Case report & translation
Menzis et al. / AstraZeneca
The following is a brief report and unofficial courtesy translation of the Dutch judgment handed down by the District Court of The Hague in the Netherlands on the 14th of October 2020 in the matter of health insurer Menzis against pharmaceutical company AstraZeneca.
In this matter, Menzis sought to be compensated for the amount it had paid for AstraZeneca’s anti-psychotic medication Seroquel®, the price of which, Menzis argued, was kept artificially high by AstraZeneca’s evergreening patent policies, in particular the aggressive enforcement of one of its patents in the Dutch market that had already been declared invalid in the United Kingdom.
The district court of The Hague declared AstraZeneca to be liable for the claimed damages and chose to base that liability on the concept of unjustified enrichment: maintaining a patent that has a non-negligible chance of being declared invalid is one thing, but actively enforcing it to keep a generic competitor of the market can make the patent holder liable.
Why is this case noteworthy?
The case is quite remarkable in that it is not a case between two direct pharmaceutical competitors playing their usual “you win some, you lose some” patent game, but a third party seeking damages for the economic (healthcare) consequences of certain patent enforcement practices for patients.
The bigger issue at stake for pharmaceutical companies is of course that – should this judgment turn out to be the start of a shift in legal thinking – they may be held liable for economic damage suffered by third parties following agressive enforcement practices when concerns exist regarding the validity of the patents.
After several ground-breaking decisions in recent years, including the Supreme Court Urgenda case in which the Dutch government was held to its stated climate goals, this is yet another surprising decision from the Dutch courts which are obviously lending an ear to those voices arguing that governments and big business should be held accountable for their behaviour (or their failure to improve).
Evergreening: on its way to be labelled an anti-competitive or even unlawful practice?
Most people still agree that patents are in principle a good thing: investments in research and development leading to real innovations need to have a chance of being recouped. Awarding the innovators with limited legal monopolies through patents has proven to be an effective system to foster innovation. But any right and legal construct may be open to abuse, and even such legal monopolies as patents grant may be used in unlawful ways: this often difficult and blurred line between competition law, tort and patents has fed legal discussions for many years.
Evergreening as practiced in the pharmaceutical is of course a slightly more ambiguous thing: in essence this derogatory word describes the practice of patenting a new medicinal product (by way of a generally strong ‘specialty’ patents) and then introducing – usually somewhat ‘thin’ – incremental innovations (e.g. new delivery systems, pharmaceutical mixtures with known substances or dosage regimes) as part of strategies that can appear to be more about extending market exclusivity after the expiration of the original specialty patent, than actual innovations.
The case is expected to go to appeal and is certain to be followed with great interest: it is far from certain that Menzis’ unexpected success will be upheld on appeal, since it is clear from the judgment that the court was sympathetic to Menzis’ case and found creative ways to argue its decision.
The original Dutch text of this judgement can be found here.
An unofficial office translation is provided courtesy of Coupry lawyers here.
Coupry lawyers is a Dutch law firm specialised in technology, energy and litigation.
For any questions or comments regarding this report or the case, including requests to be kept informed of this case in appeal, please contact the authors of this report: Maurits Westerik (patent law) and Jan-Koen Sluijs (competition law & public interest litigation).