“Noerr-Pennington” doctrine applied in Argentina

1.    Introduction

The Federal Court of Appeals for Civil and Commercial Matters (the “Court of Appeals”) recently revoked a decision from the National Commission for the Defense of Competition (the “Antitrust Commission”) that decided to investigate Monsanto Technology LLC and Monsanto Argentina SAIC (both hereinafter, “Monsanto”) for the potential infringement of competition in Argentina due to the enforcement by Monsanto of certain patent rights outside Argentina. The Court of Appeals accepted, on September 30, 2008, that Monsanto has a constitutional right to petition before judicial authorities and that said action could not be considered as an anticompetitive conduct in Argentina. 

2.    Background

On February 7, 2006, the Argentine Secretary of Agriculture filed an accusation before the Antitrust Commission in which it stated that Monsanto had initiated several legal actions in some countries of the European Union to enforce certain patents’ rights. These actions, according to the Argentine Government, were anticompetitive because they blocked the commerce of soy flour and other soy products imported from Argentina.

The grounds for these legal actions brought by Monsanto was the breach of intellectual property rights over the “Round Up Ready Soybean” (“RR”) and the indemnity that was pursued was that the importers of the soy products pay royalties to Monsanto in the countries where they commercialize those products. While RR patent rights had been denied to Monsanto in Argentina, they had been granted in Europe. The Antitrust Commission decided on September 10, 2007, that this conduct could be considered as an abuse of dominant position and decided to serve Monsanto with notice of the initiation of an investigation.

Monsanto answered this notice and introduced, as a preliminary defense, the lack of reason of the act since the investigation restricted Monsanto’s right to petition before judicial authorities outside Argentina. Monsanto stated that the initiation of judicial proceedings abroad, in order to defend intellectual property rights, could not be considered as anticompetitive under the Argentine Antitrust Law since it was Monsanto’s constitutional right to petition before foreign judicial authorities. This right has constitutional hierarchy and thus cannot be left aside by the law. Monsanto made reference to the “Noerr-Pennington” doctrine developed in the United States.

The Antitrust Commission rejected Monsanto’s defense; however the Court of Appeals revoked, on September 30, 2008, the decision of the Antitrust Commission to initiate the investigations. 

The Court of Appeals decided that there were no elements that would evidence that Monsanto’s legal actions had been baseless. Furthermore, it established that the judicial proceedings had been performed within Monsanto’s constitutional legal right to petition before foreign judicial authorities and, therefore, they were not exercised to harm competition. The Court of Appeals expressly mentioned and applied the “Noerr-Pennington” doctrine developed in the United States (Noerr v. Eastern Railroads, 365 US 127, SCt. and Pennington v. United Mine Workers, 381 US 657, SCt.). Additionally, the Court of Appeals stated that there was no evidence that Monsanto had abused its right to petition before foreign judicial authorities.

The Court of Appeals also stressed that the Antitrust Commission failed to demonstrate the way in which the judicial actions brought by Monsanto outside Argentina could limit, restrict, falsify or distort competition or access to the market or constitute an abuse of a dominant position in the relevant market in Argentina. Additionally, the Antitrust Commission did not prove any possible harm to the general economic interest both on a geographic market and product market level.

3.    Conclusion

The resolution issued by the Court Appeals is relevant since it adopted the “Noerr-Pennington” doctrine developed in the United States. The Court of Appeals established that the right to petition before judicial authorities could not constitute an infringement to the antitrust regime, unless it was clearly demonstrated that said right has been performed to harm competition in Argentina and on an abusive and unfounded basis.

Finally, the resolution also established a limit for the Antitrust Commission’s right to start investigations for potential anticompetitive conducts. The Court of Appeals stated that the facts mentioned by the Antitrust Commission for opening the proceedings were not enough to support the existence of a conduct that justified the initiation of the investigation.