The Advocate General, whose opinion is usually followed by the Court of Justice, tried to limit the effect of his opinion by applying it only to cases where the rival company intends to use the license to produce goods or services that are different from those produced by the dominant company.
At issue is the right of NDCHealth to demand a licence to the marketing database of its larger rival, IMS Health. Both are US companies.
IMS Health makes over a billion dollars a year in data sales. The dispute concerns its control of sales data gathered in Germany. The company uses a pharmaceutical tracking service called RPM 1860. A key component of this service is called the "1860 Brick Structure". RPM 1860 helps German pharmaceutical companies track the flow of drug products, dividing the German pharmacy market into 1,860 regional districts.
The problem for NDCHealth, which offers a similar service to its rival, is that it failed to break the German market because potential customers had become so familiar with the 1860 Brick Structure that they didn't want the German market categorised in any other, incompatible way.
So NDCHealth tried to break the market into 1,860 segments – and was successfully sued by IMS Health in Germany, on the grounds of breaching regulations that give copyright protection in databases.
The German court referred the matter to the Court of Justice, which has already heard arguments from the companies concerned. The influential opinion of the Advocate General, Antonio Tizzano, has far reaching implications.
The Advocate General considered that the refusal to grant a licence may constitute an abuse of a dominant position if there is no objective justification for such a refusal; and by refusing to grant a licence, the rights holder ends up eliminating competition in the marketplace.
An exception applies if the company seeking the licence intends to produce goods or provide services with "different characteristics" which, while in indirect competition with the rights holder, meet particular needs of consumers not met by the rights holder's goods or services.
According to experts this means that market leaders may find it difficult in future to protect their market share through the licensing of their trade marks or patents.
"The Advocate General's opinion represents an interesting development in intellectual property law," said John MacKenzie, an intellectual property lawyer with Masons. "The essence of statutory intellectual properly is that it creates a restricted monopoly. This opinion may create an opening for others looking to obtain licences where previously the rights holder had refused to issue them."
IMS welcomed the ruling. In a statement it said:
"IMS is pleased with the Advocate General's opinion. The opinion supports IMS's core position: that a license of intellectual property is neither required nor appropriate if the licensee intends to use that intellectual property to produce the same goods or services in the same market."
The company added that it would seek substantial monetary damages in the German Courts for the copyright infringement.
The Opinion is available, in German, Spanish, French, Italian, Portuguese, Finnish and Swedish. An English translation was not available at the time of writing.
