lundbeck is the holder of crystallisation and film distillation patents (‘Lundbeck’s new patents’);

– the fourth recital in the UK preamble states that ‘… Arrow [UK] has obtained a licence from a third party to import into the [United Kingdom] citalopram not manufactured by Lundbeck or with the consent of Lundbeck (“the said Citalopram”, which definition shall for the avoidance of doubt comprise only Citalopram for marketing and sale in the [United Kingdom] and shall exclude citalopram for marketing and sale in other countries)’;

– the sixth recital in the UK preamble states that Lundbeck performed a laboratory analysis of ‘the said Citalopram’ which gave it substantial reason to believe that that citalopram infringed, in particular, the patents referred to in the first indent above;

– the seventh recital in the UK preamble states that Arrow UK does not consider that it has infringed those patents or consider that they are valid, but accepts that Lundbeck has a reasonable belief that they may be valid and have been infringed, which Arrow UK is unable to disprove by incontrovertible evidence;

– the eighth recital in the UK preamble observes that Lundbeck has threatened to seek an interim injunction and that it intends to initiate the UK infringement action;

– Article 1.1 of that agreement (‘Article 1.1 UK’) provides that ‘Arrow [UK] on its own behalf and on behalf of all associated and related entities undertakes during the [term of the UK agreement] not in the [United Kingdom] to make, dispose of, offer to dispose of, use or, after the Second Delivery date, … import or keep for disposal or otherwise (1) the said Citalopram or (2) any other Citalopram which Lundbeck alleges to infringe its [intellectual property] Rights and, to enable Lundbeck to ascertain if there may be an infringement, during the [term of the UK agreement] to provide Lundbeck with sufficient samples for analysis purposes at least one month prior to any threatened manufacture, importation, sale or offer for sale pending a final unappealable decision in [the UK infringement action …]’;

– Article 1.2 of that agreement states that Arrow UK has agreed that the undertakings given by it and referred to in Article 1.1 UK may be incorporated in an order that Lundbeck might ask the competent United Kingdom court to make;

– Article 2.1 of that agreement states that Lundbeck will commence the UK infringement action as soon as possible and in any event no later than 31 March 2002;

– Article 2.2 of that agreement states that, in consideration of the undertakings in Article 1.1 UK and Arrow not seeking a ‘cross-undertaking in damages’ (i.e. the amount which, in accordance with the laws of England and Wales, Lundbeck would have had to deposit with the Court if it intended to seek an injunction in the UK infringement action), Lundbeck is to pay Arrow UK GBP 5 million, in four instalments, that sum having subsequently been increased by GBP 450 000 under Article 2.1 of the first addendum to the UK agreement, and by GBP 1.35 million in application of Articles 2.1 and 3 of the second addendum to the UK agreement (see recitals 446 and 447 of the contested decision);

– Article 2.3 of that agreement establishes that, in the event that the final decision in the UK infringement action should find that Arrow UK had not infringed Lundbeck’s intellectual property rights, the amount specified in Article 2.2 of that agreement would constitute the full and final compensation that Arrow UK could obtain from Lundbeck for loss sustained as a result of the obligations arising under Article 1.1 UK;

– Article 3.4 of that agreement (‘Article 3.4 UK’) provides that Arrow UK is to deliver to Lundbeck its stock ‘of said Citalopram’ in two stages, the first of which, covering approximately 3.975 million packed tablets, by no later than 6 February 2002 and the second, covering around 1.1 million bulk tablets, by no later than 15 February 2002.

18 It should be observed, moreover, that on 6 February 2002 Lundbeck obtained the order referred to in Article 1.2 of the UK agreement (‘the consent order’).

– the first, third and fifth to ninth recitals in the preamble thereto (‘the Denmark preamble’) correspond, in essence, to the first, fourth and sixth to eighth recitals in the UK preamble, it being noted that the ninth recital in the Denmark preamble refers to the consent order;

– Article 1.1 of that agreement (‘Article 1.1 of the Danish agreement’) provides that ‘Arrow [Group] consents to cancel, cease and desist from any importation, manufacture, production, sale or other marketing of products containing Citalopram which Lundbeck alleges to infringe its intellectual property rights in the [Danish] Territory for the term of [the Danish agreement]’;

– Article 2.1 of that agreement states that, as compensation for the undertakings given by Arrow Group, Lundbeck is to pay Arrow Group the sum of 500 000 United States dollars (USD);

– Article 2.2 of that agreement establishes that, in the event that the final decision in the UK infringement action should find that Arrow Group had not infringed Lundbeck’s intellectual property rights, the amount specified in Article 2.1 of that agreement would constitute the full and final compensation that Arrow Group could obtain from Lundbeck for loss sustained as a result of the obligations arising under Article 1.1 of the Danish agreement;

– Article 3.1 of that agreement adds that Lundbeck is to purchase Arrow Group’s stock of citalopram, consisting of approximately 1 million tablets, for the price of USD 147 000.

4. Steps taken by the Commission in the pharmaceutical sector and administrative procedure

20 In October 2003, the Commission of the European Communities was informed of the agreements in question by the Konkurrence- og Forbrugerstyrelsen (the Danish authority for [the protection of] competition and consumers, ‘the KFST’).

21 Since most of those agreements concerned the whole of the EEA or, in any event, Member States other than the Kingdom of Denmark, it was agreed that the Commission would examine their compatibility with competition law, while the KFST would not pursue the matter.

22 Between 2003 and 2006, the Commission carried out inspections within the meaning of Article 20(4) of Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles [101 TFEU] and [102 TFEU] (OJ 2003 L 1, p. 1) at the premises of Lundbeck and other companies active in the pharmaceutical sector. It also sent Lundbeck and another company requests for information within the meaning of Article 18(2) of that regulation.

23 On 15 January 2008, the Commission adopted the decision initiating an inquiry into the pharmaceutical sector pursuant to Article 17 of Regulation No 1/2003 (Case No COMP/D2/39514). The single article of that decision stated that the inquiry would relate to the introduction of innovative and generic medicinal products for human consumption on to the market.

24 On 8 July 2009, the Commission adopted a communication summarising its report of the inquiry into the pharmaceutical sector. That communication included, in a ‘technical annex’, the full version of the inquiry report, in the form of a Commission working document, available only in English.

26 In 2010 and the first half of 2011, the Commission sent requests for information to Lundbeck and, among others, to the other companies which were parties to the agreements in question, including Arrow Group and Arrow Generics.

27 On 24 July 2012, the Commission opened proceedings against, inter alia, the generic undertakings which were parties to the agreements in question and sent them, and Lundbeck, a statement of objections.

28 All the addressees of that statement of objections who had requested a hearing were heard at the hearings on 14 and 15 March 2013.

29 On 12 April 2013, the Commission sent a letter of facts to all the addressees of the statement of objections.

31 On 19 June 2013, the Commission adopted Decision C(2013) 3803 final relating to a proceeding under Article 101 [TFEU] and Article 53 of the EEA Agreement (Case AT.39226 — Lundbeck) (‘the contested decision’).

32 By the contested decision, the Commission considered that the agreements in question constituted restrictions of competition by object within the meaning of Article 101(1) TFEU and Article 53(1) of the EEA Agreement.

33 In particular, the Commission found, first, that the UK agreement and the Danish agreement (together ‘the agreements at issue’) constituted a single and continuous infringement by Lundbeck and by Arrow Group and, secondly, that Arrow Generics and Resolution Chemicals had also infringed Article 101(1) TFEU and Article 53(1) of the EEA Agreement by participating in the UK agreement (Article 1(2) of the contested decision).

34 As is apparent from the summaries in recitals 962 and 1013 of the contested decision, concerning the UK agreement and the Danish agreement respectively, the Commission based its assessment, in particular, on the following factors:

– at the time of concluding the agreements at issue, Lundbeck and Arrow were at least potential competitors in the United Kingdom and in Denmark;

– Lundbeck transferred significant value to Arrow pursuant to those agreements;

– that transfer of value was linked to Arrow’s acceptance of the limitations on its entry to the citalopram market in the United Kingdom and in Denmark set out in those agreements, in particular Arrow’s commitment not to sell generic citalopram which Lundbeck regarded as infringing its patents, during the relevant terms of the agreements at issue;

– that transferred value corresponded approximately to the profits Arrow expected to make if it had successfully entered the market;

– Lundbeck could not have obtained those limitations through enforcement of its new patents, since the obligations on Arrow following those agreements went beyond the rights granted to holders of process patents;

– the agreements at issue contained no commitment from Lundbeck to refrain from bringing infringement proceedings against Arrow if the latter entered the United Kingdom or Danish markets with generic citalopram after the expiry of one of those agreements.

35 The Commission also imposed fines on all the parties to the agreements in question. To that end, it applied the Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation No 1/2003 (OJ 2006 C 210, p. 2) (‘the 2006 Guidelines’). Although, in Lundbeck’s case, the Commission followed the general methodology described in the 2006 Guidelines, based on the value of sales of the relevant product made by that undertaking (recitals 1316 to 1358 of the contested decision), in the case of the other parties to the agreements in question, however, namely the generic undertakings, it made use of the possibility, provided for in point 37 of those guidelines, to depart from that methodology, in view of the particularities of the case so far as those parties were concerned (recital 1359 of the contested decision).

36 Thus, as regards those parties to the agreements in question other than Lundbeck, including Arrow, the Commission considered that, in order to determine the basic amount of the fine and to ensure that the fine would have a sufficient deterrent effect, it was appropriate to take account of the value of the sums transferred to them by Lundbeck pursuant to the agreements in question, without differentiating between the infringements on the basis of their nature or geographic scope, or on the basis of the market share of the undertakings concerned, those factors being addressed only for the sake of completeness (recital 1361 of the contested decision).

37 As regards Arrow Group and Arrow UK, the Commission considered that the sums which Lundbeck had paid them came to EUR 10.4 million under the UK agreement (recital 447 of the contested decision) and USD 684 000 (recital 472 of the contested decision) under the Danish agreement, giving a total basic amount of EUR 11.1 million (recital 1373 of the contested decision).

38 In view of the total length of the investigation, the Commission reduced by 10% the amount of the fines imposed on all the addressees of the contested decision (recitals 1349 and 1380 of the contested decision).

39 Last, the Commission applied the second subparagraph of Article 23(2) of Regulation No 1/2003, which provides that, for each undertaking participating in an infringement, the fine is not to exceed 10% of its total turnover in the preceding business year, separately to Arrow Group and to Arrow Generics, on the one hand, and to Resolution Chemicals, on the other, since it was no longer controlled by Arrow Group (recital 1383 of the contested decision).

40 On the basis of those considerations, the Commission imposed a fine of EUR 9 975 000 on Arrow Group, jointly and severally with Arrow Generics for the sum of EUR 9 360 000 and also with Resolution Chemicals for the sum of EUR 823 735 (recital 1396 and Article 2(2) of the contested decision).

41 By application lodged at the Court Registry on 28 August 2013, the applicants, Arrow Group and Arrow Generics, brought the present action.

43 On 27 November 2014, in the context of the measures of organisation of procedure provided for in Article 64 of the Rules of Procedure of the General Court of 2 May 1991, the parties were requested to comment in writing on the possible consequences for the present case of the judgment of 11 September 2014 in CB v Commission (C‑67/13 P, ECR, EU:C:2014:2204).

45 On a proposal from the Judge-Rapporteur, the Court (Ninth Chamber) decided to open the oral part of the procedure.

46 The parties presented oral argument and answered the questions put by the Court at the hearing on 15 October 2015.

– annul Articles 1 to 3 of the contested decision in so far as they concern the applicants;

– in the alternative, annul Article 2 of the contested decision, in so far as it imposes a fine on the applicants in respect of the agreements at issue;

– in the further alternative, annul Article 2 of the contested decision in that it imposes a fine on them in respect of the Danish agreement;

– in the final alternative, reduce the amount of the fine imposed on the applicants pursuant to Article 2 of the contested decision;

49 In support of their action, the applicants raise six pleas in law, alleging, in essence, (i) breach of essential procedural requirements in the procedure leading to the adoption of the contested decision; (ii) that the applicants were not in potential competition with Lundbeck; (iii) that the agreements at issue are not restrictions by object; (iv) errors of law concerning the imposition of a fine in the present case; (v) in the alternative, incorrect characterisation of the agreements at issue as a single and continuous infringement; and (vi) further in the alternative, the disproportionate nature of the fine imposed on the applicants.

50 It is appropriate to examine (i) the second plea in law, followed by (ii) the third plea in law, then (iii) the first plea in law and, finally, (iv) the other pleas in law in the order in which the applicants submitted them.

1. The second plea in law, alleging that the applicants and Lundbeck were not potential competitors

51 The applicants dispute the argument set out in the contested decision that at the time when the agreements at issue were concluded they were at least potential competitors of Lundbeck and they claim that the burden of proof relating to that question is borne by the Commission. In that context, they submit that the assessment of potential competition must be based on a realistic approach; the purely theoretical possibility of entering the market is not sufficient. The Commission’s findings in that respect must not be based on a mere hypothesis, but must be supported by objective facts or by an analysis of the structures of the relevant market which shows that the entry to the market of a potential competitor corresponds to a viable economic strategy for that potential competitor.

53 Before examining the applicants’ arguments in detail, it is necessary briefly to recall the analysis of potential competition made in the contested decision, in particular as regards the applicants, and to make a number of preliminary observations concerning the case-law relating to that competition, to the burden of proof and to the extent of the Court’s review.

54 In recitals 615 to 620 of the contested decision, the Commission examined the specific characteristics of the pharmaceutical sector and identified two phases in which potential competition could occur in that sector.

55 The first phase may begin several years before the impending expiry of the patent on an API, when generic producers that want to launch a generic version of the medicinal product concerned begin developing viable processes leading to a product that meets regulatory requirements. Next, in the second phase, in order to prepare for actual market entry, a generic undertaking must apply for marketing authorisations (‘MAs’), pursuant to Directive 2001/83/EC of the European Parliament and of the Council of 6 November 2001 on the Community code relating to medicinal products for human use (OJ 2001 L 311, p. 67), order tablets from one or more generic producers or produce them itself and find distributors or set up its own distribution network, that is to say, it must take a series of preliminary steps, without which there would never be any effective competition on the market.

56 The impending expiry of the patent on an API therefore generates a dynamic competitive process, during which the various generic undertakings compete to be the first to enter the market. The first generic undertaking to enter the market can generate significant profits, before competition intensifies and prices fall drastically. That is why generic undertakings are willing to make considerable investments and take significant risks in order to be the first to enter the market for the product concerned once the patent on the API concerned expires.

57 In those phases of potential competition, generic undertakings are often confronted with issues concerning patent law and intellectual property law. Nevertheless, they generally find a way to avoid infringing existing patents, such as process patents. They have various options in that respect, such as seeking a declaration of non-infringement or ‘clearing the way’ by informing the originator undertaking of their intention to enter the market. They may also launch their products ‘at risk’, defending themselves against any allegations of infringement or by bringing a counter-claim calling into question the validity of the patents relied on in support of an infringement action. Lastly, they may also work with their API supplier in order to alter the production process or reduce the risk of infringement, or they may switch to another API producer in order to avoid such risk.

58 In recitals 621 to 623 of the contested decision, the Commission noted that, in the present case, the original patents had expired by January 2002 in most EEA countries. That had generated a dynamic competitive process, in which several generic undertakings had taken steps in order to be the first to enter the market. Lundbeck had been aware of that threat since December 1999, when it wrote in a strategic plan for 2000 that ‘by 2002 … generics [were] expected to have captured a substantial share of Cipramil sales’. Likewise, in December 2001, Lundbeck wrote in its strategic plan for 2002 that it expected that the United Kingdom market in particular would be severely hit by generic competition. Accordingly, the Commission had no doubt that the generic undertakings were exerting competitive pressure on Lundbeck at the time when the agreements in question were concluded.

59 In addition, in recitals 624 to 633 of the contested decision, the Commission stated that challenging patents is an expression of potential competition in the pharmaceutical sector. It noted, in that respect, that in the EEA, generic undertakings are not required to demonstrate that their products do not infringe any patents in order to obtain an MA or to begin marketing those products. It is for the originator undertaking to prove, at least prima facie, that those products infringe one of its patents, in order to obtain a court injunction prohibiting the generic undertaking concerned from making further sales of its products on the market.

60 Finally, the Commission observed that Lundbeck’s process patents were not capable of blocking all possibilities of market entry open to the generic undertakings. In recital 635 of the contested decision, it identified, in the present case, eight possible routes to the market:

– first, launching the product ‘at risk’ and facing possible infringement actions brought by Lundbeck;

– secondly, making efforts to ‘clear the way’ with the originator undertaking before entering the market, especially in the United Kingdom;

– thirdly, requesting a declaration of non-infringement from a national court before entering the market;

– fourthly, claiming patent invalidity before the national courts, as a counter-claim to a claim of patent infringement made by the originator undertaking;

– fifthly, opposing a patent before the competent national authorities or the EPO and requesting that the patent be revoked or narrowed;

– sixthly, working with the current API producer or its intermediary to change the API producers’ process in such a way as to eliminate or reduce the risk of infringement of Lundbeck’s process patents;

– seventhly, switching to another API producer within the existing supply contract;

– eighthly, switching to another API producer outside of the existing supply contract, either because the existing supply contract permitted it or possibly because an exclusive supply contract could be invalidated if the API were found to infringe Lundbeck’s process patents.

61 As regards, in particular, the examination of the competitive relationship between Lundbeck and the applicants at the time of conclusion of the agreements at issue, the Commission, in recitals 877 to 899 and 965 to 975 of the contested decision, noted, inter alia, that the applicants:

– had already concluded an agreement with Alfred E. Tiefenbacher GmbH & Co. (‘Tiefenbacher’), which allowed them to purchase generic citalopram produced by the Indian companies Cipla or Matrix, without that agreement preventing them from purchasing citalopram produced by other companies, subject to a royalty payment to Tiefenbacher;

– had a stock of citalopram amounting to 9 222 000 tablets, produced in accordance with the process used by Cipla at the time (‘the Cipla I process’);

– had received, in December 2001, a positive opinion from the competent United Kingdom authority concerning their MA application, based, under the mutual recognition procedure provided for in Directive 2001/83, on the MA that Tiefenbacher had already obtained in the Netherlands;

– considered, as Lundbeck did, that that authority would grant the MA in question in the near future;

– while being concerned that the Cipla I process might infringe the crystallisation patent which Lundbeck had applied for, but not yet obtained, in the United Kingdom, were not certain in that regard;

– expected to be able swiftly to obtain an MA in Denmark, on the basis of the MA obtained by Tiefenbacher for another generic undertaking in that Member State on 2 May 2002;

– had the option of switching to citalopram produced by Matrix, which at the time of conclusion of the agreements at issue, used a process which was not regarded as infringing Lundbeck’s new patents (‘the Matrix I process’), of working with Cipla and Matrix to develop other processes and of switching to citalopram produced by the generic undertaking Ranbaxy Laboratories Ltd (‘Ranbaxy’), which used a different process.

62 It must be noted that, having regard to the requirements set out in Article 101(1) TFEU regarding effect on trade between Member States and repercussions on competition, that provision applies only to sectors open to competition (see judgment of 29 June 2012 in E.ON Ruhrgas and E.ON v Commission, T‑360/09, ECR, EU:T:2012:332, paragraph 84 and the case-law cited).

63 According to the case-law, the examination of conditions of competition on a given market must be based not only on existing competition between undertakings already present on the relevant market but also on potential competition, in order to ascertain whether, in the light of the structure of the market and the economic and legal context within which it functions, there are real concrete possibilities for the undertakings concerned to compete among themselves or for a new competitor to enter the relevant market and compete with established undertakings (judgments of 15 September 1998 in European Night Services and Others v Commission, T‑374/94, T‑375/94, T‑384/94 and T‑388/94, ECR, EU:T:1998:198, paragraph 137; 14 April 2011 in Visa Europe and Visa International Service v Commission, T‑461/07, ECR, EU:T:2011:181, paragraph 68, and E.ON Ruhrgas and E.ON v Commission, cited in paragraph 62 above, EU:T:2012:332, paragraph 85).

64 In order to determine whether an undertaking is a potential competitor in a market, the Commission is required to determine whether, if the agreement in question had not been concluded, there would have been real concrete possibilities for the undertaking to enter that market and to compete with established undertakings. Such a demonstration must not be based on a mere hypothesis, but must be supported by evidence or an analysis of the structures of the relevant market. Accordingly, an undertaking cannot be described as a potential competitor if its entry into a market is not an economically viable strategy (see judgment in E.ON Ruhrgas and E.ON v Commission, cited in paragraph 62 above, EU:T:2012:332, paragraph 86 and the case-law cited).

65 It necessarily follows that, while the intention of an undertaking to enter a market may be of relevance in order to determine whether it can be considered to be a potential competitor in that market, nonetheless the essential factor on which such a description must be based is whether it has the ability to enter that market (see judgment in E.ON Ruhrgas and E.ON v Commission, cited in paragraph 62 above, EU:T:2012:332, paragraph 87 and the case-law cited).

66 It should, in that regard, be recalled that whether potential competition — which may be no more than the existence of an undertaking outside that market — is restricted cannot depend on whether it can be demonstrated that that undertaking intends to enter that market in the near future. The mere fact of its existence may give rise to competitive pressure on the undertakings then operating in that market, a pressure represented by the likelihood that a new competitor will enter the market if the market becomes more attractive (judgment in Visa Europe and Visa International Service v Commission, cited in paragraph 63 above, EU:T:2011:181, paragraph 169).

67 Moreover, the case-law has also stated that the very fact that an undertaking already present on the market seeks to conclude agreements or to establish information exchange mechanisms with other undertakings which are not present on the market provides a strong indication that the market in question is not impenetrable (see, to that effect, judgments of 12 July 2011 in Hitachi and Others v Commission, T‑112/07, ECR, EU:T:2011:342, paragraph 226, and 21 May 2014 in Toshiba v Commission, T‑519/09, EU:T:2014:263, paragraph 231).

68 Although it follows from that case-law that the Commission may rely inter alia on the perception of the undertaking present on the market in order to assess whether other undertakings are potential competitors, nevertheless, the purely theoretical possibility of market entry is not sufficient to establish the existence of potential competition. The Commission must therefore demonstrate, by evidence or an analysis of the structures of the relevant market, that the market entry could have taken place sufficiently quickly for the threat of a potential entry to influence the conduct of the participants in the market, on the basis of costs which would have been economically viable (see, to that effect, judgment in E.ON Ruhrgas and E.ON v Commission, cited in paragraph 62 above, EU:T:2012:332, paragraphs 106 and 114).

69 It follows from Article 2 of Regulation No 1/2003 and settled case-law that in the area of competition law, where there is a dispute as to the existence of an infringement, it is incumbent on the Commission to prove the infringements which it has found and to adduce evidence capable of demonstrating to the requisite legal standard the existence of circumstances constituting an infringement (see judgment of 12 April 2013 in CISAC v Commission, T‑442/08, ECR, EU:T:2013:188, paragraph 91 and the case-law cited).

70 In that context, any doubt on the part of the Court must operate to the advantage of the undertaking to which the decision finding an infringement was addressed. The Court cannot therefore conclude that the Commission has established the infringement in question to the requisite legal standard if it still entertains any doubts on that point, in particular in proceedings for annulment of a decision imposing a fine (see judgment in CISAC v Commission, cited in paragraph 69 above, EU:T:2013:188, paragraph 92 and the case-law cited).

71 It is necessary to take into account the principle of the presumption of innocence resulting in particular from Article 48 of the Charter of Fundamental Rights of the European Union. Given the nature of the infringements in question and the nature and degree of severity of the penalties which may ensue, the presumption of innocence applies, inter alia, to the procedures relating to infringements of the competition rules applicable to undertakings that may result in the imposition of fines or periodic penalty payments (see, to that effect, judgment in CISAC v Commission, cited in paragraph 69 above, EU:T:2013:188, paragraph 93 and the case-law cited).

72 In addition, account must be taken of the non-negligible stigma attached to a finding of involvement in an infringement of the competition rules for a natural or legal person (see judgment in CISAC v Commission, cited in paragraph 69 above, EU:T:2013:188, paragraph 95 and the case-law cited).

73 Thus, the Commission must show precise and consistent evidence in order to establish the existence of the infringement and to support the firm conviction that the alleged infringement constitutes a restriction of competition within the meaning of Article 101(1) TFEU (see judgment in CISAC v Commission, cited in paragraph 69 above, EU:T:2013:188, paragraph 96 and the case-law cited).

74 However, it is important to emphasise that it is not necessary for every item of evidence produced by the Commission to satisfy those criteria in relation to every aspect of the infringement. It is sufficient if the set of indicia relied on by the institution, viewed as a whole, meets that requirement (see judgment in CISAC v Commission, cited in paragraph 69 above, EU:T:2013:188, paragraph 97 and the case-law cited).

75 Lastly, it must be pointed out that, when the Commission establishes that the undertaking in question has participated in an anticompetitive measure, it is for that undertaking to provide, using not only documents that were not disclosed but also all the means at its disposal, a different explanation for its conduct (see, to that effect, judgment of 7 January 2004 in Aalborg Portland and Others v Commission, C‑204/00 P, C‑205/00 P, C‑211/00 P, C‑213/00 P, C‑217/00 P and C‑219/00 P, ECR, EU:C:2004:6, paragraphs 79 and 132).

76 Where the Commission has documentary evidence of an anticompetitive practice, it is not sufficient for the undertakings concerned to prove circumstances which cast the facts established by the Commission in a different light and thus allow another explanation of the facts to be substituted for the one adopted by the Commission. In the presence of documentary evidence, the burden is on those undertakings not merely to submit another explanation for the facts found by the Commission but to challenge the existence of those facts established on the basis of the documents produced by the Commission (see, to that effect, judgment in CISAC v Commission, cited in paragraph 69 above, EU:T:2013:188, paragraph 99 and the case-law cited).

77 It must be borne in mind that Article 263 TFEU involves review by the EU judicature, in respect of both the law and the facts, of the arguments relied on by applicants against the contested decision, which means that it has the power to assess the evidence and annul that decision. Accordingly, whilst, in areas giving rise to complex economic assessments, the Commission has a margin of discretion, that does not mean that the Court must refrain from reviewing the Commission’s interpretation of information of an economic nature. The Court must not only establish whether the evidence put forward is factually accurate, reliable and consistent but must also determine whether that evidence contains all the relevant data that must be taken into consideration in appraising a complex situation and whether it is capable of substantiating the conclusions drawn from it (see, to that effect, judgment of 10 July 2014 in Telefónica and Telefónica de España v Commission, C‑295/12 P, ECR, EU:C:2014:2062, paragraphs 53 and 54 and the case-law cited).

78 The applicants’ specific arguments concerning potential competition must be addressed in the light of those principles. Those arguments relate to the temporal aspect of that competition, the importance of Lundbeck’s perception, the expiry of the original patents, Lundbeck’s new patents, factual errors concerning the available evidence, the possibility of switching to citalopram produced in accordance with processes other than the Cipla I process, the applicability of the Guidelines on the application of Article [101 TFEU] to technology transfer agreements (OJ 2004 C 101, p. 2) (‘the technology transfer guidelines’) and the relevance of the judgment of 23 October 2001 of the High Court of Justice of England and Wales, Chancery Division, in Smithkline Beecham Plc v Generics (UK) Ltd (2002) 25(1) I.P.D. 25005 (‘the Paroxetine judgment’).

79 The applicants maintain that an undertaking cannot be regarded as a potential competitor unless it is able to enter the market in question within a reasonable time, especially where there are significant barriers to entry, such as a vast array of patents.

81 In that regard, it must be stated that the steps necessary for obtaining MAs and preparing for market entry constitute potential competition, when they are carried out by generic undertakings which have made significant investments in terms of human and economic resources in order to launch their generic medicinal product.

82 That potential competition is protected by Article 101 TFEU. If it were possible, without infringing competition law, to pay undertakings taking the necessary steps to prepare for the launch of a generic medicinal product, including obtaining an MA, and which have made significant investments to that end, to cease or merely slow that process, effective competition would never take place, or would suffer significant delays, at the expense of consumers, that is to say, in the present case, patients or health insurance schemes.

83 That approach is consistent with the case-law arising from the judgment of 6 December 2012 in AstraZeneca v Commission (C‑457/10 P, ECR, EU:C:2012:770, paragraph 108). The case that gave rise to that judgment concerned, inter alia, an abuse of a dominant position committed by an undertaking which had submitted misleading representations in order to obtain, from the competent national authorities, SPCs (see paragraph 8 above) allowing it to prevent the entry to the market of generic versions of its medicinal product, even after the future expiry of the patents protecting that product. In that context, the Court of Justice considered, in essence, that the anticompetitive character of those representations was not called into question by the fact that those SPCs had been requested between five and six years before their entry into force and that, until that time, the appellants’ rights had been protected by lawful patents. According to the Court of Justice, not only did such unlawful SPCs lead to a significant exclusionary effect after the expiry of the basic patents, but they were also liable to alter the structure of the market by adversely affecting potential competition even before that expiry. In that respect, it should be noted that the remark of the Court of Justice concerning the fact that potential competition begins before the expiry of the patents is independent of the fact that the SPCs at issue in that judgment had been obtained fraudulently or irregularly. Accordingly, that case-law confirms that potential competition already exists before the expiry of the patents protecting a medicinal product and that the steps taken before that expiry are relevant in assessing whether that competition was restricted.

84 In the contested decision, independently of its general statements concerning the activities of API producers which precede the expiry of the patent protecting an API by several years, the Commission examined in detail the steps taken by the applicants to prepare for their market entry up to the signature of the agreements at issue, while placing them in the context created by the fact that the original patents had expired or were to expire in the near future in a number of countries of the EEA (see paragraph 8 above).

85 It follows that the Commission did not make an error of assessment concerning the temporal aspect of the potential competition.

86 The applicants maintain that the question whether they were in potential competition with Lundbeck must be assessed objectively and not on the basis of Lundbeck’s perception. Furthermore, the fact that Lundbeck may have regarded the applicants as threatening to enter the market unlawfully does not mean that they were potential competitors.

88 It must be noted that, in accordance with the case-law referred to in paragraph 67 above, the perception that Lundbeck had of the applicants is a factor that may be taken into consideration, although it does not suffice, by itself, to demonstrate the existence of potential competition.

89 As regards the possibility, referred to by the applicants, that Lundbeck’s perception was affected by a successful ‘bluff’ by the applicants, it must be noted, first, that Lundbeck was an experienced undertaking, which had for a long time monitored the steps taken by generic undertakings in relation to citalopram (see, inter alia, recitals 172 to 183 of the contested decision), including those taken by the applicants, their supplier Tiefenbacher, and Cipla and Matrix (see recitals 374, 380, 384, 388 and 389 of the contested decision). The applicants do not dispute the findings contained in the contested decision in that regard.

90 Next, it is apparent from several items of evidence referred to in the contested decision that Lundbeck was aware of the fact that its crystallisation patent was ‘not the strongest of all patents’ and acknowledged that the likelihood that it would be held invalid was between 50 and 60% (see, inter alia, recitals 149, 157, 627, 669 and 745 and footnote No 322 of the contested decision).

91 Finally, as the Commission, in essence, points out, Lundbeck never complained that it had been the victim of a bluff; rather, as can be seen from recital 206 of the contested decision, it was delighted, in December 2002, that it had delayed the launch of generic citalopram, expected for the first quarter of 2002, which would have a positive effect on the sales development of their new medicinal product, Cipralex (see paragraph 12 above). Moreover, it pursued its strategy by signing the Danish agreement on 2 June 2002 and by the UK agreement extensions in 2003 (see paragraph 15 above). In the absence of any evidence to that effect, it is not credible that the applicants could have deceived Lundbeck over such a long period.

93 The applicants claim that the Commission attached too much importance to the fact that the original patents had expired. In that regard, they maintain that it was not possible to enter the market with citalopram produced in accordance with the processes covered by those patents, which did not lend themselves to industrial use. That is confirmed, in their submission, by the fact that no undertaking interested in selling generic citalopram relied on those processes in order to apply for MAs.

95 As regards the original API patent, it must be noted that, as the Commission highlighted, inter alia, in recital 127 of the contested decision, in which it cited an extract from Lundbeck’s activity plan for 1999, Lundbeck feared that generic undertakings could enter the market with citalopram in competition with Cipramil after the expiry of that patent.

96 Likewise, as is apparent in particular from recitals 150 and 634 of the contested decision, in reply to questions raised by the Commission before the statement of objections was sent, Lundbeck acknowledged that, after the expiry of the original patents, the generic undertakings could have produced citalopram using the processes covered by those patents, even though they were not very efficient.

97 The fact that, in the reply to the statement of objections, Lundbeck abandoned that position is not capable of calling into question the evidential value of that material, since that reversal took place in tempore suspecto (see, to that effect, judgment of 8 July 2008 in Lafarge v Commission, T‑54/03, EU:T:2008:255, paragraph 509).

98 Furthermore, it follows from the documents cited in recitals 382 and 482 and footnote No 1640 of the contested decision that Tiefenbacher considered that it was possible to produce citalopram in accordance with a process corresponding to one of those covered by the original patents.

99 Similarly, it follows from recital 158 of the contested decision that, in the context of the litigation between the generic undertaking Lagap and Lundbeck, one of Lundbeck’s advisers acknowledged that Matrix was using one of the processes covered by those patents ‘more efficiently than we [had] believed that they could do it’. That shows that it was possible to produce generic citalopram using the processes covered by those patents, even if it might be of lesser quality or more difficult to produce on an industrial scale than using the processes covered by Lundbeck’s new patents.

100 In any event, even if it was not possible to use the processes covered by the original patents on an industrial scale, it remained possible to adapt those processes in order to make them more effective. In that regard, it can be seen from recital 150 of the contested decision that Lundbeck acknowledged that, during the period from 2002 to 2004, there were a number of processes for producing citalopram which were different from those covered by the crystallisation patent.

101 In the light of those assessments from undertakings experienced in the economic sector concerned, the Commission was entitled to consider that the expiry of the original patents was an important factor in the assessment of potential competition. The fact, were it to be proved, that no generic undertaking made an MA application concerning citalopram produced in accordance with the processes covered by those patents does not call into question that finding, but means, at most, that those undertakings preferred to work with citalopram produced in accordance with more profitable processes.

103 The applicants submit that they took steps to prepare for their market entry by concluding, in May 2001, an agreement with Tiefenbacher, in order to obtain generic citalopram produced in accordance with the Cipla I process, which they regarded, at the time, as not infringing any patent held by Lundbeck. However, Lundbeck subsequently obtained new patents, which, the applicants argue, prevented them from lawfully entering the market with that citalopram. They thus sought other API suppliers. The fact that they took preliminary steps does not make the applicants potential competitors of Lundbeck.

104 The applicants also deny that the existence of potential competition can result from the fact that, in legal proceedings, Lundbeck’s new patents might be found not to have been infringed or to be invalid. Those patents benefit from a presumption of validity.

106 It must be noted that, as the Commission rightly observes, when generic companies seek to enter a market in which there is a patented medicinal product, the risk of litigation concerning patent infringement is sometimes unavoidable, given that process patents are often applied for late in the life-cycle of the product, close to the expiry of the patent concerning the API of that medicinal product and after those undertakings have made substantial preparations for entry to that market.

107 This is a commercial risk which most generic companies face and which must be balanced against the substantial commercial rewards they may obtain from entering that market quickly. The existence of risk and uncertainty is inherent in the fact that the competition in question is potential. However, the Commission is required to show, by means of specific evidence, that there is a real concrete possibility of the undertaking concerned entering the market within a reasonable period.

108 Those considerations are not called into question by the fact that Lundbeck’s new patents enjoy, like all patents, a presumption of validity.

109 It must be recalled that the Court of Justice has indeed acknowledged that the specific purpose of industrial property is, inter alia, to ensure that the patentee, in order to reward the creative effort of the inventor, has the exclusive right to use an invention with a view to manufacturing industrial products and putting them into circulation for the first time, either directly or by the grant of licences to third parties, as well as the right to oppose infringements (judgment of 31 October 1974 in Centrafarm and de Peijper, 15/74, ECR, EU:C:1974:114, paragraph 9). However, it has also established that, although the existence of rights recognised under the industrial property legislation of a Member State is not affected by the provisions of Article 101 TFEU, the conditions under which those rights may be exercised may nevertheless fall within the prohibitions contained in that article. This may be the case whenever the exercise of such a right appears to be the object, the means or the consequence of an agreement, decision or concerted practice (see, to that effect, judgment in Centrafarm and de Peijper, EU:C:1974:114, paragraphs 39 and 40).

110 Likewise, the Court of Justice has established that, although the Commission is not competent to determine the scope of a patent, it may not refrain from all action when the scope of the patent is relevant for the purposes of determining whether there has been an infringement of Articles 101 and 102 TFEU (judgment of 25 February 1986 in Windsurfing International v Commission, 193/83, ECR, EU:C:1986:75, paragraph 26). In the same judgment, the Court held that the specific subject-matter of the patent cannot be interpreted as also affording protection against actions brought in order to challenge its validity (judgment in Windsurfing International v Commission, EU:C:1986:75, paragraph 92).

111 In the light of the principles deriving from that case-law, it must be observed that the presumption of validity which all patents enjoy cannot be equated with a presumption of illegality of any product placed on the market which the patent holder deems to be infringing the patent. In the present case, it was for Lundbeck to prove, before the national courts, in the event that generic medicinal products entered the market, that they infringed one of its process patents, since an ‘at risk’ entry by a generic undertaking is not in itself unlawful. Moreover, in the context of such an action, the defendant could have challenged the validity of the patent on which Lundbeck relied by raising a counter-claim.

112 Thus, it is necessary to examine the question whether the Commission proved that the applicants, after taking a number of preliminary steps to prepare their entry in the near future to the citalopram market in the United Kingdom and Denmark, had not ruled out, at the time when the agreements at issue were concluded, running the risks that that entry entailed.

113 The applicants claim that the Commission made a number of factual errors when assessing the evidence used to conclude that the applicants and Lundbeck were in potential competition. They maintain that it is apparent from several documents that, even without the conclusion of the agreements at issue, they would not have entered the market with the citalopram available to them, given that it had been produced in accordance with the Cipla I process, which infringed the crystallisation patent. Moreover they would not have been able swiftly to obtain an MA for the United Kingdom.

115 It is necessary to examine the evidence in the Commission’s possession and to determine whether the applicants’ arguments permit the inference that that evidence is not sufficient to support the conclusions drawn in the contested decision. That examination must be carried out in the light, inter alia, of the principles referred to in paragraphs 69 to 76 above, in so far as concerns the burden of proof.

116 Moreover, it is necessary to confirm the Commission’s approach, as it can be seen from the contested decision as a whole, which consists in principally taking into account evidence prior to or contemporaneous with the dates on which the agreements at issue were concluded (see, to that effect, judgment of 11 July 2014 in Esso and Others v Commission, T‑540/08, ECR, EU:T:2014:630, paragraph 75 and the case-law cited). First, the Commission cannot reconstruct the past by imagining the events that would have occurred and which did not in fact occur as a result of those agreements. Secondly, the parties to those agreements now have every interest in arguing that they had no realistic perspective of entering the market or that they thought that their products infringed one of Lundbeck’s patents. Nevertheless, it is solely on the basis of the information available to them at the time and their perception of the market at that time that they decided to adopt a particular course of conduct and concluded the agreements at issue.

117 The Commission did not err, therefore, in taking as its point of reference the time when those agreements were concluded in order to evaluate the competitive situation between the applicants and Lundbeck; subsequent evidence may also be taken into account provided that it is capable of clarifying those parties’ positions at the time, confirming or casting doubt on their arguments in that respect as well as allowing a better understanding of the market concerned. In any event, that subsequent evidence cannot be decisive in the examination of the potential competition between the parties to the agreements at issue.

The possibility of entering the market with citalopram produced in accordance with the Cipla I and Matrix I processes

118 As regards the UK agreement signed on 24 January 2002, it must be recalled that, in recitals 375 and 878 of the contested decision, the Commission found that, on 22 May 2001, the applicants had concluded an agreement with Tiefenbacher in order to purchase, on the one hand, the MAs that Tiefenbacher had requested in several EEA countries concerning generic citalopram and, on the other hand, tablets of that medicinal product itself containing the API produced by Cipla or Matrix.

119 In recitals 379 and 878 of the contested decision, the Commission noted that, on 10 September 2001, the applicants had ordered 2.8 million German marks (DEM) worth of citalopram tablets from Tiefenbacher, which they had received in part in November 2001 and in part during the second week of January 2002. Those tablets had been made using the API produced in accordance with the Cipla I process.

120 Recital 382 of the contested decision states that, on 14 December 2001, a meeting was held between the applicants and Tiefenbacher. According to the notes concerning that meeting, which the applicants drew up no later than 17 December 2001 and which they have produced before the Court, Tiefenbacher considered that the citalopram produced in accordance with the Cipla I process could infringe the crystallisation patent, if that patent were granted in the United Kingdom (see paragraph 10 above), although Cipla maintained that its process was one of those covered by the original patents. Those notes also indicate that the applicants wanted to prepare a defence strategy as regards the applications for injunctions that Lundbeck was going to make before the competent courts in order to oppose their entry to the United Kingdom market. In addition, the covering email accompanying those notes mentions the fact that an Arrow employee had examined the Cipla I and Matrix I processes and had concluded that they did not seem to infringe the crystallisation patent.

121 Fourthly, according to recital 383 of the contested decision, on 21 December 2001, the applicants purchased from Tiefenbacher an MA application that Tiefenbacher had previously lodged with the competent authorities in the United Kingdom. That application, which was based, in accordance with the mutual recognition procedure referred to in Article 18 of Directive 2001/83, on the MA that Tiefenbacher had already obtained in the Netherlands, was granted in July 2002, after the action that Lundbeck had brought in the Netherlands against that MA had failed. In that respect, it must be noted that, as the Commission mentioned in recital 882 of the contested decision, potential competition begins before the issue of an MA (paragraphs 79 to 83 above) and that, in any event, that MA was issued during the term of the UK agreement.

122 In recital 387 of the contested decision, the Commission emphasised the fact that, in an email sent to the applicants on 15 January 2002, Cipla had stated that it was ready to support them in any litigation with Lundbeck, although it wished to provide the necessary information concerning its process directly to the competent authorities, and not first to the applicants or to Tiefenbacher. Thus, it is immaterial that, according to an email of 11 January 2002, referred to by the applicants, Cipla did not wish to provide further information on its process.

123 According to recital 389 of the contested decision, the applicants, in an email of 22 January 2002 responding to a warning sent by Lundbeck on the previous day, informed Lundbeck that they did not believe that they were infringing its new patents.

124 In an email of 23 January 2002, referred to in recitals 390, 880 and 887 of the contested decision and sent to a producer of the citalopram API, Resolution Chemicals, a subsidiary of the applicants (see paragraph 5 above), stated as follows:

125 It also expressed an interest in the API of that producer as a second API source.

126 Finally, it must be recalled that, in the seventh recital in the UK preamble, Arrow UK did not state that it had infringed Lundbeck’s new patents, but merely observed that it could not disprove that accusation by ‘any demonstrable inconvertible’ evidence.

127 That evidence, together with the fact that, as noted in paragraph 90 above, Lundbeck was aware of the risk that the crystallisation patent could be declared invalid, which would have deprived any infringement of that patent by the applicants of all consequence, permits the inference that, when the UK agreement was concluded, the applicants were ready to take the risk of entering the United Kingdom market, owing to the steps which they had taken, including to prepare their defence in the event of a dispute with Lundbeck and to obtain an MA within a reasonable period.

128 Similar conclusions may be drawn as regards the UK agreement extensions (see paragraph 15 above). The addenda by which those extensions were decided contain a recital identical to that referred to in paragraph 126 above.

129 The other items of evidence relied on by the applicants do not call into question the conclusions reached by the Commission.

130 In that regard, it must be observed that they date from after the conclusion of the UK agreement, with the result that their probative value is reduced, in accordance with the considerations set out in paragraphs 116 and 117 above.

131 In the first place, the applicants rely on an exchange of emails between themselves and Tiefenbacher, dating from the period from 25 to 29 January 2002, which show that the founder of Arrow, when he signed the UK agreement, had been informed, by a director of that undertaking, that there were serious doubts as to the non-infringing nature of the Cipla I process.

132 It is true that it is apparent from that exchange of emails that those undertakings were aware of the possibility that the Cipla I process infringed the crystallisation patent. However, it does not follow that there was certainty on that point. Moreover, those emails confirm that Cipla was ready to cooperate with Tiefenbacher in assisting the applicants in the event of disputes with Lundbeck. It follows that, although that email exchange points to difficulties, it does not however permit the conclusion that, before signing the UK agreement, the applicants had given up their plan to enter the United Kingdom market, including with the citalopram produced in accordance with the Cipla I process.

133 In the second place, the applicants rely on an email that Tiefenbacher sent them on 13 February 2002, which they maintain confirms that the Cipla I process infringed the crystallisation patent.

134 In that regard, it must be noted that that email, in addition to the fact that it does not establish the position of the applicants before the conclusion of the UK agreement, in no way excludes the possibility that the applicants could have raised a claim of invalidity against the crystallisation patent in the event of Lundbeck bringing an infringement action against them.

135 In the third place, the applicants rely on the witness statement of Arrow’s founder of 6 November 2012, which reports that undertaking’s position at the time of the conclusion of the agreements at issue.

136 It must be noted that that witness statement was clearly drafted for the purposes of the proceedings at a date remote from the material time, with the result that it has very low evidential value (see, to that effect, judgment in Lafarge v Commission, cited in paragraph 97 above, EU:T:2008:255, paragraph 509).

137 In any event, that witness statement does not establish that the applicants had given up their plan to enter the citalopram market in the United Kingdom but merely refers to difficulties and uncertainties as regards the Cipla I process and Cipla’s alleged failure to cooperate. However, it follows from recital 387 of the contested decision that Cipla was ready to support the applicants in a potential dispute with Lundbeck (see paragraph 122 above).

138 As regards the possibility, disputed by the applicants, of switching to citalopram produced in accordance with the Matrix I process which Tiefenbacher could have provided, it must be noted that, according to the covering email accompanying the notes on the meeting of 14 December 2001 (see paragraph 120 above), the applicants considered that that process was not likely to infringe the crystallisation patent. Those notes also mention the possibility for the applicants of switching to Matrix citalopram, while presuming that it would not be possible to make such a switch at that stage.

139 In that respect, it must be noted that, as the Commission rightly observed in recitals 885, 886, 889 and 895 and in footnote No 1636 of the contested decision, the applicants’ agreement with Tiefenbacher allowed such a switch, so the fact that that option may have been a less advantageous solution for the applicants than entering into agreements with Lundbeck does not preclude the conclusion that they had a real concrete possibility of entering the market with the citalopram produced in accordance with the Matrix I process.

140 The fact that the adoption of anticompetitive conduct may be the most cost-effective or least risky course of action for an undertaking in no way excludes the application of Article 101 TFEU (see, to that effect, judgments of 8 July 2004 in Corus UK v Commission, T‑48/00, ECR, EU:T:2004:219, paragraph 73, and Dalmine v Commission, T‑50/00, ECR, EU:T:2004:220, paragraph 211).

141 The fact relied on by the applicants that, subsequent to the date of conclusion of the agreements at issue, Matrix developed a new process (‘the Matrix II process’), as is stated in footnote No 155 of the contested decision, does not establish that the Matrix I process infringed the crystallisation patent, but merely shows the efforts subsequently made by Matrix to avoid all risk of infringement.

142 It follows from the foregoing that the Commission correctly assessed the evidence and that the evidence supports the Commission’s conclusions concerning the fact that the applicants had not given up their plan to enter the market in the United Kingdom with citalopram produced in accordance with the Cipla I process and that they had a real concrete possibility of switching to citalopram produced in accordance with the Matrix I process.

143 As regards the Danish agreement, in addition to referring to the evidence already mentioned above in respect of the UK agreement, it must be observed that it follows from recitals 450, 454, 967 and 968 of the contested decision and the third recital in the Denmark preamble, that the applicants, even after Lundbeck had obtained the crystallisation patent in Denmark, continued to take steps to obtain an MA within a reasonable period, in order to be able to sell on the Danish market generic citalopram supplied by Tiefenbacher and produced in accordance with the Cipla I or Matrix I processes.

144 Furthermore, the seventh recital in the Denmark preamble recalls that Arrow Group does not acknowledge any infringement of Lundbeck’s new patents.

145 Accordingly, the Commission has established to the requisite legal standard that, at the time of the conclusion of the Danish agreement, the applicants were potential competitors of Lundbeck.

The possibility for the applicants of obtaining citalopram produced in accordance with other processes

146 The applicants submit that the Commission has not established the veracity of the assertions in the contested decision (see paragraph 61 above) which state that the applicants could have obtained citalopram produced in accordance with other processes in order to avoid any risk of infringing Lundbeck’s new patents.

148 It must be noted, as a preliminary observation, that the fact that the applicants had already made considerable investments to buy citalopram produced in accordance with the Cipla I process is not sufficient to establish that, had the agreements at issue not been concluded, the applicants would have been deprived of the possibility of entering the market in the United Kingdom and Denmark using citalopram produced in accordance with other processes.

149 Next, as regards, first, the alleged difficulties arising from the fact that the applicants had no MA covering processes of other API suppliers, it must be recalled that the steps taken by an undertaking to obtain an MA or vary one which it possesses are already within the ambit of potential competition (see paragraphs 79 to 83 above).

150 Secondly, the applicants had the option of switching to citalopram produced in accordance with the Matrix II process, with which Tiefenbacher could have supplied them. That process was updated during the term of the agreements at issue; consequently the applicants could have used it if they had not concluded those agreements.

151 In that regard, it must be noted that, as follows from recital 420 of the contested decision, on 22 May 2002, the applicants varied the MA application that they had already filed in the United Kingdom concerning, inter alia, Tiefenbacher’s citalopram produced in accordance with the Matrix I process, in order to extend that MA to citalopram produced in accordance with the Matrix II process. That demonstrates the feasibility of such steps. That variation was granted on 23 December 2002, that is to say, during the term of the agreements at issue.

152 As regards the applicants’ reference to the Lagap litigation, which could have established whether the Matrix II process, of which they acknowledge being aware as from May 2002, infringed the crystallisation patent, it must be observed that it is apparent from recital 63 of the contested decision that that litigation was already under way at the end of 2002, although it was taken into account in the agreements at issue only at the time of the second extension of the UK agreement. Accordingly, the applicants are not justified in claiming that they ruled out the switch to citalopram produced in accordance with the Matrix II process on the ground that they were waiting for the outcome of that litigation. Thus, the existence of the Lagap litigation is not a decisive factor in determining whether the applicants had a real concrete possibility of entering the market with citalopram produced in accordance with the Matrix II process.

153 Thirdly, it must be observed that the applicants had the option of continuing to work with Cipla in order to improve its process. The Commission stressed, inter alia in recital 898 of the contested decision, that, during the term covered by the agreements at issue, Cipla had developed a new process (‘the Cipla II process’). Consequently, the applicants could have sought to sell citalopram produced using the Cipla II process, as another generic undertaking did, without Lundbeck being able effectively to oppose them, as the Commission indicated in footnote No 1671 of the contested decision.

154 Fourthly, as regards the possibility, disputed by the applicants, that they might switch to citalopram produced in accordance with the process used by Ranbaxy, there was, as the Commission has pointed out, no reason, in January 2002, to believe that market entry with that citalopram would not have been realistically achievable before the end of 2002, that is to say, before the expiry of the initial term of the UK agreement. On 11 January 2002, the applicants obtained a certificate of analysis of the citalopram offered to them by Ranbaxy (see recitals 386 and 896 of the contested decision). In May 2002, Ranbaxy was in a position to make the applicants a specific offer to supply citalopram (see recital 419 of the contested decision).

155 Furthermore, it must be noted that, in their reply of 6 May 2011 to a request for information from the Commission, the applicants did not state the reasons that they now rely on to support the claim that the switch to the Ranbaxy API was not a real concrete possibility but stated that their choice not to take that route could possibly be explained by the fact that, in view of the prices requested, the Ranbaxy offer was not competitive.

156 As regards the fact, relied on by the applicants, that, when the UK agreement was concluded, Ranbaxy had not yet started the procedure for obtaining an MA, it must be recalled that the taking of such steps, not only by an API producer but also by generic undertakings interested in selling generic medicinal products produced using that API, is an aspect of potential competition (see paragraphs 79 to 83 above), at least when the producer in question is taking the necessary steps to obtain an MA covering the IPA produced in accordance with its process. Moreover, the applicants could have sought to vary their own MA application which was under examination in the United Kingdom in order also to cover the Ranbaxy process, as they did in respect of citalopram produced in accordance with the Matrix II process (see paragraph 151 above).

157 As regards the applicants’ argument that Ranbaxy was offering citalopram only in API form, so that they would have had to find a way to obtain the finished product in order to sell it, it should be noted that such steps are also within the scope of potential competition. That is particularly so in the case of the applicants, whose ultimate goal was, as is apparent from the reply to the abovementioned request for information from the Commission, not only to sell generic citalopram tablets produced by third parties but, eventually, also to produce them themselves.

158 Accordingly, the applicants had real concrete possibilities of entering the markets covered by the agreements at issue during the term of those agreements by switching supplier or API producer, as the Commission correctly stated.

159 The applicants rely on paragraph 32 of the technology transfer guidelines, under which, in their submission, the Commission ought to have recognised that Lundbeck’s new patents gave rise to a blocking position preventing all competition.

161 As the Commission noted in recital 677 of the contested decision, the technology transfer guidelines are not applicable in the present case, given that Lundbeck did not transfer any technology to the applicants by means of the agreements at issue.

162 In any event, it follows from paragraph 32 of the technology transfer guidelines that they refer to the possibility of authorising an agreement if a blocking position actually exists, on the basis of objective factors that the parties to a technology transfer agreement must produce, and not on the basis of a presumption. Such a blocking position did not exist in the present case since the applicants had real concrete possibilities of entering the market.

164 The applicants rely on the Paroxetine judgment, cited in paragraph 78 above, which they maintain is an important matter fundamentally altering the legal context in which the generic undertakings operated at the time when the agreements at issue were concluded. That judgment significantly changed the context of patent disputes in the United Kingdom by setting a very low standard for the grant of interim measures in favour of a patent holder.

166 In the present case, the parties differ mainly as to the scope and interpretation to be attributed to the Paroxetine judgment, cited in paragraph 78 above, in so far as the Commission claims, contrary to the applicants’ view, that it did not fundamentally change the rules for generic undertakings and is rather a very specific case which sets out the obligation of those undertakings to inform patent holders of their settled intention to enter the market in order to allow the patent holders to take the necessary measures. According to the applicants, the Commission did not sufficiently take into account the implications of that judgment.

167 In that regard it must be borne in mind that a question relating to the interpretation of the national law of a Member State is a question of fact (see, to that effect and by analogy, judgments of 21 December 2011 in A2A v Commission, C‑318/09 P, EU:C:2011:856, paragraph 125 and the case-law cited, and 16 July 2014 in Zweckverband Tierkörperbeseitigung v Commission, T‑309/12, EU:T:2014:676, paragraph 222 and the case-law cited) in respect of which the Court is required, in principle, to carry out a comprehensive review (see paragraph 77 above).

168 In the case that gave rise to the Paroxetine judgment, cited in paragraph 78 above, the court concerned applied the principles governing the grant of interim injunctions in English law and found that the balance of interests weighed in favour of the originator undertaking in view of the particular circumstances of the case and in particular the fact that the generic undertaking in question had not ‘cleared the way’ by informing the originator undertaking of its settled intention to launch its generic product on the market, even though it had been preparing for that entry for four years and despite the fact that it knew that the originator undertaking held patents that would allow it to bring an infringement action against the generic undertaking.

169 Without it being necessary to rule on the interpretation and the exact scope to be given to the Paroxetine judgment (cited in paragraph 78 above), it must be noted, as the Commission observed, that there are several differences between the present case and the case which gave rise to that judgment.

170 First, it is stated in recital 374 of the contested decision that Lundbeck and the applicants had been in contact as early as 15 December 2000 in order to discuss the issue of generic citalopram. In addition, in recital 389 of the contested decision, the Commission noted that, in January 2002, the applicants had confirmed to Lundbeck that they were preparing to enter the market in the United Kingdom.

171 Secondly, in the case that gave rise to the Paroxetine judgment, cited in paragraph 78 above, the patent allegedly infringed by the generic undertaking in question already existed throughout the period in which that undertaking was preparing to enter the market, whereas, in the present case, Lundbeck filed its application for the crystallisation patent in the United Kingdom only on 12 March 2001 and that application was not published until 4 July 2001, the patent itself being definitively issued only on 30 January 2002, after the UK agreement had been concluded.

172 Moreover, it must be noted that, as the Commission rightly observed, the applicants do not even attempt to explain why Lundbeck, an experienced undertaking advised by specialist lawyers, preferred to conclude a costly agreement such as the UK agreement, by which it obtained only a delay in respect of the applicants’ entry to the United Kingdom market, instead of applying for an interim measure for the same purpose, a measure which, if the interpretation of the Paroxetine judgment, cited in paragraph 78 above, was correct, would surely have been granted. Lundbeck’s approach confirms, therefore, that that judgment had not created a situation in which the applicants were deprived of the real concrete possibility of entering the market.

173 In the light of the above, the Court rejects the applicants’ complaint that the Commission did not take sufficient account of the implications of the Paroxetine judgment, cited in paragraph 78 above.

174 In the light of all the foregoing considerations, it must be concluded that the Commission has established to the requisite legal standard that, at the time of conclusion of the agreements at issue, the applicants were potential competitors of Lundbeck, and therefore the present plea in law must be rejected in its entirety.

2. The third plea in law, alleging that the agreements at issue are not a restriction by object

175 By their third plea in law, the applicants take issue, from a number of aspects, with the fact that, in the contested decision, the Commission characterises the agreements at issue as restrictions of competition by object within the meaning of Article 101(1) TFEU. In essence, their complaints in that regard may be arranged in six parts, concerning the following:

– (ii) the necessary conditions in order to characterise an agreement as restrictive by object;

– (iii) the role of the payments provided for in the agreements at issue and the asymmetry of risks between the parties to those agreements;

– (vi) errors with respect to the scenario that would have come about in the absence of the agreements at issue (‘the counterfactual scenario’).

176 By the first part of the present plea in law, the applicants dispute the interpretation of the agreements at issue in the contested decision.

177 It is necessary to examine the scope, first, of the UK agreement and, secondly, of the Danish agreement.

‘Arrow [UK] on its own behalf and on behalf of all associated and related entities undertakes during the [term of the UK agreement] not in the [United Kingdom] to make, dispose of, offer to dispose of, use or, after the Second Delivery date, … import or keep for disposal or otherwise (1) [“]the said Citalopram[”] or (2) any other Citalopram which Lundbeck alleges to infringe its [intellectual property] Rights and, to enable Lundbeck to ascertain if there may be an infringement, during the [term of the UK agreement] to provide Lundbeck with sufficient samples for analysis purposes at least one month prior to any threatened manufacture, importation, sale or offer for sale pending a final unappealable decision in [the UK infringement action …]’

179 In the first place, the applicants submit that the Commission misinterpreted the scope of the expression ‘the said Citalopram’ used in Article 1.1 UK. They claim that it is incorrect to assert that ‘the said Citalopram’ does not merely cover the citalopram which the applicants had already ordered from Tiefenbacher and which was produced in breach of Lundbeck’s new patents, but also includes citalopram which they might subsequently order from the same supplier and which could be produced with the use of processes that did not infringe those patents. According to the applicants, the expression ‘the said Citalopram’ covers only citalopram produced in accordance with the Cipla I and Matrix I processes. At the hearing, they stated that that expression refers to any citalopram produced in accordance with those processes and not only to the tablets that they had already ordered before concluding the UK agreement.

180 The applicants further claim that their interpretation is confirmed by the fact that the MA which Tiefenbacher had been granted in the Netherlands (see paragraph 121 above) covered only those processes. However, the applicants remained free to order from Tiefenbacher citalopram produced according to new processes, which is consistent with the fact that, during the term of the UK agreement, they varied their MA application in the United Kingdom to cover processes other than those mentioned in the MA which Tiefenbacher had obtained in the Netherlands.

182 In order to interpret the meaning of the expression ‘the said Citalopram’ which appears in the article of the UK agreement in question, it must be noted that:

– that expression is a defined term used in the fourth recital in the UK preamble, which is worded as follows: ‘Arrow [UK] has obtained a licence from a third party to import into the [United Kingdom] Citalopram not manufactured by Lundbeck or with the consent of Lundbeck (“the said Citalopram”, which definition shall for the avoidance of doubt comprise only Citalopram for marketing and sale in the [United Kingdom] and shall exclude Citalopram for marketing and sale in other countries)’;

– it is clear from Article 3.4 UK that the ‘Second Delivery date’ referred to in Article 1.1 UK is the date on which Arrow UK was to deliver to Lundbeck the second shipment of its stock ‘of the said Citalopram’ and that that delivery was to take place no later than 15 February 2002.

183 In recitals 905, 910 to 913 and 916 of the contested decision, the Commission considered that the expression ‘the said Citalopram’ should be interpreted as covering not only the citalopram that the applicants had already purchased from Tiefenbacher but also any citalopram that they could buy from that undertaking subsequently, even if the API used was henceforth produced in accordance with the Cipla II or Matrix II processes. To that end, the Commission relied on the reference, in Article 1.1 UK, to the period after the ‘Second Delivery date’, set out in Article 3.4 UK, which, according to the Commission, prevents restriction of the concept of ‘the said Citalopram’ to the stock already held by the applicants, and on the wording of the fourth recital in the UK preamble, from which it is apparent that ‘the said Citalopram’ is any citalopram produced by Tiefenbacher and covered by its MA.

184 In the light of the abovementioned factors, it must be observed that one of the obligations provided for in Article 1.1 UK consists of prohibiting the applicants from importing or keeping ‘the said Citalopram’ after the second delivery date referred to in Article 3.4 UK. That obligation only has meaning and effectiveness if that expression also relates to citalopram indeed originating from Tiefenbacher, but ordered by the applicants after that delivery. As regards that point, it must be noted that nothing in the wording of that clause allows the view that the abovementioned obligation does not concern ‘the said Citalopram’ but relates only to ‘any other Citalopram which Lundbeck alleges to infringe its [intellectual property] Rights’.

185 Likewise, the definition of ‘the said Citalopram’ in the fourth recital in the UK preamble is worded so that it cannot be interpreted as referring only to the citalopram that the applicants had already purchased from Tiefenbacher. That recital means that any citalopram covered by Tiefenbacher’s MA was included in the definition of ‘the said Citalopram’. That MA applied to citalopram produced in accordance with the Cipla I and Matrix I processes, irrespective of the fact that the tablets that the applicants had in stock contained only citalopram produced in accordance with the Cipla I process.

186 While it is true that the applicant for or holder of an MA may make a request to the authority which is to grant or has granted that MA for variations in order to extend its scope to other processes, the applicants are nevertheless justified in claiming that there is nothing in the recital in question which can establish that the parties to the UK agreement, when they defined ‘the said Citalopram’, also covered the API produced in accordance with the Cipla II and Matrix II processes, which could have been covered by Tiefenbacher’s MA only after that MA was varied.

187 Finally, the interpretation of the expression ‘the said Citalopram’ proposed by the applicants (see paragraph 179 above) is not called into question by the fact, relied on by the Commission, that, in the consent order (see paragraph 18 above), that expression was replaced by the expression ‘Citalopram not manufactured by Lundbeck or with the consent of Lundbeck’. The consent order, although it was adopted following the conclusion of the UK agreement, is a separate legal instrument from that agreement. Moreover, that order must be interpreted in the light of the agreement which constitutes its basis and not the reverse.

188 Consequently, ‘the said Citalopram’ must be understood to mean any generic citalopram produced by Tiefenbacher in accordance with the Cipla I or Matrix I processes that the applicants had already purchased on the date of signature of the UK agreement or that they could have purchased subsequently.

189 In the second place, the applicants claim that the expression ‘any other Citalopram which Lundbeck alleges to infringe its [intellectual property] Rights’ used in Article 1.1 UK does not cover any generic citalopram whatsoever. The scope of that expression should be understood in the light of the sampling mechanism also mentioned in that article, which was intended to enable the applicants to find other sources of citalopram and, if they succeeded in doing so, to submit that citalopram to Lundbeck, in accordance with the guidance in the Paroxetine judgment, cited in paragraph 78 above (see paragraph 168 above). While accepting that that mechanism was not used, the applicants submit that the reason is that they were unable to find citalopram which in their view did not infringe Lundbeck’s new patents and that the Lagap litigation had provided the opportunity to carry out an important test as to the processes covered by those patents. They also refer to the principles of English law concerning the interpretation of contracts.

191 It must be recalled that, inter alia, in recitals 917 and 922 to 924 of the contested decision, the Commission considered that the expression in question allowed Lundbeck to veto the importation or sale by the applicants of citalopram produced using any process, in so far as Lundbeck needed only to declare that it believed that a given process infringed its intellectual property rights. The Commission also noted that the sampling mechanism provided for in Article 1.1 UK had never been used, since the applicants had no interest in challenging Lundbeck’s claims concerning the outcome of possible tests or even in submitting APIs to it for testing as long as Lundbeck made the agreed payments.

192 In that regard, it must be stressed that, as the Commission correctly stated, the applicants, in reply to the request for information from the Commission of 18 December 2008, acknowledged the following:

‘The test established [by Article 1.1 UK] is a subjective test of alleged infringement, not actual infringement. Therefore, citalopram products that have not been found by a court to be non-infringing [of Lundbeck’s intellectual property rights] but do not actually infringe [those rights] could have been within the scope [of that article], but that is entirely usual in agreements of this nature.’

193 That statement confirms the Commission’s view that Lundbeck had, in essence, a right of veto. Contrary to what the applicants claim, such a right may not be regarded as equivalent to the situation allegedly created by the judgment in Paroxetine, cited in paragraph 78 above. In addition to the considerations set out in paragraphs 164 to 173 above, it must be observed that the mechanism provided for in Article 1.1 UK does not involve court intervention, while that is clearly the case in the scenario set out in that judgment, it being noted that it is inconceivable that a court might adopt an interim measure on the basis of mere allegations made by the holder of a patent alleged to have been infringed.

194 Moreover, it should be noted that the existence of that right of veto does not render superfluous the part of Article 1.1 UK referring to ‘the said Citalopram’, given that, with regard to that citalopram, Lundbeck did not even have to exercise its right of veto, since the prohibitions imposed on the applicants concerning that citalopram were applicable without Lundbeck having to do anything other than make the payments provided for.

195 That the ‘test’ provided for in Article 1.1 UK, by its subjective nature, served to confer a right of veto on Lundbeck, of which the applicants were aware, is corroborated by the fact that that test was not used at any time during the term of the UK agreement. Although, during the term of that agreement, the applicants continued to seek other sources of API, they never submitted samples to Lundbeck for examination.

196 As regards that point, first, it must be noted that the applicants’ searches for that purpose can be explained by their intention to enter markets other than that of the United Kingdom. On the one hand, the applicants were preparing their entry to the Danish market up to the time of the conclusion of the Danish agreement, which took place several months after the UK agreement. On the other hand, as the Commission noted in recital 931 of the contested decision, the applicants were also interested in the Swedish market. Secondly, as is apparent from the applicants’ reply to a question from the Commission, they needed an alternative to Tiefenbacher in order to complete their plan to be able eventually to produce generic citalopram tablets themselves, by purchasing the API directly from producers without using an intermediary which transformed that API into tablets (see footnote No 1935 of the contested decision).

197 Moreover, such research could relate to steps taken in preparation for the period after the expiry of the UK agreement, which had initially been concluded for a term of under one year and which was subsequently extended twice. Those considerations also apply in respect of the fact, relied on by the applicants, that, during the term of the UK agreement, they requested a variation of the MA concerning the Cipla I and Matrix I processes so that it would also cover the Cipla II and Matrix II processes.

198 Finally, it must be observed, however, that the reference made by the applicants to the principles of English law concerning the interpretation of contracts does not call into question the Commission’s interpretation.

199 It is true that, as stated in paragraph 167 above, a question relating to the interpretation of the national law of a Member State is a question of fact concerning which the Court must, in principle, carry out a comprehensive review. However, while it follows from the case-law of the United Kingdom relied on by the applicants that interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the
situation in which they were at the time of conclusion of the agreement to be interpreted, it must be noted that, as the Commission rightly submits, such a reasonable and informed observer would not have been surprised by the fact that the parties to the UK agreement had agreed to give Lundbeck a right of veto, which could also be used against citalopram produced using the Cipla II and Matrix II processes, in return for a payment corresponding to a general estimate of the benefit that the applicants could have gained from their entry to the United Kingdom market.

200 In fact, that observer would have considered that such a payment was hardly compatible with the applicants’ retaining the freedom to begin selling citalopram other than ‘the said Citalopram’, namely, that produced in accordance with the Cipla I or Matrix I processes. Had it been otherwise, the applicants could have enjoyed not only payments made by Lundbeck but also the benefits of market entry, for example with citalopram produced in accordance with the Cipla II or Matrix II processes, while Lundbeck would have had to take responsibility both for the payments and the losses arising from that entry.

201 It follows that the applicants’ arguments summarised in paragraph 189 above must be rejected.

202 It follows from the foregoing that Article 1.1 UK must be interpreted as meaning that Lundbeck had received an assurance that the applicants would not enter the United Kingdom market during the term of the UK agreement with generic citalopram of any kind.

203 It must be recalled that Article 1.1 of the Danish agreement is worded as follows:

‘Arrow [Group] consents to cancel, cease and desist from any importation, manufacture, production, sale or other marketing of products containing citalopram which Lundbeck alleges to infringe its intellectual property rights in the territory [of Denmark] for the term of [the Danish agreement].’

204 The applicants maintain that the Denmark preamble shows that that article must be interpreted as meaning that it concerns only the citalopram that the applicants had already purchased from Tiefenbacher.

206 It should be noted that it is true that the third and fifth recitals in the Denmark preamble, read in the light of the clarifications concerning them in recital 986 of the contested decision, which were not called into question by the applicants, refer to the fact that the applicants were about to purchase an MA which would have allowed them to sell in Denmark generic citalopram produced in accordance with the Cipla I or Matrix I processes and which had been subjected to laboratory tests by Lundbeck. The fourth recital in that preamble also refers to the applicants’ intention to export bulk citalopram originating from Tiefenbacher from Germany to Denmark.

207 However, those references, while they explain the context in which the Danish agreement took place, are not sufficient to call into question the clear wording of Article 1.1 of the Danish agreement, whose scope cannot be reduced to that proposed by the applicants.

208 If the parties to that agreement wished to reduce the scope of the obligations covered by it to the citalopram that the applicants had in stock, they could have chosen wording suitable for that purpose, instead of choosing wording which was very broad, whose scope would have to be restricted by an interpretation in the light of the recitals in the preamble, which, moreover, do not express the clear intention to introduce restrictions.

209 Accordingly, it must be concluded that the Commission made no error of assessment in considering that Article 1.1 of the Danish agreement should be interpreted as meaning that Lundbeck had received an assurance that the applicants would not enter the Danish market during the term of that agreement with any generic citalopram.

210 In the light of the foregoing considerations, the first part of the present plea in law must be rejected in its entirety.

211 By the second part of the present plea in law, as clarified following the question put by the Court concerning the consequences, if any, for the present case of the judgment in CB v Commission, cited in paragraph 43 above (EU:C:2014:2204), the applicants submit, in essence, that the agreements at issue do not constitute restrictions of competition by object within the meaning of Article 101(1) TFEU, as interpreted in the case-law. They submit that the Commission has made the same error as that found in that judgment, inasmuch as it applied the concept of restriction by object to agreements that do not merit that description.

213 Before examining the applicants’ arguments in further detail, it is necessary to make some preliminary observations on, inter alia, the judgment in CB v Commission, cited in paragraph 43 above (EU:C:2014:2204), and briefly to recall the analysis relating to the existence of a restriction of competition by object made in the contested decision.

‘The following shall be prohibited as incompatible with the internal market: all agreements between undertakings, decisions by associations of undertakings and concerted practices … which have as their object or effect the prevention, restriction or distortion of competition within the internal market, and in particular those which:

(a) directly or indirectly fix purchase or selling prices or any other trading conditions;

(d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;

(e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.’

215 In that regard, it is clear from the case-law that certain types of coordination between undertakings reveal a sufficient degree of harm to competition for the examination of their effects to be considered unnecessary (judgment in CB v Commission, cited in paragraph 43 above, EU:C:2014:2204, paragraph 49; see also, to that effect, judgments of 30 June 1966 in LTM, 56/65, ECR, EU:C:1966:38, pp. 249 and 250, and 14 March 2013 in Allianz Hungária Biztosító and Others, C‑32/11, ECR, EU:C:2013:160, paragraph 34).

216 That case-law arises from the fact that some forms of coordination between undertakings can be regarded, by their very nature, as being injurious to the proper functioning of normal competition (judgment in CB v Commission, cited in paragraph 43 above, EU:C:2014:2204, paragraph 50; see also, to that effect, judgment in Allianz Hungária Biztosító and Others, cited in paragraph 215 above, EU:C:2013:160, paragraph 35 and the case-law cited).

217 Consequently, it is established that certain collusive behaviour, such as that leading to horizontal price-fixing by cartels or consisting in the exclusion of some competitors from the market, may be considered so likely to have negative effects, in particular on the price, quantity or quality of the goods and services, that it may be considered redundant, for the purposes of applying Article 101(1) TFEU, to prove that they have actual effects on the market. Experience shows that such behaviour leads to falls in production and price increases, resulting in poor allocation of resources to the detriment, in particular, of consumers (judgment in CB v Commission, cited in paragraph 43 above, EU:C:2014:2204, paragraph 51; see also, to that effect, judgment of 20 November 2008 in Beef Industry Development Society and Barry Brothers, C‑209/07, ECR, ‘the BIDS judgment’, EU:C:2008:643, paragraphs 33 and 34).

218 Where the analysis of a type of coordination between undertakings does not reveal a sufficient degree of harm to competition, the effects of the coordination should, on the other hand, be considered and, for it to be caught by the prohibition, it is necessary to find that factors are present which show that competition has in fact been prevented, restricted or distorted to an appreciable extent (judgments in Allianz Hungária Biztosító and Others, cited in paragraph 215 above, EU:C:2013:160, paragraph 34, and CB v Commission, cited in paragraph 43 above, EU:C:2014:2204, paragraph 52).

219 In order to establish the anticompetitive nature of an agreement and assess whether it reveals a sufficient degree of harm to competition that it may be considered a restriction of competition by object within the meaning of Article 101(1) TFEU, regard must be had to the content of its provisions, its objectives and the economic and legal context of which it forms a part. When determining that context, it is also necessary to take into consideration the nature of the goods or services affected, as well as the real conditions of the functioning and structure of the market or markets in question (judgments in Allianz Hungária Biztosító and Others, cited in paragraph 215 above, EU:C:2013:160, paragraph 36, and CB v Commission, cited in paragraph 43 above, EU:C:2014:2204, paragraph 53).

220 In addition, although the parties’ intention is not a necessary factor in determining whether an agreement between undertakings is restrictive, there is nothing prohibiting the competition authorities, the national courts or the Courts of the European Union from taking that factor into account (judgments in Allianz Hungária Biztosító and Others, cited in paragraph 215 above, EU:C:2013:160, paragraph 37, and CB v Commission, cited in paragraph 43 above, EU:C:2014:2204, paragraph 54).

Analysis relating to the existence of a restriction of competition by object in the contested decision

221 The Commission considered, in the contested decision, that the agreements in question constituted restrictions of competition by object within the meaning of Article 101(1) TFEU, by relying, in that respect, on a series of factors relating to the content, the context and the purpose of those agreements.

222 It thus found that the fact that the original patents had expired before the conclusion of the agreements in question, but that Lundbeck had obtained or applied for several process patents at the time those agreements were concluded, including the crystallisation patents, was a significant element of the economic and legal context in which those agreements were concluded. The Commission observed, however, that a patent did not grant the right to limit the commercial autonomy of parties to an agreement by going beyond the rights granted by that patent to its holder (recital 638 of the contested decision).

223 It therefore considered that although all patent settlements were not necessarily problematic from a competition law perspective, such agreements were problematic where they provided for the exclusion from the market of one of the parties, which was at the very least a potential competitor of the other party, for a certain period, and where they were accompanied by a transfer of value from the patent holder to the generic undertaking liable to infringe that patent (‘the reverse payment’) (recitals 639 and 640 of the contested decision).

224 It can also be seen from the contested decision that, even if the restrictions set out in the agreements in question fell within the scope of the Lundbeck patents — that is to say, that the agreements prevented only the market entry of generic citalopram produced by a process deemed by the parties to those agreements potentially to infringe those patents, without covering every type of generic citalopram — those agreements would nevertheless constitute restrictions on competition by object, since, inter alia, they prevented or rendered pointless any type of challenge to Lundbeck’s patents before the national courts, whereas, according to the Commission, that type of challenge is part of normal competition in relation to patents (recitals 603 to 605, 625, 641 and 674 of the contested decision).

225 In other words, according to the Commission, the agreements in question had transformed the uncertainty in relation to the outcome of such litigation into the certainty that the generics would not enter the market, which may also constitute a restriction on competition by object when such limits did not result from an assessment, by the parties to those agreements, of the merits of the exclusive right at issue, but rather from the size of the reverse payment provided for, which, in such a case, overshadows that assessment and induces the generic undertaking not to pursue its independent efforts to enter the market (recital 641 of the contested decision).

226 It must be noted, in that respect, that the Commission did not assert, in the contested decision, that all patent settlement agreements containing reverse payments were contrary to Article 101(1) TFEU; it stated only that the disproportionate nature of such payments, combined with several other factors — such as the fact that the amounts of those payments seemed to correspond at least to the profit anticipated by the generic undertakings if they had entered the market, the absence of provisions allowing the generic undertakings to launch their product on the market upon the expiry of the agreement without having to fear infringement actions brought by Lundbeck, or the presence, in those agreements, of restrictions going beyond the scope of Lundbeck’s patents — led to the conclusion that the agreements in question had as their object the restriction of competition, within the meaning of Article 101(1) TFEU, in the present case (see recitals 661 and 662 of the contested decision).

227 As regards more specifically the classification of the agreements at issue, the main factors relied upon by the Commission are those referred to in paragraph 33 above.

228 It is necessary to examine, in the light of the principles and considerations set out above, whether, as the applicants claim, the Commission erred in concluding that the agreements at issue gave rise to a restriction by object within the meaning of Article 101(1) TFEU.

229 It must be borne in mind that the examination of the second plea in law and the first part of the present plea in law has shown (i) that the applicants were potential competitors of Lundbeck and (ii) that, under the agreements at issue, they agreed not to enter the market in the United Kingdom and Denmark during the respective terms of those agreements in exchange for the sums that Lundbeck had paid them. In that regard, it must be noted that, contrary to the applicants’ claim, Lundbeck thus obtained restrictions on their conduct which were much more significant than those which it could have obtained if it had chosen to bring legal proceedings, relying on its new patents, and if it had always been successful (‘restrictions going beyond the scope of Lundbeck’s new patents’).

230 As the Commission appositely pointed out in recitals 1300, 1331, 1332, 1338, 1361 and 1362 of the contested decision, those are, in essence, market exclusion agreements. Such agreements broadly equate to two examples of particularly restrictive agreements covered by the non-exhaustive list contained in Article 101(1) TFEU, namely those listed under points (b) and (c) (see paragraph 214 above), since market exclusion is an extreme form of the desire to share a market and limit production.

231 Moreover, even if, as the applicants claim, the agreements at issue covered only citalopram produced in accordance with the Cipla I and Matrix I processes, the Commission would in any event have been justified in considering that those agreements gave rise to a restriction of competition by object. That circumstance would not preclude the view that the applicants gave up, in exchange for reverse payments, the possibility of entering the market with citalopram produced in accordance with the Cipla I process, which was alleged to infringe a patent, in respect of which there was a reasonable chance of its being declared invalid. That possibility was real and concrete for the applicants, as is apparent from the examination of the second plea in law, so that the payment was a determining factor in their decision to give it up. The same applies to the possibility which the applicants had of deciding to switch to citalopram produced in accordance with the Matrix I process, which, moreover, the applicants considered did not infringe any of Lundbeck’s patents.

232 Accordingly, the Commission, which bears the burden of proof, in accordance with the case-law referred to in paragraphs 69 to 76 above, had sufficient evidence to classify the agreements at issue as a restriction by object, unless other factors relating to their objectives, viewed in their economic and legal context, meant that they were not sufficiently harmful to competition.

233 It is true, as the applicants claim, that, in that connection, the Commission, in the contested decision, referred to the judgment of 29 November 2012 in CB v Commission (T‑491/07, EU:T:2012:633), which had wrongly concluded that the concept of restriction by object should not be interpreted restrictively.

234 Nevertheless, the Commission also relied on earlier case-law, which the judgment in CB v Commission, cited in paragraph 43 above (EU:C:2014:2204), did not call into question.

235 It is true that, in the judgment in CB v Commission, cited in paragraph 43 above (EU:C:2014:2204), the Court of Justice rejected the General Court’s analysis in the judgment in CB v Commission, cited in paragraph 233 above (EU:T:2012:633), which had held that the concept of restriction of competition by object should not be interpreted restrictively. The Court noted that the concept of restriction of competition by object could be applied only to certain types of coordination between undertakings which revealed a sufficient degree of harm to competition that it could be found that there was no need to examine their effects, otherwise the Commission would be exempted from the obligation to prove the actual effects on the market of agreements which were in no way established to be, by their very nature, harmful to the proper functioning of normal competition (judgment in CB v Commission, cited in paragraph 43 above, EU:C:2014:2204, paragraph 58).

236 However, it does not follow that the Commission was required to examine the effects of the agreements at issue if it was able to establish to the requisite legal standard that the agreements could be considered — in view of their content, the scope of their provisions and their objectives, viewed in their economic and legal context — to be sufficiently harmful to competition (see paragraphs 217 to 219 above).

237 Accordingly, it must be examined whether, as the applicants submit, the conclusions reached by the Commission as regards the context in which the agreements at issue arose call into question the classification applied to them in the contested decision.

238 According to the applicants, the purpose of the agreements at issue was to settle a genuine patent dispute. In that regard, it is irrelevant that no clause in those agreements prevented Lundbeck from bringing infringement proceedings if the applicants subsequently entered the market.

240 First, it must be observed that an agreement may be regarded as having a restrictive object even if it does not have the restriction of competition as its sole aim but also pursues other legitimate objectives (see the BIDS judgment, cited in paragraph 217 above, EU:C:2008:643, paragraph 21 and the case-law cited). Similarly, it must be recalled that, according to the case-law, an agreement is not exempt from competition law merely because it concerns a patent or is intended to settle patent litigation (see, to that effect, judgment of 27 September 1988 in Bayer and Maschinenfabrik Hennecke, 65/86, ECR, EU:C:1988:448, paragraph 15).

241 Next, it must be recalled that the examination of the first part of the present plea in law has demonstrated that the agreements at issue had a much wider scope than that of possible legal proceedings that Lundbeck could have brought against the applicants.

242 Lastly, and above all, the agreements at issue in no way provide that Lundbeck should refrain from pursuing the applicants for infringement of its new patents after the periods covered by those agreements. That is, moreover, confirmed by Lundbeck’s declaration cited in recital 80 of the contested decision, from which it is clear that it did not consider that the agreements in question, including the agreements at issue, resolved any dispute.

243 It must also be recalled that the Commission did not find that the presence of a reverse payment, the amount of which appeared to correspond to the profits expected by the generic undertakings, was sufficient to establish infringement of the Treaty rules on free competition in the present case. On the contrary, the Commission considered that settlement agreements providing for certain payments, even reverse payments, were not always problematic from a competition law perspective, provided that such payments were linked to the strength of the patent concerned, as perceived by each of the parties and were not accompanied by restrictions intended to delay the market entry of generics (recitals 638 and 639 of the contested decision). It thus took as an example Neolab Ltd, with which Lundbeck had concluded a settlement agreement which had not been considered to be problematic — even though it involved a reverse payment — since that payment to Neolab had been made in exchange for a commitment on Neolab’s part not to seek damages before the competent courts and Lundbeck had agreed not to bring any claims under its patents during a certain period (recitals 164 and 639 of the contested decision). In that case, the actual object of the reverse payment was to settle a dispute between the parties, without, however, delaying the market entry of generics.

244 Although it is true that, in Neolab’s case, there had also been a first settlement agreement between the same parties which provided that Neolab’s entry to the market would be delayed, pending the outcome of the litigation between Lundbeck and Lagap Pharmaceuticals Ltd, a generic undertaking, that settlement agreement was not accompanied by a transfer of value and was conditional upon Lundbeck paying damages to Neolab in the event of an unfavourable judgment in that litigation. After Lundbeck had finally decided to settle its dispute with Lagap amicably, Neolab still had an interest in obtaining damages, which required that it first have Lundbeck’s patent declared invalid. In that context, Lundbeck had deemed it preferable to settle its dispute with Neolab, by agreeing to pay it the damages incurred in respect of the year when it withdrew from the market, and by committing not to make any patent claims in the event that Neolab entered the market (recital 164 of the contested decision). That latter commitment is therefore crucial, since, contrary to the agreements at issue, the reverse payment made by Lundbeck did not constitute a payment made in exchange for exclusion from the market, but was accompanied, on the contrary, by an acceptance of non-infringement and a commitment not to hinder the market entry of generics.

245 That was not the situation in the present case. Accordingly, the Commission could impose fines in respect of the agreements at issue without thereby ruling out any possibility of patent disputes being settled amicably in a manner compatible with competition law.

247 The applicants complain that the Commission did not establish with certainty that they would have been successful in potential patent litigation against Lundbeck.

249 In that regard, it suffices to observe that an agreement can have a restrictive object even if it restricts only potential competition.

250 It was held in the context of the second plea that the applicants had real concrete possibilities of entering the market instead of concluding the agreements at issue and were therefore Lundbeck’s potential competitors. Accordingly, the Commission was in no way required to establish with certainty that the applicants would have been successful if they had opted for litigation.

251 In fact, that argument seeks to call into question the distinction between actual and potential competition, inasmuch as, in the applicants’ view, no potential competition can be restricted as long as it has not been shown with absolute certainty that, in the absence of the agreements at issue, they would have actually entered the citalopram market in the relevant countries, if need be after succeeding in any litigation that could have arisen between them and Lundbeck. However, the fact that the conclusion of the agreements at issue meant that the uncertainty which existed as to the outcome of a potential dispute was exchanged for certainty by means of the payments made is a significant factor in classifying those agreements as a restriction by object (see paragraph 225 above).

253 The applicants maintain that the economic and legal context prevailing at the time of the conclusion of the agreements at issue is such as to preclude their being characterised as a restriction by object. They submit that it is necessary to take into account, in particular, their fears of potentially infringing Lundbeck’s new patents, the Paroxetine judgment, cited in paragraph 78 above, and the fact that the applicants did not yet have an MA.

255 In that regard, it is sufficient to observe that it has already been established, by the rejection of the second plea in law, that the applicants were potential competitors of Lundbeck despite the fears they may have had as to the possibility of infringing its new patents.

256 Likewise, it has been explained that the Paroxetine judgment, cited in paragraph 78 above, is not decisive for that purpose (see paragraphs 164 to 173 and 193 above) and that the fact of having carried out all the steps, in particular the administrative steps, required to enter the market is not essential for the purpose of finding a relationship of potential competition (see paragraphs 79 to 83 above).

258 The applicants submit that since the circumstances of the present case are characterised by the fact that Lundbeck had new patents, application of the BIDS judgment, cited in paragraph 217 above (EU:C:2008:643), is not appropriate.

260 It must be recalled that, in recitals 657 and 658 of the contested decision, the Commission found that there were parallels between the agreements at issue in the case giving rise to the BIDS judgment, cited in paragraph 217 above (EU:C:2008:643) (‘the BIDS case’), and the agreements in question, including the agreements at issue.

262 As can be seen from, inter alia, paragraph 8 of the BIDS judgment, cited in paragraph 217 above (EU:C:2008:643), the undertakings active on the beef processing market in Ireland had created a mechanism by which certain undertakings agreed to stay out of that market for two years in exchange for payments from the undertakings that stayed in that market. A similar dynamic arose in the present case through the conclusion of the agreements at issue, pursuant to which the principal, or even the only, undertaking present on the market with generic citalopram in the countries covered by the agreements paid the applicants, which were potential competitors, so that they would stay out of the market for a given period.

263 It follows that both the BIDS case and the present case concerned agreements that limited the ability of competing economic operators to determine independently the policy that they intended to adopt on the market, by preventing the normal process of competition from following its course (see, to that effect, the BIDS judgment, cited in paragraph 217 above, EU:C:2008:643, paragraphs 33 to 35).

264 It is true that, unlike the situation in the BIDS case, the agreements at issue were concluded in a context in which Lundbeck held patents allowing it to prevent the market entry of products which infringed them. It must be recalled, nevertheless, that, in the present case, the existence of Lundbeck’s patents, in particular the crystallisation patent, did not preclude the applicants from being considered potential competitors of Lundbeck, as is apparent from the examination of the second plea in law. Likewise, it is true that, in the BIDS case, the undertakings in question were actual competitors, since that case concerned the removal from the market of undertakings which were already present on that market, whereas, in the present case, Lundbeck and the applicants were potential competitors. However, Article 101 TFEU protects potential competition as well as actual competition.

265 Furthermore, it must be recalled that, in paragraphs 84 and 85 of the judgment in CB v Commission, cited in paragraph 43 above (EU:C:2014:2204), the Court of Justice essentially highlighted the fact that the agreements referred to in the BIDS case changed the structure of the market and revealed such a degree of harm that they could be classified as a restriction by object, whereas that was not the case of the conduct at issue in the case that gave rise to the judgment in CB v Commission, which consisted in the obligation imposed on banks to pay a fee or limit their card issuing activities.

266 In that regard, it must be noted that, even if paragraphs 84 and 85 of the judgment in CB v Commission, cited in paragraph 43 above (EU:C:2014:2204), may be read as meaning that the alteration of the structure of the market is a condition sine qua non for finding a restriction by object, the agreements at issue affected the structure of the market concerned, since they were intended to delay the applicants’ entry to that market, thus allowing Lundbeck to retain high prices for Cipramil and to ensure favourable conditions for the launch of Cipralex, which was supposed to replace Cipramil in the treatment of numerous patients (see paragraphs 12 and 91 above).

267 Consequently, the Commission was entitled, in the contested decision, to apply by analogy the BIDS judgment, cited in paragraph 217 above (EU:C:2008:643), and therefore the applicants’ present argument must be rejected.

268 The applicants claim that they had no intention of restricting competition, or of giving up all efforts to enter the market. They merely sought a satisfactory solution to the situation that had arisen after they discovered that the citalopram which they had bought from Tiefenbacher infringed Lundbeck’s new patents.

270 In that context, it must be recalled that, according to the case-law, an anticompetitive intent on the part of the parties is not as a matter of law a necessary factor in order to determine that an agreement is anticompetitive (see paragraph 220 above).

271 That argument is therefore ineffective, since the Commission was not required to examine the intentions of the parties to the agreements at issue in order to establish a restriction of competition by object within the meaning of Article 101(1) TFEU.

272 In any event, inter alia in recitals 950 to 954 and 1000 to 1005 of the contested decision, the Commission principally examined Lundbeck’s anticompetitive intention in concluding the agreements at issue and, in essence, added that the applicants must have been aware of it. In particular, Lundbeck sought to delay entry to the generic citalopram market in order to avoid significant losses and create favourable conditions for the launch of Cipralex (see paragraph 91 above).

273 Those factors clearly reveal the anticompetitive intention of the parties to the agreements at issue, consisting in sharing the benefits obtained by Lundbeck as a result of preventing the applicants from competing in respect of citalopram sales. Accordingly, those factors cannot call into question the Commission’s conclusion that the agreements at issue give rise to a restriction of competition by object, by reason of their objectives, their content and the context in which they were concluded. To that end, as is apparent from the examination of the second plea in law and of the first part of the present plea in law, the Commission relied in particular on objective evidence relating to statements and conduct of the parties to those agreements, dating, in particular, from before the agreements were signed and therefore in tempore non suspecto.

274 The fact that those agreements could have also pursued other objectives cannot call into question that assessment, since it is settled case-law that an agreement may be regarded as having a restrictive object even if it does not have the restriction of competition as its sole aim but also pursues other legitimate objectives (see paragraph 239 above).

275 As regards the fact that the conclusion of the agreements at issue was for the applicants a satisfactory solution, it suffices to refer to the case-law cited in paragraph 140 above.

277 The applicants submit that, given, in particular, the alleged absence of precedents relating to the agreements at issue, it is not possible to presume that they relate to coordination so harmful to competition that there was no need to assess their effects.

279 It must be noted that, well before the date of conclusion of the agreements at issue, the Court had ruled on the application of competition law in fields characterised by the presence of intellectual property rights, as is apparent, inter alia, from the considerations set out in paragraphs 109, 110 and 240 above.

280 Moreover, it must be noted that Lundbeck was aware that its conduct was at least capable of posing problems from the point of view of competition law. It follows in particular from the email referred to in recital 188 of the contested decision that the conclusion of agreements with generic undertakings was considered ‘difficult’ from the point of view of competition law. That perception was shared, for example, by the generic undertaking mentioned in recital 190 of the contested decision. Accordingly, it is not credible that the applicants did not understand that their conduct was problematic from a competition law perspective.

281 Moreover, it is not necessary that the same type of agreement should have already been censured by the Commission in order for them to be considered a restriction of competition by object. The role of experience, mentioned by the Court of Justice in paragraph 51 of the judgment in CB v Commission, cited in paragraph 43 above (EU:C:2014:2204), does not concern the specific category of an agreement in a particular sector, but rather refers to the fact that it is established that certain forms of collusion are, in general and in view of the experience gained, so likely to have negative effects on competition that it is not necessary to demonstrate that they had such effects in the particular case at hand. The fact that the Commission has not, in the past, considered that a certain type of agreement was, by its very object, restrictive of competition is therefore not, in itself, such as to prevent it from doing so in the future following an individual and detailed examination of the measures in question having regard to their content, purpose and context (see, to that effect, judgment in CB v Commission, cited in paragraph 43 above, EU:C:2014:2204, paragraph 51; the Opinion of Advocate General Wahl in CB v Commission, C‑67/13 P, ECR, EU:C:2014:1958, point 142, and the Opinion of Advocate General Wathelet in Toshiba Corporation v Commission, C‑373/14 P, ECR, EU:C:2015:427, point 74).

282 As regards more specifically the KFST press release of 28 January 2004 (‘the KFST press release’) referred to by the applicants, which, they maintain, indicated that the Commission did not envisage initiating proceedings in relation to the agreements in question and thus caused Arrow to acquire a legitimate expectation, while it is true that that document refers to the Commission’s opinion regarding the anticompetitive nature of the agreements in question, including the agreements at issue, it must be noted that it was not issued directly by the Commission or its departments, but is a press release from a national competition authority.

283 In that regard, it follows from the case-law that national competition authorities cannot cause undertakings to entertain a legitimate expectation that their conduct does not infringe Article 101 TFEU, since they do not have the power to adopt a negative decision, that is to say, a decision concluding that there is no infringement of Article 101 TFEU (see, to that effect, judgment of 18 June 2013 in Schenker & Co. and Others, C‑681/11, ECR, EU:C:2013:404, paragraph 42 and the case-law cited).

284 Furthermore, that document clearly states that, following a preliminary assessment, there were doubts as to whether or not those agreements were anticompetitive, in view in particular of the size of the payment made by Lundbeck to the generic undertakings, and that the Commission was therefore going to launch a broader investigation into that type of agreement in the pharmaceutical field.

285 It was specifically following that investigation, which enabled the Commission to form a clearer idea of the operation of settlements in the pharmaceutical sector, that the Commission opened proceedings on the basis of Article 101(1) TFEU against Lundbeck and generic undertakings such as the applicants.

286 Finally and in any event, it is also clear from the KFST press release that any agreement whose object is to acquire the market exclusion of a competitor is anticompetitive.

287 The applicants cannot therefore claim that the Commission changed its view and that that prevents it from applying the concept of restriction by object, given that it was specifically following a detailed investigation of the pharmaceutical sector that the Commission was able to refine its approach and fully comprehend the anticompetitive nature of certain agreements, in particular where those agreements involve a significant reverse payment.

288 It follows that, at the time of conclusion of the agreements at issue, it was already established that a patent holder was not entitled to pay a potential competitor to give up some or indeed all real concrete possibilities of entering the market in exchange for a sum paid by that holder and determined on the basis of the profits expected by that competitor in the event of market entry. A fortiori, at the time when the contested decision was issued, the Commission was entitled to take the view that experience showed that agreements such as those in question could be restrictions by object, provided that its examination of the legal and economic context in which they had been concluded was not contrary to such a finding.

290 In the light of the foregoing, the present part must be rejected in its entirety.

291 By the third part of this plea in law, the applicants claim that the Commission has not established that they agreed to the limitations on market entry specified in the agreements at issue solely because of the sums which Lundbeck paid to them, and they maintain that the Commission acknowledged in the contested decision that those limitations would not constitute restrictions if they were the result of the strength of Lundbeck’s patents. That is the position in the present case, since at the time of concluding the agreements at issue the applicants did not have generic citalopram that did not infringe Lundbeck’s new patents and the UK agreement had been extended because of the Lagap litigation. Thus, the payment of those sums was merely the consequence of the success of the applicants’ ‘bluff’ and of the asymmetry of the risks between the parties to the agreements.

293 First, it must be recalled that it follows from the examination of the first part of the present plea in law that, by concluding the agreements at issue, the applicants agreed to restrictions going beyond the scope of Lundbeck’s new patents. Accordingly, it is apparent that it was not the strength of those patents that convinced them to conclude those agreements.

294 Secondly, it follows from the examination of the second plea in law that the applicants were potential competitors of Lundbeck when the agreements at issue were concluded, as they had real concrete possibilities of entering the market with generic citalopram in the United Kingdom and Denmark.

295 In that regard, it must be noted that the competition in question is potential, and not effective or actual, precisely because such entry had not yet taken place but the generic undertaking concerned was preparing for that entry by taking the essential steps for that purpose.

296 Moreover, in the examination of the second plea in law (see paragraphs 89 to 91 above), it was also noted that the applicants’ argument that they had ‘bluffed’ Lundbeck was not credible.

297 As regards, more specifically, the asymmetry of risks relied on by the applicants in that context, it must be observed, first, that, by concluding the agreements at issue, both parties to those agreements were able to exchange uncertainties for certainties. The applicants did not know whether their market entry would be successful and Lundbeck did not know whether it would be successful in litigation or what the presence of generics on the market would cause it to lose. By contrast, on the one hand, the payments provided for in those agreements constituted a definite benefit for the applicants and, on the other hand, Lundbeck was assured that they would comply with the obligations arising from those agreements. It follows that there were risks for both parties.

298 Finally, it is true that asymmetry of risks can encourage a patent holder to make a reverse payment in order to avoid any risk, even slight, of market entry by generic undertakings, especially where the patented product, like Cipramil in the present case, is the flagship product representing most of its turnover (recitals 26 and 120 of the contested decision). However, the fact that conduct may be rational from an economic or commercial point of view does not prevent it from being subject to application of the Treaty provisions on free competition, when it seeks to limit market access or exclude actual or potential competitors from that market and to share the benefits arising from that exclusion or limitation, to the detriment of consumers, that is to say, patients or health insurance schemes in the present case (see paragraph 140 above). In any event, it is apparent from the file that the risks were not as asymmetrical as the applicants claim. As has been noted in paragraph 90 above, Lundbeck acknowledged that there was a likelihood of between 50 and 60% that the crystallisation patent could be declared invalid. Furthermore, although Cipramil was Lundbeck’s flagship product, the applicants had made, what was for them, significant investments to prepare for their market entry and sought a return on those investments.

299 As regards the applicants’ reference to the Lagap litigation, it must be noted that nothing in the agreements at issue permits the view that the reverse payments in question were made in order to avoid increased litigation costs. While paragraph 3 of the second addendum to the UK agreement provides that the delivery by the applicants to Lundbeck of their stock of citalopram covered by that addendum should take place without payment or in exchange for payment of GPB 750 000, depending on whether or not the outcome of the Lagap litigation favoured Lundbeck, it must be observed that that clause in no way permits the conclusion that that sum was set in order to take into account litigation costs. According to the document cited in recital 441 of the contested decision, that sum represented the purchase price of around 5 million tablets in the applicants’ possession.

300 The foregoing considerations show that the Commission placed the reverse payments provided for in the agreements at issue in the specific context of the present case, characterised in particular by the relationship of potential competition between the parties to those agreements and by the very broad scope of the obligations undertaken by the applicants in exchange for those payments.

302 By the fourth part of the present plea in law, the applicants dispute the Commission’s argument that the sums that Lundbeck paid them corresponded in essence to the profit that they would have been able to make if they had entered the market during the term of the agreements at issue. Those sums are linked to the amount that, under English law, Lundbeck would have had to provide as security in order to obtain interim measures preventing the applicants from entering the market.

304 The Court observes, as has the Commission, that, as is stated in recitals 398 and 943 of the contested decision, in reply to the Commission’s request for information of 18 December 2008, the applicants acknowledged that the sum of GBP 5 million provided for in the UK agreement was an estimate of the sum that they would have received from Lundbeck, under the mechanism of English law known as a cross-undertaking in damages, if it had obtained, from a UK court, an interim measure preventing the applicants from selling generic citalopram in the United Kingdom, but had ultimately failed to demonstrate, at the end of the proceedings on the merits before that court, that the generic citalopram in question infringed a valid patent.

305 Before the Court, the applicants, while not disputing the fact that they made that statement, submit that the amount thus provided for did not correspond to the profits expected in the event of market entry but was merely a way ‘to monetise the benefit’ that they would have had from the security which Lundbeck would have had to give in exchange for the adoption of an injunction against them.

306 In that regard, it must be noted that, even if the amount of that security does not correspond precisely to those profits, the fact remains that it was determined by taking into account the damages that Lundbeck would have had to pay the applicants in the event that it had obtained an injunction preventing them from entering the market but had then been unsuccessful on the merits of its infringement action. Those damages are necessarily very closely linked to the profits that the applicants would have made in the event of market entry, since they are specifically intended to compensate the applicants for those lost profits.

307 The same considerations apply to the addenda to the UK agreement, which, in Article 2.1 of each addendum concerning the ‘compensation’ that the applicants would receive from Lundbeck, still refer to the security that Lundbeck would have had to provide in order to obtain interim measures.

308 Moreover, it must be noted that Article 2.3. of the UK agreement stipulates that, if it were established in the UK infringement action that the applicants had not infringed Lundbeck’s intellectual property rights, the reverse payment amount provided for in Article 2.2. of that agreement would constitute full and final compensation to the applicants for loss sustained as a result of the obligations arising under Article 1.1.

309 Article 2.2. of the Danish agreement corresponds, in essence, to Article 2.3 of the UK agreement.

310 As the Commission rightly noted, those articles show that the parties to the agreements at issue regarded the payments by Lundbeck as compensation to the applicants for the loss of the profit that they could have made had they entered the markets of the United Kingdom and Denmark.

311 In any event, even if the amount of those payments was lower than the profits that the applicants could have made had they entered those markets, the Court observes that it was a case for the applicants of receiving a definite payment from Lundbeck, while the expected profits were subject to the vagaries inherent in any commercial procedure, including those concerning the outcome of an infringement action.

312 It follows that the present part of the present plea in law must be rejected.

313 By the fifth part of the present plea in law, the applicants criticise the Commission for having failed to state the reasons for its statement, in recital 698 of the contested decision, that the agreements at issue would still contain restrictions of competition by object even if they were interpreted as meaning that the limitations accepted by the applicants corresponded to the limitations that Lundbeck would have been able to obtain under its patents.

315 Principally, it must be recalled that the examination of the first part of the present plea in law established that the scope of the agreements at issue was such that the applicants were prevented from selling any citalopram during the term of those agreements. Consequently, the present part is ineffective. Even supposing that the Commission had not sufficiently explained, in recital 698 of the contested decision, the reasons why it could have found there to be a restriction by object even if the agreements at issue had contained no restriction going beyond the scope of Lundbeck’s new patents, that failure to state reasons would relate only to grounds given for the sake of completeness in the contested decision (see, to that effect and by analogy, order of 8 April 2008 in Saint-Gobain Glass Deutschland v Commission, C‑503/07 P, ECR, EU:C:2008:207, paragraph 62 and the case-law cited).

316 In any event, according to the case-law, the statement of reasons required by the second paragraph of Article 296 TFEU must be appropriate to the measure at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted that measure in such a way as to enable the persons concerned to ascertain the reasons for it and to enable the competent court to exercise its power of review (see judgment of 29 September 2011 in Elf Aquitaine v Commission, C‑521/09 P, ECR, EU:C:2011:620, paragraph 147).

317 Thus, in the context of individual decisions, it is settled case-law that the purpose of the obligation to state the reasons on which an individual decision is based is, in addition to permitting review by the Courts, to provide the person concerned with sufficient information to know whether the decision may be vitiated by an error enabling its validity to be challenged (see judgment in Elf Aquitaine v Commission, cited in paragraph 316 above, EU:C:2011:620, paragraph 148 and the case-law cited).

318 It is also settled case-law that the requirement to state reasons must be assessed by reference to the circumstances of the case, in particular the content of the measure in question, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom it is of direct and individual concern, may have in obtaining explanations. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons for a measure meets the requirements of the second paragraph of Article 296 TFEU must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question (see judgment in Elf Aquitaine v Commission, cited in paragraph 316 above, EU:C:2011:620, paragraph 150 and the case-law cited).

319 Moreover, any lack of precision in a recital of an act does not undermine the lawfulness of that act where its other recitals clearly and intelligibly show the reasoning of the institution which adopted that act, so that an applicant, which had available to it all the information on which that institution based its reasoning and which had participated in the various stages of the administrative procedure, could not reasonably have been mistaken as regards that reasoning (see, to that effect, judgment of 14 July 1995 in Koyo Seiko v Council, T‑166/94, ECR, EU:T:1995:140, paragraph 105).

320 In the present case, it must be noted that, as the Commission rightly states, recital 698 of the contested decision must be read in its overall context and not in isolation.

321 In that regard, it is necessary to refer in particular to the Commission’s reasoning summarised in paragraph 224 above.

322 Accordingly, the Commission fulfilled the obligation to state reasons laid down in Article 296 TFEU.

324 By the sixth part of the present plea in law, the applicants maintain that the Commission made errors with respect to the counterfactual scenario. According to the applicants, even in that scenario, they would not have entered the market, since they were now aware that the Cipla I process infringed Lundbeck’s new patents and could not take the financial risk of buying other citalopram produced in accordance with different processes. They further submit that, following the conclusion of the agreements at issue, they continued to seek sources of generic citalopram that did not infringe Lundbeck’s new patents and would have acted in the same way in the counterfactual scenario, which means that the agreements at issue cannot be characterised as restrictions by object.

326 For the present part of this plea to be rejected, first, it suffices to recall that, in the context of the second plea, it was established that the applicants were potential competitors of Lundbeck, as they had real concrete possibilities of entering the markets of the United Kingdom and Denmark at the time of conclusion of the agreements at issue. Secondly, it follows from the examination of the first and second parts of the present plea in law that the agreements at issue are an infringement by object, in particular because they include restrictions going beyond the scope of Lundbeck’s new patents, obtained by means of reverse payments in an amount connected with the profits expected by the applicants in the event of market entry.

327 Under those circumstances, the Commission was in no way required to make any further comparison of the situation which arose following the conclusion of the agreements at issue with the situation that would have prevailed in their absence.

329 In the light of all of the foregoing, the third plea in law must be rejected in its entirety.

3. The first plea in law, alleging breach of essential procedural requirements in the procedure leading to the adoption of the contested decision

330 By the first plea in law, which consists of three parts, the applicants claim, in essence, that there has been a breach of their rights of defence because, first, the Commission did not act within a reasonable time; secondly, it did not provide them with proper and timely access to the file; and, thirdly, it failed to issue a supplementary statement of objections.

331 The applicants submit that more than six and a half years elapsed between the time when the Commission was informed of the agreements at issue and the time when it sent them a request for information. It follows that the documents contemporaneous with the conclusion of the agreements are no longer available, owing in particular to changes in the applicants’ IT systems and corporate restructurings in the meantime. Likewise, a number of individuals who worked for their undertaking at the time of the conclusion of the agreements have left or no longer have a clear recollection of the relevant events.

334 It must be recalled that compliance with the requirement that administrative procedures relating to competition policy be conducted within a reasonable time constitutes a general principle of EU law whose observance the Courts of the European Union ensure (see judgment of 19 December 2012 in Bavaria v Commission, C‑445/11 P, EU:C:2012:828, paragraph 77 and the case-law cited).

335 It is also settled case-law that the question whether the duration of the administrative procedure is reasonable must be determined in the light of the particular circumstances of each case and, in particular, the background to the case, the various procedural stages followed, the complexity of the case and its importance for the various parties involved (judgments of 15 October 2002 in Limburgse Vinyl Maatschappij and Others v Commission, C‑238/99 P, C‑244/99 P, C‑245/99 P, C‑247/99 P, C‑250/99 P to C‑252/99 P and C‑254/99 P, ECR, EU:C:2002:582, paragraph 187, and 30 September 2003 in Aristoteleio Panepistimio Thessalonikis v Commission, T‑196/01, ECR, EU:T:2003:249, paragraph 230).

336 Furthermore, it must be borne in mind that the fact that a reasonable time is exceeded, even on the assumption that it is established, does not necessarily constitute a ground for annulment of the contested decision. For the purposes of the application of the competition rules, the fact of exceeding a reasonable time can constitute a ground for annulment, in the case of a decision finding infringements, only where it has been established that the breach of that principle adversely affected the rights of defence of the undertakings concerned. Other than in that specific case, failure to observe the duty to deal with the matter within a reasonable time has no effect on the validity of the administrative procedure under Regulation No 1/2003 (see judgment of 18 June 2008 in Hoechst v Commission, T‑410/03, ECR, EU:T:2008:211, paragraph 227 and the case-law cited).

337 It must also be noted that, according to the case-law, for the purposes of the application of the ‘reasonable time’ principle, a distinction must be drawn between the two phases of the administrative procedure, namely the investigation phase preceding the statement of objections (‘the first phase’) and the phase corresponding to the remainder of the administrative procedure (‘the second phase’), each of which has its own internal logic. The first phase, covering the period up to notification of the statement of objections, begins on the date on which the Commission takes measures which imply an accusation of an infringement and must enable the Commission to adopt a position on the course which the procedure is to follow. The second phase covers the period from notification of the statement of objections to adoption of the final decision. It must enable the Commission to reach a final decision on the alleged infringement (judgment of 21 September 2006 in Technische Unie v Commission, C‑113/04 P, ECR, EU:C:2006:593, paragraphs 42 and 43).

338 In that regard, it has been held that the excessive duration of the first phase may have an effect on the future ability of the undertakings concerned to defend themselves, in particular by reducing the effectiveness of the rights of the defence where they are relied on in the second phase, owing to the passage of time and the resulting difficulty in obtaining exculpatory evidence. It is necessary, however, in such a case, for the undertakings concerned to demonstrate in a sufficiently precise manner that they experienced difficulties in defending themselves against the Commission’s claims, specifying the documents or testimonies that they could no longer obtain and the reasons why that was capable of compromising their defence (see, to that effect, judgments in Technische Unie v Commission, cited in paragraph 337 above, EU:C:2006:593, paragraphs 54 and 60 to 71, and of 29 March 2011 in ArcelorMittal Luxembourg v Commission and Commission v ArcelorMittal Luxembourg and Others, C‑201/09 P and C‑216/09 P, ECR, EU:C:2011:190, paragraph 118).

339 Similarly, according to the case-law, those undertakings must indicate in detail, if not the specific items of evidence that have disappeared, at least the incidents, events or circumstances which prevented them, during the period in question, from complying with their obligation of diligence and brought about the alleged disappearance of the evidence alluded to. Only by examining such specific indications can the European Union judicature assess whether an undertaking has shown to the requisite legal standard that it experienced the alleged difficulties in defending itself against the Commission’s claims as a result of the excessive length of the administrative procedure, or whether those difficulties in fact derive from a failure to comply with its obligation of diligence (judgment in ArcelorMittal Luxembourg v Commission and Commission v ArcelorMittal Luxembourg and Others, cited in paragraph 338 above, EU:C:2011:190, paragraphs 120 to 122).

340 In order to apply those principles in the present case, it is necessary to begin by recalling below the sequence of the principal events leading to the adoption, on 19 June 2013, of the contested decision, as they are described, in particular, in Section 2.1 thereof:

– in October 2003, the Commission first became aware of the agreements in question through information from the KFST;

– in January 2005, the Commission conducted inspections in Denmark, Italy and Hungary, principally on Lundbeck’s premises;

– in 2006, requests for information were sent to the competition authorities of all the Member States, and to Lundbeck and a generic undertaking;

– in 2007, the Commission examined the replies to those requests and established a preliminary position in respect of Lundbeck’s practices and those of other undertakings involved;

– in January 2008, the Commission decided to launch a sector inquiry into the pharmaceutical sector, which was closed with the adoption of a final report on 8 July 2009 (see paragraphs 23 and 24 above);

– in December 2009, the Commission conducted new inspections at the premises of Lundbeck Italia SpA and Italian generic undertakings;

– on 7 January 2010, the Commission opened formal proceedings against Lundbeck;

– in March 2010, the Commission notified the applicants of the existence of the investigation;

– on 24 July 2012, the Commission opened formal proceedings against, amongst others, the applicants and sent a statement of objections to them and to Lundbeck.

341 It suffices to note that the second phase lasted under one year in respect of the applicants, which cannot be considered excessive.

342 It must be observed that the first phase began, in respect of the applicants, in March 2010, when the Commission took the initial measures implying an accusation of infringement, and was closed on 24 July 2012, the date of the statement of objections. Such a period is not unreasonable.

343 First, in so far as the applicants base their plea in law on the date on which the Commission first became aware of the agreements at issue in order to establish that it failed to fulfil its obligation to adopt a decision within a reasonable period and thus infringed their rights of defence, it must be stressed that nowhere is that approach followed in the case-law, which takes as its starting point the date of the initial measures implying an accusation of infringement (see, to that effect, judgment in Technische Unie v Commission, cited in paragraph 337 above, EU:C:2006:593, paragraph 43).

344 It must also be noted that Article 25(1)(b) of Regulation No 1/2003 provides that the Commission’s powers to impose fines are subject to a limitation period of five years. Under Article 25(2) of that regulation, time is to begin to run in the case of continuing infringements, as in the present case, on the day on which the infringement ceases. Under Article 25(3) and (4) of that regulation, requests for information, the initiation of proceedings and notification of a statement of objections are to interrupt the limitation period, for all participants in an infringement. Under Article 25(5) of Regulation No 1/2003, each interruption is to start time running afresh, but the limitation period is to expire at the latest on the day on which a period equal to twice the limitation period has elapsed without the Commission having imposed a fine or a periodic penalty payment, so that the Commission cannot put off a decision on fines indefinitely without incurring the risk of the limitation period expiring.

345 Where there is a complete system of rules covering in detail the limitation periods within which the Commission is entitled, without undermining the fundamental requirement of legal certainty, to impose fines on undertakings which are the subject of procedures under the competition rules, there is no room for consideration of the Commission’s duty to exercise its power to impose fines within a reasonable period (see, to that effect and by analogy, judgment of 19 March 2003 in CMA CGM and Others v Commission, T‑213/00, ECR, EU:T:2003:76, paragraph 324 and the case-law cited).

346 Secondly, it should be noted that the duration of the first phase, even supposing it may be calculated as from the end of the infringement as the applicants propose, would be almost seven years. Such a period may be justified by the particular circumstances of the present case, from which it can be seen that, in addition to the numerous requests for information which it sent to the undertakings concerned, the Commission considered it necessary to conduct a sector inquiry in order to examine all practices concerning settlements in the pharmaceutical sector and to obtain a detailed view of the competitive environment in that sector. Thus, in the whole of the procedure specifically concerning the agreements in question there was no period of prolonged inactivity that could not be justified by the Commission’s need to carry out a more general inquiry into the sector concerned.

347 Thirdly, as regards the KFST press release, which suggested, according to the applicants, that the Commission would not initiate any proceedings against them, it must be observed that, in the light of the considerations set out in paragraphs 282 to 287 above in that regard, the applicants cannot reasonably claim that such a press release encouraged them not to take measures to defend themselves, still less that such encouragement, if it were established, would be attributable to the Commission and the excessive duration of the administrative proceedings before it.

348 Fourthly, even if the applicants’ claims summarised in paragraph 331 above fulfilled the conditions of precision and specificity required by the case-law referred to in paragraph 338 above, it must be stated that, in view of the KFST press release and the sector inquiry opened by the Commission, a diligent undertaking should have retained any documents that might prove useful in its defence in any proceedings that might be initiated in respect of an infringement of competition law.

349 Diligence is among the conditions which the case-law (see paragraph 339 above) requires a party to meet in order to be able successfully to plead infringement of its rights of defence owing to the allegedly unreasonable length of the proceedings.

350 As the applicants have failed to give details about the occurrence of specific events other than the mere passage of time, which might explain why the documents in question have gone astray, their argument cannot be upheld.

351 In those circumstances, the present plea in law must be rejected in so far as it seeks the annulment of the contested decision.

352 Moreover, assuming that the present part may be interpreted as also requesting the Court to reduce the amount of the fine imposed on the applicants even in the absence of an illegality justifying the annulment of the contested decision, it should be recalled that the review of legality of decisions adopted by the Commission is supplemented by the unlimited jurisdiction which the Courts of the European Union are afforded by Article 31 of Regulation No 1/2003, in accordance with Article 261 TFEU. That jurisdiction empowers the Courts, in addition to carrying out a mere review of the lawfulness of the penalty, to substitute their own appraisal for the Commission’s and, consequently, to cancel, reduce or increase the fine or penalty payment imposed (judgment of 27 February 2014 in InnoLux v Commission, T‑91/11, ECR, EU:T:2014:92, paragraph 156).

353 It is therefore for the Court, in the exercise of its unlimited jurisdiction, to assess, on the date on which it adopts its decision, whether the fine imposed on the applicant was one whose amount properly reflects the gravity and duration of the infringement in question (judgments in InnoLux v Commission, cited in paragraph 352 above, EU:T:2014:92, paragraph 157, and of 10 December 2014 in ONP and Others v Commission, T‑90/11, ECR, EU:T:2014:1049, paragraph 352).

354 It must be pointed out, however, that the exercise of unlimited jurisdiction is not a review that is conducted by the Court of its own motion (judgment of 8 December 2011 in KME Germany and Others v Commission, C‑389/10 P, ECR, EU:C:2011:816, paragraph 131).

355 In the present case, even if it were considered that the case-law of the Court of Justice (see, to that effect, judgment of 8 May 2014 in Bolloré v Commission C‑414/12 P, EU:C:2014:301, paragraphs 106 and 107) could be interpreted as not precluding the Court, in the exercise of its unlimited jurisdiction, from reducing a fine in order to censure solely an infringement of the rights of the defence, it must be noted that the Commission has already taken into account the duration of the administrative proceedings and accordingly granted a 10% reduction in the amount of the fines imposed on the applicants and other addressees of the contested decision (see paragraph 38 above). Accordingly, the Court considers, in the exercise of its unlimited jurisdiction, that it is not in any event appropriate further to reduce the amount of the fine for which the applicants are liable.

356 In the light of the foregoing considerations, the present part must also be rejected in so far as it concerns the exercise of unlimited jurisdiction.

357 The applicants maintain that the Commission initially granted them partial access to the file, which was extended only subsequently to other documents relating to generic citalopram produced by the Indian company Matrix (‘the Matrix documents’). Certain documents were communicated to the applicants only after the expiry of the period for responding to the statement of objections, although that period was extended on a number of occasions.

359 It must be noted, as the Commission observes, that the Matrix documents in its possession were covered by confidentiality orders made by the national courts and that it was therefore unable to allow the applicants to consult them before the parties concerned had given their consent.

360 That explains why the applicants had access to those documents on a staggered basis.

361 As regards the fact that the final Matrix documents were forwarded to the applicants after the expiry of the final time limit for replying to the statement of objections, it must be observed that the applicants did not take up the opportunity to submit additional observations, which the Commission had, however, offered, as is apparent from the hearing officer’s letter of 18 December 2012 produced by the applicants before the Court.

363 The applicants claim that the Commission had maintained in the statement of objections that Lundbeck and Arrow were potential competitors on the ground that Arrow could enter the market without infringing any patent, whereas in the contested decision it considered that, after expiry of the original patents, the market was wide open to competition and that Lundbeck’s new patents were irrelevant for the purpose of assessing potential competition. In the applicants’ submission, before pursuing what they allege to have been that new approach, the Commission ought to have issued a supplementary statement of objections.

365 It must be noted that, as the Commission rightly observes, it took the same approach to potential competition both in the statement of objections and in the contested decision. The position set out in recitals 561 to 563 and 593 to 595 of the statement of objections corresponds broadly to the position stated in the contested decision as regards the reasons why the applicants and Lundbeck were potential competitors at the time of the conclusion of the agreements at issue.

366 Moreover, it is necessary to note that the applicants have not even replied to the comments to that effect made by the Commission in its defence.

367 Under those circumstances, the present part must also be rejected, as must, therefore, the first plea in law in its entirety.

4. The fourth plea in law, alleging errors of law relating to the imposition of a fine in the present case

368 By the fourth plea in law, raised in support of the claim for annulment of the fine imposed on them, the applicants claim that it has not been proved that they committed an infringement of Article 101 TFEU intentionally or negligently, within the meaning of Article 3(3) of Regulation No 1/2003, and that the imposition of a fine in the present case breaches the principle of proportionality, the principle that penalties must have a proper legal basis and the principle of legal certainty.

369 It must be recalled that, according to case-law, the principle that penalties must be provided for by law and the principle of legal certainty cannot be interpreted as prohibiting the gradual clarification of the rules of liability but may preclude the retroactive application of a new interpretation of a rule establishing an offence. That is particularly true of a judicial interpretation which produces a result that was not reasonably foreseeable at the time when the offence was committed, especially in the light of the interpretation put on the provision in the case-law at the material time (see judgment in Telefónica and Telefónica de España v Commission, cited in paragraph 77 above, EU:C:2014:2062, paragraphs 147 and 148 and the case-law cited).

370 In that regard, it follows from the case-law that the scope of what is foreseeable depends to a considerable degree on the content of the text in issue, the field it covers and the number and status of those to whom it is addressed, and that a law may still satisfy the requirement of foreseeability even if the person concerned has to take appropriate legal advice to assess, to a degree that is reasonable in the circumstances, the consequences which a given action may entail (judgment of 28 June 2005 in Dansk Rørindustri and Others v Commission, C‑189/02 P, C‑202/02 P, C‑205/02 P to C‑208/02 P and C‑213/02 P, ECR, EU:C:2005:408, paragraph 219).

371 Moreover, with regard to whether an offence was committed intentionally or negligently and is therefore liable to be penalised by the imposition of a fine in accordance with the first subparagraph of Article 23(2) of Regulation No 1/2003, it is settled case-law that that condition is satisfied where the undertaking concerned cannot be unaware of the anticompetitive nature of its conduct, whether or not it is aware that it is infringing the competition rules of the Treaty (see judgment in Schenker & Co. and Others, cited in paragraph 283 above, EU:C:2013:404, paragraph 37 and the case-law cited).

372 In the present case, in the first place, it follows inter alia from paragraphs 109, 110 and 279 to 281 above that there was no legal uncertainty regarding the possibility of classifying, as a restriction by object, agreements with the characteristics of those at issue in the present case and which came about in the context of those agreements.

373 In the second place, as regards, more particularly, the references made by the applicants to the KFST press release, it suffices to refer to paragraphs 282 to 287 above.

374 In the third place, as regards the alleged absence of restriction of competition, it must be observed that the examination of the second and third pleas in law has established that the applicants were potential competitors of Lundbeck and that the agreements at issue, which included restrictions going beyond the scope of Lundbeck’s new patents, excluded them from the markets concerned during the terms of those agreements, in exchange for reverse payments in an amount linked to expected profits.

375 In the fourth place, having regard to the alleged lack of anticompetitive intention, it suffices to refer to paragraphs 270 to 275 above.

376 Finally, as to the applicants’ argument relating to the lack of solutions apart from conclusion of the agreements at issue, it may not be considered that the only option available to the applicants was to reach agreements excluding them from the market for a given period, with no guarantee that they would not subsequently be subject to infringement proceedings, in exchange for reverse payments in an amount taking into account the profits hoped for by the applicants in the event of market entry. Moreover, while that is a beneficial solution both for the applicants and for Lundbeck, that is not sufficient to render inapplicable Article 101 TFEU, in accordance with the case-law referred to in paragraph 140.

377 In the light of the foregoing considerations, the present plea in law must be rejected.

5. The fifth plea in law, alleging an error in the characterisation of the agreements at issue as a single and continuous infringement

378 By the fifth plea in law, raised in the alternative, the applicants maintain that the UK agreement and the Danish agreement cannot be regarded as giving rise to a single and continuous infringement.

379 The applicants dispute the merits of the findings made in the contested decision in that respect, in particular the finding that the agreements covered the same period, and claim that the agreements are not part of an overall plan and are not complementary.

380 According to the applicants, the Commission characterised the agreements at issue in that way in order to ensure that the 10-year limitation period arising under Article 25(1)(b) and Article 25(5) of Regulation No 1/2003 did not prevent it from imposing a fine in respect of the Danish agreement, which had ended more than 10 years before the adoption of the contested decision.

382 It should be recalled that the concept of a single infringement covers a situation in which a number of undertakings have participated in an infringement consisting in continuous conduct in pursuit of a single economic aim intended to distort competition or in individual infringements linked to one another by the same object (all the elements sharing the same purpose) and the same subjects (the same undertakings, which are aware that they are participating in the common object) (see judgment of 28 April 2010 in Amann & Söhne and Cousin Filterie v Commission, T‑446/05, ECR, EU:T:2010:165, paragraph 89 and the case-law cited).

383 Furthermore, it should be observed that an infringement of Article 101(1) TFEU may result not only from an isolated act but also from a series of acts or from continuous conduct. That interpretation cannot be challenged on the ground that one or more elements of that series of acts or continuous conduct could also constitute, in themselves and in isolation, an infringement of that provision. Where the various actions form part of an overall plan, owing to their identical object, which distorts competition within the single market, the Commission is entitled to impute responsibility for those actions on the basis of participation in the infringement considered as a whole (see judgment in Amann & Söhne and Cousin Filterie v Commission, cited in paragraph 382 above, EU:T:2010:165, paragraph 90 and the case-law cited).

384 It must also be made clear that the single objective to which the overall plan characterising a single and continuous infringement is directed cannot be determined by a general reference to the distortion of competition in the market concerned by the infringement, since an impact on competition, whether it is the object or the effect of the conduct in question, is an element inherent in any conduct covered by Article 101(1) TFEU. Such a definition of the concept of a single objective would be likely to deprive the concept of a single and continuous infringement of part of its meaning, since it would have the consequence that different instances of conduct which relate to a particular economic sector and are prohibited under Article 101(1) TFEU would have to be systematically characterised as constituent elements of a single infringement. Thus, for the purposes of characterising various instances of conduct as a single and continuous infringement, it is necessary to establish whether they are complementary, in that each of them is intended to deal with one or more consequences of the normal pattern of competition, and whether, through interaction, they contribute to the attainment of the set of anticompetitive effects desired by those responsible, within the framework of an overall plan having a single objective. In that regard, it will be necessary to take into account any circumstance capable of establishing or casting doubt on that complementary link, such as the period of implementation, the content (including the methods used) and, correlatively, the objective of the various actions in question (see judgment in Amann & Söhne and Cousin Filterie v Commission, cited in paragraph 382 above, EU:T:2010:165, paragraph 92 and the case-law cited).

385 The applicants’ arguments must be assessed in the light of those considerations.

386 In the first place, it must be noted that the agreements at issue were concluded by the same undertakings, namely Lundbeck and the undertaking formed by the applicants.

387 In the second place, those agreements both seek to prevent the applicants’ market entry with generic citalopram, in Member States in which they had taken numerous steps to that end, in exchange for a payment by Lundbeck.

388 In the third place, as the Commission rightly observes, while it is true that the terms of those agreements do not coincide exactly, it is the case that the term of the Danish agreement falls within that of the UK agreement, as extended.

389 In the fourth place, it must be noted that the agreements at issue are clearly interrelated, as the Commission has also pointed out.

390 First, it must be observed that the ninth recital of the Danish agreement, and Articles 1.1 and 4.1 thereof, refer to the UK infringement action. In particular, Article 4.1 of the Danish agreement provides that it may end at the time of any final court decision on that action, which corresponds, in essence, to Article 4.1 of the UK agreement.

391 Secondly, the applicants, in their replies to the Commission’s request for information of 6 May 2011 acknowledged that the Danish agreement had been entered into in the light of the UK infringement action.

392 Thirdly, it is apparent from the file that the applicants acknowledged, in their reply to the Commission’s request for information of 18 December 2008, that the UK agreement had been followed by at least one other agreement, concerning Denmark, concluded for substantially the same reasons as those leading to the UK agreement.

393 Fourthly, as is apparent from an email of 23 May 2002 in the Commission’s file, which was produced before the Court, and, more generally, from recital 455 of the contested decision, Arrow Generics, a signatory of the UK agreement, was also involved in the negotiations for the Danish agreement, signed by Arrow Group.

394 All those circumstances allow the conclusion that the agreements at issue were part of the overall plan whereby Lundbeck and the applicants had decided that it was in their interests to delay, in exchange for reverse payments, the time when the applicants would enter the market with generic citalopram.

395 Accordingly, the Commission was entitled to consider that those agreements gave rise to a single and continuous infringement which had ended on 20 October 2003 and which was therefore not time-barred when the contested decision was adopted.

6. The sixth plea in law, alleging that the amount of the fine is disproportionate

397 By the sixth plea in law, raised in the further alternative, in the first place, the applicants claim that the amount of the fine is manifestly disproportionate to the gravity of the infringement and that the Court should therefore reduce it, in the exercise of its unlimited jurisdiction.

398 It should be recalled that, as was observed in paragraph 35 above, the Commission used two different methods to calculate, first, the amount of the fine to be imposed on Lundbeck and, secondly, the amount of the fines to be imposed on the generic undertakings, including the applicants.

399 As regards Lundbeck, the Commission used the general method provided for in the 2006 Guidelines and accordingly calculated the basic amount from a proportion of the value of sales of goods or services, made by Lundbeck, related directly or indirectly to the infringements committed, in the relevant geographic area within the EEA (points 13 and 19 of those guidelines). The figure adopted was 10 or 11%, depending on the geographic scope of the agreements in question.

400 As regards the applicants, and, moreover, the other generic undertakings concerned, the Commission noted that, as a result of the agreements at issue, the applicants had sold virtually no citalopram during the relevant period and it therefore considered that it was necessary to apply point 37 of the 2006 Guidelines, which provides that the particularities of a given case or the need to achieve deterrence in a particular case may justify departing from the general methodology.

401 The method applied to the applicants therefore consisted in using as the basic amount the total value of the payments which they had received from Lundbeck, that is to say, EUR 11.1 million.

402 It cannot seriously be disputed, having regard to the lack of sales on the market by the applicants, that the Commission was obliged to depart from the general methodology.

403 Similarly, it must be observed that the method used by the Commission in the present case as regards the applicants enabled the Commission to deprive them of the profits they had obtained by concluding the agreement at issue.

404 Furthermore, even if, by the application of that method, the Commission had fixed the amount of the fine imposed on the applicants at an amount which exceeded those profits, it must by noted that the purpose of a fine is not simply to remove the benefits that an undertaking has obtained through its anticompetitive conduct, but also to deter that undertaking and other undertakings from engaging in such conduct. Thus, even in that situation, the amount of the fine imposed by the Commission would nevertheless not be disproportionate.

406 In the second place, the applicants submit that the Commission should have taken account of certain alleged mitigating circumstances.

407 In that regard, first, it must be observed, as the Commission, in essence, notes, the applicants’ alleged error of purchasing potentially infringing citalopram did not entitle them to conclude anticompetitive agreements in order to obtain a return on the investment made.

408 Secondly, nor is the fact that the applicants formed a start-up undertaking a mitigating circumstance. In that regard, in addition to referring to paragraphs 371 and 372 above in respect of negligence, it must be noted that, according to the case-law, the fact that an undertaking was unaware, for any reason, that its conduct infringed the competition rules laid down by EU law is not a mitigating circumstance justifying a reduction in the amount of the fine (see, to that effect, judgment of 12 December 2012 in Novácke chemické závody v Commission, T‑352/09, ECR, EU:T:2012:673, paragraphs 81, 87 and 89).

409 Thirdly, although the applicants maintain that they could not have entered the market during the term of the agreements at issue, it follows from examination of the second plea in law that they had real concrete possibilities of entering the market, which were impeded by the conclusion of the agreements at issue. Since the infringement found in the contested decision concerns a restriction of potential competition by object, the date on which the applicants would have entered the market had the agreements not been concluded is immaterial.

410 Fourthly, as regards the claim that the infringement in question was novel, it follows, in particular, from paragraphs 109, 110, 229 to 231, 369 and 370 above that it was not and therefore no reduction in the amount of the fine should have been provided for in that regard.

411 Fifthly, as regards the alleged short duration of the infringement in question, it must be noted that, as the Commission, in essence, stated in recital 1368 of the contested decision, since the agreements at issue are a restriction by object, the duration of the infringement committed by the applicants corresponds to the term of those agreements, irrespective of the period during which those agreements produced effects. Accordingly, by relying on the amounts of payments which, by virtue of the agreements at issue, Lundbeck had made to the applicants in exchange for the obligations which they undertook during the term of those agreements, the Commission duly took into account the term of the alleged infringement.

412 In the third place, the applicants claim that the Commission erred in taking into account, as an aggravating circumstance, Lundbeck’s very high market share.

413 It must be noted that, according to the last part of recital 1361 of the contested decision, the nature of the infringement, Lundbeck’s market share, the geographic scope of the agreements in question and the implementation of those agreements were noted only for the sake of completeness but were not decisive for the purpose of determining the amount of the fine to be imposed on the generic undertakings using the method selected by the Commission in respect of those undertakings, by virtue of the discretion conferred upon it by point 37 of the 2006 Guidelines.

414 Accordingly, for the purpose of establishing that this was a serious infringement, the Commission was entitled merely to find, as it did inter alia in recital 1362 of the contested decision in response to an objection raised by the applicants, that these were agreements excluding a potential competitor from the market, a finding which is correct, as is apparent from the examination of the second and third pleas in law.

415 In the light of the foregoing considerations, the present plea in law must be rejected.

416 Since none of the pleas in law raised by the applicants in support of their application for annulment of the contested decision is well founded and since the examination of the arguments put forward in support of their application for variation of that decision has not revealed inappropriate elements in the Commission’s calculation of the amount of the fine, the action must be dismissed in its entirety.

417 Under Article 134(1) of the Rules of Procedure of the General Court, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. As the applicants have been unsuccessful, they must be ordered to pay the costs, in accordance with the form of order sought by the Commission.

3. The agreements concluded by Lundbeck with Arrow Group, Arrow Generics and Resolution Chemicals, and other background factors

4. Steps taken by the Commission in the pharmaceutical sector and administrative procedure

1. The second plea in law, alleging that the applicants and Lundbeck were not potential competitors

The possibility of entering the market with citalopram produced in accordance with the Cipla I and Matrix I processes

The possibility for the applicants of obtaining citalopram produced in accordance with other processes

2. The third plea in law, alleging that the agreements at issue are not a restriction by object

Analysis relating to the existence of a restriction of competition by object in the contested decision

3. The first plea in law, alleging breach of essential procedural requirements in the procedure leading to the adoption of the contested decision

4. The fourth plea in law, alleging errors of law relating to the imposition of a fine in the present case

5. The fifth plea in law, alleging an error in the characterisation of the agreements at issue as a single and continuous infringement

6. The sixth plea in law, alleging that the amount of the fine is disproportionate

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Arrow Group and Arrow Generics v Commission (Judgment) [2016] EUECJ T-467/13 (08 September 2016) URL: http://www.bailii.org/eu/cases/EUECJ/2016/T46713.html Cite as: [2016] EUECJ T-467/13, ECLI:EU:T:2016:450, EU:T:2016:450

Court of Justice of the European Communities (including Court of First Instance Decisions)