Tying trade mark considerations into your drug development strategy can be a rather challenging task. However, informing yourself about the relevant issues early on can turn this task from a daunting to a manageable one.
We will now explore how pharmaceutical companies can plan their trade mark applications in the UK and EU strategically, to avoid losing their rights prematurely before they enter the market. Exercising foresight and deciding exactly when to apply for a trade mark can help you avert some common problems faced by pharmaceutical companies.
Requirement of ‘genuine use’
As you prepare to enter the market, you may want to apply for a trade mark registration to secure protection for your brand name. With that goal in mind, it is important to remember that in most territories, including in the UK and EU, a trade mark registration may be cancelled (i.e. revoked) if it has not been put to use in an appropriate manner – referred to as ‘genuine use’.
A trade mark registration can only be challenged on the ground of non-use after a certain length of time has passed. The relevant time period after which a trade mark becomes old enough to be potentially vulnerable for revocation varies by jurisdiction. For European Union Trade Marks (EUTMs), which cover the whole of the EU, and UK national trade marks, if the mark is not used within five years of registration, or if subsequently it has not been used for a continuous five years, third parties can seek to cancel it due to non-use. The same period also applies to EU and UK designations of International trade mark registrations (as from the date of protection).
A challenge for non-use may be brought by a third party independently, by way of a cancellation action, or as a result of some enforcement action the trade mark owner has tried to take. This could take the form of a request for proof of use in an opposition or a counterclaim for revocation in an infringement proceeding, for example.
In light of this requirement, it is vital that the owner of a trade mark uses their mark in the relevant time period to avoid losing their rights.
Pharmaceutical companies seeking to launch new medicinal products, which are subject to long clinical trials before being granted market authorisation, may find it especially difficult to navigate this legal requirement.
Does use of a mark in clinical trials constitute ‘genuine use’?
The seminal decision which tackles the question of whether use of a mark in clinical trials constitutes genuine use of that trade mark was held by the Court of Justice of the European Union (CJEU) in the ‘BOSWELAN’ decision [1]. The court answered this question in the negative. As the decision was held prior to the IP Completion Day, when the transitional arrangements of Brexit were finalised, it will remain good law in the UK until it is explicitly repealed.
On the facts, Viridis Pharmaceutical Ltd (‘Viridis’) applied for an EUTM which was intended to be the name of its medicinal product for the treatment of multiple sclerosis. After grant of the EUTM, Viridis had waited more than three years to apply to conduct a clinical trial. During the clinical trial, it had distributed 400,000 capsules in participating hospitals, which was not shown to be a significant number in this sector. All in all, ten years had passed since the trade mark application was made and Viridis had not only not been successful in obtaining market authorisation of its product, but it had not even applied for its approval.
The clinical trials were found by the CJEU to amount to mere internal use within a company and not ‘genuine use’ as such. Internal use is not customer-facing; it is outside competition. By contrast, genuine use of a trade mark is outwardly directed and market-facing. Genuine use of the trade mark takes place when there has been a real commercial exploitation of the trade mark to create or preserve an outlet for the goods or services that bear the trade mark, as distinct from the goods or services of other traders in the market [2]. In other words, the owner must be using the trade mark to educate consumers that the mark is a badge of origin for their business.
The CJEU affirmed that Viridis’ use “had taken place outside of competition, within a restricted circle of participants, and without being designed to obtain or preserve market shares” [3]. As such, it did not amount to outwardly directed, genuine use.
In sum, the principle laid down by the court was that a trade mark registered for a medicinal product can be put to genuine use only where a marketing authorisation has been granted for that medicinal product, or at the very least where the trade mark owner can evidence that the marketing of their product is imminent [4]. For example, if Viridis were able to adduce evidence to show that the clinical trial was about to conclude and/or that it had applied for market authorisation of their product, the court would have likely decided in its favour.
Ultimately, the EU and UK courts will carry out the assessment of genuine use by looking at several factors in order to ascertain whether there has been real commercial exploitation of the mark which can be regarded as warranted in the economic sector concerned to maintain or create a share in the market for the goods or services protected by the mark. For example, in the UKIPO decision ‘MicroGEM’ the Tribunal found that in relation to vitro diagnostic products and services for infectious disease testing, a market share of about 5% was significant in this industry [5].
Possible justifications for non-use
There is a narrow exception to the use requirement in the UK and EU. Namely, if the owner of the trade mark can present evidence of having genuine reasons for not using their mark in the relevant period, their mark may be kept alive.
This exception is stringent. Non-use must result from factors that are outside of the owner’s own control, for example export or legal restrictions such as a trade embargo.
On the facts of ‘BOSWELAN’, Viridis argued that the requirements of an ongoing clinical trial constituted a proper reason for non-use of the contested mark. In response, the CJEU did not rule out the possibility of a clinical trial being capable of constituting a proper reason for non-use of a mark [6]. Yet, it reminded us that this get-out provision only applies when the trade mark owner can show they have faced an “obstacle independent of [their] will”. [7]
Unfortunately Viridis’s delay in obtaining market authorisation was on account of its own choice, and not of a legal obligation. Firstly, Viridis had waited more than three years after the mark was registered to apply to conduct a clinical trial [8]. Secondly, the difficulties experienced in the course of the clinical trial, related back to the insufficient investment secured by Viridis. It chose to apply for a trade mark at a time when there was great uncertainty as to both the date and the possibility of the marketing of the product covered by that trade mark.
Had Viridis exercised a more forward-looking approach at the time of application, the cancellation of its trade mark could have been avoided. For example, in another decision concerning an application to cancel the registered EUTM ‘NOCDURNA’ the EUIPO Cancellation Division ruled that pending marketing authorisations for pharmaceutical products in the EU constitute a proper reason for non-use of an EUTM [9]. The trade mark owner adduced evidence to show that it had already initiated marketing authorisation proceedings for its pharmaceutical product in the EU. The difference was that the owner of ‘NOCDURNA’ applied for its trade mark when it was about to initiate market authorisation proceedings, whilst the owner of ‘BOSWELAN’ had not even started its clinical trials at the time of the trade mark application.
It is important to keep in mind that a decision of the EUIPO Cancellation Division is not binding on the UKIPO or the UK courts. However, it seems likely that a similar decision might be reached in the UK.
When should you apply to register a trade mark?
It is typically desirable to file a trade mark application for your brand name as soon as possible, in order to secure the earliest possible filing date. In the UK and EU, this is the date from which your rights in the resulting trade mark registration are considered to begin, unless there is a priority claim.
However, pharmaceutical companies need to be especially considerate when deciding to file an application for a trade mark. Acting too early could leave a registration vulnerable and effectively unenforceable. Timing the application wisely can help minimise the risk of a trade mark being cancelled before the product enters the market.
To that end, be prepared to ask yourself the following questions:
- What is the relevant period for making a trade mark vulnerable to cancellation on the ground of non-use in the relevant country?
- When will I start clinical trials?
- How long can I expect clinical trials to last?
- When do I hope to apply for market authorization?
It is likely you will need to hold filing until you are reasonably sure that clinical trials will be concluded, and marketing authorisations achieved, within five years.
As you navigate your journey towards market authorisation, our trusted advisors will be on hand to advise you on the best branding strategy for your business.
References
- Viridis Pharmaceutical v EUIPO C-668/17 P
- Ansul Case C-40/01 [37]
- Viridis Pharmaceutical v EUIPO C-668/17 P [50]
- ibid. C-668/17 P [44], [50 – 58].
- O/315/22 [60]
- Viridis Pharmaceutical v EUIPO C-668/17 P [70]
- ibid. [71]
- ibid. [69]
- Cancellation No 12 497 C (Revocation) [page 7].
