Flynn Pharma Ltd v Drugsrus Ltd & Anor

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.

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.

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.