Federal Law dated 26.07.2006 No. 135-FZ “On Protection of Competition” (the “Law”) prohibits unfair competition, i. e. actions that are aimed at obtaining business advantages in contravention of the common norms of doing business and may cause damages to competitors. Specifically, Article 14.5 of the Law prohibits unfair competition by using someone else’s intellectual property.
Over the past few years, the number of complaints on unfair competition submitted to the Federal Antitrust Service (the “FAS”) by originator pharmaceutical companies has increased significantly. These complaints typically ask for recognition of the circulation of generic drugs prior to the expiry of patent protection for the original product as an act of unfair competition.
A considerable number of such complaints have been satisfied. Manufacturers and distributors of generics were ordered to cease circulation of the respective products and pay significant fines. Moreover, FAS issued official public letters prohibiting the purchase of the concerned generics through public procurement procedures. As a result, many originator companies considered the complaints on unfair competition as effective and resource-saving way of protecting patent rights (especially compared to the traditional court litigation).
Subsequently, some generic companies succeeded in challenging FAS’s decisions in court. So, to date, the prospects of unfair competition complaints by patent holders and their partners are clouded.
This document provides a brief overview of the enforcement practice of FAS and the courts regarding the recognition of the circulation of generics as unfair competition, arguments of the parties in such disputes, and approach of the courts and FAS to the arguments of originator companies and generic market players.