European Court ruling could affect Microsoft case

European Court ruling could affect Microsoft case

In a move that might affect the Microsoft Corp. antitrust case in the European Union, a senior judge at the European Court of Justice said Thursday that IMS Health, the largest collector of pharmaceutical sales and prescription data in the world, might be abusing its dominant position by refusing to license the way it organizes its information about the German market to rival NDC Health.

Advocate General Antonio Tizzano’s preliminary finding in the case could make it harder for dominant companies to use their intellectual property, such as copyright or patents, to fend off competitors, lawyers said.

In most cases, the advocate general’s opinion forms the basis for a ruling some months later by fellow judges at the European Court. “If the court rules in line with this opinion then this will make it harder for a dominant player to use intellectual property rights to defend his market position,” said Jacques Bourgeois, a partner in the Brussels office of law firm Akin Gump Strauss Hauer & Feld.

The specifics of the IMS Health case will be decided by a German court in Frankfurt, after the Luxembourg-based European Court gives its official ruling. The outcome in this specific case is uncertain, but the general legal principle regarding the behaviour of dominant firms such as IMS Health is unequivocal, Bourgeois said.

“In the IMS case it all depends on whether the Frankfurt court decides that NDC intends to use the database structure to offer a different or better product than IMS, and whether there exists a reasonable alternative to IMS’s database structure for NDC to use instead,” Bourgeois said.

If the court agrees that it was NDC’s intention to offer a better or different product, then that would be considered a qualifying circumstance “that would render a refusal to grant a license an abuse of IMS’s dominant position,” he said.

IMS Health reached a different conclusion to Thursday’s announcement from the European Court. “The opinion supports IMS’ core position: That a license of intellectual property is neither required nor appropriate if the licensee intends to use that intellectual property to produce substantially the same goods or services as those already marketed by the IP owner,” the company said in a statement.

If the European Court does follow the opinion, then IMS Health will seek “substantial” monetary damages from NDC for having used its database structure when the case returns to the Frankfurt court, IMS Health said.

The broader issue of how intellectual property can be used as a tool to abuse a dominant position may affect the outcome of the European Commission’s ongoing antitrust lawsuit against Microsoft, lawyers said.

Microsoft refuses to license interfaces to other firms like Sun Microsystems Inc. and IBM Corp. that would allow them to create server operating software that interacts with Microsoft’s dominant Windows operating system, said Thomas Vinje, a partner in the Brussels office of law firm Morrison & Foerster.

“In this sense, today’s opinion could have an impact on the Microsoft antitrust case,” Vinje said.If the Commission can prove that there is no reasonable alternative to the Windows operating system for rival software makers, “then a refusal by Microsoft to license the necessary parts of Windows could be an abuse of its dominant position,” Bourgeois said.

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