Provisional text

27 June 2024 (*)

Table of contents

II. Background to the dispute

III. The decision at issue

IV. The procedure before the General Court and the judgment under appeal

VII. The appeal

(a) The decision at issue

(b) The judgment under appeal

3. Preliminary considerations relating to the examination of the substance of the first to sixth grounds of appeal

(a) The relevance of the first ground of appeal

(1) Arguments of the parties

(2) Findings of the Court

(b) The first to third parts

(1) Arguments of the parties

(2) Findings of the Court

(c) The fourth and sixth parts

(1) Arguments of the parties

(2) Findings of the Court

(d) The fifth part

(1) Arguments of the parties

(2) Findings of the Court

(e) Conclusion on the first ground of appeal

5. The second ground of appeal

(a) The second part

(1) Arguments of the parties

(2) Findings of the Court

(b) The first, third and fourth parts

(1) Arguments of the parties

(2) Findings of the Court

(c) The fifth to eighth parts

(1) Arguments of the parties

(2) Findings of the Court

(a) The first part

(1) Arguments of the parties

(2) Findings of the Court

(b) The second part

(1) Arguments of the parties

(2) Findings of the Court

(c) The third part

(1) Arguments of the parties

(2) Findings of the Court

(d) The fourth part

(1) Arguments of the parties

(2) Findings of the Court

(e) The fifth part

(1) Arguments of the parties

(2) Findings of the Court

(f) Sixth part

(1) Arguments of the parties

(2) Findings of the Court

(a) The first part

(1) Arguments of the parties

(2) Findings of the Court

(b) The second part

(1) Arguments of the parties

(2) Findings of the Court

(c) The third part

(1) Arguments of the parties

(2) Findings of the Court

(d) The fourth part

(1) Arguments of the parties

(2) Findings of the Court

8. The fifth ground of appeal

(a) Arguments of the parties

(b) Findings of the Court

(a) Arguments of the parties

(b) Findings of the Court

(a) The decision at issue

(b) The judgment under appeal

3. Findings of the Court

(a) The decision at issue

(b) The judgment under appeal

(a) Arguments of the parties

(b) Findings of the Court

3. The ninth and tenth grounds of appeal

(a) Arguments of the parties

(b) Findings of the Court

VIII. The consequences of setting aside the judgment under appeal

IX. The action before the General Court

(a) The potential competition exerted by Krka on Servier

(b) The existence of a market-sharing agreement

Costs

(Appeal – Competition – Pharmaceutical products – Market for perindopril – Article 101 TFEU – Agreements, decisions and concerted practices – Market sharing – Potential competition – Restriction of competition by object – Strategy to delay the market entry of generic versions of perindopril – Patent dispute settlement agreement – Patent licence agreement – Technology assignment and licence agreement – Article 102 TFEU – Relevant market – Abuse of dominant position)

In Case C‑176/19 P,

APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 22 February 2019,

European Commission,

represented initially by F. Castilla Contreras, B. Mongin, J. Norris and C. Vollrath, subsequently by F. Castilla Contreras, F. Castillo de la Torre, B. Mongin, J. Norris and C. Vollrath, and lastly by F. Castilla Contreras, F. Castillo de la Torre, J. Norris and C. Vollrath, acting as Agents,

appellant,

supported by:

United Kingdom of Great Britain and Northern Ireland,

represented initially by D. Guðmundsdóttir, acting as Agent, and by J. Holmes KC, subsequently by L. Baxter, D. Guðmundsdóttir, F. Shibli and J. Simpson, acting as Agents, and by J. Holmes KC, and P. Woolfe, Barrister, and lastly by S. Fuller, acting as Agent, and by J. Holmes KC, and P. Woolfe, Barrister,

intervener in the appeal,

the other parties to the proceedings being:

Servier SAS,

established in Suresnes (France),

Servier Laboratories Ltd,

established in Stoke Poges (United Kingdom),

Les Laboratoires Servier SAS,

established in Suresnes,

represented by O. de Juvigny, J. Jourdan, T. Reymond, A. Robert, avocats, J. Killick, advocaat, and M.I.F. Utges Manley, Solicitor,

applicants at first instance,

European Federation of Pharmaceutical Industries and Associations (EFPIA),

established in Geneva (Switzerland), represented by F. Carlin, Barrister, and N. Niejahr, Rechtsanwältin,

intervener at first instance,

THE COURT (First Chamber),

composed of A. Arabadjiev (Rapporteur), President of the Chamber, K. Lenaerts, President of the Court, acting as Judge of the First Chamber, P.G. Xuereb, A. Kumin and I. Ziemele, Judges,

Advocate General: J. Kokott,

Registrar: M. Longar and R. Şereş, Administrators,

having regard to the written procedure and further to the hearing on 20 and 21 October 2021,

after hearing the Opinion of the Advocate General at the sitting on 14 July 2022,

gives the following

1 By its appeal, the European Commission seeks to have set aside in part the judgment of the General Court of the European Union of 12 December 2018, Servier and Others v Commission (T‑691/14, ‘the judgment under appeal’, EU:T:2018:922), by which the General Court annulled Article 4, in so far as it found that Servier SAS and Les Laboratoires Servier SAS participated in the agreements referred to in that article, Article 6, Article 7(4)(b) and Article 7(6) of European Commission Decision C(2014) 4955 final of 9 July 2014 relating to a proceeding under Article 101 and Article 102 [TFEU] (Case AT.39612 – Perindopril (Servier)) (‘the decision at issue’).

2 Paragraphs 13 to 15, 17 and 24 of the Commission Notice on the definition of relevant market for the purposes of Community competition law (OJ 1997 C 372, p. 5) are worded as follows:

‘Competitive constraints

13. Firms are subject to three main sources or competitive constraints: demand substitutability, supply substitutability and potential competition. From an economic point of view, for the definition of the relevant market, demand substitution constitutes the most immediate and effective disciplinary force on the suppliers of a given product, in particular in relation to their pricing decisions. A firm or a group of firms cannot have a significant impact on the prevailing conditions of sale, such as prices, if its customers are in a position to switch easily to available substitute products or to suppliers located elsewhere. Basically, the exercise of market definition consists in identifying the effective alternative sources of supply for the customers of the undertakings involved, in terms both of products/services and of geographic location of suppliers.

14. The competitive constraints arising from supply side substitutability other [than] those described in paragraphs 20 to 23 and from potential competition are in general less immediate and in any case require an analysis of additional factors. As a result such constraints are taken into account at the assessment stage of competition analysis.

Demand substitution

15. The assessment of demand substitution entails a determination of the range of products which are viewed as substitutes by the consumer. One way of making this determination can be viewed as a speculative experiment, postulating a hypothetical small, lasting change in relative prices and evaluating the likely reactions of customers to that increase. The exercise of market definition focuses on prices for operational and practical purposes, and more precisely on demand substitution arising from small, permanent changes in relative prices. This concept can provide clear indications as to the evidence that is relevant in defining markets.

…

II. Background to the dispute

3 The background to the dispute, as described in particular in paragraphs 1 to 73 of the judgment under appeal, may be summarised as follows.

4 Servier SAS is the parent company of the Servier pharmaceutical group which includes Les Laboratoires Servier SAS and Servier Laboratories Ltd (individually or jointly, ‘Servier’). Les Laboratoires Servier is specialised in the development of originator medicines, while its subsidiary Biogaran SAS is specialised in the development of generic medicines.

5 Servier developed perindopril, a medicinal product primarily intended for the treatment of hypertension and heart failure. That medicinal product is one of the angiotensin converting enzyme (‘the ACE medicinal products’). The 16 ACE medicinal products which existed at the material time were classified both at the third level of the Anatomical Therapeutic Chemical (ATC) classification of the World Health Organisation (WHO), which corresponds to therapeutic indications, and at the fourth level of that classification, corresponding to the mode of action, in the same group, entitled ‘[angiotensin converting enzyme] inhibitors, plain’. The active ingredient of perindopril takes the form of a salt. The salt used initially was erbumine

6 Patent EP0049658, relating to the active ingredient of perindopril, was filed by a company in the Servier group with the European Patent Office (EPO) on 29 September 1981. That patent was due to expire on 29 September 2001, but its protection was prolonged in a number of Member States, including the United Kingdom, until 22 June 2003. In France, protection under the patent was prolonged until 22 March 2005 and, in Italy, until 13 February 2009.

7 On 16 September 1988, Servier filed a number of patents with the EPO relating to processes for the manufacture of the active ingredient of perindopril with an expiry date of 16 September 2008, namely patents EP0308339, EP0308340 (‘the 340 patent’), EP0308341 and EP0309324.

8 On 6 July 2001, Servier filed with the EPO patent EP1296947 (‘the 947 patent’), relating to the alpha crystalline form of perindopril erbumine and the process for its manufacturing, which was granted by the EPO on 4 February 2004.

9 On 6 July 2001, Servier moreover filed national patent applications in several Member States before they were parties to the Convention on the Grant of European Patents, which was signed in Munich on 5 October 1973 and entered into force on 7 October 1977. Servier filed, for example, patent applications relating to the 947 patent in Bulgaria (BG 107 532), the Czech Republic (PV 2003-357), Estonia (P200300001), Hungary (HU225340), Poland (P348492) and Slovakia (PP0149-2003). Those patents were granted on 16 May 2006 in Bulgaria, on 17 August 2006 in Hungary, on 23 January 2007 in the Czech Republic, on 23 April 2007 in Slovakia and on 24 March 2010 in Poland.

10 From 2003, KRKA, tovarna zdravil, d.d. (‘Krka’), a company established in Slovenia which manufactures generic medicines, began to develop medicinal products based on the active ingredient perindopril, composed of the alpha crystalline form of erbumine covered by the 947 patent (‘Krka’s perindopril’). In 2005 and 2006, it obtained a number of marketing authorisations and began to market that medicinal product in several Member States in central and eastern Europe, in particular in Hungary and Poland. During that period, it also made preparations to place the medicinal product on the market in other Member States, including France, the Netherlands and the United Kingdom

11 Between 2003 and 2009, a number of disputes were conducted between Servier and manufacturers preparing to market a generic version of perindopril.

12 In 2004, 10 manufacturers of generic medicines, including Niche Generics Ltd (‘Niche’), Krka, Lupin Ltd and Norton Healthcare Ltd, a subsidiary of Ivax Europe, which subsequently merged with Teva Pharmaceutical Industries Ltd, the ultimate parent company in the Teva group, specialising in the manufacture of generic medicines, filed opposition proceedings against the 947 patent before the EPO, seeking its revocation on grounds of lack of novelty, lack of inventive step and insufficient disclosure of the invention.

13 On 27 July 2006, the Opposition Division of the EPO confirmed the validity of the 947 patent (‘the EPO decision of 27 July 2006’). That decision was challenged before the EPO Technical Board of Appeal. After concluding a settlement agreement with Servier, Niche withdrew from the opposition proceedings on 9 February 2005. Krka and Lupin withdrew the proceedings before the EPO Technical Board of Appeal on 11 January 2007 and 5 February 2007, respectively.

14 By decision of 6 May 2009, the EPO Technical Board of Appeal annulled the EPO decision of 27 July 2006 and revoked the 947 patent. Servier’s request for a revision of that decision of the Technical Board of Appeal was rejected on 19 March 2010.

15 The validity of the 947 patent has been challenged before certain national courts by manufacturers of generic products, and Servier has brought actions for infringement and has applied for interim injunctions against those manufacturers. The majority of those proceedings were closed before the courts seised were able to give a final ruling on the validity of the 947 patent, as a result of settlement agreements concluded by Servier, between 2005 and 2007, with Niche, Matrix Laboratories Ltd (‘Matrix’), Teva, Krka and Lupin.

16 In the United Kingdom, only the dispute between Servier and Apotex Inc. gave rise to a finding, by a court, that the 947 patent was invalid. On 1 August 2006, Servier brought an action for infringement of the 947 patent before the High Court of Justice (England & Wales), Chancery Division (patents court) (United Kingdom), against Apotex, which had begun marketing a generic version of perindopril on the UK market. On 8 August 2006, Servier was granted an interim injunction against Apotex. On 6 July 2007, following a counterclaim by Apotex, that interim injunction was lifted and the 947 patent was declared invalid, thereby enabling Apotex to place a generic version of perindopril on the market in the United Kingdom. On 9 May 2008, the decision declaring the 947 patent invalid was confirmed on appeal.

17 In the Netherlands, on 13 November 2007, Katwijk Farma BV, an Apotex subsidiary, brought an action before a court of that Member State seeking a declaration of invalidity of the 947 patent. Servier applied to that court for an interim injunction, which was rejected on 30 January 2008. By decision of 11 June 2008 in proceedings brought by Pharmachemie BV, a company in the Teva group, that court declared the 947 patent invalid for the Netherlands Following that decision, Servier and Katwijk Farma withdrew their claims.

18 A number of disputes between Servier and Krka relating to perindopril were also brought before national courts.

19 In Hungary, on 30 May 2006, Servier applied for an interim injunction preventing the marketing of Krka’s perindopril, as a result of the infringement of the 947 patent. That application was rejected in September 2006.

20 In the United Kingdom, on 28 July 2006, Servier brought an action for infringement of the 340 patent against Krka before the High Court of Justice (England & Wales), Chancery Division (patents court). On 2 August 2006, Servier brought an action for infringement of the 947 patent and an application for an interim injunction against Krka before that court. On 1 September 2006, Krka brought an initial counterclaim seeking the invalidation of the 947 patent, with an attached motion for summary judgment, and on 8 September 2006, a second counterclaim seeking the invalidation of the 340 patent. On 3 October 2006, that court granted Servier’s application for an interim injunction and dismissed the motion for summary judgment lodged by Krka on 1 September 2006 (‘the decision of the High Court of 3 October 2006’). On 1 December 2006, the proceedings were discontinued as a result of the settlement reached between the parties and that interim injunction was lifted.

21

Servier and Krka concluded three agreements (‘the Krka agreements’). On 27 October 2006, they concluded a settlement agreement (‘the Krka settlement agreement’) and a licence agreement, which was supplemented by an amendment on 2 November 2006 (‘the Krka licence agreement’ and, both those agreements together, ‘the Krka settlement and licence agreements’). In addition, on 5 January 2007, Servier and Krka concluded an assignment and licence agreement (‘the Krka assignment and licence agreement’).

The Krka settlement agreement covered the 947 patent and the equivalent national patents. By that agreement, in force until the expiry or the revocation of the 947 or the 340 patent, Krka undertook to withdraw any claim against the 947 patent worldwide and against the 340 patent in the United Kingdom, and not to challenge either of those two patents worldwide in the future. Moreover, Krka and its subsidiaries were not authorised to launch or to market a generic version of perindopril which would infringe the 947 patent for the duration of the validity of that patent and in the countries in which it was still valid, unless expressly authorised by Servier. Similarly, Krka could not supply to any third party a generic version of perindopril that would infringe the 947 patent, unless expressly authorised by Servier. In return, Servier was required to withdraw its actions against Krka for infringement of the 947 and 340 patents, including its pending applications for interim injunctions, worldwide.

Pursuant to the Krka licence agreement, the duration of which corresponded to the validity of the 947 patent, Servier granted Krka an exclusive, irrevocable licence on that patent to use, manufacture, sell, offer for sale, promote and import its own products which contain the alpha crystalline form of erbumine in the Czech Republic, Latvia, Lithuania, Hungary, Poland, Slovenia and Slovakia (‘Krka’s core markets’). In return, Krka was required, under Article 3 of that agreement, to pay Servier 3% royalties on its net sales throughout those territories. Servier was entitled, in those States, to use the 947 patent directly or indirectly, that is to say, for one of its subsidiaries or for one third party per country.

Pursuant to the Krka assignment and licence agreement, Krka assigned two patent applications to Servier, one concerning a process for the synthesis of perindopril (WO 2005 113500) and the other the preparation of formulations of perindopril (WO 2005 094793). The technology protected in those patent applications was used for the production of Krka’s perindopril. Krka undertook not to challenge the validity of any patents granted on the basis of those applications. In return for that assignment, Servier paid Krka the sum of EUR 30 million.

In addition, by that agreement, Servier also granted Krka a non-exclusive, irrevocable, non-assignable, royalty-free licence, with no right to sublicense (other than to its subsidiaries) on the applications or resulting patents, that licence being unrestricted in time, territory or scope of use.

III. The decision at issue

On 9 July 2014, the Commission adopted the decision at issue.

In Articles 1 to 5 of that decision, the Commission found that Servier had infringed Article 101 TFEU by participating in the Niche, Matrix, Teva, Krka and Lupin agreements. In particular, in Article 4 of that decision, the Commission stated that the Krka agreements had constituted a single and continuous infringement covering all the Member States of the European Union at the material time, with the exception of those constituting Krka’s core markets; that the infringement had started on 27 October 2006, except in relation to Bulgaria and Romania, where it had started on 1 January 2007, Malta, where it had started on 1 March 2007, and Italy, where it had started on 13 February 2009; and that that infringement had ended on 6 May 2009, except in the case of the United Kingdom, where it ended on 6 July 2007, and the Netherlands, where it ended on 12 December 2007.

In Article 7(1) to (5) of the decision at issue, the Commission imposed on Servier, for infringements of Article 101 TFEU, fines totalling EUR 289 727 200, including EUR 37 661 800 for its participation in the Krka agreements.

Furthermore, in Article 6 of the decision at issue, the Commission found that Servier had infringed Article 102 TFEU by drawing up and implementing – by means of technology acquisition and five settlement agreements – an exclusionary strategy covering the market for perindopril and the technology market relating to the principal active ingredient of that medicinal product in France, the Netherlands, Poland and the United Kingdom.

In Article 7(6) of the decision at issue, the Commission imposed on Servier, in respect of the infringement of Article 102 TFEU, a fine of EUR 41 270 000.

IV. The procedure before the General Court and the judgment under appeal

By document lodged at the Registry of the General Court on 21 September 2014, Servier brought an action for annulment of the decision at issue, or, in the alternative, a reduction in the amount of the fine that had been imposed on it by that decision.

By document lodged on 2 February 2015, the European Federation of Pharmaceutical Industries and Associations (EFPIA) sought leave to intervene in the proceedings in support of the form of order sought by Servier. That request was granted by an order of the President of the Second Chamber of the General Court of 14 October 2015.

In its action at first instance, Servier raised 17 pleas in law in support of its claim for annulment of the decision at issue. Seven of those pleas are relevant for the purposes of the present appeal, namely the fourth, ninth and tenth grounds of appeal, relating to the infringement of Article 101 TFEU on account of that undertaking’s participation in the Krka agreements, and the fourteenth to seventeenth pleas, which concern the infringement of Article 102 TFEU.

The General Court upheld the pleas directed against the characterisation of the Krka agreements as an infringement of Article 101(1) TFEU. It found, in essence, that the Commission had not established the existence of a restriction of competition by object or of a restriction of competition by effect. Consequently, the General Court annulled Article 4 of the decision at issue, finding an infringement of Article 101 TFEU committed by Servier on account of its participation in the Krka agreements, and Article 7(4)(b) of that decision, imposing a fine on Servier in respect of that infringement.

The General Court also upheld the pleas directed against the definition of the perindopril market and the finding that Servier had abused its dominant position on that market and the technology market relating to the active ingredient of perindopril. It held, in essence, that the definition of the perindopril market was vitiated by errors of assessment such as to invalidate the findings in the decision at issue relating to Servier’s dominant position on the relevant markets. It therefore annulled Article 6 of that decision finding an abuse of a dominant position by Servier, and Article 7(6) of that decision imposing a fine on Servier in respect of that infringement.

The General Court dismissed the action as to the remainder.

By document lodged at the Registry of the Court of Justice on 22 February 2019, the Commission brought the present appeal.

By document lodged at the Registry of the Court on 22 May 2019, the United Kingdom of Great Britain and Northern Ireland sought leave to intervene in the present case in support of the form of order sought by the Commission. By decision of 19 June 2019, the President of the Court of Justice granted that application.

The Court invited the parties to submit their written observations by 4 October 2021 on the judgments of 30 January 2020, Generics (UK) and Others (C‑307/18, EU:C:2020:52); of 25 March 2021, Lundbeck v Commission (C‑591/16 P, EU:C:2021:243); of 25 March 2021, Sun Pharmaceutical Industries and Ranbaxy (UK) v Commission (C‑586/16 P, EU:C:2021:241); of 25 March 2021, Generics (UK) v Commission (C‑588/16 P, EU:C:2021:242); of 25 March 2021, Arrow Group and Arrow Generics v Commission (C‑601/16 P, EU:C:2021:244); and of 25 March 2021, Xellia Pharmaceuticals and Alpharma v Commission (C‑611/16 P, EU:C:2021:245). The Commission, Servier, EFPIA and the United Kingdom complied with that request within the prescribed period.

The oral part of the procedure was closed on 14 July 2022, following the delivery of the Advocate General’s Opinion. The complied with that request within the prescribed period

By its appeal, the Commission claims that the Court should:

– set aside points 1 to 3 of the operative part of the judgment under appeal which annul (i) Article 4 of the decision at issue in so far as it finds that Servier participated in the Krka agreements, (ii) Article 7(4)(b) of that decision which sets the fine imposed on Servier for concluding those agreements, (iii) Article 6 of that decision which finds that Servier infringed Article 102 TFEU and (iv) Article 7(6) of that decision which sets the amount of the fine imposed on Servier in relation to that infringement;

– set aside the judgment under appeal in so far as it declares Annexes A 286 and A 287 to the application at first instance and Annex C 29 to the reply at first instance admissible;

– give final judgment on Servier’s action for annulment of the decision at issue and dismiss Servier’s application for annulment of Article 4, Article 7(4)(b), Article 6 and Article 7(6) of that decision and uphold the Commission’s claim that Annexes A 286 and A 287 to the application at first instance and Annex C 29 to the reply at first instance should be declared inadmissible;

– order Servier to bear all the costs of the present appeal.

Servier contends that the Court should

– dismiss the appeal in its entirety, and

– order the Commission to pay the costs.

EFPIA contends that the Court should:

– dismiss the appeal in its entirety, and

– order the Commission to pay the costs.

The United Kingdom requests the Court to grant the form of order sought by the Commission.

By document lodged at the Court Registry on 21 July 2022, Servier requested that the oral part of the procedure be reopened. In support of that request, Servier relies on the need to ensure a sufficient exchange of views on key points of the factual background to the present case, while also criticising various aspects of the Advocate General’s Opinion. According to Servier, such a reopening is necessary given that the forms of order sought propose that the Court should give final judgment in the dispute even though certain pleas raised at first instance involving complex factual assessments were neither examined nor, a fortiori, decided by the General Court.

It should be borne in mind that, in accordance with Article 83 of the Rules of Procedure of the Court of Justice, the Court may at any time, after hearing the Advocate General, order the reopening of the oral part of the procedure, in particular if it considers that it lacks sufficient information or where a party has, after the close of that part of the procedure, submitted a new fact which is of such a nature as to be a decisive factor for the decision of the Court, or where the case must be decided on the basis of an argument which has not been debated between the parties.

It should be recalled that neither the Statute of the Court of Justice of the European Union nor its Rules of Procedure make provision for parties to submit observations in response to the Advocate General’s Opinion. Under the second paragraph of Article 252 TFEU, the Advocate General, acting with complete impartiality and independence, is to make, in open court, reasoned submissions on cases which require the Advocate General’s involvement. The Court is not bound either by the Advocate General’s conclusion or by the reasoning which led to that conclusion. Consequently, a party’s disagreement with the Advocate General’s Opinion, irrespective of the questions that he or she examines in his or her Opinion, cannot in itself constitute grounds justifying the reopening of the oral part of the procedure (judgment of 31 January 2023, Puig Gordi and Others, C‑158/21, EU:C:2023:57, paragraphs 37 and 38 and the case-law cited).

In the present case, the Court finds, having heard the Advocate General, that the elements set out by Servier do not disclose any new fact which is of such a nature as to be a decisive factor for the decision which it is called upon to deliver in the present case and that that case must not be decided on the basis of an argument which has not been debated between the parties or the interested persons. Since the Court has at its disposal, at the close of the written and oral stages of the procedure, all the elements necessary, it is therefore sufficiently informed to make a ruling on the present appeal. In any event, it should be recalled that, where the appeal is well founded and the state of the proceedings so permits, within the meaning of Article 61 of the Statute of the Court of Justice of the European Union, the Court may itself give final judgment in the matter. In the light of the foregoing, there is no need to grant the request that the oral part of the procedure be reopened.

VII. The appeal

In support of its appeal, the Commission has raised 11 grounds. By its first to sixth grounds of appeal, the Commission claims that the General Court erred in law in finding that the Krka agreements did not constitute a restriction of competition by object within the meaning of Article 101(1) TFEU. By its seventh ground of appeal, the Commission submits that the General Court erred in law in finding that the Commission had not established that those agreements constituted a restriction of competition by effect.

The eighth and ninth grounds of appeal allege errors of law relating to the definition of the market for the medicinal product perindopril used in the decision at issue to support the existence of an infringement of Article 102 TFEU. By its tenth ground of appeal, the Commission alleges that the General Court erred in law when it held that certain documents which Servier had annexed to its application and its reply at first instance were admissible. The eleventh ground alleges errors of law in the General Court’s assessment of the existence of an abuse of a dominant position on the technology market relating to the active ingredient of perindopril.

The first ground of appeal alleges infringement of Article 101(1) TFEU, in that the General Court ruled on the existence of a restriction of competition by object without ascertaining whether Krka was a potential competitor of Servier or responding to Servier’s arguments in that regard, infringement of the limits of judicial review, infringement of the rules on the production of evidence, distortion of the evidence relating to the existence of potential competition between Krka and Servier, and insufficient and contradictory reasoning in the judgment under appeal.

The second ground of appeal alleges infringement of Article 101(1) TFEU, in that the General Court applied incorrect legal criteria in order to assess the existence of a restriction of competition by object, distortion of the evidence, and insufficient and contradictory reasoning in the judgment under appeal.

The third ground of appeal alleges infringement of Article 101(1) TFEU, in that the General Court required a market-sharing agreement to provide for ‘hermetic’ division between the parties in order to be caught by the prohibition laid down in that provision, a misinterpretation of Commission Regulation (EC) No 772/2004 of 27 April 2004 on the application of Article [101(3) TFEU] to categories of technology transfer agreements (OJ 2004 L 123, p. 11) and of the Commission Notice entitled ‘Guidelines on the application of Article [101 TFEU] to technology transfer agreements’ (OJ 2004 C 101, p. 2), and distortion of certain items of evidence.

The fourth ground of appeal alleges infringement of Article 101(1) TFEU, in that the General Court criticised the decision at issue for finding a restriction of competition by object without analysing the intention of the parties, an infringement of the rules on the production of evidence, and an inadequate statement of reasons.

The fifth ground of appeal alleges infringement of Article 101(1) TFEU, in that the General Court took into consideration the pro-competitive effects of the Krka licence agreement on Krka’s core markets, whereas the decision at issue had not found an infringement on those markets.

The sixth ground of appeal alleges infringement of Article 101(1) TFEU, in that the errors of law alleged in the first to fifth grounds of appeal led the General Court to refuse to recognise that the Krka assignment and licence agreement constituted a restriction of competition by object, and an inadequate statement of reasons.

In that regard, it should be recalled that it is apparent from Article 256(1) TFEU and the first paragraph of Article 58 of the Statute of the Court of Justice of the European Union that an appeal is to be limited to points of law and that the General Court therefore has sole jurisdiction to find and appraise the relevant facts and to assess the evidence. The assessment of the facts and evidence does not, save where the facts or evidence are distorted, constitute a point of law, which is subject, as such, to review by the Court of Justice on appeal. Such a distortion must be obvious from the documents on the Court’s file, without there being any need to carry out a new assessment of the facts and evidence (judgment of 10 July 2019, VG v Commission, C‑19/18 P, EU:C:2019:578, paragraph 47 and the case-law cited).

However, where the General Court has found or appraised the facts, the Court of Justice has jurisdiction to carry out a review, provided that the General Court has defined their legal nature and determined the legal consequences. The jurisdiction of the Court of Justice to review extends, inter alia, to the question whether the General Court has taken the right legal criteria as the basis for its appraisal of the facts (see, to that effect, judgment of 2 March 2021, Commission v Italy and Others, C‑425/19 P, EU:C:2021:154, paragraph 53 and the case-law cited).

In the present case, by its first ground of appeal, the Commission criticises the General Court, first of all, in essence, for having applied an incorrect legal standard in order to assess the legality of the reasons in the decision at issue that led to the finding of potential competition between Krka and Servier. Next, the Commission criticises the General Court for having given insufficient or contradictory reasons for the judgment under appeal, and for having distorted certain evidence. Lastly, it submits that that court infringed the rules governing the production of evidence and the scope of judicial review by failing to rule on the complaints relating to potential competition developed in the context, inter alia, of the ninth plea in the action at first instance, by failing to analyse the reasoning and all of the evidence set out in the decision at issue relating to the anticompetitive object of the Krka settlement and licence agreements, and by substituting its own assessment of the facts for the grounds of that decision, in so far as it attributed to Krka grounds explaining that undertaking’s decision to pursue its litigation after the EPO decision of 27 July 2006 even though those reasons are merely alleged and are, moreover contradicted by other findings made by the General Court.

Thus, it must be held that, by that line of argument, the Commission disputes the interpretation and application of the concept of potential competition, and alleges infringement of procedural rules and distortion of evidence. Contrary to Servier’s submission, complaints of that nature fall within the jurisdiction of the Court of Justice in the context of an appeal, in accordance with the case-law cited in paragraphs 69 and 70 of the present judgment.

By its second to fourth grounds of appeal, the Commission essentially challenges the General Court’s assessment of the anticompetitive object of the Krka agreements consisting in market sharing. Such a question is clearly a point of law since it involves determining whether the General Court misinterpreted and misapplied Article 101(1) TFEU.

By its fifth ground of appeal, the Commission submits that the General Court erred in law by taking into account the allegedly pro-competitive effects of the Krka licence agreement on Krka’s core markets, when no infringement had been found by the Commission on those markets, and that such effects could not justify a restriction of competition on other markets. It must be observed that such a line of argument relates to the legal criterion applied by the General Court to assess the relevance of the pro-competitive effects which it found and that its examination therefore falls within the jurisdiction of the Court of Justice in the context of an appeal.

By its sixth ground of appeal, the Commission complains that the General Court refused to recognise that the Krka assignment and licence agreement constituted a restriction of competition by object, on the ground that that characterisation was based on the incorrect finding that there was market sharing between Krka and Servier. Thus, the outcome of that ground of appeal depends on the outcome of the complaints put forward by the Commission in the context of its first to fifth grounds of appeal, which do in fact relate to errors of law. Consequently, the examination of the sixth ground of appeal falls within the jurisdiction of the Court of Justice in the context of an appeal.

In the second place, Servier submits, in general terms, that the appeal merely repeats the arguments relied on by the Commission at first instance, which were rejected by the General Court, without demonstrating the existence, in the judgment under appeal, of errors of law or distortion of the facts. That is alleged to be the case as regards the Commission’s arguments in support of the first ground of appeal, in particular the fourth part, and the second part of the third ground of appeal.

It should be borne in mind that it follows from Article 256 TFEU, the first paragraph of Article 58 of the Statute of the Court of Justice of the European Union and Article 168(1)(d) and Article 169 of its Rules of Procedure that an appeal must indicate precisely the contested elements of the judgment or order which the appellant seeks to have set aside and the legal arguments specifically advanced in support of that appeal. According to the settled case-law of the Court of Justice, that requirement is not satisfied by an appeal which confines itself to reproducing the pleas in law and arguments previously submitted to the General Court. Such an appeal amounts in reality to no more than a request for re-examination of the application submitted to the General Court, which the Court of Justice does not have jurisdiction to undertake (judgment of 24 March 2022, Hermann Albers v Commission, C‑656/20 P, EU:C:2022:222, paragraph 35 and the case-law cited).

However, where an appellant challenges the interpretation or application of EU law by the General Court, the points of law examined at first instance may be discussed again in the course of an appeal. Indeed, if an appellant could not base its appeal on pleas in law and arguments already relied on before the General Court in that way, the appeal would be deprived of part of its purpose (judgment of 24 March 2022, Hermann Albers v Commission, C‑656/20 P, EU:C:2022:222, paragraph 36 and the case-law cited).

In the present case, while it is true that the arguments put forward by the Commission in its appeal bear certain similarities to those on which it relied at first instance, the fact remains that it does not merely reiterate the arguments it has already put forward before the General Court, but specifically challenges that court’s interpretation and application of EU law. It follows that Servier’s line of argument based on the repetition of the Commission’s arguments at first instance cannot be accepted.

In the third place, Servier contends that the Commission’s line of argument, in particular that set out in the context of the first to fifth grounds of appeal, is not sufficiently clear to be admissible.

In that regard, it is apparent from Article 169(2) of the Rules of Procedure of the Court of Justice that the pleas in law and legal arguments raised and relied on must identify precisely those points in the grounds of the decision of the General Court which are contested (see, to that effect, judgment of 20 September 2016, Mallis and Others v Commission and ECB, C‑105/15 P to C‑109/15 P, EU:C:2016:702, paragraphs 33 and 34). That is so in the present case, since in its appeal the Commission set out in detail the contested elements of the judgment under appeal and the legal arguments in support of its claim that it should be set aside, while referring specifically to the paragraphs of the judgment under appeal which are the subject of its arguments.

In the fourth place, Servier claims that the appeal merely cites the judgment under appeal in a piecemeal and selective manner and that it is based on a misinterpretation of that judgment’s content.

By that line of argument, Servier is in fact challenging the substantive validity of the grounds of appeal. Such a line of argument falls within the scope of the assessment of the substance of those grounds of appeal and cannot, therefore, lead to the inadmissibility of that appeal.

Lastly, in the fifth place, Servier claims that, in so far as the Commission complains, in its first, fourth and sixth grounds of appeal, that the General Court failed to examine certain passages of the decision at issue and all the evidence cited therein, it is mistaken as to the nature of the review carried out by that court.

However, the general nature of such a plea of inadmissibility cannot lead to the inadmissibility of the first, fourth and sixth grounds of appeal. The Court will specifically rule on the pleas of inadmissibility raised more specifically by Servier in the context of the examination of the grounds of appeal concerned.

In the light of the foregoing considerations, the pleas of inadmissibility raised by Servier in general, in respect of the first to sixth grounds of appeal must be rejected.

Preliminary considerations relating to the examination of the substance of the first to sixth grounds of appeal

Before examining the merits of the grounds of appeal relating to the existence of a restriction of competition by object, it should be noted that, unlike the circumstances underlying the cases in which the Court has been called upon to rule on the legal characterisation, in the light of Article 101 TFEU, of agreements under which a manufacturer of originator medicines compensated a manufacturer of generic medicines economically in return for the latter’s refraining from entering the market, in particular the cases which gave rise to the judgments of 30 January 2020, Generics (UK) and Others (C‑307/18, EU:C:2020:52), and of 25 March 2021, Lundbeck v Commission (C‑591/16 P, EU:C:2021:243), and unlike the other agreements concluded by Servier that formed the subject matter of the decision at issue, the Krka settlement and licence agreements did not provide for any payment from the manufacturer of originator medicines to the manufacturer of generic medicines. On the contrary, the Krka licence agreement provided for payments from the manufacturer of generic medicines to the manufacturer of originator medicines.

On the other hand, according to recitals 1731 to 1749 of the decision at issue, the Krka settlement and licence agreements allowed Servier to delay the entry into the market of generic medicines produced by Krka. In the territory of the European Union, it is alleged that those two undertakings divided the national markets into two spheres of influence, comprising, for each of them, their core markets, within which they could operate in the assurance, in the case of Servier, that it would not be subject to competitive pressure from Krka beyond the limits resulting from those agreements and, in the case of Krka, that it would not run the risk of being sued for infringement by Servier.

While it is therefore clear from the evidence in the decision at issue that Servier did not make any reverse payment as such to Krka under the Krka settlement agreement, it is also clear, according to the Commission, that those undertakings divided the various national markets within the European Union geographically. It will therefore be necessary to take those circumstances into consideration in order to rule, in particular, on the second and third grounds of appeal, and to assess whether, and if so to what extent, the Commission’s line of argument seeking to call into question the legal criteria on the basis of which the General Court upheld the pleas at first instance relied on by Servier to challenge the characterisation of the Krka settlement and licence agreements as a restriction of competition by object is well founded.

In that regard, it should be recalled that Article 101(1) TFEU states that all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market are incompatible with the internal market and are prohibited.

Accordingly, if the conduct of undertakings is to be subject to the prohibition in principle laid down in Article 101(1) TFEU, that conduct must reveal the existence of coordination between them, that is to say, an agreement between undertakings, a decision by an association of undertakings or a concerted practice (see, to that effect, judgment of 30 January 2020, Generics (UK) and Others, C‑307/18, EU:C:2020:52, paragraph 31 and the case-law cited).

The latter requirement means, with respect to horizontal cooperation agreements entered into by undertakings that operate at the same level of the production or distribution chain, that the coordination involves undertakings which are in competition with each other, if not in reality, then at least potentially (judgment of 30 January 2020, Generics (UK) and Others, C‑307/18, EU:C:2020:52, paragraph 32).

In addition, it is necessary to demonstrate, in accordance with the very wording of that provision, either that that conduct has as its object the prevention, restriction or distortion of competition, or that that conduct has such an effect (judgment of 21 December 2023, European Superleague Company, C‑333/21, EU:C:2023:1011, paragraph 158). It follows that that provision, as interpreted by the Court, makes a clear distinction between the concept of restriction by object and the concept of restriction by effect, each of those concepts being subject to different rules with regard to what must be proved (judgment of 30 January 2020, Generics (UK) and Others, C‑307/18, EU:C:2020:52, paragraph 63).

Accordingly, as regards practices characterised as restrictions of competition by object, there is no need to investigate their effects nor a fortiori to demonstrate their effects on competition, in so far as 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 (see, to that effect, judgments of 19 March 2015, Dole Food and Dole Fresh Fruit Europe v Commission, C‑286/13 P, EU:C:2015:184, paragraph 115, and of 21 December 2023, European Superleague Company, C‑333/21, EU:C:2023:1011, paragraph 159).

On the other hand, where the anticompetitive object of an agreement, a decision by an association of undertakings or a concerted practice is not established, it is necessary to examine its effects in order to prove that competition has in fact been prevented or restricted or distorted to an appreciable extent (see, to that effect, judgment of 26 November 2015, Maxima Latvija, C‑345/14, EU:C:2015:784, paragraph 17).

That distinction arises from the fact that certain forms of collusion between undertakings can be regarded, by their very nature, as being injurious to the proper functioning of normal competition (judgments of 20 November 2008, Beef Industry Development Society and Barry Brothers, C‑209/07, EU:C:2008:643, paragraph 17, and of 14 March 2013, Allianz Hungária Biztosító and Others, C‑32/11, EU:C:2013:160, paragraph 35). The concept of restriction of competition by object must be interpreted strictly and can be applied only to certain agreements between undertakings which reveal, in themselves and having regard to the content of their provisions, their objectives, and the economic and legal context of which they form part, a sufficient degree of harm to competition for the view to be taken that it is not necessary to assess their effects (see, to that effect, judgments of 26 November 2015, Maxima Latvija, C‑345/14, EU:C:2015:784, point 20, and of 21 December 2023, European Superleague Company, C‑333/21, EU:C:2023:1011, paragraphs 161 and 162 and the case-law cited).

The Court has already held that market-sharing agreements constitute particularly serious breaches of the competition rules (see, to that effect, judgments of 11 July 2013, Gosselin Group v Commission, C‑429/11 P, EU:C:2013:463, paragraph 50; of 5 December 2013, Solvay Solexis v Commission, C‑449/11 P, EU:C:2013:802, paragraph 82; and of 4 September 2014, YKK and Others v Commission, C‑408/12 P, EU:C:2014:2153, paragraph 26). The Court has moreover held that agreements of that nature have, in themselves, an object restrictive of competition and fall within a category of agreements expressly prohibited by Article 101(1) TFEU, and that such an object cannot be justified by an analysis of the economic context of the anticompetitive conduct concerned (judgment of 19 December 2013, Siemens and Others v Commission, C‑239/11 P, C‑489/11 P and C‑498/11 P, EU:C:2013:866, paragraph 218).

As regards such categories of agreements, it is thus only if Article 101(3) TFEU applies and all of the conditions provided for in that provision are observed that they may be granted the benefit of an exemption from the prohibition laid down in Article 101(1) TFEU (see, to that effect, judgments of 20 November 2008, Beef Industry Development Society and Barry Brothers, C‑209/07, EU:C:2008:643, paragraph 21, and of 21 December 2023, European Superleague Company, C‑333/21, EU:C:2023:1011, paragraph 187).

The implementation of the principles set out above with regard to collusive practices in the form of horizontal cooperation agreements between undertakings, such as the Krka agreements, involves determining, at an initial stage, whether those practices may be characterised as a restriction of competition by undertakings which are in competition with each other, even if only potentially. If that is the case, it is necessary to ascertain, at a second stage, whether, in the light of their economic characteristics, those practices fall within the characterisation of a restriction of competition by object.

As regards the first stage of that analysis, the Court has already held that, in the specific context of the opening of the market for a medicinal product to the manufacturers of generic medicines, it is necessary to determine, in order to assess whether one of those manufacturers, although absent from a market, is a potential competitor of a manufacturer of originator medicines present in that market, whether there are real and concrete possibilities of the former moving into that market and competing with the latter (see, to that effect, judgment of 30 January 2020, Generics (UK) and Others, C‑307/18, EU:C:2020:52, paragraph 36 and the case-law cited).

Thus, it is necessary to assess, first, whether, at the time when those agreements were concluded, the manufacturer of generic medicines had taken sufficient preparatory steps to enable it to enter the market concerned within such a period of time as would impose competitive pressure on the manufacturer of originator medicines. Such steps permit the conclusion that a manufacturer of generic medicines has a firm intention and an inherent ability to enter the market of a medicine containing an active ingredient that is in the public domain, even when there are process patents held by the manufacturer of originator medicines. Second, it must be determined that the market entry of such a manufacturer of generic medicines does not meet barriers to entry that are insurmountable (see, to that effect, judgment of 30 January 2020, Generics (UK) and Others, C‑307/18, EU:C:2020:52, paragraphs 43 to 45).

The Court has already held that any patents protecting an originator medicine or one of its manufacturing processes are indisputably part of the economic and legal context characterising the relationships of competition between the holders of those patents and the manufacturers of generic medicines. However, the assessment of the rights conferred by a patent must not consist in a review of the strength of the patent or of the probability of a dispute between the patent holder and a manufacturer of generic medicines concluding with a finding that the patent is valid and has been infringed. That assessment must rather concern the question whether, notwithstanding the existence of that patent, the manufacturer of generic medicines has real and concrete possibilities of entering the market at the relevant time (judgment of 30 January 2020, Generics (UK) and Others, C‑307/18, EU:C:2020:52, paragraph 50).

Furthermore, a finding of potential competition between a manufacturer of generic medicines and a manufacturer of originator medicines can be confirmed by additional factors, such as the conclusion of an agreement between them when the manufacturer of generic medicines was not present on the market concerned, or the existence of transfers of value to that manufacturer in exchange for the postponement of its market entry (see, to that effect, judgment of 30 January 2020, Generics (UK) and Others, C‑307/18, EU:C:2020:52, paragraphs 54 to 56).

At a second stage of that analysis, in order to determine whether a delay in the market entry of generic medicines, as the result of a patent dispute settlement agreement, in exchange for transfers of value by the manufacturer of originator medicines to the manufacturer of those generic medicines must be regarded as a collusive practice constituting a restriction of competition by object, it is necessary to examine first of all whether those transfers of value may be fully justified by the need to compensate for the costs of or disruption caused by that dispute, such as the expenses and fees of the latter manufacturer’s advisers, or by the need to provide remuneration for the actual and proven supply of goods or services by the manufacturer of generic medicines to the manufacturer of the originator medicine. If that is not the case, it must be ascertained whether those transfers of value can have no explanation other than the commercial interest of those manufacturers of medicinal products not to engage in competition on the merits. For the purposes of that analysis, it is necessary, in each individual case, to assess whether the net gain from the transfers of value was sufficiently large to actually act as an incentive to the manufacturer of generic medicines to refrain from entering the market concerned and, therefore, not to compete on the merits with the manufacturer of originator medicines, without it being necessary for that net gain necessarily to be greater than the profits which the manufacturer of generic medicines would have made if it had been successful in the patent proceedings (see, to that effect, judgment of 30 January 2020, Generics (UK) and Others, C‑307/18, EU:C:2020:52, paragraphs 84 to 94).

In that regard, it must be borne in mind that challenges to the validity and scope of a patent are part of normal competition in the sectors where there exist exclusive rights in relation to technology, so that settlement agreements whereby a manufacturer of generic medicines that is seeking to enter a market recognises, at least temporarily, the validity of a patent held by a manufacturer of originator medicines and gives an undertaking, as a result, not to challenge that patent nor indeed to enter that market are liable to restrict competition (see, to that effect, judgment of 30 January 2020, Generics (UK) and Others, C‑307/18, EU:C:2020:52, paragraph 81 and the case-law cited).

In the light of the foregoing, the General Court was required to apply the criteria set out in paragraphs 104 and 105 of the present judgment in order to rule on those of Servier’s arguments, invoked in particular in the context of the ninth plea at first instance, that relate to the existence of a restriction of competition by object and thus to determine whether the Commission was entitled, in the decision at issue, to find the existence of such a restriction.

Thus, once the existence of the elements relating to potential competition, which are the subject of the first ground of appeal, had been established, the General Court needed, at that second stage, to ascertain whether the Krka settlement and licence agreements constituted a market-sharing agreement which restricted competition by object within the meaning of Article 101(1) TFEU, a category of agreements expressly prohibited by that provision. The General Court was required to examine, in that context, the objectives of those agreements and the economic link which existed between them, according to the decision at issue, and, more specifically, whether the transfer of value by Servier to Krka by means of the Krka licence agreement was sufficiently significant to induce Krka to share markets with Servier, by refraining, even if only temporarily, from entering Servier’s core markets in return for the assurance that it would be able to market its generic version of perindopril on its own core markets without incurring the risk that it would be the subject of patent infringement actions brought by Servier.

Servier submits that the first ground of appeal, according to which the General Court erred in law in finding that Krka was not a source of competitive pressure on Servier at the time of the Krka agreements, is ineffective. The fact that the General Court did not rule on potential competition cannot call into question the General Court’s findings relating to the absence of a restriction of competition by object. Demonstrating potential competition is not a sufficient condition for such a characterisation. Servier adds that, since the General Court considered that the Commission had incorrectly adopted that characterisation on grounds unrelated to Krka’s status as a potential competitor, it was not necessary to examine that status, as is, moreover, apparent from paragraph 1234 of the judgment under appeal.

According to the Commission, the first ground of appeal is ineffective.

(2) <i>Findings of the Court</i>

It follows from the case-law of the Court of Justice that a ground of appeal directed against the reasoning of a judgment under appeal which has no effect on its operative part is ineffective and must therefore be rejected (judgment of 27 April 2023, <i>Fondazione Cassa di Risparmio di Pesaro and Others </i>v<i> Commission</i>, C‑549/21 P, EU:C:2023:340, paragraph 80 and the case-law cited).

Moreover, it is open to the General Court, after setting out the grounds on which a plea for annulment must be declared well founded, to consider, for reasons of procedural economy, that it is not necessary to respond to all the arguments put forward in support of that plea, provided that those grounds are sufficient to justify the operative part of the judgment under appeal (see, to that effect, judgment of 16 February 2012, <i>Council and Commission </i>v<i> Interpipe Niko Tube and Interpipe NTRP</i>, C‑191/09 P and C‑200/09 P, EU:C:2012:78, paragraph 111).

In the present case, point 1 of the operative part of the judgment under appeal, in which the General Court annulled Article 4 of the decision at issue, which had found an infringement of Article 101 TFEU as a result of the Krka agreements, is based (i) on the grounds set out in paragraphs 943 to 1060 of the judgment under appeal, by which the General Court held that the Commission had erred in finding that those agreements constituted a restriction of competition by object, and (ii) on the grounds set out in paragraphs 1061 to 1232 of that judgment, by which the General Court held that the Commission had erred in finding that there was a restriction of competition by effect. Thus, after finding, in essence, in paragraph 1233 of that judgment that the Commission had not established that Servier, in concluding the Krka agreements, had infringed Article 101 TFEU, the General Court held, in paragraph 1234 of that judgment, that it was appropriate to annul Article 4 of the decision at issue, ‘without there being any need to examine the other complaints relied on by [Servier] in the present plea or the plea relating to the status of Krka as a potential competitor’.

Contrary to what Servier claims, that assessment by the General Court does not mean that the Commission’s first ground of appeal is directed against grounds of the judgment under appeal which have no effect on its operative part. That ground of appeal seeks to call into question the grounds of that judgment relating to the characterisation of the Krka agreements as a restriction of competition by object, grounds which led the General Court to annul Article 4 of the decision at issue. By that ground of appeal, the Commission submits, in essence, that the General Court, in its analysis of the characterisation of the Krka agreements in the light of the concept of a restriction of competition by object, took into consideration Krka’s alleged recognition of the validity of the 947 patent, on the basis, inter alia, of an incorrect legal test, of an incomplete or even selective assessment of the evidence set out in the decision at issue and of the distortion of some of that evidence. The Commission submits, in particular, that the General Court could not take a view on Krka’s recognition of the validity of the 947 patent without examining the evidence referred to in the decision at issue in order to demonstrate that Krka was a potential competitor of Servier. According to that institution, that evidence shows that Krka, which had both a firm intention and an inherent ability to enter the perindopril market, concluded the Krka settlement agreement not because it was convinced of the validity of that patent, but because the Krka licence agreement had induced it to conclude an agreement with Servier on the geographic allocation of the national markets, with each refraining from competing freely also on the other’s core markets.

It should be noted in that regard that the General Court found, first of all, in paragraph 970 of the judgment under appeal, that there were, at the time the Krka settlement and licence agreements were concluded, ‘consistent indications capable of leading the parties to believe that the 947 patent was valid’; and then, in paragraph 971 of that judgment, that the EPO decision of 27 July 2006 confirming the validity of the 947 patent had therefore been ‘one of the driving factors leading to the settlement and licence agreements’. It inferred, lastly, in paragraph 972 of that judgment that ‘the linking of those two agreements was justified and therefore [did] not constitute a strong indication of … a reverse payment from Servier to Krka giving rise to the licence agreement’.

Similarly, the General Court considered, in paragraph 1026 of the judgment under appeal, that the fact that Krka had continued to challenge Servier’s patents and to market its product even though the validity of the 947 patent had been upheld by the EPO Opposition Division was not a decisive factor for the purpose of establishing the existence of a restriction of competition by object, since the fact that Krka continued to exert competitive pressure on Servier can be explained by Krka’s desire, despite the expected litigation risks, to strengthen its position in the negotiations that it was likely to have with Servier with a view to reaching a settlement.

That reasoning only makes sense if it is considered that the General Court necessarily held that, after the EPO had confirmed the validity of the 947 patent, Krka’s perindopril, composed of the alpha crystalline form of erbumine protected by that patent, could no longer compete with Servier’s perindopril, thus putting an end to any potential competition between those undertakings. On that view, the Krka settlement agreement, by which that undertaking refrained from entering Servier’s markets, merely reflects the rights arising from that patent and cannot therefore be perceived as the real consideration for Servier’s grant of a licence to that patent on Krka’s core markets. Indeed, the General Court expressly stated in paragraph 1234 of the judgment under appeal that it was appropriate to annul Article 4 of the decision at issue ‘without there being any need to examine … the plea relating to the status of Krka as a potential competitor’. However, it is apparent from the grounds which led to the annulment of that decision that the General Court did in fact examine certain complaints falling within the scope of that plea and a number of recitals of that decision which relate to the issue of potential competition between Krka and Servier.

Indeed, it is apparent from the assessments made, inter alia, in paragraphs 943 to 1032 and 1140 to 1233 of the judgment under appeal that the General Court relied decisively on Krka’s alleged recognition of the validity of the 947 patent following the EPO decision of 27 July 2006 and that of the High Court of 3 October 2006, as regards the characterisation of the Krka agreements as both a restriction of competition by object and a restriction of competition by effect. Since the General Court considered that the possibility of Krka’s entering Servier’s core markets in order to compete with Servier depended essentially on whether, at the date of the Krka agreements, Krka recognised the validity of the 947 patent, and Krka’s status as a potential competitor to Servier resulting from the possibility of Krka’s entering those markets, it must be held that there is a close link between that alleged recognition and Krka’s status as a potential competitor to Servier.

In those circumstances, contrary to Servier’s assertion, the fact that the General Court, after upholding Servier’s line of argument relating to the existence of an infringement of Article 101(1) TFEU, stated in paragraph 1234 of the judgment under appeal that there was no need to adjudicate on ‘the plea relating to the status of Krka as a potential competitor’ does not therefore mean that the Commission’s first ground of appeal is directed against grounds which have no effect on the operative part of that judgment, since it follows, inter alia, from paragraphs 967, 968 and 970 to 972 of that judgment that the General Court necessarily examined certain complaints put forward by Servier at first instance relating to potential competition.

It follows that the first ground of appeal is effective.

(b) <i><b>The first to third parts</b></i>

(1) <i>Arguments of the parties</i>

By the first part of its first ground of appeal, the Commission criticises paragraph 1026 of the judgment under appeal. In its view, the General Court did not apply the correct test when it appears to have considered that Krka had ceased to be a potential competitor following the EPO decision of 27 July 2006 and because it no longer had an incentive to enter the market. In that regard, it is necessary to determine whether, in the absence of agreements, there would have been real and concrete possibilities of entering the market and competing with established undertakings. Moreover, the General Court substituted its own assessment for that of the Commission by holding that Krka continued to exert competitive pressure on Servier after that EPO decision only in order to strengthen its position in negotiations with that undertaking, but did not explain why, in its view, Krka would not have been in a position to enter the market in the absence of the agreements at issue.

By the second part of its first ground of appeal, the Commission criticises paragraphs 970 and 1028 of the judgment under appeal. The General Court held, in essence, that the Commission had not succeeded in proving that the Krka settlement agreement had been concluded by that undertaking for reasons other than the fact that the EPO decision of 27 July 2006 had convinced it of the validity of the 947 patent. However, the General Court failed to examine the evidence and the reasoning to the contrary set out in recitals 1686 to 1690 of the decision at issue. According to the Commission, the General Court thus infringed the rules on the production of evidence and the scope of the review of legality which it is required to carry out under Article 263 TFEU with regard to Commission decisions relating to proceedings applying Articles 101 and 102 TFEU.

By the third part of its first ground of appeal, the Commission alleges a contradiction between paragraph 361 and paragraph 970 of the judgment under appeal. Paragraph 361 states that the EPO decision of 27 July 2006 was not in itself sufficient to prevent potential competition from taking place, whereas, according to paragraph 970, that EPO decision had convinced Krka that the 947 patent was valid, thus prompting it to reach a settlement with Servier.

Servier submits, first of all, that the first part is based on a misreading of the judgment under appeal, since the General Court did not rule out Krka’s status as a potential competitor. The General Court did not substitute its assessment for that of the Commission, but rejected the relevance of Krka’s continuation of the disputes after the EPO decision of 27 July 2006. Next, Servier submits that the second part is inadmissible because the Commission asks the Court to re-examine the facts in the light of the evidence referred to in the decision at issue, in particular in recitals 1680 to 1700 thereof. Lastly, it claims that the third part is unfounded.

(2) <i><b>Findings of the Court</b></i>

As a preliminary point, it is necessary to reject Servier’s claim that the Commission’s line of argument put forward in the first three parts of the first ground of appeal is based on a misreading of the judgment under appeal. As is apparent from paragraphs 114 to 119 of the present judgment, by holding, inter alia, in paragraph 970 of the judgment under appeal that, at the time the Krka settlement and licence agreements were concluded, there were consistent indications capable of leading Servier and Krka to believe that the 947 patent was valid, the General Court inferred from those indications that competition between those undertakings on the national markets within the European Union was now precluded and that there was therefore no potential competition between them.

It is appropriate to deal first with the third part of the first ground of appeal, since it relates to an alleged failure to state reasons in the judgment under appeal. Although there is a certain tension between, on the one hand, paragraphs 970 and 1154 of the judgment under appeal and, on the other, paragraph 361 of that judgment, the latter paragraph is worded in cautious terms which cannot be regarded as directly contradicting those two other paragraphs. In that paragraph 361, the General Court stated that the fact that the EPO decision of 27 July 2006 declared the 947 patent valid was not ‘in itself’ sufficient to prevent potential competition from taking place. That finding is not incompatible with the finding which follows, as has been held in paragraph 125 of the present judgment, from paragraph 970 of the judgment under appeal, according to which the General Court considered that Servier and Krka were not potential competitors before the conclusion of the Krka agreements, in the light, in particular, of the ‘consistent indications’ leading those undertakings to believe that the 947 patent was valid.

As regards the admissibility of the second part of the first ground of appeal, it should be borne in mind that, on appeal, complaints based on findings of fact and on the assessment of those facts in the contested decision are admissible on appeal where it is claimed that the General Court has made findings which the documents in the file show to be substantially incorrect or that it has distorted the clear sense of the evidence before it (judgment of 18 January 2007, <i>PKK and KNK </i>v<i> Council</i>, C‑229/05 P, EU:C:2007:32, paragraph 35).

That distortion must be obvious from the documents in the Court’s file, without there being any need to carry out a new appraisal of the facts and the evidence (judgment of 28 January 2021, <i>Qualcomm and Qualcomm Europe </i>v<i> Commission</i>, C‑466/19 P, EU:C:2021:76, paragraph 43). Although such a distortion may consist in an interpretation of a document that is at odds with its content, that must be manifestly clear from the file and the General Court must have manifestly exceeded the limits of a reasonable assessment of the evidence. In that regard, it is not sufficient to show that a document could be interpreted in a different way from that adopted by the General Court (judgment of 17 October 2019, <i>Alcogroup and Alcodis </i>v<i> Commission</i>, C‑403/18 P, EU:C:2019:870, paragraph 64 and the case-law cited).

Contrary to what Servier claims, the Commission, by the second part of its first ground of appeal, does not seek to obtain a fresh assessment of the evidence, which would not fall within the jurisdiction of the Court of Justice in appeal proceedings. By its line of argument, the Commission alleges, in essence, an error in the application of Article 101(1) TFEU, in that the General Court failed, in the context of the review of the legality of the decision at issue, to take into consideration all the relevant factors for the purpose of determining whether the Commission was entitled to consider that the Krka agreements could be characterised as a restriction of competition, even if only potential. The Commission is therefore challenging an error of law, which falls within the jurisdiction of the Court of Justice in the context of an appeal.

As regards the first and second parts of the first ground of appeal, on the substance, the General Court was required to apply the criteria set out in paragraphs 100 to 103 of the present judgment in order to rule on those of the arguments put forward by Servier, in particular, in the context of the ninth plea at first instance, that relate to potential competition and thus to determine whether the Commission had been entitled, in the decision at issue, to conclude that Krka was a potential competitor of Servier at the time the Krka agreements were concluded.

In view of the characteristics of the infringement of Article 101 TFEU found in the decision at issue, the General Court therefore had to examine whether those agreements had been concluded between undertakings in a potential competitive relationship and could be characterised as a restriction of competition. To that end, that court was required to ascertain whether the Commission had been right to consider that, on the date those agreements were concluded, there were real concrete possibilities for Krka to enter the relevant market and compete with Servier, in view of sufficient preparatory steps and the absence of insurmountable barriers to that entry, it being possible to confirm the finding of potential competition, where appropriate, by additional factors, such as the existence of a transfer of value to Krka in exchange for the postponement of its market entry.

Admittedly, where the validity of a patent protecting an originator medicinal product or one of its manufacturing processes has been definitively established before all the courts before which that question has been brought, it would hardly be conceivable that other aspects of the economic and legal context characterising objectively the competitive relationships between the holder of those patents and a manufacturer of generic medicines could justify the conclusion that there is still a potential competitive relationship between them. However, where disputes between them on the question of the validity of the patent in question are still pending, it is for the administrative authority or the competent court to examine all the relevant elements before reaching the conclusion that that holder and that manufacturer are not potential competitors, as is apparent from the case-law referred to in paragraph 102 of the present judgment.

However, instead of applying the criteria set out in paragraphs 100 to 103, 131 and 132 of the present judgment in order to carry out the necessary verifications to determine whether Krka was a potential competitor of Servier, as it was required to do, the General Court merely stated, in essence, in particular in paragraphs 970, 1026 and 1028 of the judgment under appeal, that those two undertakings were convinced that the 947 patent was valid and, without specific reasons or supporting evidence, that Krka’s conduct consisting in maintaining competitive pressure on Servier could be explained by Krka’s desire to strengthen its position in the negotiations that it was likely to have with Servier with a view to reaching a settlement accompanied by a licence agreement, the obtaining of such a licence having become the commercial solution preferred by Krka on the perindopril market.

(i) The decision of the High Court of 3 October 2006

Paragraph 968 of the judgment under appeal is worded as follows:

‘… On 1 September 2006, Krka had brought a counterclaim for annulment of the 947 patent and, on 8 September 2006, a separate counterclaim for annulment of the 340 patent. On 3 October 2006, the High Court of Justice (England & Wales), Chancery Division (Patents Court), granted Servier’s application for an interim injunction and denied the motion brought by Krka on 1 September 2006. On 1 December 2006, the ongoing proceedings were discontinued as a result of the settlement reached between the parties and the interim injunction was lifted.’

It follows from the wording of that paragraph 968 that the General Court, by referring to the denial of ‘the motion brought by Krka on 1 September 2006’ was referring to the rejection by the decision of the High Court of 3 October 2006 of Krka’s counterclaim.

However, that decision, which is set out in Annex A.174 to Servier’s application at first instance, first, states that Servier’s application for an interim injunction was granted and, second, dismisses not Krka’s counterclaim but the application that that counterclaim, seeking the invalidation of the 947 patent, be granted by means of a motion for summary judgment.

It follows that, in paragraph 968 of the judgment under appeal, the General Court distorted the clear and precise terms of the decision of the High Court of 3 October 2006, even though it faithfully referred to that decision in paragraphs 23 and 1196 of that judgment.

On the basis of that distortion, the General Court, first of all, stated, in paragraph 970 of the judgment under appeal, that ‘there were, at the time the [Krka] settlement and licence agreements were concluded, consistent indications capable of leading the parties to believe that the 947 patent was valid’ and, next, in paragraph 1017 of that judgment, that the two events consisting of the EPO decision of 27 July 2006 and the decision of the High Court of 3 October 2006 ‘substantially altered the context in which the agreements were concluded, in particular as regards the perception that Krka, as well as Servier, could have of the validity of the 947 patent’. Lastly, on the basis of that latter finding, the General Court held, in paragraph 1024 of that judgment, that the occurrence of those two events ‘considerably limits’ the relevance of a Servier document relating to its strategy towards Krka. Furthermore, in paragraph 999 of that judgment, the General Court stated that Krka had settled with Servier not in return for the earnings obtained from the Krka licence agreement, but because Krka ‘recognised the validity of the 947 patent’, which was the ‘decisive factor’ in that regard.

The decision of the High Court of 3 October 2006, given its provisional nature and the preliminary procedure at the end of which it was adopted, in no way prejudged the substantive outcome of the dispute, as the General Court moreover noted, in essence, in paragraphs 367 and 368 of the judgment under appeal. The national court merely found, in reality, in accordance with the criteria for granting summary judgment, that Krka’s counterclaim was not manifestly well founded, yet pointed out in that regard, in paragraph 70 of that decision, that there was ‘no doubt that Krka has shown that there is a serious issue to be tried that the sale of [Servier’s perindopril] tablets before the priority date deprives the [947] patent of novelty’, also stating, however, that it was not ‘persuaded that Servier [has] no real prospects of defending [the 947] patent against that attack’.

By thus distorting the clear and precise terms of the decision of the High Court of 3 October 2006, the General Court vitiated paragraphs 968, 970, 999, 1017 and 1024 of the judgment under appeal with illegality.

(ii) The EPO decision of 27 July 2006

Paragraph 967 of the judgment under appeal is worded as follows:

‘In 2004, 10 generic companies, including Krka, had filed opposition proceedings against the 947 patent before the EPO, seeking the revocation of that patent in its entirety on grounds of lack of novelty, lack of inventive step and insufficient disclosure of the invention. On 27 July 2006, the EPO Opposition Division confirmed the validity of that patent following minor amendments to Servier’s original claims. Seven companies then brought an appeal against the EPO decision of 27 July 2006. Krka withdrew from the opposition proceedings on 11 January 2007, pursuant to the settlement agreement concluded with Servier.’

The General Court thus gave an accurate account of the content of the EPO decision of 27 July 2006.

However, it must be noted that the statement, in paragraph 970 of the judgment under appeal, that ‘there were, at the time the [Krka] settlement and licence agreements were concluded, consistent indications capable of leading the parties to believe that the 947 patent was valid’ is based, at least in part, on the distortion of the decision of the High Court of 3 October 2006, on which the General Court also relied in paragraphs 1017 and 1024 of that judgment.

Furthermore, that statement by the General Court disregards several other items of evidence referred to in the decision at issue, which, according to the Commission, prove that, although the EPO decision of 27 July 2006 constituted a setback for Krka, that undertaking was far from having resigned itself to recognising the validity of the 947 patent. The decision at issue mentions, inter alia, in recitals 1687 to 1689 that Krka, which had appealed against that EPO decision, also continued the challenge to the 947 patent by bringing, on 1 September 2006, in the United Kingdom, a counterclaim against Servier seeking a declaration of invalidity of that patent. The decision of the High Court of 3 October 2006 emphasises that Krka had a ‘powerful base’ for attacking the 947 patent. The decision at issue also mentions statements by Krka’s employees in response to that decision, which contradict any sense of resignation with regard to the EPO decision of 27 July 2006 as well as the fact that Krka obtained, in September 2006, the dismissal of the action for infringement of the 947 patent brought by Servier in Hungary and continued to market its generic version of perindopril on the market of that Member State.

It was on the basis of that material that, in recital 1690, the decision at issue made the following finding as regards Krka’s position following the EPO decision of 27 July 2006:

‘Krka’s assessment of the patent situation was certainly influenced by the Opposition Decision, and the grant of the interim injunctions against Krka and Apotex in the UK. Yet, the above strongly suggests that, from an ex ante perspective, nothing precluded a real concrete possibility for Krka to invalidate the 947 patent in full trial.’

It is therefore clear, on reading that material, that the decision at issue, examined as a whole, set out to demonstrate, on the basis of a body of consistent evidence, that Krka had not resigned itself to recognising the validity of the 947 patent following the EPO decision of 27 July 2006, despite the doubts to which that decision could have given rise as regards the chances of obtaining the revocation of that patent. In paragraph 970 of the judgment under appeal, the General Court stated, without giving adequate reasons, since it did not examine all the evidence relied on in that regard in the decision at issue, that ‘there were, at the time the settlement and licence agreements were concluded, consistent indications capable of leading the parties to believe that the 947 patent was valid’. Thus, as the Advocate General observed in point 105 of her Opinion, the General Court not only failed to take into consideration the matters referred to in paragraphs 158 and 159 of the present judgment, but also failed to explain the reasons for that omission, whereas the existence of an infringement of the competition rules can only be correctly determined if the evidence upon which the decision at issue is based is considered, not in isolation, but as a whole, account being taken of the specific features of the market of the products in question (judgment of 14 July 1972, Imperial Chemical Industries v Commission, 48/69, EU:C:1972:70, paragraph 68).

In so doing, the General Court distorted the meaning and scope of the decision at issue in so far as it relates to the effects of the EPO decision of 27 July 2006 on Krka’s recognition of the validity of the 947 patent (see, by analogy, judgment of 11 September 2003, Belgium v Commission, C‑197/99 P, EU:C:2003:444, paragraphs 66 and 67). In addition, it infringed its obligation under Article 36 of the Statute of the Court of Justice of the European Union, applicable to the General Court by virtue of the first paragraph of Article 53 of that Statute, to state the reasons on which its judgments are based, since it failed to set out, in paragraph 970 of the judgment under appeal, the grounds on which it relied in a manner sufficient to enable the persons concerned to be apprised of those grounds and the Court of Justice to have the evidence available to it to exercise its power of review on appeal (see, to that effect, judgment of 25 November 2020, Commission v GEA Group, C‑823/18 P, EU:C:2020:955, paragraph 42 and the case-law cited).

Therefore, in addition to the distortion of the decision of the High Court of 3 October 2006 established in paragraph 154 of the present judgment, paragraph 970 of the judgment under appeal is based on a distortion of the decision at issue and is vitiated by a failure to state reasons.

In the light of the foregoing, the fourth and sixth parts of the first ground of appeal must be upheld.

(d) The fifth part

By the fifth part of its first ground of appeal, the Commission criticises the General Court for having considered, in paragraph 1000 of the judgment under appeal, that the fact that Krka estimated the opportunity cost of not reaching a settlement with Servier at EUR 10 million over a period of three years was an indication of Krka’s recognition of the validity of the 947 patent. First, that estimate was provided during the investigation, with the result that it could not be used retroactively as evidence of Krka’s perception at the time of the conclusion of the Krka settlement and licence agreements. Second, Krka’s expected profits were one of the reasons why the Krka licence agreement constituted an inducement to reach a settlement. Third, there was no evidence on the basis of which to assert, as the General Court did in paragraph 1000 of that judgment, that it was unlikely that Krka would decide to make an ‘at risk’ entry to its core markets, which were covered by the Krka licence agreement.

According to Servier, that part is inadmissible, since the Commission does not allege any distortion.

It should be noted that, by the fifth part of its first ground of appeal, the Commission does not allege any distortion but is seeking to have the evidence reassessed, which does not fall within the jurisdiction of the Court of Justice in appeal proceedings.

The fifth part of the first ground of appeal must therefore be rejected as inadmissible.

Conclusion on the first ground of appeal

In the light of all the foregoing considerations, the third and fifth parts of the first ground of appeal must be rejected and the first, second, fourth and sixth parts of that ground must be upheld.

5. The second ground of appeal

(a) The second part

By the second part of its second ground of appeal, the Commission complains that the General Court held, in paragraphs 963 and 965 to 972 of the judgment under appeal, that, where there is a genuine dispute relating to a patent, the linking of a settlement agreement with a licence agreement does not constitute a strong indication of reverse payment. That formalistic approach is contrary to the case-law, in particular the judgment of 4 October 2011, Football Association Premier League and Others (C‑403/08 and C‑429/08, EU:C:2011:631, paragraph 136), which requires, in order to identify a restriction of competition by object, account to be taken of the content, objective and economic and legal context of the agreements at issue.

Servier submits, as a preliminary point, that the Commission does not challenge the legal criteria set out in paragraphs 943 to 963 of the judgment under appeal, relating to the analysis of a patent dispute settlement agreement coupled with a licence for that patent, but the application of those principles and the findings of fact made by the General Court in paragraphs 964 to 1032 of that judgment.

Servier submits that the second part of the second ground of appeal lacks clarity and is manifestly unfounded. Contrary to the Commission’s assertion, the ground set out in paragraph 972 of the judgment under appeal is not based solely on the form of the agreements in question, but also on an analysis of their context, described in paragraphs 967, 968, 970 and 971 of that judgment. Furthermore, the General Court also rejected the Commission’s argument that the object of the agreement was to share markets.

Since the second part of the second ground of appeal relates to the criteria in the light of which the General Court had to assess the existence of a restriction of competition by object, it is appropriate to examine it first.

It should be noted that, by the second part of the second ground of appeal, the Commission challenges the legal criteria set out in paragraph 963 of the judgment under appeal and calls into question the assessment carried out on the basis of those criteria in paragraphs 965 to 972 of that judgment, maintaining, inter alia, that that assessment is based ‘solely on the form of the agreements at issue’ and ‘has no basis in the case-law’. It is thus apparent from the very wording of that second part of the second ground of appeal that that part includes a criticism of the legal criteria set out in paragraphs 943 to 963 of that judgment. Servier’s preliminary argument is therefore based on a misreading of the appeal.

As regards the Commission’s criticisms of paragraph 963 of the judgment under appeal, it should be borne in mind that, in that paragraph, the General Court held that, where there is a genuine dispute relating to a patent and a licence agreement directly connected with the settlement of that dispute, an agreement settling that dispute, containing competition-restricting clauses such as non-challenge and non-marketing clauses, linked to a licence agreement concerning that patent, can be characterised as a restriction of competition by object only if the Commission can demonstrate that that licence agreement does not constitute a transaction concluded at arm’s length and thus masks a reverse payment.

Although the infringement of Article 101 TFEU found by the decision at issue consisted in Servier and Krka dividing the markets into two areas, only one of which falls within the scope of that infringement, the General Court stated, in essence, in paragraphs 963 to 965 of the judgment under appeal, that it would confine itself to examining whether the Krka licence agreement could be justified by the Krka settlement agreement or whether, on the contrary, that licence agreement actually masked a reverse payment inducing Krka to agree to the non-marketing and non-challenge clauses provided for in that settlement agreement. That reasoning disregards (i) the fact that the Krka licence agreement concerns markets which do not fall within the scope of the infringement of Article 101 TFEU and (ii) the nature of that infringement, consisting not in a simple patent dispute settlement agreement in return for a reverse payment, but of a market-sharing agreement.

Thus, paragraphs 963 to 965 of the judgment under appeal lay down criteria for assessing the existence of a restriction of competition by object which are incompatible with those referred to in paragraphs 99 to 105 of the present judgment and which are based on a misinterpretation of Article 101(1) TFEU. It must be stated that the differences between those legal criteria applied by the General Court and those referred to in paragraphs 99 to 105 of the present judgment are not merely semantic but lead to substantially different results.

In addition, it must be borne in mind that, in paragraph 972 of the judgment under appeal, the General Court held that ‘having regard to the scope of the terms of the [Krka settlement and licence agreements] and the context in which those agreements were signed, it must be held that the linking of those two agreements was justified and therefore does not constitute a strong indication of the existence of a reverse payment from Servier to Krka giving rise to the licence agreement’, while referring the reader to paragraph 948 of that judgment.

It is true that the fact that undertakings conclude a patent dispute settlement agreement linked to a licence agreement concerning that patent does not, in itself, constitute conduct restricting competition. Nevertheless, such agreements may, depending on both their content and their economic context, serve as an instrument for influencing the commercial conduct of the undertakings in question so as to restrict or distort competition on the market on which they carry on business (see, by analogy, judgment of 17 November 1987, British American Tobacco and Reynolds Industries v Commission, 142/84 and 156/84, EU:C:1987:490, paragraph 37).

In order to be caught by the prohibition laid down in Article 101(1) TFEU, a collusive practice must fulfil certain conditions depending not on the legal nature of that practice or on the legal instruments intended to implement it, but on its relationship with competition. Since the application of that provision is based on an assessment of the economic impacts of the practice in question, that provision cannot be interpreted as establishing any kind of prejudgment with regard to a category of agreements determined by their legal nature, since every agreement must be assessed in the light of its specific content and economic context and, in particular, in the light of the situation on the market concerned (see, to that effect, judgments of 30 June 1966, LTM, 56/65, EU:C:1966:38, p. 248, and of 17 November 1987, British American Tobacco and Reynolds Industries v Commission, 142/84 and 156/84, EU:C:1987:490, paragraph 40). As the Advocate General stated, in particular, in point 127 of her Opinion, the effectiveness of EU competition law would be seriously jeopardised if the parties to anticompetitive agreements could evade the application of Article 101 TFEU simply by giving such agreements particular forms.

In addition to the fact that, in the present case, the Krka settlement and licence agreements relate to separate markets and that the markets covered by the Krka licence agreement do not fall within the scope of the infringement of Article 101 TFEU, it must be pointed out that, while the conclusion by the holder of a patent of a settlement agreement with a manufacturer of generic medicines accused of patent infringement does constitute an expression of the intellectual property right of that holder, which permits that holder, inter alia, to oppose any infringement, the fact remains that that patent does not permit its holder to enter into contracts that are contrary to Article 101 TFEU (see, to that effect, judgment of 30 January 2020, Generics (UK) and Others, C‑307/18, EU:C:2020:52, paragraph 97).

Moreover, classification as a restriction of competition by object does not depend either on the form of the contracts or other legal instruments intended to implement such a collusive practice or on the subjective perception that the parties may have of the outcome of the dispute between them as to the validity of a patent.

Furthermore, as recalled in paragraph 108 of the present judgment, the fact that undertakings the conduct of which could be characterised as a restriction of competition by object acted without having an intention to prevent, restrict or distort competition and the fact that they pursued certain legitimate objectives are not decisive for the purposes of the application of Article 101(1) TFEU (see, to that effect, judgment of 21 December 2023, European Superleague Company, C‑333/21, EU:C:2023:1011, paragraph 167 and the case-law cited). Only the assessment of the degree of economic harm of that practice to the proper functioning of competition in the market concerned is relevant. That assessment must be based on objective considerations, where necessary as a result of a detailed analysis of that practice, its objectives and the economic and legal context of which it forms part (see, to that effect, judgments of 30 January 2020, Generics (UK) and Others, C‑307/18, EU:C:2020:52, paragraphs 84 and 85, and of 25 March 2021, Lundbeck v Commission, C‑591/16 P, EU:C:2021:243, paragraph 131).

That is why, in order to determine whether a collusive practice may be classified as a restriction of competition by object, it is necessary to examine its content, its origin and its legal and economic context, in particular the specific characteristics of the market in which its effects will actually occur. The fact that the terms of an agreement intended to implement that practice do not reveal an anticompetitive object is not, in itself, decisive (see, to that effect, judgments of 8 November 1983, IAZ International Belgium and Others v Commission, 96/82 to 102/82, 104/82, 105/82, 108/82 and 110/82, EU:C:1983:310, paragraphs 23 to 25, and of 28 March 1984, Compagnie royale asturienne des mines and Rheinzink v Commission, 29/83 and 30/83, EU:C:1984:130, paragraph 26).

Instead of carrying out such an assessment of the collusive practice implemented by means of the Krka settlement and licence agreements in the light of its specific content and its economic impacts, the General Court, in paragraphs 943 to 963 of the judgment under appeal, developed criteria to identify, in a general and abstract manner, the conditions under which a combination of a patent dispute settlement agreement and a licence agreement relating to that patent may, in view of the legal characteristics of those agreements alone, be classified as a restriction of competition by object within the meaning of Article 101(1) TFEU. Applying those criteria to the Krka settlement and licence agreements, the General Court focused its analysis on the form and legal characteristics of those agreements, rather than examining their actual relationship with competition. It thus disregarded the principles governing the application and interpretation of Article 101(1) TFEU referred to in paragraphs 179 and 183 of the present judgment and vitiated paragraphs 943 to 972 of the judgment under appeal with illegality.

Accordingly, the second part of the second ground of appeal must be upheld.

(b) The first, third and fourth parts

By the first part of its second ground of appeal, the Commission complains that the General Court’s reasoning is contradictory. In paragraph 1029 of the judgment under appeal, the General Court recognised that the Krka licence agreement was a condition for that undertaking to agree to the non-marketing and non-challenge clauses, which, as the General Court pointed out in paragraph 273 of that judgment, are ‘inherently restrictive’. However, it refused to infer from this that that licence agreement induced Krka to settle the disputes relating to the 947 patent, by relying on two erroneous grounds, namely, (i) the parties’ perception of the validity of that patent and (ii) the fact that that licence agreement was concluded at arm’s length. The General Court, in relying on the fiction of a settlement based on the merits of the 947 patent and of a licence for that patent concluded at arm’s length, therefore did not, for the purposes of the legal characterisation of those agreements as a restriction of competition by object, attach sufficient importance to the objective pursued by those agreements. The General Court also overlooked statements by which Krka acknowledged that it had ‘sacrificed’ its entry into Servier’s core markets in order to be able to remain on its seven core markets.

By the third part, the Commission criticises the grounds set out in paragraphs 806, 963, 975 to 984 and 1029 of the judgment under appeal, by which the General Court considered that the Krka licence agreement had been concluded at arm’s length. That consideration is, in its view, irrelevant, since the decisive factor is that the Krka settlement and licence agreements were based not on each party’s assessment of the validity of the 947 patent, but on their common objective of sharing the markets, at the expense of consumers, by means of the Krka agreements, taken as a whole.

By the fourth part, the Commission complains that, in paragraphs 806 and 977 to 982 of the judgment under appeal, the General Court limited its analysis of the inducive nature of the Krka licence agreement to the question whether the royalty rate provided for in that agreement was abnormally low. The General Court should have analysed that agreement, together with the Krka settlement agreement, and examined the effect of those agreements on the parties’ incentives to compete with each other and the profit – estimated at over EUR 25 million – which Servier forewent by concluding that licence agreement.