COMMISSION DECISION of 3 July 2001 relating to a proceeding pursuant to Article 82 of the EC Treaty (Case COMP D3/38.044 — NDC Health/IMS Health)

European Court of Justice to consider case March 2003

Intercontinental Marketing Services Health Inc. (IMS) and NDC Health Corp (NCD) compete in  tracking sales in the pharmaceutical industry and in the healthcare products sector. They supply pharmaceutical firms with data on the sales performance of pharmaceutical products recorded by pharmacies and on doctors' prescriptions.

Intercontinental Marketing Services Health Inc. (IMS), a US company, is the world's number one supplier of information to the pharmaceutical and healthcare industry. IMS Health describes itself as "the world's leading provider of information solutions to the pharmaceutical and healthcare industries"

NDC believes  that IMS is abusing its dominant position by refusing to grant it a licence to use the "1860 brick structure", a segmentation of Germany into 1860 geographical areas, used to report sales information. Without this licence NDC claims it cannot provide regional sales reports based on this structure for Germany  the largest pharmaceutical market of the EU, and is also prevented from making contracts for multi-jurisdictional coverage because it would be unable to provide German reports. Furthermore, NDC claims that the German Court has strengthened IMS' dominant position through its interim judgements which prohibited  using the 1860, 2847 or 3000 brick structures or any other brick structure derived from the 1860 brick structure on the basis that they constitute a personal intellectual creation belonging to IMS. IMS Health  argued it cannot be forced to share its design, which is protected by copyright. For violation of this order NDC may be fined a maximum of DEM 500000 

NDC lodged a complaint on 19 December 2000 requesting the Commission to: - initiate a procedure to establish the existence of an infringement of Article 82, and  grant interim measures.

There are two questions at stake in the case that will have important impacts on how competition policy is applied and that are of interest to companies and industry sectors where intellectual property in a major consideration, from software to pharmaceuticals.

can a facility become essential not because the competitors are unable to produce a rival facility of their own, but because the customers prefer the dominant company's facility and are not interested in alternatives.

and

Can there be a violation of Article 82 if the only action of the dominant company has been the refusal to license?

In July 2001, The Commission  ordered IMS Health to license its geographic areas to competitors, but in October the Court of First Instance suspended that order until the high court ruling.

NCD Health solicited the help of  pharmaceutical companies, who are its customers, to design new geographical areas, each made up of several postal codes, to better meet their marketing needs. But over the years  the pharmaceutical companies  built up databases based on IMS Health's 1,860 survey areas in Germany and were not inclined to incur new costs.  One of the decisions to arise will be whether   those switching costs should make a difference in whether IMS Health's survey areas must be licensed. Because the pharmaceutical companies worked with IMS Health to create a database system that enjoys consideration marketplace acceptance is the IPR necessary to use that database IPR that should be   somehow shared as is the general case with  IPR essential to meet a standard developed though a consensus process? 

EU court weighs forced licensing in drug data case By David Lawsky  BRUSSELS, March 5 (Reuters)

COMMISSION DECISION of 3 July 2001 relating to a proceeding pursuant to Article 82 of the EC Treaty(Case COMP D3/38.044 — NDC Health/IMS Health: Interim measures) (notified under document number C(2001) 1695) (2001/165/EC)