Procedures and strategies for pharmaceutical brands: United Kingdom

By John Olsen and Ellen Hughes-Jones, Locke Lord (UK) LLP

Selection, clearance and registration

Trademark protection may be obtained through the registration of a national trademark, which offers protection in the United Kingdom only, or through an EU trademark offering protection across all 28 EU member states, including the United Kingdom.

UK national trademarks are governed by the Trademarks Act 1994. Regulation and enforcement of the rules governing the pharmaceutical industry are carried out by the Medicines and Healthcare Products Regulatory Agency (MHRA). EU-wide approvals are regulated by the European Medicines Agency (EMA).

Registration

Section 1 of the Trademarks Act establishes the main function and registration criterion of a trademark: a mark that can be represented graphically and distinguish the goods or services of one undertaking from those of another. An application can be rejected on absolute grounds or on third-party opposition.

Absolute grounds for refusal under Section 3 focus on distinctiveness. The UK Intellectual Property Office (UKIPO) refuses applications for marks that are:

  • devoid of distinctive character;
  • customary;
  • generic; or
  • descriptive of the kind, quality, quantity, intended purpose, value, geographical origin or time of production of the goods or services.

Relative grounds for refusal under Section 5 arise where the mark conflicts with an existing registered or pending third-party trademark. Alcon Inc v OHIM (Case C-412/05) examined the likelihood of confusion in the context of pharmaceuticals, concluding that the relevant consumers for pharmaceutical products are health professionals and end consumers. Aventis Pharma SA v OHIM (Case T-95/07) established that end consumers exercise an “above average” level of attention to pharmaceutical products, given the potential medical implications if products are confused.

The EU trademark regime sets out similar absolute and relative grounds for refusal to the act. The viewpoint of all EU consumers will be taken into account, as illustrated by Endoceutics, Inc (Case T-324/13), in which the General Court held that there was a likelihood of confusion between FEMIVA and FEMIBON due to phonetic similarity in Spanish pronunciation.

A trademark search on a specialist pharmaceutical database will minimise the risk of third-party oppositions on relative grounds.

Non-traditional trademarks

The definition of a ‘trademark’ includes shapes, motions, colours, tastes and sounds. The UKIPO examines applications taking into account the requirements set out by the European Court of Justice (ECJ) in Libertel (Case C-104/01), Sieckmann (Case C-273/00) and Shield Mark (Case C-283/01). It has proved difficult to show trade origin in a colour or shape, resulting in many applications – such as a tablet shape – being refused. An application to register a strawberry taste for pharmaceutical products was refused in Eli Lilly & Co’s Application ((R120-2001/2) [2004] ETMR 4).

Regulatory approval

Applications for pharmaceutical trademarks must satisfy the requirements of the MHRA and marketing authorisation must be obtained for every product. The EMA can provide centralised European marketing authorisations. A product authorised under the centralised procedure must have the same name in every member state. The primary concerns of the MHRA and the EMA relate to safety or efficacy, rather than infringement.

INNs

An international non-proprietary name (INN) is a unique name that is globally recognised for a particular pharmaceutical product and cannot be registered as a trademark. Names of pharmacologically related substances are grouped using a common ‘stem’ which is assigned to different categories of drug.

The MHRA has issued guidance for proposed product names, which covers the construction of pharmaceutical trademarks and the similarity of invented names to existing INNs.

The EMA assesses proposed names through the Name Review Group, which cooperates with the relevant national authorities and the World Health Organisation. Assessment is by reference to the Guidelines on the Acceptability of Names for Human Medicinal Products Processed Through the Centralised Procedure. The guidelines address whether the proposed name could cause confusion with another product, convey misleading pharmaceutical connotations or be misleading regarding the composition of the product. An invented name should not be derived from its own INN.

Parallel imports and repackaging

The rules regarding parallel trading reflect those of the European Union. Regulated by the MHRA, the UK Parallel Import Licensing Scheme enables a parallel import licence to be obtained, allowing medicinal products authorised in other member states to be marketed in the United Kingdom, provided that the imported products have no therapeutic difference from the equivalent UK products. Requirements depend on the nature of the parallel licence obtained (simple, standard or complex). The MHRA requires parallel imports to be marketed under:

  • the same name as the UK product;
  • the name under which it was marketed in the source country; or
  • a new name.
Pharmaceutical repackaging

Parallel importers of pharmaceutical products that are already on the market in other parts of the European Economic Area (EEA) rely on Article 7(1) of the EU First Trademarks Directive (2008/95/EC), which provides for exhaustion of the rights conferred by a trademark. A rights holder cannot use its rights to prevent resale of its branded goods within the European Union when these goods were first put on the market in the European Union by the rights holder or with its consent. To meet local requirements for marketing authorisation, importers must repackage products before they are imported. Product manufacturers and rights holders rely on Article 7(2) of the directive, which states that Article 7(1) will not apply where the rights holder can legitimately oppose further commercialisation of the goods, especially where the condition of the goods has been altered or impaired. Where repackaging is deemed necessary by the importing member state, the repackaging should be assessed in terms of whether it damages the reputation of the trademark. This issue was addressed in Flynn Pharma Ltd v Drugsrus Ltd ([2015] EWHC 2759 (Ch)), where the High Court held that a parallel importer infringed a pharmaceutical company’s trademark by rebranding and marketing in the United Kingdom a drug that had not been put on the market in the EEA by (or with the consent of) the trademark owner.

Implied consent

Exhaustion of rights applies when the goods were first placed on the market by the rights holder or with its consent (which can be implied). In Zino Davidoff SA (Case C-414/99) the importance of a rights holder’s ability to control the initial marketing of goods in the EEA was emphasised; subsequent UK case law makes it difficult for an importer to establish implied consent (see Roche Products v Kent Pharmaceuticals Limited [2006] EWCA Civ 1775). In Mastercigars Direct v Hunters & Frankau ([2007] ECWA Civ 196) and Honda Motor Co Ltd v Neesam ([2008] EWHC 338 (Ch)), implied consent by the rights holder was found. The facts of the cases, including the behaviour of the rights holder in Mastercigars and previous dealings between the parties in Honda, were consistent with implied consent to the import.

Goods in transit

Potentially infringing goods in transit in the United Kingdom give rise to infringement only if they are used in the United Kingdom in the course of trade. Eli Lilly & Co v 8PM Chemists Ltd ([2008] FSR 12) concerned the import of pharmaceutical products from Turkey into the United Kingdom in sealed boxes which were then sent on to the United States. Pharmaceutical companies including AstraZeneca, Eli Lilly and Pfizer unsuccessfully claimed trademark infringement. The court was not persuaded of the risk that consumers in the United States might incorrectly view the origin of the goods as the United Kingdom.

The definition of ‘counterfeit products’ does not include goods in transit, as illustrated in Nokia Corporation v HMRC ([2009] EWHC 1903 (Ch)), where counterfeit telephones passed through the United Kingdom during transportation from Hong Kong to Colombia, but were not deemed counterfeit because they had not been placed on the UK market. The ECJ also held in Koninklijke Philips Electronics NV v Lucheng Meijing Industrial Company Ltd and Nokia Corporation v HMRC (C-446/09 and C-495/09) that goods in transit are not the responsibility of customs authorities in the European Union. This remains the case in light of the EU Customs Enforcement of IP Rights Regulation (608/2013).

Anti-counterfeiting and enforcement

The United Kingdom is a transit point and end-user market. It is seldom used as a manufacturing base for counterfeit medicine and marketing authorisation must be obtained for every pharmaceutical product. Since the UK pharmaceutical market is attractive to counterfeiters, the MHRA introduced a new falsified medical products strategy in 2012.

Prevention

Pharmaceutical manufacturers employ various measures to prevent copying, such as complex shapes or markings that are difficult to reproduce. Manufacturers work closely with Customs through customs monitoring and the use of covert markings to enable identification of counterfeits. The MHRA also conducts public risk awareness campaigns, issues guidance to pharmacists (with the General Pharmaceutical Council) and offers training to police and customs officials throughout Europe. To minimise the risk of counterfeit medicines reaching consumers, the MHRA licenses all steps of the medicine distribution system – including manufacture, distribution and storage – and monitors the supply and manufacture of medical devices.

Since 2006 the MHRA has convened a bi-annual meeting of the Anti-counterfeit Stakeholders Group, including trade associations for manufacturers, wholesalers, parallel traders, generics manufacturers, Her Majesty’s Revenue and Customs (HMRC) and the police. The objective is to share information and intelligence concerning seizures or reports of falsified medical products, unusual or suspicious market activity and information from industry concerning demand, as well as to update a watchlist of products that are most susceptible to counterfeiting. The watchlist is then circulated at each level of the supply chain.

Criminal enforcement

Criminal enforcement is the principal method of preventing the distribution of counterfeit pharmaceutical products in the United Kingdom.

The MHRA, in conjunction with HMRC and the police, has responsibility for investigating trade in counterfeit medicines. The MHRA has a well-developed enforcement group comprising a case referral centre, an intelligence unit, operations teams and a prosecution unit. Appropriate legal powers – including entry to premises, inspection and seizure – are afforded to appropriately trained and authorised staff.

On June 18 2015 the MHRA announced that it had seized £15.8 million of counterfeit and unlicensed medicines and devices in the United Kingdom as part of a month-long global operation focusing on the illegal online trade of medical products, resulting in seizures totalling £51.6 million from 115 countries worldwide.

The primary relevant legislation comprises:

  • the Human Medicines Regulations 2012 (maximum of two years’ imprisonment and an unlimited fine);
  • the Medicines Act 1968 (maximum of two years’ imprisonment and an unlimited fine);
  • the Trademarks Act (maximum of 10 years’ imprisonment and an unlimited fine); and
  • the Proceeds of Crime Act 2002 (maximum of 14 years’ imprisonment and an unlimited fine).
Civil enforcement

Civil enforcement is rarely pursued, due to disproportionate cost, and is likely to be economically viable only where collective action is taken by several brand owners. A successful civil action can result in a search order without notice to the defendant, a freezing injunction or an interim injunction. However, a defendant can be entitled to compensation if an order is incorrectly granted.

Advertising

The relevant UK legislation is Part 14 of the Human Medicines Regulations 2012. This codifies and replaces the Medicines (Advertising) Regulations 1994 and the Medicines (Monitoring of Advertising) Regulations 1994. Part 14 implements Title VIII of the directive (as amended).

Chapter 1 of Part 14 sets out general definitions relevant to advertising. These supplement the general definitions in Part 1 of the regulations. Chapter 2 of Part 14 regulates the content of ads and promotions. Chapter 3 provides for enforcement of the requirements in Chapter 2, including complaints about advertisements and the ability for health ministers to make court applications and determinations regarding breach of the regulations.

The advertisement of pharmaceutical products is also governed by two trade associations with individual codes of practice. The Association of the British Pharmaceutical Industry Code of Practice for the Pharmaceutical Industry is the self-regulatory system covering prescription medicines. The Proprietary Association of Great Britain regulates the advertisement of over-the-counter medicines to the general public. The codes of practice supplement, and sometimes surpass, the regulations. Self-regulation is the principal method of dealing with complaints.

The regulations prohibit certain ads, including ads for prescription-only medicines directed at the public and ads directed at children. The regulations also require that ads:

  • state that the advertised product is a medicine;
  • state the name of the medicine, including the common name if there is only one active ingredient; and
  • include instructions for use of the product and adequately direct consumers to the instructions.

The MHRA enforces the regulations and deals with complaints. It publishes the outcome of investigations and the Blue Guide on the Advertisement and Promotion of Medicines in the United Kingdom. The most common method of enforcement is via pre-publication vetting of ads. The MHRA also monitors published material, handles complaints and enforces penalties for ads that fail to comply.

Generic substitution

The Medicines Act 1968 does not permit automatic generic substitution, except in emergencies or under strict hospital control.

On October 25 2011 the MHRA issued a consultation document on the need to consolidate the UK medicines legislation, with the aim of rationalising and simplifying existing fragmented medicines legislation. The MHRA identified a number of concerns regarding generic substitution, including that:

  • patients could be confused by a change in the appearance of their medication;
  • practitioner workload would increase in counselling and reassuring patients regarding changes in medication appearance; and
  • the use of similar packaging, size, shape and colour to the original by generic substitution could result in the original product not being sold.

Due to these and other concerns, it was confirmed that automatic generic substitution would not proceed. Pharmacists can dispense generic medicine if a generic prescription is received (these account for around 83% of UK prescriptions), but specific branded products must be dispensed for branded prescriptions.

Online issues

E-pharmacies

The rapid growth of the Internet and e-pharmacies poses many dangers, including an increase in the purchase of incorrect or fake medicine and illegal sales of prescription-only medicines. In September 2010 the Royal Pharmaceutical Society of Great Britain was split into:

  • the General Pharmaceutical Council, the independent regulator; and
  • the Royal Pharmaceutical Society, the representative body for pharmacists and pharmacies.

The council introduced a logo to be displayed on legitimate online pharmacy sites to provide a way for consumers to identify registered online pharmacies. The logo includes a direct link to the council’s website, enabling consumers to verify the registration details of the pharmacy and pharmacist(s) behind the e-pharmacy’s website. The NHS Commissioning Board maintains pharmaceutical lists and the Health and Wellbeing Boards develop and publish pharmaceutical needs assessments.

Domain names

The country-code top-level domain for the United Kingdom is ‘.uk’. The ‘.uk’ domain name registry offers the Dispute Resolution Service (DRS) Policy, which enables rights holders to prevent others from using domain names that are similar or identical to their trademarks, if the registration is considered abusive under the DRS Policy. To be considered an abusive registration, a domain name must have been registered, acquired or used in a manner which has taken unfair advantage of or has been unfairly detrimental to the trademark owner’s rights.

Locke Lord (UK) LLP

201 Bishopsgate

London EC2M 3AB

United Kingdom

Tel +44 20 7861 9000

Fax +44 20 7785 6869

Web www.lockelord.com

John Olsen
Partner

john.olsen@lockelord.com

With more than 30 years’ experience in IP law – 25 of which were spent practising in Europe – John Olsen advises clients on the selection, acquisition, exploitation and enforcement of trademark rights throughout the world. His hands-on approach is unique in helping clients to understand the interrelationship of IP rights worldwide and to ensure that their trademarks enjoy as much exclusivity as possible. Mr Olsen advises individuals through to multinationals.

Ellen Hughes-Jones
Associate

ellen.hughes-jones@lockelord.com

Ellen Hughes-Jones is an associate in the London office of Locke Lord LLP and is a member of the IP practice. She advises clients on a variety of IP matters, particularly in relation to trademarks (covering all aspects of the selection, prosecution, protection and enforcement of trademarks), copyright and design right issues, licensing agreements and IP/IT disputes. Ms Hughes-Jones is a co-founder and committee member of Women In Law London.

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Issue 71