Flynn Pharma Ltd v Drugsrus Ltd & Anor

[2015] EWHC 2759 (Ch)

Summary

Use of a pharmaceutical brand name by a parallel importer is trade mark use where consumers would perceive it as identifying the undertaking responsible for the product’s quality. A disclaimer will not necessarily alter that perception.

The BMS repackaging principles do not remove the need to establish that the goods were first placed on the market in the exporting state by, or with the consent of, the same entity seeking to enforce the mark. Identical manufacture and regulatory oversight are insufficient where responsibility for product quality is divided between independent undertakings. If the BMS criteria apply, rebranding may be necessary where refusal would hinder effective access to a substantial part of the importing market.

Factual background

Flynn Pharma held UK trade marks for FLYNN and marketed phenytoin sodium capsules as Phenytoin Sodium Flynn. The defendants proposed importing Epanutin capsules sold by Pfizer in other EU member states and relabelling them with the name Phenytoin Sodium Flynn.

The claim concerned whether the proposed use was trade mark use, whether the defendants could rely on the descriptive-use exception in section 11(2)(b) of the Trade Marks Act 1994, and whether preventing the imports was contrary to Articles 34 and 36 TFEU. The central issues included exhaustion of trade mark rights, the relevance of the BMS conditions, and whether rebranding was necessary to obtain effective market access.

Held

  1. Trade mark use. The defendants’ proposed use of FLYNN was use as a trade mark. The word was not descriptive of the medicine, its ingredients or its characteristics. Consumers would perceive it as identifying Flynn Pharma as the holder of the marketing authorisation and the undertaking responsible for product quality. The proposed disclaimer did not sufficiently alter that perception. The defence under section 11(2)(b) of the Trade Marks Act 1994 therefore failed.
  2. Relevant EU-law condition. The repackaging and rebranding authorities, including Bristol-Myers Squibb v Paranova and Pharmacia & Upjohn SA v Paranova A/S, did not establish a free-standing public-health exception based solely on therapeutic identity. The goods must have been placed on the market in the exporting state by, or with the consent of, the same entity seeking to prevent their import.
  3. Control and exhaustion. The decisive question was whether the same entity could control the quality of the products bearing the mark in both states. Flynn Pharma and Pfizer had no corporate link. Under their agreements, Flynn Pharma controlled the UK marketing authorisation, specification and use of the FLYNN mark, while Pfizer remained responsible for Epanutin supplied elsewhere. The trade mark rights were therefore not exhausted.
  4. Alternative finding. If the BMS criteria were engaged, the defendants would satisfy the necessity condition. Refusal to permit rebranding would hinder access to a substantial part of the market, including branded prescriptions and prescriptions for patients stabilised on Flynn Pharma’s product. The defendants accordingly needed to rebrand to obtain effective market access.
  5. The claim for trade mark infringement succeeded.

The court’s approach to earlier authorities

Available to signed-in members.

Appeal route

  1. This judgment [2015] EWHC 2759 (Ch) High Court (Chancery Division)
  2. Appealed to[2017] EWCA Civ 226Outcomeappeal dismissed

Key cases cited

10 authorities cited.

  • Speciality European Pharma Ltd v Doncaster Pharmaceuticals Group Ltd & Anor [2015] EWCA Civ 54
  • Adam Opel AG v Autec AG Case C-48/05
  • Bristol-Myers Squibb v Paranova A/S [2003] Ch 75
  • Boehringer Ingelheim KG v Swingward Ltd (Merck Sharp & Dohme GmbH v Paranova Pharmazeutika Handels GmbH, Boehringer Ingelheim KG, Boehringer Ingelheim Pharma KG, Glaxo Group Ltd, The Wellcome Foundation Ltd, SmithKline Beecham plc, Beecham Group plc, SmithKline & French Laboratories Ltd and Eli Lilly and Co. v Swingward Ltd and Dowelhurst Ltd.) Case C-143/00
  • Arsenal Football Club v Matthew Reed Case 206/01
  • Pharmacia & Upjohn SA v Paranova A/S Case C-379/97
  • British Sugar v James Robertson & Sons Ltd [1996] RPC 281
  • IHT Internationale Heiztechnik GmbH v Ideal Standard GmbH [1994] ECR I 02836
  • De Peijper [1976] ECR 613
  • Centrafarm v Sterling Drug [1974] ECR 1147

Sign in to see how the court treated each authority. A free account is enough.

Cases citing this case

Available to signed-in members.