When should a pharmaceutical company apply for a trademark for its medicinal products?

The pharmaceutical market presents unique challenges to pharmaceutical companies seeking to launch new medicinal products. Before they can introduce a new medicinal product on the market, they must go through a lengthy process of executing clinical trials as a prerequisite for obtaining a market authorisation. A crucial question in this context is whether they could already register their trademark during the clinical trials phase, without risking revocation of their trademarks (i.e. due to non-use when the marketing approval process outlasts the five-year grace period).

In its decision dated 3 July 2019, the CJEU stated that when choosing to register a trademark for their medicinal product early on, pharmaceutical companies will either have to make sure that they are certain to obtain a marketing authorisation within the five-year timeframe or to make sure that they invest sufficient financial resources to reasonably expect obtaining a marketing authorisation within the five-year timeframe.

The case brought before the CJEU

On 3 July 2019, the Court of Justice of the European Union (CJEU) rendered an important decision for pharmaceutical companies. The case revolved around a trademark dispute, in relation to medicinal products, that raised two far-reaching issues concerning the scope and definition of the requirement of genuine use within the provisions of Article 58 of Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trademark (“EUTMR”). You can read the judgement here (in Dutch, currently not available in English).
The decision was given in the context of an appeal brought by Viridis Pharmaceutical Ltd. (“Viridis”) against the judgment of the General Court in Case T-276/16, Viridis v European Union Intellectual Property Office (“EUIPO”). The primary proceedings concerned the revocation by the EUIPO of the EU trademark “Boswelan”, registered by Viridis for class 5 of the Nice classification (pharmaceutical and sanitary preparations), following the application filed by Hecht-Pharma GmbH to have the trademark revoked due to lack of genuine use for a period of more than five years by Viridis.

In short, the main points of discussion were whether the use of the trademark during clinical trials may constitute genuine use and, if not, whether conducting clinical trials, as a prerequisite for receiving a market authorisation, may constitute a proper reason for non-use.

Genuine use

According to settled case law, genuine use is made of a trademark within the meaning of Article 51(1)(a) of Regulation No 207/2009 (now article 58.1(a) EUTMR), when it is used, in accordance with its essential function of ensuring the identity of the origin of the goods or services in respect of which it is registered, to find or preserve an outlet for those goods or services, to the exclusion of any symbolic use intended solely to enforce the rights conferred by the trademark (judgements of 11 March 2003, Case C-40/01 Ansul, EU:C:2003:145, paragraph 43, and 8 June 2017, W.F. Gözze Frottierweberei and Gözze, Case C-689/15, EU:C:2017:434, paragraph 37 and the case law cited there).

Thus, the normal use of the trademark presupposes that it is used on the market for the goods or services protected by the trademark and not only within the undertaking concerned. The use of the trademark must relate to goods or services which have already been placed on the market or which can be placed on the market at any time, and the company is preparing to do so with a view to winning customers, in particular in the context of advertising campaigns (see, to that effect, Case C-40/01 Ansul v Commission [2003] ECR I-145, paragraph 37).

On the other hand, the affixing of a trademark to goods which are not supplied to the customer with a view to their penetration into the market for the goods covered by the trademark registration cannot be regarded as genuine use of that mark, since such affixing does not help to find a market for those goods or to distinguish them, in the interests of consumers, from goods originating from other undertakings (see, to that effect, Case C-495/07 Silberquelle v Commission [2009] ECR I-10, paragraph 21).

After recalling the settled case law and general principles on genuine use, the CJEU went on to address the first plea.

The CJEU affirmed the observations of the General Court:

  • That Viridis had adopted preparatory acts which consisted in the conduct of a clinical trial carried out in view to apply for marketing authorisation and which included certain acts in the form of advertising for that trial;
  • However, the use of the trademark during the clinical trials could not be equated with marketing or even with a direct preparatory act, but had to be regarded as an internal use, since that use had taken place outside competition, within a limited circle of participants, and without its purpose being to obtain or maintain market shares. Also, the use (400.000 capsules) had not been shown to be significant in the pharmaceutical sector;
  • In addition, Viridis did not demonstrate that the marketing of the medicinal product designated by the trademark was imminent since it had not produced any evidence to show that the clinical trial was almost complete; and
  • In any event, only the acquisition of a marketing authorisation by the competent authorities could have allowed a public and outward-looking use of the trademark, since the legislation on medicinal products prohibits the advertising of medicinal products which have not yet been the subject of marketing authorisation and, consequently, any communication intended to gain or maintain a market share. It was therefore impossible to use the trademark designating a medicinal product on the relevant market as required by the settled case law.

The CJEU dismissed the following two arguments of Viridis as irrelevant:

  • The fact that the acts of use relied on were in conformity with the applicable legal provisions; and
  • The argument that the five-year period to make genuine use is inadequate for the pharmaceutical sector and does not take into account the specific circumstances of the pharmaceutical market.

The CJEU thus followed the reasoning of the General Court and declared the first plea in law partly unfounded and partly irrelevant.

Proper reasons for non-use

Again, the CJEU started with recalling the settled case law and general principles on proper reasons for non-use. According to the case law of the Court, only obstacles which are sufficiently directly related to a trademark and render its use impossible or unreasonable and which are beyond the control of the proprietor of that mark can be regarded as ‘valid reasons’ for non-use of that mark. It must be determined on a case-by-case basis whether a change in the business strategy in order to overcome the obstacle in question would render the use of that mark unreasonable (judgments of 14 June 2007 in Case C-246/05 Häupl, EU:C:2007:340, paragraph 54, and of 17 March 2016 in Case C-252/15 P Naazneen Investments v OHIM, not published, EU:C:2016:178, paragraph 96).

Regarding the second plea, the CJEU affirmed that conducting a clinical trial may constitute a proper reason for non-use, but observed that the acts and events in the present case, were within the sphere of influence and under the responsibility of Viridis and, therefore, could not be regarded as obstacles which arose outside its control.

The CJEU argued that Viridis had already, on the basis of its own choice and not on the basis of any legal obligation, applied for registration of the trademark even though there was considerable uncertainty as to both the date and the possibility of marketing the goods designated by that mark, since those goods were in the clinical trials phase. It noted that Viridis’ application for a clinical trial had been submitted more than three years after the registration of the trademark. Also, the difficulties alleged during the clinical trial in question were, in view of the specific characteristics of the sector concerned, due to insufficient investments by Viridis.

With the above reasoning, the CJEU declared the second plea unfounded and dismissed the appeal in its entirety.

Key takeaways

It can be tricky to register a trademark in relation to a medicinal product for which no market authorisation has yet been obtained. Pharmaceutical companies will have to determine whether or not the benefit of registering the trademark early on outweighs the risk of losing the trademark due to non-use.

The judgement, read together with the opinion of AG SZPUNAR, makes it clear that the chances for a pharmaceutical company to make genuine use of their registered trademark during the clinical trial phase are, although not fully excluded, very low. The use during clinical trials, no matter how quantitatively large, is aimed at testing the medicinal product (scientific objective) and is not aimed at maintaining or creating a share in the market for the goods or services protected by the mark (economic objective). The restrictions flowing from the legal framework relating to medicinal products (prohibition of sales and advertisement of non-authorised medicinal products) make it (nearly) impossible to make genuine use of the registered trademark during the clinical trial phase.

When choosing to register a trademark for their medicinal product early on, pharmaceutical companies will thus either have to make sure that they are certain to obtain a marketing authorisation within the five-year timeframe or to make sure that they invest sufficient financial resources in order to reasonably expect to obtain a marketing authorisation within the five-year timeframe.

The CJEU confirmed that a clinical trial and the restrictions of use flowing from the legal framework relating to medicinal products that go with it may constitute a proper reason for non-use.

However, pharmaceutical companies’ own behaviour in coping with the legal barriers to use its trademark is also taken into consideration when examining the proper reasons for non-use. Waiting three years after registering the trademark to start the clinical trials with insufficient funds will clearly not suffice for the CJEU. Conversely, the reasoning of the Court does seem to suggest that a pharmaceutical company that registers a trademark and starts the clinical trials early on with sufficient funds and reasonable expectations of finishing the clinical trials and obtaining a market authorisation to make use of the trademark before the expiry of the five-year period, may successfully invoke clinical trials and the unexpected delay during the clinical trials as a proper reason for non-use.

In sum, the decision teaches us that timing, careful assessment and awareness are essential when it comes to applying for and maintaining a trademark for medicinal products in the pharmaceutical context.

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Eric De Gryse and Christopher Dumont

You may always contact us should you have any questions.
eric.degryse@simontbraun.eu – +32 2 533 17 52
christopher.dumont@simontbraun.eu – +32 2 533 17 58

Benelux Trademarks: Extension of the procedures with the Office and centralisation of the appeals with the Benelux Court of Justice

On 1 June 2018, the amendments[1] to the Benelux Convention on Intellectual Property (BCIP), adopted in 2014, entered into force. From 1 June on, new powers are attributed to both the Benelux Court of Justice (BCJ) (1) and the Benelux Office of Intellectual Property (BOIP) (2). Furthermore, a new opposition ground – currently already available to opponents of EU trademarks – is available (3). The implementation of the second EU harmonisation directive is on track but still not in force.

Article also available in French, Dutch and German.

Centralisation of the appeals filed against the decisions of the BOIP with the second chamber of the BCJ

Until now, appeals against decisions of the BOIP (refusal or opposition decisions) had to be filed before the Courts of Appeal of Brussels, The Hague or Luxemburg, depending essentially on the residence of the trademark applicant.

According to the new article 1.15bis BCIP, the BCJ becomes the unique and central jurisdiction for all appeals against decisions of the BOIP in the framework of its attributions under titles II, III and IV BCIP (trademarks, designs, amendments of registrations and i-depot procedure).

The new competence of the second chamber of the BCJ replaces the current competence of the national courts of appeal as regards these decisions. Further to the intended harmonisation of case law, the centralisation of all appeals before the same court aims at enhancing procedural efficiency.

The appeal period is two months, irrespective of the type of BOIP decision against which the appeal is launched. Whereas the procedure in first instance before the BOIP can be conducted in French, Dutch or English, the appeal is introduced either in French or Dutch. Attention must be drawn to the fact that the choice of language in the appeal proceeding depends, according to article 1.6 of the rules of procedure of the BCJ, not on the language of the procedure in first instance, but on the sole choice of the appellant. Consequently, even if the proceedings before the BOIP have been conducted in Dutch, the appellant will be allowed to launch the appeal in French, and conversely. It is furthermore of interest to note that the rules of procedure do not foresee the possibility to bring incidental appeals before the BCJ’s second Chamber.

The appeal against the second Chamber’s decisions will be brought before the First Chamber for legal review only (analogous to the Dutch Supreme Court “Hoge Raad” and the “Court of cassation” in Belgium and Luxembourg). The First Chamber also retains competence of preliminary rulings concerning questions asked by national courts about the BCIP. Both First and Second Chambers should be entitled to submit preliminary questions to the Court of Justice of the European Union.

Filing invalidity and revocation applications to the BOIP

Until now, invalidity and revocation proceedings had to be filed before Belgian, Dutch or Luxemburg national courts. From 1 June on, the BOIP and the national courts have concurrent jurisdiction.

It is now possible, through an administrative procedure, to obtain the invalidation of a trademark on absolute (a.o. against signs which cannot constitute trademarks, lack distinctiveness, etc.) or relative grounds (a.o. against identical or similar prior trademarks), or to claim its revocation in the absence of genuine use. With these new administrative remedies available under chapter 6bis, the BCIP is now in line with the EU trademarks regulation, which already provides for an administrative procedure before the EUIPO. It will be up to the claimant to launch either a procedure before a national court (ruled by articles 2.27 and 2.28 BCIP) or an administrative procedure before the BOIP (new chapter 6bis, new articles 2.30bis until 2.30quater). Such choice will depend on strategic considerations. In this respect, it is noteworthy that the administrative proceedings are suspended when the trademark on which the invalidity or revocation action is based (article 2.30ter, sub 2.a.iii BCIP) or the trademark against which said action is directed (article 2.30ter, sub 2.b.iii BCIP), is subject to a judicial nullity or revocation procedure. Furthermore, a counterclaim for infringement will not be possible before the BOIP, but only before national courts.

As reported sub (1), as from 1 June 2018, appeals against final decisions of the BOIP in these matters will have to be filed before the second chamber of the BCJ.

New opposition ground: well-known trademarks

Under the previous law, the opponent could only act against an identical or confusingly similar trademark registered for identical or similar goods or services (previous article 2.14, al. 1 BCIP). Today, the BOIP is regarded as having the necessary resources to handle a broader range of opposition grounds. Hence, an additional ground for opposition is made available: the opponent, owner of a well-known trademark, can invoke such trademark to oppose a later trademark even if different goods or services are concerned, subject to the respect of the other applicable conditions. Article 2.14 BCIP was modified accordingly.

*

All amendments outlined above entered into force on 1 June 2018 for procedures initiated as from that date. This means, in particular, that the previous article 2.14, al. 1 BCIP (limited grounds for opposition) remains applicable to all opposition proceedings launched before 1 June 2018.

*      *      *

For any question or assistance, please contact
Emmanuel Cornu and Eric De Gryse
emmanuel.cornu@simontbraun.eu
eric.degryse@simontbraun.eu
+32 (0)2 543 70 80

[1] Protocol of 21 May 2014 and Protocol of 16 December 2014.

Simont Braun promotes Philippe Campolini to Partner

Simont Braun is delighted to announce that Philippe Campolini has been promoted to partner, effective may 1, 2017.

Philippe started his career 10 years ago with Simont Braun’s Intellectual Property department and has become an expert in patent law and copyright. “He has always been a key asset to our IP department, contributing to the high level of quality and professionalism, which characterizes the firm, as well as bringing contagious energy to the team,” says Fernand de Visscher, head of Simont Braun’s Intellectual Property practice.

Philippe Campolini advises major national and multinational companies active in various sectors, in particular the medical devices, life sciences, automotive, and IT sectors.

Philippe is appreciated for his tough analytical skills and perseverance in defending clients’ interests both in and out of court. He has significant experience in drafting cast-iron licensing, technology transfer and R&D cooperation agreements. Our clients can also count on Philippe’s in-depth knowledge of trade practices and unfair competition law, especially advertising and trade secrets law.

“With his sharp mind and pragmatism, Philippe is an excellent addition to our partnership,” says Managing Partner Vanessa Marquette. “Fluent in French, English, Dutch, German, Italian and Spanish, he will strengthen both the national and international development of our patent law and copyright practices.”

Contact: Philippe Campoliniphilippe.campolini@simontbraun.eu – +32 (0)2 533 17 17

Curing rules on parallel import of pharmaceuticals?

On 7 November 2016 the Belgian Supreme Court (Cour de cassation – Hof van cassatie) gave judgment in two cases regarding the repackaging of pharmaceuticals, wherein it ruled in favour of the parallel importer with respect to the exhaustion of trademark rights principle. Simont Braun represented with success the defendant in these two cases.

Just three days later, on November 10, 2016, the CJEU gave a preliminary ruling on a question submitted by a Danish court in a similar case.

All three cases dealt with the issue of whether a trademark owner can oppose the parallel import of trademarked pharmaceuticals of which the packaging format has been modified.

The Belgian proceedings concerned the medicine ‘Cozaar’, containing the active component ‘Losartan’ in a dose of 50 milligrams in one case and a dose of 100 milligrams in the other case, both manufactured by Merck and imported by Pi Pharma into Belgium from Poland. In both proceedings, Pi Pharma bought the most common Polish packaging format of 28 tablets and repackaged these in formats of 98 tablets for the Belgian market.

In the Danish case, the parallel importer Orifarm imported the medicine ‘Klyx’ from Norway to Denmark, after having repackaged it from boxes containing 10 doses into boxes containing 1 dose. In the Danish case, just like in the Belgian 50-milligram case, both packaging formats at stake (i.e. the formats before and after repackaging) were available in the importing as well as in the exporting State. In the Belgian 50 milligram case, the 28 tablets packaging represented only 2% of the market, while in the 100-milligram case, the 28 tablets packaging was absent in the Belgian market.

Both the CJEU and the Belgian Supreme Court start their judgments by recalling the previous CJEU case law on the interaction between the principle of free movement of goods and the trademark rights. According to this case law, a trademark owner can only oppose importation of previously marketed and repackaged products within the EU or EEA if such opposition does not contribute to the artificial partitioning of the single market. Such partitioning occurs when the repackaging is objectively necessary to allow the importer to sell the repackaged products in the importing State. This may be the case when the product cannot be marketed in the importing State because of, in particular, a rule authorizing packaging only of (a) certain size(s) or a national practice to the same effect, sickness insurance rules making the reimbursement of medical expenses depend on the size of the packaging, or well-established medical prescription practices based, inter alia, on standard sizes recommended by professional groups and sickness insurance institutions. Then, where, in accordance with the rules and practices in force in the importing State, the proprietor uses several different sizes of packaging in that importing State, the finding that one of those sizes is also marketed in the exporting State is not enough to justify the conclusion that repackaging is unnecessary. Partitioning of the markets would exist if the importer were able to sell the product only in a limited part of the market.

The Belgian Supreme Court applied this case law by ruling that a trademark owner cannot oppose the repackaging and parallel import if the importer proves that without repackaging he would have access only to a limited part of the market in the importing State. In order to assess this, the Brussels Court of appeal had taken into account the whole Belgian market (all packaging formats) of the active component in their doses of 50 and 100 milligram respectively. The Court of appeal noted that the sale of 28 tablets packaging formats of the 50 milligram Cozaar in that market was marginal (2%) due to the Belgian popularity of the 98 tablets version. This was considered sufficient to prove that the pharmaceuticals in the 28 tablets format could be marketed in a limited part of the Belgian market only, thereby depriving the importer of effective access to the market as a whole. In the proceedings regarding the 100-milligram doses, the 28 tablets format was even inexistent in Belgium, so that the repackaging was also considered necessary. This analysis of the Brussels Court of appeal was explicitly confirmed by the Belgian Supreme Court in the 50-milligram case (in the 100-milligram case, the appeal was dismissed by the Supreme Court for mere procedural reasons). In both cases, repackaging has been objectively determined by the Court of appeal as necessary in order to enable entering the Belgian market. Allowing a trademark holder to oppose the repackaging in such circumstances would lead to the creation of artificial barriers to national markets and would undermine the EU/EEA single market.

A couple of days later, the CJEU went on to apply the same rules in the Danish case. The referring court asked whether the contested repackaging (from packets of 10 doses to packets of 1 dose) could be considered as “necessary” given that the products were available in both formats in the importing and exporting States, while the parallel importer argued that the partitioning of markets is an inherent consequence of the opposition to the repackaging, because the importer could then penetrate the Danish sub-market of packets of one dose of Klyx solely by importing the product in the same packaging from Norway.

On this specific point, the CJEU stated that it was not apparent from the court bundle that the market for Klyx in packets of 10 doses represents only a limited part of the market of the importing State, namely Denmark, and that it is for the referring national court to determine if such a condition is met in the main proceedings.

This led the CJEU to conclude that trademark owners may object to parallel import of repackaged pharmaceuticals when (i) the medicinal product at issue can be marketed in the importing State in the same packaging as that in which it is marketed in the exporting State and (ii) the importer has not demonstrated that the imported product can be marketed only in a limited part of the importing State’s market.

Whether these judgments in any way “cure” (or clarify) the rules on the parallel import of pharmaceuticals is doubtful. As it appears from this case law, the central question is : what is a “limited part” of a market? The Belgian cases confirm that 0% or 2% of a market are limited parts of that market, which seems rather obvious. However, the question whether, under what circumstances and to what extent a part of a market will be determined as a “limited” part of that market, is a very factual question that remains open and will need to be clarified on a case-by-case basis.

Fernand de Visscher, Eric De Gryse and Philippe Campolini

European patents – Late filing of a translation in Belgium: new special restoration procedure with retroactive effect

In a previous article, we commented on the special restoration procedure that was instituted by the Belgian legislator in favour of European patent holders that had forfeited their rights because the translation of their patent was filed too late with the Belgian IP Office (OPRI). Amongst other things, we noted in our previous news that this special restoration procedure, only available for a one-off period of six months ending on 22 March 2015, was only open (under certain conditions) to European patents that had been subject to an opposition or a central limitation procedure. We commented on that limitation by saying that this requirement “might be viewed as a form of discrimination that the Constitutional Court could judge contrary to the equality rule, combined with the respect due to the right of property.” We concluded as follows:

“Although the law only refers to European patents “maintained as modified or limited”, we believe that it should also be possible to file a special restoration application for patents issued without opposition or limitation. If the OPRI were to refuse to grant restoration and that decision were appealed against, it can doubtlessly be expected that a reference would be made to the Constitutional Court for a preliminary ruling.”

Our analysis was confirmed by a judgment of March 2015 by the Brussels Court of Appeal. As a consequence, and to avoid any further problems, the Belgian legislator recently instituted a new special restoration procedure. This time the procedure is also open to European patents that were not subject to opposition or limitation procedures and that could therefore not benefit from the initial special restoration procedure.

What are the requirements for being able to use this new special restoration procedure?

The date of grant of the European patent cannot be later than 21 September 2014;

  • The patent owner had no access to any of the other restoration procedures instituted by the Belgian legislator (i.e. the “normal” restoration procedure in case of translations filed with delay or the first special restoration procedure ending on 22 March 2015) ;
  • A translation of the patent has been filed, but too late;
  • The request for this new special restoration is filed before 5 January 2017.

If you think one of your European patents, or one of your client’s European patents, could be in this situation, you should urgently consider filing a request for restoration with the Belgian IP Office. We are at your disposal should you need any further information on the above.

Fernand de Visscher, Eric De Gryse and Philippe Campolini

 

Validation of European patents in Belgium: filing of a translation no longer required as from 2017

From the 1st of January 2017 onwards, the filing of a translation with the Belgian Intellectual Property Office will not be required any longer in Belgium for European patents delivered in English.

This new regime will only be applicable to European patents of which the mention of the grant or the maintenance, in amended or limited form, are published from the 1st of January 2017 onwards.

If the mention is published before that date, the filing of a translation of the European patent will still be required.

See here the letter of the Belgian Intellectual Property Office of 30th of September 2016.

Fernand de Visscher, Eric De Gryse and Philippe Campolini

 

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