The EU Court of Justice rules that payment of royalties under a licence agreement where the patent was held invalid may be compatible with Article 101 TFEU (Genentech / Hoechst)

License fees, invalid patents and Article 101 TFEU: Genentech v Hoechst and Sanofi Aventis* Consider an agreement under which a license fee is payable for use of a patented technology even if it transpires that the patent is invalid. Is such an agreement contrary to Article 101 TFEU? The answer is no, provided that the licensee is able freely to terminate the contract by giving reasonable notice. Some years ago the ECJ so held in relation to expired patents: C-320/87 Ottung [1989] ECR 1177 at §13. The recent decision in C-567/14 Genentech v Hoechst and Sanofi-Aventis clarifies that the same proposition applies to revoked patents (and indeed to patents which are valid but have not been infringed). The case also throws into sharp relief the tensions that may arise between European

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  • Blackstone Chambers (London)

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Ajay Ratan, The EU Court of Justice rules that payment of royalties under a licence agreement where the patent was held invalid may be compatible with Article 101 TFEU (Genentech / Hoechst), 7 July 2016, e-Competitions Bulletin Competition in the Pharmaceutical sector, Art. N° 81673

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