Procedures and strategies for pharmaceutical brands: Germany
Selection, clearance and registration
One of the most important and widely discussed topics in the life sciences sector over the last few years has been healthcare compliance – in particular, for pharmaceutical companies in Germany.
Cooperation between the pharmaceutical industry and other members of the healthcare sector – such as doctors – must comply with statutory laws (eg, criminal law and competition law). This is particularly true regarding invitations to congresses, sponsorship, gifts and donations.
Although a number of decisions have been issued addressing corruption of chief executive officers in other business fields, in a 2012 judgment the Federal Court of Justice decided that a resident doctor does not act as an official or representative of the statutory health insurers (see Case GSSt 2/11, March 29 2012). Therefore, liability for bribery of officials or bribery in commercial transactions under the Criminal Code does not apply to resident doctors.
Following this decision, on April 14 2016 Parliament passed the Act to Combat Corruption in Healthcare. This act still requires approval by the Federal Council.
The main innovations of the proposed act are the inclusion in the Criminal Code of new Sections 299a and 299b, covering active and passive bribery in healthcare. The criminal offences apply not only to doctors, but to all medical professionals.
In practical terms, the proposed act will require adjustments to the relevant compliance guidelines and the practice of compliance departments in pharmaceutical and medical companies. Any practice of sponsorship will require strict critical review. The frequency of prosecution is likely to increase significantly once the law comes into force.
Confusion with INNs
International non-proprietary names (INNs) facilitate the identification of pharmaceutical substances or active pharmaceutical ingredients. Each INN is a unique name that is globally recognised public property. To avoid confusion, which could jeopardise the safety of patients, trademarks should not be derived from INNs or contain common stems used in INNs.
In practice, descriptive trademarks using INNs are attractive, but enforcement may turn out to be difficult. Recent case law in Germany suggests that the greater the deviation from the actual INN (ie, through abbreviation or combination with other word elements), the higher the level of distinctiveness.
For instance, the Federal Patent Court found that the trademark DORZOTIM is confusingly similar to the applied-for younger trademark DOROTIM-OPHTAL (Case 30 W (pat) 19/13, January 23 2014). The court determined that an abbreviation of the INN Dorzolamid could be seen in the element ‘dorzo’ and an abbreviation of the INN Timolol could be seen in the element ‘tim’. However, this did not result in a presumption of inherent weak distinctiveness. The opposing mark DOROTIM-OPHTAL also formed a new artificial word by combining the abbreviations of two INNs, giving it a normal level of distinctiveness. The element ‘ophtal’ was disregarded as a clear indication of its application area (ie, ophthalmology).
The Federal Patent Court found the trademark VERAMEX to be confusingly similar to the applied-for younger trademark BESAMEX (Case 29 W (pat) 117/12, September 17 2014). The court decided that the opposing mark had an average level of distinctiveness. For the relevant public, the word element ‘vera’ referred to the INN Verapamil. However, in this case the descriptive element was combined with the non-descriptive element ‘mex’ – relating to a fantasy term – resulting in above-average distinctiveness. Therefore, the court held that overall, the word combination VERAMEX was an imaginative word formation with average distinctiveness.
The Federal Patent Court denied a likelihood of confusion between the opposing trademark DORZO and the applied-for younger trademark DORZO PLUS T STADA (Case 30 W (pat) 42/13 December 24 2015). The court pointed out that both health professionals and end consumers would understand the element ‘dorzo’ to be a reference to the active ingredient Dorzolamid. Therefore, the distinctiveness of the earlier trademark was low and the extra elements included in the younger trademark were sufficient to exclude a likelihood of confusion. Even if the element ‘stada’ could be recognised as the company name, the additional elements ‘plus t’ merged to a uniform element.
The same applies in application proceedings. For instance, the Federal Patent Court confirmed the rejection of the trademark MPH, since it was an abbreviation for the medical ingredient Methylphenidat – used to treat attention deficit syndrome – and therefore descriptive in respect of pharmaceutical products (Case 29 W (pat) 78/12, July 15 2015). Regarding the applied-for services in Class 41, the term ‘MPH’ may be understood by the relevant consumers to mean “master of public health”.
The EU trademark law reform which entered into force on March 23 2016 removed the requirement that trademarks be capable of graphic representation. According to statistics published by the EU Intellectual Property Office (EUIPO) on May 4 2016, three-dimensional (3D) shape marks and colour marks accounted for less than 0.5% and 0.05% of applications, respectively.
Theoretically, the reform will remove some of the practical obstacles to the registration of non-traditional marks. However, the removal of the graphic representation requirement does not mean that non-traditional marks will be more likely to avoid an objection on the grounds of non-distinctiveness. It remains to be seen whether the reform will lead to increased filings of non-traditional trademarks.
Under the previous law, the General Court decided on the registrability of a 3D mark for pharmaceutical preparations which showed the shape of a plastic container in the colours red and white (Case T-654/13, June 16 2015). The court upheld the contested decision of the EUIPO Board of Appeal that the mark was non-distinctive. Although the applicant claimed that the colours were unusual in the relevant market, the court held that white is generally associated with hygiene and that red is linked to warnings in the medical area. The court admitted that the existence of two openings gave the shape an innovative character which differed from commonly used shapes. However, the level of deviation from usual forms was held to be insufficient to render the mark registrable.
Parallel imports and repackaging
The Federal Court of Justice recently referred a case to the European Court of Justice (ECJ) in order to obtain guidance on the interpretation of EU Directive 98/79/EC, relating to in-vitro diagnostic medical devices (in this case, diabetes test strips) (I ZR 153/13, April 30 2015).
The plaintiff in the main proceedings was a distributor subsidiary of Roche Diagnostics GmbH, a manufacturer of blood glucose meter systems. Roche distributed separate test strips for its Accu-Chek Aviva and Accu-Chek Compact devices in order to ensure the accuracy of the blood tests. Roche received CE marking as a prerequisite for the marketing of these products in Germany, in accordance with the Medical Devices Act. The defendant was an importer of medical devices which imported the same test strips from EU member states to Germany. The importer affixed a product label in German and added a German translation of the user manual, which was identical to Roche’s German-language user manual. The only difference was that the importer’s translation of the user manual indicated the UK unit of measurement ‘mmol/l’ instead of the German equivalent, ‘mg/dl’.
Roche claimed that the relabelling of the product packaging and reprinting of the user manual in German necessitated a new CE conformity assessment procedure, since any relabelling and reprinting entails the risk of errors.
The Federal Court of Justice asked the ECJ for interpretation regarding whether the importer of the test strips (which had successfully passed all conformity tests) must obtain a fresh CE conformity declaration before marketing them. The ECJ decision will affect parallel imports of all types of medical device that require CE conformity before being marketed within the European Union.
Anti-counterfeiting and enforcement
The EU trademark law reform has introduced another important change for trademark owners in the pharmaceutical industry. In the past, EU trademark rights were not infringed by goods that were merely transiting through the European Union, even if those goods were counterfeits.
However, Article 9(4) of the revised Community Trademark Regulation (207/2009) now entitles the holder of an EU trademark to prevent all third parties from bringing goods into the European Union without being released for free circulation there where the goods come from third countries and bear an unauthorised identical trademark.
This entitlement will lapse if the declarant or holder of the goods provides evidence that the EU trademark holder is not entitled to prohibit the placing of the goods on the market in the country of final destination.
However, this provision may not be used to inhibit the transit of generic medicines through the European Union. Recital 19 of the regulation provides that appropriate measures should be taken with a view to ensuring the smooth transit of generic medicines. Consequently, the proprietor of an EU trademark may not prevent a third party from bringing goods into the European Union without being released for free circulation there based on similarities between the INN for the medicine’s active ingredient and its trademark.
Further, in order to enable holders of EU trademarks to combat counterfeiting more effectively, Article 9(2)(a) of the Community Trademark Regulation prohibits the affixing of an infringing mark to goods, as well as preparatory acts. This provision enables customs authorities to act when materials are imported into the European Union with the intention of affixing them to counterfeit products within the European Union.
The Federal Court of Justice recently issued a decision in a case regarding perfumes which strengthened the position of rights holders in facilitating enforcement against counterfeiters (Case I ZR 51/12, October 21 2015). This decision also applies for pharmaceuticals.
In brief, the court decided that a bank cannot refuse to disclose the name and address of a bank account holder on the basis of banking secrecy where the account has been used to sell counterfeit items.
The plaintiff, unable to locate a seller of counterfeit perfumes, had conducted test purchases through an internet platform and detected that money had been paid to a specific bank account. An out-of-court claim requesting the name and address of the bank account holder was refused by the bank, for reasons of banking secrecy. Although the first-instance court granted the claim, the appellate court overruled it and rejected the claim.
The Federal Court of Justice suspended the proceedings and asked the ECJ whether a provision allowing a banking institution to invoke banking secrecy in order to refuse to provide the name and address of an account holder complied with the EU IP Rights Enforcement Directive (2004/48/EC).
On July 16 2015 the ECJ decided that Article 8(3)(e) of the directive precludes any national provision which unconditionally allows a banking institution to invoke banking secrecy in order to refuse to provide information concerning the name and address of an account holder.
The requirements regarding health-related advertising are strict; advertising is admissible only if the information that it contains is accurate, unambiguous and clear.
Section 8 of the Medicinal Products Act prohibits medicinal products or active substances which bear misleading names, specifications or presentations from being manufactured or placed on the market.
In particular, deception will be established where claims are made that medicinal products have a therapeutic efficacy or effects which they do not possess.
Section 3(a) of the Medicine Advertisement Act prohibits the advertising of medicinal drugs for which the necessary market approval has not been obtained, and is not assumed to be obtained.
This prohibition also applies in cases where the advertisement refers to therapeutic indications or pharmaceutical forms which are not covered by the market approval. The Koblenz Higher Regional Court recently prohibited two claims made in an advertisement because the therapeutic effects mentioned therein could not be proven (Case 9 U 895/15, January 27 2016). The burden of proof that the statements are true rests with the advertiser.
The accuracy of claims may be examined by government authorities such as the Federal Institute for Drugs and Medical Devices; further, it may also be subject to unfair competition law and thus challengeable by competitors and consumer associations.
A recent Federal Court of Justice decision confirmed this and expanded it to cover the summary of medicinal product characteristics (I ZR 29/14, May 7 2015).
In Germany, generic substitution is not prohibited. Indeed, it is promoted in order to reduce costs in the healthcare system.
Newly developed pharmaceutically active substances are mostly patented by pharmaceutical companies. Patent protection grants the exclusive right to manufacture and market an active substance for 20 years. After the patent protection has expired, competitors can produce this active substance and sell it under a different name. These generic medicinal products are basically less expensive than the originals.
The new world of domains which emerged when ICANN launched its new generic top-level domain (gTLD) programme in 2013 has also reached the pharmaceutical sector.
As of October 31 2015 a handful of pharmaceutical companies had acquired new gTLD registrations in order to provide online space for the presentation of information, services and resources. The new gTLD’s include ‘.abbott’, ‘.sanofi’, ‘.stada’ and ‘.emerck’.
In addition, broader gTLD’s have been registered, such as ‘.healthcare’ and ‘.diet’. The new gTLD ‘.pharmacy’ is available to pharmacies and other entities offering prescription drugs or prescription drug-related products, services or information online.
Tel +49 89 212186 0
Fax +49 89 212186 70