Remedies

Remedies for violations of competition law involving IP

What sanctions or remedies can the competition authorities or courts impose for violations of competition law involving IP?

The Competition Commission has the authority to impose fines on undertakings of up to 10 per cent of the turnover achieved in Switzerland in the preceding three business years. Such fines can be imposed for the following violations of the Cartel Act:

  • horizontal price-fixing, quota cartels and market sharing;
  • vertical price-fixing agreements and vertical agreements on absolute territorial protection; and
  • abuse of a dominant position.

In addition, both the competition authority and the civil courts may impose remedies for violation of competition law involving IP. However, the civil courts may not sanction such behaviour with fines. Further, the Competition Commission is not allowed to impose fines on individuals. There was, however, a legislative proposal that suggested introducing criminal sanctions or administrative sanctions (a ban from the profession) against individuals. The Swiss parliament rejected the whole Cartel Act revision project on 17 September 2014 and therefore also the rules on criminal sanctions.

Competition law remedies specific to IP

Do special remedies exist under your competition laws that are specific to IP matters?

No.

Scrutiny of settlement agreements

How would a settlement agreement terminating an IP infringement dispute be scrutinised from a competition perspective? What are the key factors informing such an analysis?

There is no specific case law available on this matter. As long as an agreement whereby one party agrees not to compete with respect to a patented product is a real settlement agreement and not a hidden market-sharing arrangement, such a settlement agreement should be in compliance with Swiss antitrust law. In Federal Trade Commission v Actavis, the United States Supreme Court held that certain settlements of patent litigation, especially if they involved the payment of ‘large’ sums of money by the patentee to a challenger, can ‘sometimes violate the antitrust laws’. In Switzerland there has been no case relating to ‘pay for delay’ or ‘reverse payment settlements’ so far. It is assumed that the US decision will have no direct impact on Swiss practice. The Swiss authority will most likely base its decisions upon the European model, for example, the Citalopram case (Az COMP/39226 - Lundbeck; where the EU Commission imposed a fine of €93.8 million on the manufacturer as well as fines totalling €52.2 million on four generic companies (Alpharm, Arrow, Merck KGaA/Generics (UK) and Ranbaxy)).