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Re-brand of imported drugs under locally used trade mark not justified, rules High Court

Out-Law News | 25 Nov 2013 | 9:37 am | 2 min. read

A drugs distributor was not justified in changing the name of products it had imported from France and Germany to sell into the UK to that of a rivals' trade mark, the High Court has ruled.

Parallel importer Doncaster Pharmaceuticals Group Limited (DPG) marketed drugs in the UK which had been imported from France and Germany where they had been marketed under different names.

When DPG imported the drugs from France and Germany and used the 'Regurin' brand for its marketing in the UK it infringed trade mark rights belonging to rival distributor Speciality European Pharma Limited (SEP), Mrs Justice Asplin ruled. SEP was the exclusive licensee of the Regurin mark in the UK. The mark was owned by drugs manufacturer Madeus GmbH.

The judge ruled that there was "no objective necessity for re-branding" of the French and German marketed drugs to that of Regurin.

The judge said that DPG was "seeking purely a commercial advantage" and that therefore its actions were not justified. She said it was trying to "piggy back on SEP's marketing efforts", benefit from the reputation in the Regurin name and win more orders for its same-named product in the markets SEP was operating in.

The market rules and structures did not prevent DPG from competing effectively in the UK market without relying on the Regurin mark to do so, Mrs Justice Asplin added.

"Regulators may require that certain drugs being sold in their market are marketed under a specific brand, and not just the generic product name," intellectual property law expert Emily Swithenbank of Pinsent Masons, the law firm behind Out-Law.com, said. "Some importers may rely on this to assert that altering the name to that of the local trade mark is therefore objectively necessary to gain access to the market."

"This ruling however makes clear that the ‘market’ in question is that of the product and not of the brand. Where the adoption of a new brand name would allow access to that market, use of the local trade mark may be prevented by that trade mark's owner, even if they put the imported products on the market elsewhere in the EU," she added.

EU case law has established that replacing the original trade marked name for a product in one jurisdiction with that of another trade marked name in the country in which the product is being imported without the authorisation of the trade mark owner in that country must be "objectively necessary" in order to be legitimate.

The ruling considered DPG's rights to trade without restriction under the Treaty of the Functioning of the European Union (TFEU) and how they balanced against those of SEP as a trade mark owner with rights to control the use of their brand.

DPG argued that provisions under the TFEU gave it the right to re-brand its products to those of a trade marked name when importing goods from one EU country into another.

The TFEU places a general ban on "quantitative restrictions on imports" and equivalent measures between EU member states in an effort to promote trade across the single market.

However, the treaty does permit restrictions to exist in certain circumstances, including where it clashes with intellectual property rights, providing that the restrictions do not "constitute a means of arbitrary discrimination or a disguised restriction on trade between member states".

Ultimately Mrs Justice Asplin ruled that upholding SEP's trade mark rights was a reasonable restriction of DPG's trade rights after determining that DPG's re-brand was for commercial benefit only.