Speciality European Pharma Ltd v Doncaster Pharmaceuticals Group Ltd & Anor

For parallel imports of pharmaceutical products, objective necessity to replace the original trade mark is established only where prohibiting replacement would hinder effective access to the importing Member State’s market or a substantial part of it. The market cannot be defined solely by reference to the branded segment whose mark the importer wishes to use. Access to a substantial part of the market may be sufficient, but the relevant market must be assessed by reference to the product as a whole. A desire to obtain a higher margin, avoid the cost of creating a brand, or benefit from another trader’s marketing does not amount to objective necessity. The same principles apply where a product must be sold under a brand, if an alternative brand would provide effective market access.

The claimant was the United Kingdom licensee and distributor of Regurin, a pharmaceutical product containing trospium chloride. The first defendant parallel-imported equivalent products marketed in France as Céris and in Germany as uriVesc. It rebranded those products as Regurin and Regurin XL for sale in the United Kingdom.

The claimant alleged trade mark infringement. The central issue was whether, under Articles 34 and 36 TFEU, replacement of the original marks was objectively necessary to secure effective access to the United Kingdom market, including for the 20mg and 60mg extended-release products.

1. Applicable test. The court applied the necessity test stated by the ECJ in Pharmacia & Upjohn SA v Paranova A/S [2000] 1 CMLR 51 and explained by the Court of Appeal in Boehringer Ingelheim KG v Swingward Ltd [2008] EWCA Civ 83; [2008] ETMR 36. Replacement is objectively necessary where prohibition would hinder effective access to the market of the importing Member State. A total exclusion is unnecessary; hindrance to a substantial part may suffice.
2. The relevant market could not be defined as the market for Regurin alone. That would be circular and inconsistent with the free-movement principles in Articles 34–36 TFEU. The assessment had to concern the market for trospium chloride in the United Kingdom, or a substantial part of that market.
3. For the 20mg product, generic prescriptions accounted for the overwhelming majority of prescriptions, and the evidence showed access to approximately 90% of prescriptions without using Regurin. There was no significant consumer or pharmacist resistance to generic or differently branded products. Doncaster could compete with generic products and Flotros. Rebranding as Regurin was therefore not objectively necessary and was pursued to obtain a commercial advantage by benefiting from the claimant’s marketing.
4. For the 60mg extended-release product, the MHRA required the product to be marketed under a brand, but an alternative brand could be used. Generic prescriptions comprised approximately 68% of the market, the cost of changing the branding was minimal, and an alternative brand would enable competition across the market. The inability to use uriVesc resulted from third-party trade mark rights, not from a structural feature of the United Kingdom market.
5. The use of Regurin and Regurin XL was therefore not protected by the Articles 34–36 defence. The Regurin trade mark had been infringed.