‘I have the opportunity to contribute to the seminal debate on the interface between competition law and intellectual property law.’

Personal profile
Name: Dr Avantika Chowdhury
Position: Senior Consultant
Oxera career: Consultant 2008, Senior Consultant 2012
Education: Phd Economics, Pennsylvania State University,
Msc Quantitative Economics, Indian Statistical Institute
Bsc Hons Economics, Calcutta University

Project profile
Client: Lupin
Sector: Health & Pharmaceuticals
Project: Patent settlement agreement
Skills: Competition Economics

Q: Avantika, you worked on the patent settlement agreement with pharmaceutical company, Lupin. What was your client’s issue and the core aim of the project?
A: Lupin asked us to help to support its defence against a European Commission allegation of anticompetitive behaviour through a patent settlement.

Along with other firms producing generic drugs, the client had agreed to settle with a large pharmaceutical player, Servier, to resolve a patent litigation. The Commission alleged that the settlements were anticompetitive because they’re likely to have delayed the entry of generic versions of a drug into the market. The client’s view was that they would not have entered the market in any event because of other difficulties.

Q: Why was this case relevant to Oxera?
A: This is one of the seminal cases in the interface between competition law and intellectual property law. While IP law provides the innovator with a period of exclusivity, through the grant of monopoly rights via a patent, competition law aims to reduce such monopoly market structures, which may not be compatible with IP law in the short run.

Q: What did we do for the client?

A: We provided economic analysis of two issues, to assist Lupin with its case.

First, the Commission had adopted a straightforward legal approach, arguing that the client could not supply its generic drug because it had settled with Servier. In doing so, the settlement had delayed generic entry and was anticompetitive.

To counter this argument, we developed an economic framework to assess the client’s incentive to sue and to enter with or without the relevant settlement. This completely different approach showed a range of possibilities and considerations beyond the Commission’s argument. In addition, we used game theory to model Lupin’s incentives to free-ride on the back of another generic producer that was disputing the same issue in the courts, and to show that the settlement was not necessarily harmful to consumers.Second, we provided advice on the Commission’s analysis of the value of Lupin’s patents transferred to Servier, exploring three approaches to patent valuation: cost-based,income-based and market-based.

Q: In this instance, the Commission ruled against our client. What did we learn?
A: All is not lost for our client. The case is likely to go to appeal and will be decided by the European Court. For Oxera, we had the unique opportunity to apply economics analysis to a complex legal case and have placed ourselves at the centre of the debate about the apparent conflict between IP and competition law.