Provision freezing IP rights over appearance of drugs declared unconstitutional

France
The Constitutional Council has once again declared unconstitutional a new provision of the Public Health Code that would have had the effect of stripping pharmaceutical companies of their IP rights over the appearance and/or texture of orally administered drugs for which patent protection had expired (Decision 2011-640, August 4 2011).
 
An identical provision had been passed in 2009 as part of the Social Security Financing Act 2010. On both occasions, the provision was struck down as being contrary to the French Constitution; the council considered that it was not sufficiently related to the larger budgeting bill in which it was inserted.
 
The new Article L5121-10-3 would have read as follows:

The owner of an intellectual property right that protects the appearance and texture of the oral pharmaceutical forms of a reference product within the meaning of Article L5121-1 may not prohibit the oral pharmaceutical forms of a generic drug substitutable to this product under Article L5125-23 from having a similar or identical texture or appearance.”
 
The appearance and/or texture of an oral pharmaceutical product may be protected by two main types of IP rights: trademarks and designs. Although design protection is easier to obtain for the appearance of a pharmaceutical product, it is limited to a term of 25 years, while trademarks may be protected indefinitely. However, it is more difficult to obtain trademark protection for three-dimensional marks - applications for such marks are often rejected, in particular by the Office for Harmonisation in the Internal Market, on the grounds that they lack distinctive character.
 
Had it not been declared unconstitutional, the new provision would have allowed the sale of orally administered generic drugs that are “identical or similar [in] texture and appearance” to the corresponding brand-name drug upon the expiration of patent protection, notwithstanding the existence of any trademark or design registrations protecting the texture or appearance of the drug.
 
Following its rejection in 2009, proponents resubmitted the proposal, hoping to facilitate the entry of generic drugs into the marketplace and to prevent consumers - notably the elderly - from mistakenly ingesting the wrong medication by allowing the sale of generics similar in appearance to familiar brand-name drugs. 
 
With respect to design rights, the practical consequences of the new provision may have been less drastic than initially thought. Design registrations have a maximum term of 25 years. Although patent protection is limited to 20 years, owners of patents for pharmaceutical drugs are often able to obtain Supplementary Protection Certificates, which, depending on when the drug is authorised for introduction into the market, may extend the patent protection for up to an additional five years. Consequently, in many cases, the design registration may expire at the same time, or very close to the same time, as patent protection.
 
In contrast, with respect to trademark rights (which may be renewed indefinitely), the impact would have been greater. 
 
There was also uncertainty surrounding France’s ability to enforce the new provision against Community trademark registrations and registered Community designs, which are valid in all 27 EU member states. The text of the Council Regulation on Community Designs (6/2002), which established the registered Community design system, seems to advise against it:

A Community design… shall have equal effect throughout the Community. It shall not be… surrendered or be the subject of a decision declaring it invalid, nor shall its use be prohibited, save in respect of the whole Community.” 

Likewise, Article 1 of the Community Trademark Regulation (207/2009) states as follows:

"a Community trademark shall have a unitary character. It shall have equal effect throughout the Community: it shall not be registered, transferred or surrendered or be the subject of a decision revoking the rights of the proprietor or declaring it invalid, nor shall its use be prohibited, save in respect of the whole Community. "
 
French lawmakers briefly addressed these concerns in 2009 when the measure was first proposed. There were two lines of arguments:

  • The first was that the policy was consistent with European law, as the latter was silent on the matter. Given the language of the EU legislation cited above, this line of reasoning was not particularly convincing.
  • The second was that French law should be able to limit certain IP rights provided that it was justified by a pressing public interest. According to this argument, the limitation of IP rights protecting capsule designs would be proportional to the public health concern of preventing serious iatrogenic accidents.
If the French parliament eventually succeeds in introducing this new provision in a way that is acceptable to the council, it may still be challenged before the Court of Justice of the European Union. Whether the aforementioned arguments would hold weight before the court would be of great interest to the European IP community.
 
Karina Dimidjian-Lecomte and Noah Czarny, Casalonga Avocats, Paris

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