CMS Cameron McKenna Nabarro Olswang LLP
To minimise the risk of counterfeit medicines reaching consumers, the Medicines and Healthcare Products Regulatory Agency licenses all steps of the medicine distribution system – including manufacture, distribution and storage – and monitors the supply and manufacture of medical devices.
Selection, clearance and registration
Trademark protection in the United Kingdom may be obtained through registration of a national trademark or the Madrid System designating the United Kingdom or the European Union. An EU trademark offers protection across all 28 EU member states, including the United Kingdom – at least until Brexit. After March 2019, an EU trademark will confer no protection within the United Kingdom and brand owners intending to trade in the United Kingdom will need to apply for a UK trademark separately. At the time of writing, while the UK Intellectual Property Office (UKIPO) has been open to and consulting on the possibility of transitional arrangements enabling EU trademark owners to obtain UK protection equivalent to their EU registrations (ie, retaining the same filing date and any priority), discussions have not commenced between the UKIPO and the EU Intellectual Property Office. The nature of any transitional arrangements agreed in advance of Brexit is therefore unknown.
All EU member states have until January 14 2019 to transpose EU Directive 2015/2436 into their national laws. The reforms include changes to geographical representation, goods in transit and preparatory acts or packaging.
Although the United Kingdom will formally exit the European Union in March 2019, the date by which it should have amended UK trademark law to comply with the directive is January 2019. Accordingly, if the United Kingdom fails to make the necessary changes, it will be in breach for a two-month period.
The Trademarks Act 1994 provides that the main criterion for registration is that a trademark be capable of distinguishing the goods or services of one undertaking from those of another.
An application may be refused on absolute or relative grounds:
- Absolute grounds – the UKIPO will refuse marks that are devoid of distinctive character or descriptive of the kind, quality, quantity, intended purpose, value, geographical origin or time of production of the goods or services.
- Relative grounds – a third party with an earlier conflicting right may oppose a trademark application on relative grounds and on absolute grounds (including bad faith) only in addition to the relative grounds.
The act defines a ‘trademark’ as “any sign capable of being represented graphically which is capable of distinguishing goods or services of one undertaking from those of other undertakings”. Typically this includes words (including personal names), designs, letters, numerals or the shape of goods or their packaging. Unconventional signs (eg, sound, smell or colour marks) are not excluded from registration, provided that they are graphically represented. How a mark is graphically represented will vary according to the type of mark, but will be accepted where it is “clear, precise, self-contained, easily accessible, durable and objective”, according to the test in Sieckman (C-273/00).
In relation to colour trademarks, the UK Court of Appeal in Glaxo Wellcome UK Ltd v Sandoz (2017) invalidated the EU registration for an inhaler depicted in the colour purple, as the mark lacked “clarity, intelligibility, precision, specificity and accessibility” and would leave a member of the public “in a position of complete uncertainty” as to what had been registered.
If the United Kingdom implements the above-mentioned EU trademark reforms, the requirement for graphical representation will fall away.
Selection and clearance
Performing a trademark search on a specialist pharmaceutical database will minimise the risk of third-party oppositions on relative grounds and increase the possibility of a selected trademark being accepted as an invented name by the Medicines and Healthcare Products Regulatory Agency (MHRA).
The perception of the end user is key to the trademark selection process. In Alcon Inc v OHIM (Case C-412/05) the European Court of Justice (ECJ) examined the likelihood of confusion in the context of pharmaceuticals, concluding that the relevant consumers for pharmaceutical products are health professionals and end consumers. Novartis v OHIM — Sanochemia Pharmazeutika (TOLPOSAN) (Case T-331/09) established that medicinal products, no matter whether issued on prescription, can be regarded as receiving a heightened degree of attentiveness by consumers who are reasonably well informed and reasonably observant and circumspect.
Under the Human Medicines Regulations 2012, any invented name must not be liable to confusion with the product’s generic or international non-proprietary name (INN). The INN system groups pharmacologically related substances together using a common ‘stem’. INNs are considered and approved globally by the World Health Organisation. Trademark owners may file an objection to a proposed INN if it conflicts with an existing trademark.
The MHRA and the European Medicines Agency (EMA) have also issued guidance on acceptable invented names. Both agencies consider the similarity of a proposed name to an existing medicinal product when assessing the name’s suitability, but this is primarily driven by safety rather than trademark infringement concerns. If a product obtains a centralised marketing authorisation from the EMA, the product must have the same name in every member state.
Parallel imports and repackaging
Parallel import of pharmaceutical products is permitted under UK trademark law, provided that the product has been put on the market in the European Economic Area (EEA) by or with the consent of the trademark owner. Such consent must be in respect of each actual physical product, not just the product line in general.
If these conditions are fulfilled, the trademark rights are ‘exhausted’ and the trademark owner cannot object to further sales of the product, even if these sales take place in a different EEA country. There is an exception to this general rule, however, where it can be shown that the trademark owner has a legitimate reason to oppose further commercialisation of the goods, especially where the condition of the goods is changed or impaired.
It may be necessary to repackage or over-sticker the label of the imported product to ensure compliance with UK legal or other requirements (eg, regarding language). Such repackaging is not generally considered to amount to trademark infringement if certain conditions are fulfilled (as established under EU case law):
- The repackaging does not affect the original condition of the product;
- The new packaging clearly states the name of the repackager and the original manufacturer;
- The presentation of the repackaged product is not liable to damage the reputation of the trademark;
- The importer gives advance notice to the trademark owner (15 working days is considered reasonable) and provides a sample on request; and
- Repackaging is objectively necessary to ensure effective access to the relevant market.
Where a product has a national UK marketing authorisation and a national authorisation in another EU member state, the product may be imported from the other member state into the United Kingdom where there is no therapeutic difference between the EU and UK products. In these circumstances, a parallel import licence from the MHRA is required. Where a product has a central (ie, EU-wide) marketing authorisation, the parallel trader must notify the EMA.
After Brexit, UK law on parallel imports and exhaustion of rights will change. It may become more difficult for UK pharma businesses to export their goods to the European Union and vice versa. In addition, the rules regarding parallel trade will have to be recast. This may involve the United Kingdom reverting to a principle of international exhaustion, as was the case before the United Kingdom joined the European Union in 1973. Alternatively, a more restrictive position of UK exhaustion could be adopted, or a position more akin to that of Norway or Switzerland.
Anti-counterfeiting and enforcement
The United Kingdom is a transit point and an end-user market. It is seldom used as a manufacturing base for counterfeit medicine. The MHRA’s falsified medical products strategy therefore aims to prevent the risk to UK consumers posed by counterfeit products entering the market, through a combination of preventive and enforcement measures.
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 procedures and the use of covert markings to enable identification of counterfeits. The MHRA promotes public risk awareness 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.
The MHRA convenes a bi-annual meeting of the Anti-counterfeit Stakeholders Group, including trade associations for manufacturers, wholesalers, parallel traders, generics manufacturers 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, and to update a watchlist of products that are susceptible to counterfeiting, which is circulated at every level of the supply chain.
To supplement the fight against falsified medical products, the EU Delegated Regulation to the Falsified Medicines Directive (2016/161) was introduced which allows medicines to be verified and authenticated. This is likely to come into effect in 2019, just before Brexit.
Criminal enforcement is the principal method used to prevent the distribution of counterfeit pharmaceutical products in the United Kingdom.
The primary 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).
The MHRA, in conjunction with Her Majesty’s Revenue and Customs (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 team with appropriate legal powers – including entry to premises, inspection and seizure.
In its Annual Report 2016/2017 the MHRA, with assistance from the UK Border Force and local police, conducted a range of operational activities in its annual month-long global crackdown on the illegal trade in the United Kingdom of medicines and medical devices from unregulated sources, seizing £13.6 million in potentially dangerous counterfeit medical products.
In terms of Civil enforcement, actions can include search orders without notice to the defendant, a freezing injunction or an interim injunction. However, the disproportionate costs involved mean that many pharmaceutical brand owners prefer to rely on criminal enforcement and more actively enforce their rights against parallel importers.
Goods in transit
In Koninklijke Philips Electronics NV v Lucheng Meijing Industrial Company Ltd, Nokia Corporation v HMRC (Joined Cases C-446/09 and 495/09), the ECJ held that it was not permissible to seize potentially infringing goods in transit which were destined for sale outside the European Union, unless there was a clear intention to divert the goods to EU consumers. Potentially infringing goods in transit in the United Kingdom therefore give rise to infringement only if they are used in the United Kingdom in the course of trade.
Following implementation of the EU directive, EU trademark owners will be able to prevent third parties from importing goods into the European Union even where the final destination is outside the European Union. This also extends to packaging. The goods must bear, without consent, a mark identical to the EU trademark or one which cannot be distinguished in its essential features, and registered in respect of the same goods.
However, entitlement to prevent goods in transit will lapse if the owner of the goods can show that the trademark owner is not entitled to prevent the goods from being placed on the market in the intended final destination.
The advertising of medicinal products in the United Kingdom is governed by both law and self-regulatory codes.
Medicinal products must be authorised by the MHRA or the European Commission before being advertised. Any such advertising must be within the scope of the product’s authorisation (ie, relevant to the disease or condition that the product is authorised to treat). The definition of ‘advertising’ under UK law is very broad, including anything designed to promote the prescription, supply, sale or use of the product.
Part 14 of the Human Medicines Regulations regulates advertising to the general public and healthcare professionals. Advertising prescription-only medicines to the general public is prohibited. Certain mandatory information must be provided in any permitted advertisement, such as the name of the medicinal product and the information necessary for the correct use of the product. Breach of the advertising provisions is a criminal offence.
The regulations are enforced by the MHRA, which monitors medicines’ advertising, investigates complaints and can bring prosecutions. The MHRA also has statutory powers to vet materials before publication, either because a company’s previous advertising has breached the regulations or due to the nature of the product (eg, if it contains a new active substance). The vetting period is usually one to three months.
Self-regulation by industry bodies also plays an important role in the regulation of medicines advertising; the industry codes often impose higher requirements than the legislation.
The Association of the British Pharmaceutical Industry has a code of practice which governs the promotion of prescription medicines to healthcare professionals. The advertising codes of the Proprietary Association of Great Britain govern the promotion of non-prescription products. Both associations have their own complaints-handling procedures for their members.
The CAP Code and BCAP Code apply to all broadcast and non-broadcast advertising aimed at consumers. These codes contain provisions applicable to advertising generally, such as a prohibition on misleading advertising and sector-specific rules for medicines. The Advertising Standards Authority enforces these codes.
Generic substitution is not permitted in the United Kingdom. Previous proposals to amend the law in this area have been unsuccessful, partly because the United Kingdom already has one of the highest levels of generic medicine usage globally.
Where a medicine has been prescribed by brand, pharmacists must dispense the branded product. If the INN is used, the pharmacist may dispense any suitable generic or branded product, but will receive reimbursement only at the generic price.
Generic prescribing is encouraged within the National Health Service to drive cost savings, unless substituting another manufacturer’s version of the drug could negatively affect safety or efficacy. For some products, branded prescribing is therefore advocated.
The sale of medicines online is permitted in the United Kingdom under certain conditions. The online pharmacy must be registered with the General Pharmaceutical Council and the MHRA. Both registers are available online and consumers are encouraged to check these before purchasing medicines online as unregistered pharmacies persist.
By law, the EU ‘common logo’ must be displayed on every webpage on which medicines are offered for sale to the public. The General Pharmaceutical Council also operates a voluntary logo scheme which hyperlinks through to the pharmacy’s entry on the General Pharmaceutical Council register.
Trademark infringement can occur through unauthorised online use of a registered trademark – for example, in a domain name or by using the trademark as a keyword in online advertising or a metatag on a website. Not all use in this context will amount to trademark infringement. How the trademark is being used and the nature of the goods being sold are key factors to consider in assessing potential infringement.
The ‘.uk’ domain name registry Nominet has its own dispute resolution service. Under this system, trademark owners can bring complaints against domain names which:
- are identical or similar to the rights holder’s trademark; and
- take unfair advantage of or are unfairly detrimental to the trademark owner’s rights.
A successful complaint may result in transfer, cancellation or suspension of the domain name and is therefore often an attractive alternative to litigation. If legal proceedings relating to the domain name are subsequently issued, any dispute under the system will be suspended.
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