Keeping pace with the ever-changing life sciences industry, Morrison Foerster stays on top of the trends and political, legal, and economic drivers to support striking the balance between innovative discovery and purposeful business planning to assure our clients continued success. MoFo Life Sciences shares timely legal and business insights and in-depth analyses on trends and the complex technologies at the heart of the global pharmaceutical, biotechnology, diagnostics, medical devices, digital health, and AgTech fields.Learn more about our <a href="https://www.mofo.com/capabilities/life-sciences-healthcare" target="_self">Life Sciences practice</a>.<h2 dir="ltr">ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Dr. Meghan Poon counsels clients on patent preparation and prosecution, portfolio strategy, and IP due diligence in the areas of biotechnology and biologics. She has significant experience in diverse technologies including antibodies, cell therapies, gene therapies, diagnostics, and gene-edited plants. She represents clients ranging from large international pharmaceutical companies to midsized companies, startups, and universities.Meghan has filed numerous Patent Term Extension applications to secure additional term for her clients’ patents, which cover FDA-approved products. In addition, Meghan has extensive experience addressing complex obviousness-double patenting and subject matter eligibility issues impacting her clients’ patent portfolios. Meghan also represents clients in both investor-side and target-side due diligence, in deals from seed funding to initial public offerings.Prior to law school, Meghan attended graduate school at the University of California, Los Angeles, where she received a Ph.D. in biological chemistry based on her work on protein-protein and protein-DNA interactions at a molecular level. Meghan is the author of several scientific publications and has presented her research at international conferences.Meghan received her J.D. from the University of Southern California Law School and spent a year as a visiting student at Santa Clara University, where she focused on intellectual property.

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Dr. Meghan Poon counsels clients on patent preparation and prosecution, portfolio strategy, and IP due diligence in the areas of biotechnology and biologics. She has significant experience in diverse technologies including antibodies, cell therapies, gene therapies, diagnostics, and gene-edited plants.

Meghan Poon

Wolfgang advises clients on contentious and non-contentious matters involving their most valuable intellectual property assets in life sciences, digital, and high-tech industries.His subjects of focus include research and development collaborations, complex licensing agreements, and other technology transactions, as well as know-how protection strategies, and employee invention law. He also has substantial experience in litigating patents, trademarks, and other intellectual property assets, often in a multijurisdictional context. In addition, Wolfgang and his team frequently clear trademarks and ad campaigns and prosecute trademark applications.Wolfgang is co-editor of our <a href="https://lifesciences.mofo.com/" dir="ltr" target="_blank">MoFo Life Sciences Blog</a>.Wolfgang is a partner of Morrison Foerster based in our German office in Berlin.<h4 dir="ltr">Representative Transactional Matters</h4><ul dir="ltr"><li>U.S.-based BioTech fund on various research collaborations and other transactions with German start-ups or research institutions.</li><li>Negotiate multimillion-euro strategic partnership between two AgTech leaders concerning the development and commercialization of pest-resistant transgenic traits.</li><li>Craft global multi-million collaboration regarding AI-powered robotic MaaS.</li><li>UK-based digital health company on product roll-out of RPM applications in Germany; coordinate international expansion.</li><li>Advise numerous German start-ups on their U.S. expansion.</li><li>Draft diverse global patent and know-how license agreements in the areas of AgTech and life sciences—including gene licensing and licensing of genome editing technologies (e.g., CRISPR)—and medical devices; draft correlating supply and distribution agreements.</li><li>Structure IP rights in connection with joint ventures and other M&A transactions, including the carve-out of a patent-heavy semiconductor business comprising nine jurisdictions into a German–U.S. joint venture.</li><li dir="ltr">Advise on government-funded, multi-partner R&D projects and/or R&D projects with academic institutions, as well as on employee invention law.</li></ul><h4 dir="ltr">Representative Contentious IP Matters</h4><ul dir="ltr"><li>Lead counsel in an international dispute between software companies on rights and obligations following termination of a multi-million licensing and distribution arrangement; coordinate local counsel.</li><li>Defend Japanese chip manufacturer in high-profile SEP-litigation; advise on global settlement arrangement.</li><li>Represent leading internet retailer in patent infringement and concurrent invalidity proceedings in the context of a multijurisdictional dispute concerning touch-screen technology.</li><li>Represent diverse pharmaceutical and life sciences companies in national and cross-border patent infringement proceedings and other technology-related disputes, including preliminary injunctions as well as pre‑trial discovery and inspection proceedings, concerning, inter alia, drug-coating technologies, toner cartridges, medicinal gases, transgenic plants, and vaccines.</li><li dir="ltr">Conduct trademark, copyright, and false advertising litigation, including, most notably, a high-profile trademark litigation for a German bank, and a nine-country cross-border trademark litigation involving a famous pharmaceutical brand.</li></ul>

Dr. Wolfgang Schönig berät Mandanten zum Schutz des geistigen Eigentums sowohl in streitigen als auch nichtstreitigen Angelegenheiten, mit einem besonderen Fokus auf die IP-rechtliche Beratung von Unternehmen aus den Bereichen Life Sciences, Digitalwirtschaft und High-Tech.Zu seinen Beratungsschwerpunkten gehören Forschungs- und Entwicklungskooperationen, komplexe Lizenzvertragsgestaltungen und andereTechnologie-Transaktionen, sowie Know-how-Schutz-Strategien und das Arbeitnehmererfinderrecht. Er verfügt zudem über umfangreiche Prozesserfahrung zur Durchsetzung von Patenten, Marken- und anderen IP-Rechten, häufig auch in einem grenzüberschreitenden Kontext. Darüber hinaus bewertet Dr. Wolfgang Schönig zusammen mit seinem Team regelmäßig die Rechtskonformität von Werbekampagnen, prüft die Verfügbarkeit von Marken und entwickelt entsprechende Anmeldestrategien.Dr. Wolfgang Schönig ist Co-Editor des Life Sciences Blogs von Morrison Foerster.Er hat seinen Doktortitel an der Heinrich-Heine-Universität Düsseldorf und seinen LL.M. an der Fordham School of Law in New York erworben, jeweils mit Schwerpunkt im gewerblichen Rechtsschutz. Seinen MBA-Abschluss erhielt er von der European University in Barcelona.Dr. Wolfgang Schönig ist Partner des deutschen Büros von Morrison Foerster in Berlin.<h4 dir="ltr">Repräsentative Transaktionen</h4><ul><li dir="ltr">BioTech-Fonds mit Sitz in den USA bei verschiedenen Forschungskooperationen und anderen Transaktionen mit deutschen Start-ups oder Forschungseinrichtungen</li><li dir="ltr">Verhandlung einer hochvolumigen strategischen Partnerschaft zwischen zwei Technologieführern im Bereich Crop Science betreffend der Entwicklung und Kommerzialisierung von bestimmten Resistenzen</li><li dir="ltr">Gestaltung einer globalen Multi-Millionen-Zusammenarbeit für KI-gestützte Roboter</li><li dir="ltr">Ein in Großbritannien ansässiges Unternehmen für digitale Gesundheit bei der Markteinführung von RPM-Anwendungen in Deutschland; Koordination der internationalen Expansion</li><li dir="ltr">Beratung zahlreicher deutscher Start-ups bei deren US-Expansion</li><li dir="ltr">Strukturierung und Verhandlung diverser Patent- und Know-How-Lizenzen in den Bereichen Ag Tech und Life Sciences – einschließlich Fragen zu genome editing wie CRISPR-Medizingeräte, sowie Gestaltung von Softwarelizenzverträgen und Erstellung korrespondierender Liefer- und Vertriebsvereinbarungen</li><li dir="ltr">Strukturierung von IP-Rechten im Zusammenhang mit Joint Ventures und anderen M&A-Transaktionen, darunter die Koordination eines neun Länder umfassenden IP Carve-Outs im Rahmen eines Halbleiter-JVs</li><li dir="ltr">Beratung zu staatlich geförderten Multi-Partner F&E-Projekten und/oder F&E-Projekten mit akademischen Einrichtungen sowie zum Arbeitnehmererfindungsrecht</li></ul><h4 dir="ltr">Repräsentative IP-Streitigkeiten</h4><ul><li dir="ltr">Lead Counsel in einem internationalen Rechtsstreit zwischen Softwareunternehmen über Rechte und Pflichten nach Beendigung einer millionenschweren Lizenz- und Vertriebsvereinbarung; Koordinierung der lokalen Anwälte</li><li dir="ltr">Verteidigung eines japanischen Chipherstellers in einem prominenten Streitfall bezüglich Standardessentieller Patente (SEP); Beratung zu einer globalen Vergleichsregelung</li><li dir="ltr">Verteidigung einer führenden Internetplattform gegen Ansprüche eines Patenttrolls wegen vermeintlicher Verletzung von Patent bezüglich Touchscreen-Technologie sowie korrespondierende US-Streitigkeiten</li><li dir="ltr">Vertretung von Pharma- und Life Science-Unternehmen in nationalen und grenzüberschreitenden Patentverletzungsverfahren und anderen technologiebezogenen Streitigkeiten, einschließlich einstweiliger Verfügungsverfahren und vorprozessualer Beweissicherungs- und Besichtigungsverfahren, unter anderem in Bezug auf Arzneimittelbeschichtungstechnologien, Tonerkartuschen, medizinische Gase, transgene Pflanzen und Impfstoffe</li></ul>

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Wolfgang Schönig is a partner of Morrison Foerster (International) LLP based in our German office in Berlin. His practice specialty is advising on IP aspects relative to transactions in, among others, the life sciences, AgTech and pharmaceuticals industry, as well as legal representation in IP disputes. Wolfgang is specialized in research and development collaborations, complex licensing agreements, technology acquisitions, know-how protection strategies, and employee invention law.

Wolfgang Schönig focuses his practice on IP aspects relative to transactions in the digital, telecoms, high tech, life sciences, and pharmaceuticals industry, as well as legal representation in IP disputes.

Wolfgang Schönig advises clients on IP aspects relating to transactions in, among others, the life sciences, AgTech and pharmaceuticals industry, as well as legal representation in IP disputes. His additional focus areas include research and development collaborations, complex licensing agreements, technology acquisitions, know-how protection strategies, and employee invention law.

Wolfgang Schönig

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In recent years, there have been various antitrust investigations in the pharmaceutical sector resulting in decisions of the European Commission (EC) and the Eu

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Pay-for-Delay has a tough (antitrust) time at EU Top Court

Pay-for-Delay has a tough (antitrust) time at EU Top Court | MoFo Life Sciences

Jens Hackl

Andreas Grünwald

In recent years, there have been various antitrust investigations in the pharmaceutical sector resulting in decisions of the European Commission (EC) and the European Courts.[1] In two recent rulings – “Lundbeck”[2] and “Paroxetine”[3] – the European Court of Justice (ECJ) dealt with settlement agreements between originator companies and generic companies aimed at delaying the introduction of generic drugs to the market, so-called “pay-for-delay” or “reverse patent settlement” agreements. In these agreements, the generic companies usually commit to refrain from entering the market for a relevant medicine protected by a (possibly contestable) patent that the originator company holds while the originator company is obliged to pay a certain compensation. The recent ECJ judgments indicate that most of the “pay-for-delay” agreements likely constitute anti-competitive agreements by object and hence violate EU antitrust laws.<h4>Facts/Background</h4>The ECJ provided fundamental guidance regarding questions on “pay-for-delay” agreements in its preliminary ruling in “Paroxetine” on January 30, 2020. In this case, the British Competition Appeal Tribunal (“CAT”) referred various questions to the ECJ for a preliminary ruling. The background for the legal proceedings were settlement agreements with respect to patent disputes between GlaxoSmithKline (the holder of a patent for the paroxetine anti-depressant) and certain generics companies, in which the generics companies agreed to refrain from entering the market with their own generic medicines for a certain period of time and GlaxoSmithKline promised payments in return.In its “Lundbeck” decisions of March 25, 2021, the ECJ applied the principles established in “Paroxetine” to a fine decision of the EC. The ECJ confirmed the previous EC decision including the ruling of the General Court to fine Lundbeck (originator company of the citalopram anti-depressant) and producers of generic medicines for their anti-competitive settlement agreements. After the original compound patent expired in 2002, Lundbeck (still holding a number of secondary patents) and several generic companies entered into “pay-for-delay” agreements. The generic companies committed not to enter the citalopram market and Lundbeck made in return significant payments and also purchased their stocks of generic products. Those agreements led to investigations concluded by the EC’s decision of June 19, 2013[4] to fine Lundbeck and the generic companies. Their appeals before the General Court were dismissed by various judgments of September 8, 2016. Finally, the ECJ dismissed the appeals against the Court’s decisions.<h4>The ECJ Decisions</h4>The ECJ’s decisions mainly focus on the standards of the European cartel ban (Article 101 TFEU) and the rules on abuse of dominance (Article 102 TFEU, see particularly “Paroxetine”) applying to “pay-for-delay” agreements. They particularly provide clarity in which cases generic manufacturers could be considered as potential competitors and in which cases “pay-for-delay” agreements constitute a restriction of competition “by object” (or effect). While the preliminary ruling in “Paroxetine” provides the guidelines to assess “pay-for-delay” agreements in general, the ECJ confirmed and applied those guidelines to a specific fine decision in “Lundbeck.”Potential CompetitorsThe “pay-for-delay” agreements are only anti-competitive if the companies involved are at least “potential competitors.” According to the ECJ in its “Paroxetine” ruling, the relevant potential competition between the originator companies and the generic companies needs to be assessed with “regard to the structure of the market and the economic and legal context within which it operates.” To establish potential competition, the ECJ emphasized that there is no need for certainty that the generic company will in fact enter the market, but the generic companies must have “real and concrete possibilities of entering the market at the relevant time.” More precisely, according to the ECJ, this means that a potential competitor must have taken sufficient preparatory steps to enter the market at the time of the conclusion of the “pay-for-delay” agreement and must show a firm intention as well as an inherent ability to enter the market. Moreover, there shall be no “insurmountable barriers” for entering the market, but the ECJ clarified that the existence of a patent alone cannot be regarded as such an “insurmountable barrier” as long as the potential competitor shows a readiness to challenge the validity of that patent. According to the ECJ, it is not required to assess the “strength of the patent” or how likely it is that a court would find that the patent is valid and has been infringed. Restriction of Competition by ObjectRegarding the question when there is a “restriction of competition by object,” the ECJ pointed out that the agreements must reveal a sufficient degree of harm to competition, considering the agreement’s content, objectives, and economic and legal context. According to the ECJ, such a harm to competition is strongly indicated when the agreed transfers of value cannot have any explanation other than the commercial interest of the parties not to engage in competition on the merits. For this purpose, it is crucial to assess whether the net gain arising from the payments in question is high enough to act as an incentive to the generic companies to refrain from entering the market. However, the net gain is not required to be higher than the profits the generic company would have made if it were successful in the patent proceedings. As with the assessment of a “potential competition,” it is not necessary to assess the strength of the respective patents or of the party’s prospects of success in a patent process, if the transfer of value is significant enough.Abuse of DominanceIn its “Paroxetine” decisions, the ECJ also specified the conditions under which a “pay-for-delay” agreement constitutes an abuse of a dominant market position (Article 102 TFEU). According to the ECJ, the definition of the relevant product market must take the generic versions of the medicine into account, although the generic companies would not be able to legally enter the market. The ECJ further clarified that the exercise of an IP right, including the conclusion of patent settlement agreements, is not per se abusive, but that negative effects for competition arise if this exercise prevents access to the market. Finally, the ECJ pointed out that adverse effects on the market might be counterbalanced by efficiency advantages that also benefit consumers.<h4>Conclusion and Outlook</h4>After the EC and the General Court established the first principles for the assessment of “pay-for-delay” agreements in the pharmaceutical sector under EU antitrust law, the two ECJ rulings provided now more clarity and final guidance on this topic for various issues. This particularly concerns the qualification of the companies involved as “potential competitors,” the relevant test for assessing whether there is a “restriction of competition by object,” and the (non‑)relevance of the likelihood of success in patent proceedings. There are still some open questions, particularly regarding the defense of the companies involved with respect to potential pro-competitive effects or efficiencies. But this could also have been deliberately left open as, in general, the ECJ seems to put “pay-for-delay” agreements under close scrutiny. And while it does not generally prohibit those agreements, they are subject to a critical assessment resulting in “tough (antitrust) times” for any “pay-for-delay” agreements. [1] See prior client alert.[2] Judgments of the ECJ of March 25, 2021 in Cases C-586/16 P, C-588/16 P, C-591/16 P, C-601/16 P, C-611/16 P, and C-614/16 P.[3] Judgment of the ECJ of January 30, 2020 in Case 307/18.[4] EC Decision of June 19, 2013, Case AT.39226 – Lundbeck. in Cases T-460/13, T-467/13,, T-469/13, T-470/13, T-471/13, and T-472/13.

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