Trademark law challenges

lt is common practice to register brand names as trademarks in ali coun-tries where the product will be launched on the market. Whereas for granting a patent the relevant standard (novelty) is essentially the same in ail jurisdictions the registrability of trademarks has to be exarnined country by country because in every register sirnilar or identical trade-marks may exist which then would hinder the registration. Usually, trademark searches are performed prior to filing applications with the trademark offices, but since searches are expensive they are performed in selected countries only.

For example, a full similarity search in the relevant registers for the Eu-ropean Uni on may cost between 5000 and 10 000 CHF. Applicants therefore often start with cheap identity searches or even simple inter-net searches which serve as a fil ter to identify the obviously unavailable candidates.

Sirnilarity searches are normally carried out by specialized external serv-ice providers who have access to all relevant databases and which use computer programs to find similarities. They also make a first selection manually to sort out irrelevant similarities. The following in-depth-evaluation is then made by experienced trademark managers who can be external or internallawyers. This is an extremely critical task since an overlooked obstacle may lead to serious delays of the whole project.

N evertheless, sin ce se arch reports may comprise hundreds of hits

trade-120 Hans-Friedrich Czekay

mark managers often have to decide within a few moments whether a certain hit constitutes a possible obstacle or not.

Searches among pharmaceutical trademarks are indeed likely to reveal a great number of hits. This is due to the multitude of marks which are registered in international class 5⁵ (the class comprising pharmaceutical trademarks) and this makes searches in this field particularly difficult.

On the other hand the pharmaceutical market is more transparent than many others. It is normally easy to find out whether a mark is used on the market since this kind of information is available in global databas-es.6 This facilitates recognizing the validity of prior registrations (in most countries registrations become invalid if the mark has not been put into use for 3 or 5 years). lnvalid registrations are normally not taken into consideration.

Very often conflicts can be solved by way of negotiations with the own-ers of cited marks. If detected similarities between marks appear accept-able since the products they designate are sufficiently different the par-ties may conclude a coexistence agreement in which the owner of the prior mark agrees to provide the applicant with a letter of consent to be submitted to the trademark offices. European pharma companies often use a standard form for this purpose which is restricted to essential rules so that in most cases a single sheet of paper will suffice.

Candidates who have cleared this phase are then submitted to the team who selects those for which applications are to be filed with the relevant trademark offices. ln view of the remaining uncertainties at least one, but normally severa! backup candidates must be defined. Sorne campa-nies file applications at this stage worldwide, others focus on major mar-kets for cost reasons. A worldwide filing action may cost up to 100 000 CHF per mark.

If a mark has been searched with due diligence applications should nor-mally not encounter obstacles, i.e. they should not come across prior confusingly similar marks which may be ground for oppositions filed by third parties or which may be cited ex officia. There is of course a

5 See Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks, available online at http:/ 1 www.wipo.int/treaties/en/classification/nice/trtdocs_ wo019.html, last accessed 22 June 2012.

6 E.g. the IMS Health database of used trademarks.

Challenges of Pharmaceutical Brand Name Creation 121

higher likelihood to find obstacles in countries where no prior searches were made. In such case the applicant must decide whether to negotiate or whether go through the (time consuming) opposition proceedings or whether to switch to the backup mark to circumvent the obstacle.

To assess similarity trademark offices apply a multitude of rules evolved in jurisprudence over many years. E.g., one rule says that healthcare professionals are particularly diligent when working with drugs so that danger of confusion is reduced. As a consequence, many trademark of-fices are relatively liberal to admit coexistence of similar pharmaceutical trademarks.

B. Time lines

The filing phase should start timely after searching since searches can become outdated rapidly. Marketing aspects, too, favor early filing, as said above. On the other band, a start made too early before market launch may endanger registrations that may become invalid due to non-use.

The market launch date depends mainly of the duration of the regula-tory proceedings, i.e. the examination of the application for marketing authorization to be carried out by the relevant health authorities. De-pending on the quality of the data, in particular of test results obtained during the clinical phase III, these proceedings may take several months, but also far more than one year.

lV. Regulatory challenges

There is no regulatory obligation to use a trademark to designate a phar-maceutical product in commerce. Manufacturers may also use a combi-nation of the generic name and of the company name instead. In prac-tice, they always use brand names and these need in most countries regula tory approval, i.e. they are part of the marketing authorization. In recent years, regulators have looked more and more critically at brand names submitted to them, mainly in order to exclude coexistence of sim-ilar trademarks for different products which may lead to medication

er-122 Hans-Friedrich Czekay

rors, but also to avoid use of otherwise misleading trademarks. This is a common approach in many jurisdictions, but in detail the relevant rules and practices differ of course from country to country.

B.

1. General remarks

Trademark offices and regulators have similar objectives, but different methods. The common primary objective is to avoid danger of confu-sion caused by similarity of trademarks.

As a matter of public interest, patient safety cornes first for regulatory bodies. Medication errors caused by drug name confusion may lead to serious consequences for patients and therefore the regulatory evalua-tion process is different from the evaluation made in trademark offices where normally the interests of the involved parties prevail.

Trademark Offices can rely on sophisticated jurisprudence which has developed over decades. They compare the products in question as they are named in the list of goods which is normally rather abstract.

Regulators do not rely on jurisprudence, but they have guidelines that describe in detail how to evaluate conflicts. They do not only look at medical indication but also to galenic forms (e.g. tablets, vials, am-poules), route of administration (e.g. oral or injection), dosage strengths, frequency of administration, packing design, storage conditions, patient population and possible consequences for patients in case of medication errors. The rejection rate here is much higher than the one at trademark offices. In recent year regulators have rejected, roughly summarized, every second trademark candidate.

Trademark offices resolve conflicts looking at priority dates, as they are entered in the trademark register: The earlier mark will prevail. Regula-tors follow the same approach, but it is the date of grant of marketing authorization which defines the priority. That date will overrule the pri-ority as defined in the trademark register even if the approved mark was never used on the market.

Similarity of marks belonging to the same owner is not an obstacle to trademark registration, but it is to the grant of a marketing authoriza-tion.

Challenges of Pharmaceutical Brand Name Creation 123

But there are also rules that are applied by trademark offices as weil as by regulators. They look both at sound-alike and look-alike similarity and similarity on one single level may suffice for a rejecting decision.

Sometimes regulators tend to overchallenge the distinctive power of trademarks and they reject marks having only slight similarities with a prior mark. Medication errors, however, are never caused by trademark similarity alone, but also by healthcare professionals' negligence. In-structive cases can be found in the US Pharmacopeia's database of re-ported medication errors.7 For example, a search for the mark Zyprexa, reveals as one of the marks which were confused with it, the mark Ziprasidone. Both marks are easily distinguishable. There must have been a high degree of negligence in such a case. It cannat be the function of trademark or regulatory law to neutralize this kind of negligence.

Nevertheless, regulators' decisions are taken quite seriously by industry and are almost never challenged before courts as this would unduly de-lay market launch. Therefore, most applicants rather would switch to back up candidates than file an appeal.

Trademark offices normally do not check whether use of a mark is likely to be misleading, but regulators do, particularly with regard to over-stated efficacy.

A specifie topic is similarity of marks with generic names (INNs). The WHO propagates vigorously the principle that trademarks should not be derived from generic names, contrary to what industry likes and of-ten practices.⁸ Trademark offices do not share this view. They register even marks which are almost identical to INN s. But regulators are more inclined to Iisten to WHO's concerns, particularly with regard to the INN stems. Regulators would not approve a mark if it uses an INN stem in a misleading way. E.g., a mark ending on -mab will not be ap-proved if the product is not a monoclonal antibody.

7 Available online at http://www.usp.org/hqi/similarProducts/drugErrorFinder Tool.html, last accessed 22 June 2012.

8 WHO, Guidelines (supra note 3), p. 3.

124 Hans-Friedrich Czekay

2. Requirements to be fulfilled in the European Union

The European Medicines Agency in London (EMA) is responsible for the grant of European marketing authorizations.⁹ The characteristic el-ement in the EMA proceedings and at the same time a dangerous hurdle to applicants is the so-called single trademark requirement: ln the cen-tralized procedure it is practically impossible to obtain approval to use different trademarks in single EU member states. Since there are 27 trademark registers in the EU and every single one needs to be searched for possible conflicts there is a high likelihood that a candidate cannot pass this test. Thus, an obstacle in one, even small, single country will eliminate a candidate for the EU. As a consequence, this candidate will normally no more be eligible as global brand name.

The EMA uses a decision tree to find out to what extent a trademark may incorporate INN elements. The system is relatively liberal in ad-mitting INN parts as long as there is no misleading effect.

Before filing a New Drug Application (NDA) the applicant may submit a list of trademark candidates to be pre-checked by an EMA body called Name Review Group (NRG). Up to 4 marks can be submitted and EMA recommends making full use of that. They are ali evaluated with equal diligence. NRG is composed of 19 members representing various EU regions (as defined by language groups- Germanie, Romanic, Slavic, Uralic, Baltic, Semitic, Greek) as weil as EU Commission, EMA and WHO. Decisions are made by consensus, not by majority.

Against a rejection the applicant may argue using a justification form. If the rejection was made with regard to a conflicting product the form re-quires the applicant to consider all properties of his drug compared with those of the cited one.

3. Requirements to be fulfilled in the USA

There are no fundamental differences between the substantial require-ments which a trademark candidate must fulfill in the proceedings at the United States Food and Drug Administration (FDA), compared with

9 European Mcdicincs Agency, Guideline on the acceptability of names for human medicinal products processcd through the centralized procedure, London 2007, availablc online at http:/ /www.ema.europa.eu/ docs/ en_ GB/ document_library 1 Regula tory _and_procedural_guideline/2009/1 0/WCS00004142.pdf, last accessed 22 June 2012.

Challenges of Pharmaceutical Brand Name Creation 125

those at EMA. The main difference is of procedural nature. Testing of marks is an important element in FDA proceedings.to

Whereas the FDA emphasizes that there is no single method that can evaluate all dimensions of similarity¹¹ it has developed detailed rules for safety testing to detect look-alike and sound-alike similarities. It de-scribes name simulation studies with healthcare professionals in at least 20 scenarios, requiring 2 to 5 participants per scenario ( that me ans an av-erage number of 70 test persans are needed). For example, the test pro-vided for in scenario no. 7 simulates that an orally administered drug is to be ordered verbally, then transcribed to a written arder, whereby the pronunciation must be as intended by the applicant. Participants are a physician, two nurses, a ward clerk and a pharmacist. FDA recognizes that, due to the limited number of participants, it is not possible to de-tect low error rates but hopes to understand "how a proposed name might perform in real world conditions". ¹²

FDA also uses computerized methods to identify similarities between marks in spelling and orthography. Criteria are length of the name, up-strokes, clown strokes, cross strokes, dotted letters, ambiguity intro-duced by scripting letters and overlapping products characteristics.

In recent years applicants have performed such studies on their own to improve their chances to have a trademark approved. Consequently, service providers evolved which offer to applicants trademark audits to be performed prior to submission to FDA.

Applicants may submit a first-choice name and a second-choice name, the latter to be reviewed only if the first fails.

Like EMA the FDA also performs a promotional review to eliminate proposais that are overly fanciful or overstate effectiveness or risk min-imization. If tests are made within this review they involve personnel

10 FDA, PDUFA Pilot Proj ect, Proprietary N ame Review, Concept Paper, September 2008, p. 15, available online at http://www.fda.gov/downloads/Drugs/

GuidanceComplianccRegulatory Information/ Guidances/U CM072229. pdf, last accessed 22 June 2012; see also FDA, Guidance for Industry, Contents of a Complete Submission for the Evaluation of Proprietary Names, February 2010, available online at http:/ /www.fda.gov/downloads/Drugs/GuidanceCompliance Regulatorylnformation/Guidances/UCM075068.pdf, last accessed 22 June 2012.

11 FDA, Concept Paper (supra note 10), p. 15.

12 FDA, Concept Paper (sup1·a note 10), p. 18.

126 Hans-Friedrich Czekay

from marketing, regulatory and legal affairs as weil as consumer p sy-chology.

The FDA is more restrictive than EMA with regard to the use of stems of generic names. FDA recommends not using stems in a stem position since that could result in multiple similar brand names and thus increase the likelihood of confusion.¹³

4. Requirements in other countries

In Japan¹⁴ and Mexico15 regulatory authorities operate online tools where applicants can check candidates against a data base of brand nam es for which marketing authorizations are already issued. These systems provide evaluations immediately, but they are extremely rigid since they work with very simple parameters. E.g. they reject candidates if they are identical with respect to the first three letters even if other parts are dif-ferent enough to exclude any danger of confusion.

13 FDA, Concept Paper (supra note 10), p. 13; the term USAN (US Approved Name) is used instead of INN; USAN and INN nomenclatures are coordinated.

14 In Japan candidates are tested with the JAPIC orthographie anal y sis tool, available online (in Japanese language only) at https://www.ruijimeisho.jp/Pub/Search.

aspx, last accessed 22 June 2012; the first three katakana letters should not be idemical with th ose of a prier registra ti on. For more details seeJ apanPharmaceutical Manufacturers Association (ed.), Pharmaceutical Administration and Regulations in Japan, available online at http:/ /www.nihs.go.jp/mhlw/yakuji/yakuji-e_

20110502-02.pdf, lastaccessed 22June2012. For scientific background see FuMITO TsucHrYA!NoBORU KAwAMURA, Dcvelopment of the System to Objectivcly Evaluate Similarities of Drug Names, Proceeding of APAMI & CJKMI-KOSMI Conference 2003, Taegu, pp. s348-s351 (2003).

15 Art 23 (1) of the Mexican Hcalth Suppl ics Regulation: " ... the trademark ... shall be different in at !east 3letters in each word."

Trademark Enforcement Issues in the Pharmaceutical Industry

Matthijs Marelt, Martin Senftleben'''' and Manon Rieger-]ansen''''·•:·

The acquisition of trademark rights relating to pharmaceutical products is particularly challenging. Besicles the requirements of trademark law, a pharmaceutical trademark must comply with the additional regulatory criteria in the framework of the general procedure for marketing au-thorization, su ch as the procedure before the European Medicines A gen-cy.1 Nonetheless, trademarks play a central role in the pharmaceutical sector. As in other areas of trade, they function as identifiers of commer-cial source. With regard to medicines, this basic function is not only nec-essary to ensure market transparency and prevent (consumer) confu-sion. It also reduces health risks that may arise from medication errors and fake medicines. On the basis of product quality control and market-ing efforts, a trademark may also become an important asset for produc-ers of pharmaceutical products. The resulting brand loyalty can become essential to the defence of market shares after the expiry of patent rights.

These different functions of trademarks in the pharmaceutical sector will be described in the following section I. Trademarks can only serve the outlined functions, however, when they are properly enforced.

Against this background, section II will provide an overview of enforce-ment actions, ranging from border measures against fake medicines to the regulation of parallel trade in medicines. The insights derived from the analysis will be summarized in the concluding section III.

:;.::-Lawyer, The Hague.

Professer of Intellectual Property, VU University Amsterdam; Senior Consultant, The Hague.

Lawyer, The Hague.

For a description of the different rcquirements and challenges see the article by HANs-FRIEDRJCH CZEKAY, Challenges of Pharmaceutical Brand Name Creation, in this book (p. 115 ).

128 Matthijs Mareil/Martin Senftleben/Manon Rieger-Jansen

1. Introduction to trademark rights

Trademark rights are a specifie type of intellectual property. lnstead of constituting exploitation rights, they are granted to safeguard market transparency. In principle, every trader is bound to use his own, individ-ual trademark for the identification of his goods and services. ln this way, trademark law seeks to ensure fair competition between market participants and protect consumers against confusion about the origin of goods and services offered in the marketplace. From an economie perspective, it can be added that the clear indication of the commercial origin of goods and services reduces consumers' search costs.² To achieve these goals, trademark law allows companies to establish an ex-clusive link with a distinctive sign: the law grants companies exclusive rights to their trademarks.

As a result of this grant of exclusive rights, trademark law offers suffi-cient legal security³ for investment in the sign concerned. Through

As a result of this grant of exclusive rights, trademark law offers suffi-cient legal security³ for investment in the sign concerned. Through