Plot twist in the Lucentis case: the French Court of Appeal finds no abuse of dominant position

For the second volume of The Legal Industry Reviews France, Christophe Hénin and Marine Zoroddu, associate from Intuity Law Firm explain the details of the turn that took place in the Lucentis Case in France in February.

On February 16, 2023, the French Court of Appeal fully overturned the French Competition authority’s decision (Decision No. 20-D-11 dated 9 September 2020) which imposed to Novartis and Roche a € 444 million fine for abuse of collective dominant position aimed at maintaining Lucentis’ position and price (€ 1161 by injection) by curbing the off-label use of Avastin (€ 40 by injection) for the treatment of age-related macular degeneration (AMD) between 2008 and 2013 (French Court of Appeal, 16 February 2023, No. 20/14632).

As regards cross-holdings and contractual ties between Novartis and Roche including license agreements with Genetech, which has developed both Avastin and Lucentis, they were considered as a single collective entity.

In this case, Novartis and Roche were alleged to have implemented two types of abusive measures:

  • denigration’s statements addressed to the healthcare practitioners and the public by exaggerating the risks associated with the use of Avastin in the treatment of AMD;
  • use of alarmist/misleading language regarding the risks associated with the use of Avastin as well as administrative obstruction with the French public authorities aimed at hindering the authorization for using Avastin in the treatment of AMD.

Unsurprisingly, the French Court of Appeal arguments were less guided by economic than legal considerations, but it could barely be foreseen that its interpretation would lead to overturn all grounds for the French Competition Authority’s decision.

The Court first considered that as the law n°2011-12 dated 29th of December 2011 lessened the possibilities of off-label use so that Avastin could no longer be legally prescribed and had to be considered as off-market and not substitutable with Lucentis.

Then, the Court considered that statements which points out differences between two medicinal products, where only one of which had a marketing authorisation for a given indication, could not be assessed in the same way as to that of a generic and an originator product, since they were presumed to be equally effective and safe. It was not the case for Lucentis and Avastin, and the context of the widespread of the off-label use of Avastin, at the time of the Mediator scandal contributed to legitimate Novartis and Roche statements, according to the Court. Therefore, the statements addressed to healthcare professionals and the public were found not to be disparaging or exceeding the limit of freedom of speech.

Regarding the practices undertaken with public authorities, the Court held, in particular, that Roche could not be reproached for refusing to file an application for an extension of a marketing authorisation and that on the basis of scientific studies available at that time, Novartis statements were neither alarming nor misleading. The Court finally reminded that the French Authority for Health Products Safety was fully able to conduct a critical reading of the scientific studies under discussion and publicly available.

Beyond the discrepancies of interpretation between the French Competition Authority and French Courts, this decision stands in contrast to previous decisions ruled in our European neighbouring countries on this case, in the context of the growing sanctions in the pharmaceutical sector:

  • on October 5, 2021, the Italian Supreme Court upheld the Italian Competition Authority decision to fine Novartis and Roche approximately € 180 million for anti-competitive agreements;
  • on January 23, 2023, the Belgian Competition Authority imposed a € 2 million fine on both companies on the same grounds as the French Competition Authority.

However, in France, Novartis and Roche are not out of the woods yet, as this decision can still be appealed to the French Supreme Court.

Christophe Hénin and Marine Zoroddu, are associate lawyers at Intuity Law Firm in France.

La reforma de la discordia

Marcela Blanco Mendoza, abogada y partner de la oficina en Colombia de Diaz Reus.

En la 14ta edición de The Legal Industry Reviews Colombia, Marcela Blanco, abogada partner de Díaz Reus, International Law Firm en ese país, analiza el debate que han girado en torno al proyecto de ley de reforma al Código Penitenciario.

La agenda del Gobierno Nacional estará a tope por los próximos 365 días y no es para menos, pues, como lo ha venido anunciando el Presidente Petro desde su candidatura, habrá reforma a la salud, reforma política, reforma pensional y reformas al Código Penal, al Código de Procedimiento Penal y al Código Penitenciario. Esta última ya ha causado mucho revuelo en las últimas semanas y tiene una buena cantidad de detractores y uno que otro defensor. 

Dentro de las modificaciones que se proponen en este proyecto de ley está la eliminación de delitos, tales como: la inasistencia alimentaria, la injuria, la calumnia y el incesto. Los argumentos más fuertes esbozados por el Gobierno para la supresión de estos tipos penales son: (i) la significativa congestión que generan estos delitos en la administración de justicia; y, (ii) la posibilidad de prevenirlos y perseguirlos a través de otros medios, diferentes al Derecho Penal, procurando el fortalecimiento a la justicia restaurativa.

Sin duda alguna, una de las principales problemáticas que enfrenta la justicia penal colombiana es la congestión judicial. De hecho, según los datos de la Corporación Excelencia en la Justicia proporcionados a octubre de 2022, había una congestión del 57.5% dentro del sistema penal, por lo cual, ciertamente se hace necesario tomar medidas urgentes para enfrentarla.

Eliminar conductas típicas del Código Penal que, en ciertos casos ni siquiera llegan a una imputación o a la etapa de juicio oral, y que pueden ser resueltas por vías alternas de una forma más eficiente, es una alternativa porque se contribuye a la descongestión del sistema, ayudando a que los jueces y fiscales centren sus esfuerzos en aquellos delitos en donde es necesario el desgaste del aparato judicial. Ahora bien, pensar que el solo hecho de despenalizar la inasistencia alimentaria, la injuria y la calumnia arreglará el problema de la congestión en Colombia, es una ilusión. Sin duda es un paso, pero las medidas tienen que ser aún más ambiciosas.

Adicionalmente, según lo explicado por el Gobierno, este proyecto de ley busca enfocar la política criminal nacional hacia la resocialización y la reinserción a la sociedad del condenado por encima del castigo y retribución, ampliando los criterios para acceder a la prisión domiciliaria, a la libertad condicional y a los permisos de 72 horas de libertad. Esta propuesta de medidas alternativas a la reclusión carcelaria ayudaría a aliviar el problema del hacinamiento carcelario, que, según el Ministro de Justicia, Néstor Osuna, tiene una sobrepoblación de 17.111 personas al interior de los establecimientos penitenciarios. Además, reconecta al sistema carcelario con el fin de resocialización de la persona que ha delinquido. No obstante, no creo que tenga un significativo impacto en la reducción del delito. Podrá haber menos hacinamiento y, tal vez, un enfoque resocializador más fuerte; sin embargo, la delincuencia y la prevención del delito se deben atacar a través de medidas mucho más profundas.

La reforma promete mucho, tiene un enfoque técnico y tiene buenas intenciones; sin embargo, en mi opinión, se queda corta para atacar los problemas que enfrenta el sistema penal y penitenciario en Colombia.

Marcela Blanco es abogada y Master en Corporative Law de la Pontificia Universidad Javerina en Colombia. Ostenta el título de Abogada en Estados Unidos, en la University of Kansas. Partner de Díaz Reus International Law Firm.

First Canadian Decision on COVID-19 Business Interruption Loss Claim

Nearly three years after the onset of COVID-19 pandemic in Canada, an Ontario court has released the first substantive decision addressing a claim for business interruption loss coverage under the terms of a commercial property policy.  In SIR Corp v. Aviva Insurance Company of Canada, 2022 ONSC 6929, the Ontario Superior Court dismissed the application of a policyholder for COVID-19 related business interruption losses on the basis that such losses were outside the ambit of the policy.  The decision – though the first of its kind in Canada – is consistent with a long line of American authorities finding that such losses, absent extraordinary language, are not covered under commercial property policies.

SIR Corp is a Canadian owner and operator of restaurant chains.  In March 2020, SIR Corp was required to close its restaurants and shift to providing take-out services where possible as a result of various government closure orders issued to slow the spread of COVID-19.

SIR Corp was insured under an “all-risks” commercial property policy.  The policy contained three principal insuring agreements which provided coverage for: (i) direct loss or physical damage to property, except as excluded; (ii) lost business income incurred where property is destroyed or damage by perils insured; and (iii) necessary extra expense incurred to continue normal business following damage or destruction of property by perils insured the Policy.

The Policy also contained three endorsements which provided coverage as follows:

14. CIVIL OR MILITARY AUTHORITY

This Policy insures loss, as covered herein, which is sustained by the Insured as a result of damage caused by order of civil or military authority to retard or prevent a conflagration or other catastrophe.

15. INTERRUPTION BY CIVIL OR MILITARY AUTHORITY

This Policy is extended to include the loss sustained by the Insured during the period of time while business is affected as a result of order of civil or military authority, but only when such order is given as a direct result of loss or damage of the type insured by this policy, or threat thereof.  Maximum 8 weeks.

16. INGRESS/EGRESS

This Policy is extended to include the loss sustained by the Insured during the period of time when as a result of a peril insured or threat thereof, ingress to or egress from any part of premises of the Insured or of others is prevented or impaired, including prevention or impairment of such access by any civil or military authority.  Maximum 8 weeks.

Neither COVID-19 nor the government closure orders caused any damage to SIR Corp’s property and, on that basis alone, the claim must fail.

In the wake of the government closure orders, SIR Corp made a claim under its property policy for lost business income as well as for some food spoilage costs said to have occurred as a result of the government closure orders.  SIR Corp argued that the claim was covered under the endorsements as the coverage provided was broader than, and independent of, the coverage provided under the main insuring agreements in the policy.  In particular, SIR Corp argued that it did not need to show that it had sustained any direct physical loss or damage to property to engage coverage.

The Court rejected SIR Corp’s interpretation by applying well-settled principles of policy interpretation that the endorsements were to be interpreted in connection with the policy documents as a whole.  In this case, the binder made clear that “perils insured” was to mean “All Risks of Direct Physical Loss or Damage – except as Excluded”.  The endorsements each incorporated that requirement such that physical loss or damage was a necessary element to establish coverage for any loss.

In this case, the Court concluded that SIR Corp’s claim failed on the causation analysis.  Neither COVID-19 nor the government closure orders caused any damage to SIR Corp’s property and, on that basis alone, the claim must fail.

The Court further held that, for the purposes of Endorsement 14, there was good reason to doubt that the government closure orders were an order to prevent or retard an “other catastrophe”. While in some contexts COVID-19 may be viewed as a catastrophe, the use of the term in the policy in conjunction with the word “conflagration”, required that the order in issue to be one directed at preventing or retarding large scale destruction of property.

In result, there was no coverage for SIR Corp’s claim under the policy and the Application was dismissed.

The SIR Corp decision is not the last word in Canada on coverage for business interruption loss under commercial property policies.  The decision itself is currently under appeal and a host of other class proceedings raising similar claims against a number of insurers remain pending before the courts.  Nevertheless, the decision in SIR Corp is welcome guidance from the Ontario courts regarding how COVID-19 related losses will be approached from a policy interpretation standpoint.

Ellen Snow. Editor in Chief in The Legal Industry Reviews Canada. Partner at Clyde & Co in the Toronto Commercial Litigation group. She has a Juris Doctor from the University of Toronto. Ellen focuses on cyber security and privacy issues, considering immediate containment and remediation, notification of affected parties, and defending any subsequent regulatory proceedings. She has experience in both domestic and international arbitration.