Managing Intellectual Property

Pharma companies rejoice at GSK judgment

22 September 2008

Stephen Mulrenan, London

The pharmaceutical industry is celebrating a European Court of Justice (ECJ) decision that states that even dominant companies can take reasonable and proportional steps to protect their own commercial interests against parallel trade

But the verdict has left more questions than answers for many practitioners.

In Sot Lelos Kai Sia EE (and Others) v GlaxoSmithKline AEVE (Joined Cases C-468/06 to C-478/06) , the ECJ ruled that a dominant pharmaceutical company may refuse to supply wholesalers involved in parallel exports if the orders are deemed to be "extraordinary".

The ECJ did not offer guidance on what is understood to be "extraordinary" or "ordinary" orders, leaving this to the determination of national courts, but it did state that historical relations between the parties and the size of the orders compared to national demand are relevant factors.

The case involved the Greek subsidiary of healthcare multinational GlaxoSmithKline (GSK), which was restricting supply to pharmaceutical wholesalers in order to limit their parallel activities.

Until November 2000, wholesalers in Greece purchased pharmaceuticals from GSK for both domestic supply and for export to other member states where the...



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