A recent European court ruling warns developers of pharmaceuticals against applying too early for trade mark protection.
The requirement for use
Holders of registered trade marks must make active use of the mark in order to maintain their registration. This rule is necessary to prevent unscrupulous operators from registering brands that they have no intention to use simply to take them out of action for others (a practice sometimes referred to as trade mark squatting). However, the requirement to use does not apply if the holder can give proper reasons for non-use, based on the existence of genuine obstacles outside their control. An indication of relevant obstacles is given in the international TRIPS Agreement on IP: import restrictions or other governmental requirements for the protected goods and services. The types of obstacles that are acceptable have also been explored in case law – delays in issuing operating licences for supermarkets (for example) could be sufficient.
The pharmaceutical development process
Pharmaceutical products are subject to a long testing and approval process that can take upwards of ten years. That means that the timing of an application for trade mark protection is important. Apply too early and you can find that you have used up the period allowed for non-use well before the product is approved for marketing in the relevant jurisdiction.
In this case, Viridis Pharmaceutical obtained a registration of trade mark BOSWELAN for pharmaceutical products in 2007. The trade mark was granted at EU level, meaning that it applied across all 28 member states of the EU, but similar rules apply to national trade marks. In 2013 Hecht-Pharma challenged the registration on the basis of five years’ non-use. Both Hecht-Pharma and Viridis’s commercial partner Pharmasan had an interest in products based on a traditional medicinal plant Boswellia serrata.
Two questions arose:
- Could Viridis’s clinical trials activity be regarded as use of the trade mark?
The court said it could not. Until a marketing authorisation is granted it is illegal to promote a product to relevant purchasers. This is inconsistent with the obligation to create or maintain a market for goods or services as required by trade mark law. The clinical trial activity being pursued by Viridis was an internal matter and it did not meet the threshold for establishing use of the trade mark.
- Was the requirement to carry out clinical testing in order to seek marketing approval a sufficient obstacle to justify the delay in using the mark?
Again, the answer was no. Although this question should be analysed on a case by case basis, the reasons for delay here were not adequate. Viridis could have put more financial clout behind the clinical testing programme, in order to make faster progress. Only obstacles that fell outside the control of the trade mark proprietor were relevant considerations for this question.
The court’s view was that Viridis had applied too early for the trade mark, given the uncertainty about whether a marketing authorisation would be granted and how long it would take. The court did not completely rule out ongoing clinical trials as a reason for delay, but clearly it would be dangerous to plan to leave the trade mark unused for an extended period.
Take away points
Normal industry practice is to commence clinical trials before finalising branding strategy. There is nothing to stop a developer from applying for trade marks before the marketing authorisation is granted – indeed this workstream needs to run alongside the final stages of the drug development process. Medicines regulators, whether at national or EU level, will need to approve the brand name before it can be used. But applying years in advance of any prospect of bringing a product to market is unwise.
It is worth noting that enforcement of the trade mark may also be affected. The EU Trade Mark Directive includes a defence of non-use of a claimant’s mark in infringement proceedings. For the UK this is a new rule, where previously a defendant had to issue a counterclaim for revocation, and it means that anyone sued for infringement can require the trade mark owner to prove that the trade mark has been used or that there are proper reasons for not doing so. So if you wanted to sue a competitor who is threatening to spoil your product launch by using a similar trade mark, for example, you need to be confident that the registration is not exposed to a non-use defence which could lead to revocation of the trade mark.