B. Methodology
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 ad-vertising, consumers may learn to associate a particular lifestyle or atti-tude with the trademark. The maintenance of high product quality will add an additionallayer of positive associations. In this way, the trade-mark becomes a platform which a company, provided that its trade-marketing strategy is successful, can use to raise positive pictures, associations and expectations in the minds of consumers.4 Adding this "brand
experi-2 With regard to the scarch costs argument, see ANDREWS GRil'FITHS, A Law-and-Economie Perspective on Trade Marks, in: Lionel Ben tl y /jennifer Davis /jane C.
Ginsburg (eds.), Trade Marks and Brands - An Interdisciplinary Critique, Cambridge University Press 2008, p. 241 et seq.; MATHIAS STRASSER, The Rational Basis of Trademark Protection Revisited: Putting the Dilution Doctrine into Context, Fordham Intellectual Property, Media & Entertainment Law Journal10 (2000), p. 375 et seq., pp. 379-382. With regard to questions arising in the digital environ ment, see STACEY L. Do GAN /MARK A. LEMLEY, Trademarks and Consumer Search Costs on the Internet, Houston Law Review 41 (2004), p. 777 et scq.
3 Trademark rights are not without limits. For instance, they do not reach beyond use of protected signs in trade. The principle of speciality funher limits trademark exclusivity to use on specifie goods or services. Nonetheless, the scope of the exclusive rights of trademark owners is considerable.
4 Cf. ANDREWS GRIFFITHS (supra note 2), p. 255; RALPH S. BROWN, Advertising and the Public lnterest: Legal Protection of Trade Symbols, Yale Law Journal 108 (1999), p. 1619 et seq., pp. 1619-1620; KARL-HEINZ FEZER, Entwicklungslinien und Prinzipien des Markenrechts in Euro pa- Auf dem Weg zur Marke als einem immaterialgüterrechtlichen Kommunikationszeichen, GRUR 2003, p. 457 et seq., pp. 461-462; SABINE CASPARIE-KERDEL, Dilution Disguised: Has the Concept of
Trademark Enforcement Issues in the Pharmaceutical Industry 129
ence" to the trademark, the trademark owner can crea te a valuable brand image.5
Hence, different stages of trademark development can be distin-guished:
the initial stage of "sign reservation" where exclusive rights to a trademark are acquired and maintained through continuous use in trade, and
the further stage of "brand image creation" where trademark goodwill is accumulated through investment in advertising and product quality.
A. The initial stage of "sign reservation"
As already indicated, trademark law offers companies the opportunity to establish an exclusive link with a sign-the initial process of" sign res-ervation"- because it seeks to protect consumers against confusion and ensure market transparency by safeguarding the so-called "identifica-tion func"identifica-tion"6 of trademarks: when seeing the protected sign, consum-ers should be capable of clearly identifying the commercial source of the goods or services offered under the mark.l In the pharmaceutical
sec-Trade Mark Dilution Made its Way into the Laws of Europe?, EIPR 2001, p. 185 et seq., pp. 185-186; MICHAEL LEHMANN, Die wettbewerbswidrige Ausnutzung und Beeimrachtigung des guten Rufs bekannter Marken, Namen und Herkunftsangabcn- Die Rechtslage in der Bundesrepublik Deutschland, GRUR Int.1986,p.6etseq.,pp.14-17.
5 See JoNATHAN E. ScHROEDER, Brand Culture: Trade marks, Marketing and Consumption, in: Lionel Bently/Jennifer Davis/Jane C. Ginsburg (eds.), Trade Marks and Brands-An Interdisciplinary Critique, Cambridge University Press 2008, p. 161 et seq.
6 As to trademark function the01y, see ANNETTE KuR, Funktionswandel von Schutzrechten: Ursachen und Konsequenzen der inhaltlichen Annaherung und Überlagerung von Schutzrechtstypen, in: Gerhard Schricker/Thomas Dreier/
Annette Kur (eds.), Geistiges Eigentum im Dienst der Innovation, Baden-Baden 2001, p. 23 et seq., pp. 24-30; ANSELM KAMPERMAN SANDERSISPYROS MANrATIS, A Consumer Trade Mark: Protection Based on Origin and Quality, EIPR, 1993, p. 406 et seq.; MATHIAS STRASSER (supra note 2}, pp. 378-390.
7 CJEU, 3 December 1981, Case 1/81, Pfizer v. Eurim-Pharm, para. 8, developed the formula of "the essential function of the trade mark, which is to guarantee the identity of the origin of the trade-marked product to the consumer or final user
130 Matthijs Mareil/Martin Senftleben/Manon Rieger-Jansen
tor, the importance of this basic trademark function can hardly be over-estimated. By preventing confusion, trademark law minimizes the risk of medication errors. The trademark right to take action against identi-cal and confusingly similar signs, 8 moreover, is an indispensable weapon in the fight against fake medicines.
At this initial stage of trademark development, however, the trademark primarily serves defensive purposes. It enables the trademark owner to exclude competitors and counterfeiters from use of identical or similar signs (on identical or similar goods or services) that would cause confu-sion. 9 Thus, the prevention of confusing use pla ys a central role.
As trademarks allow consumers to identify and individualize the differ-ent offers on the market, a company using a specifie trademark has rea-son to fear consumers' reaction to unsatisfactory product quality not meeting expectations formed on the basis of previous purchases. ln con-sequence, the company is not unlikely to make an effort to keep prod-uct quality at a constant level - a phenomenon often referred to as the
"quality function" of trademarks.10 Similarly, advertising based on trade-marks would make little sense if consumers were unable to identify the advertised product in the marketplace. lt may therefore be said that the exclusive trademark rights granted to ensure market transparency are a precondition of later investment in the protected sign, particularly in the form of advertising and quality control. lt is due to these features of trademark law that the investment made by trademark owners is chan-nelled and directed to their respective trademarks, and thus to the signs at which the investment aims.
by enabling him to distinguish without any possibility of confusion between that product and products which have another origin." See RAJ.PH S. BROWN (supra note 4), pp. 1638-1641. For an economie approach to the identification function, see MATHIAS STRASSER (supra note 2), pp. 379-382.
8 See Article 16(1) of the TRIPS Agreement at the international leve!. With regard to the EU, see Article 5(1) of the Trademark Directive 2008/95/EC.
9 Cf. Article 16(1) of the TRIPS Agreement.
10 Cf. RALPH S. BRowN (supra note 4), pp. 1634-1635; RoGER VAN DEN BERGH/
MICHAEL LEHMANN, Informationsokonomie und Verbraucherschutz im Wettbewerbs- und Warenzeichenrecht, GRUR lm. 1992, p. 588 et seq., pp. 591-592.
Trademark Enforcement Issues in the Pharmaceutical Industry 131
B. The further stage of "brand image creation"
Furthermore, the acquisition of trademark rights can lead to a process of "brand image creation" .n This further step - where a brand image is established in the mincis of consumers- goes beyond the primary trade-mark function of identifying companies as the commercial source of goods or services. It shows that trademarks can be more than a mere badge of origin. The creation of a brand image demonstrates that trade-marks are capable of serving as carriers of complex, additional infor-mation relating to a specifie lifestyle, behaviour, attitude or product safety and quality. Viewed from this perspective, trademarks can be qualified as the focal point of communication with consumers.12 They summarize the messages conveyed through advertising and marketing efforts. As a symbol evoking a whole bundle of associations, trademarks begin to "speak" to the target audience. They acquire a" communication function" .13
At this advanced stage of development, a broader use of exclusive trade-mark rights can be observed.14 Trademark owners focus no longer pri-marily on preventing confusing use. Instead, trademark rights gain additional importance because they offer the chance to capitalize on the brand image and recoup the substantial investment made in its creation.
In other words, exclusive trademark rights also serve the purpose of commercializing the value of a particular brand.15 In the pharmaceutical
11 See the description given by JoNATHAN E. ScHROEDER, (supra note 5), p. 161;
MICHAEL LEHMANN (supra note 4), p. 15.
12 Cf. CHARLES DE HAAs, La" contrefaçon" de la marque notoire en droit comparé américain, européen et français: une leçon américaine encore mal comprise, Propriétés intellectuelles 2003, p. 137 et seq., pp. 140-141; MATHIAS STRASSER (supra note 2), pp. 382-386; RALPH S. BROWN (supra note4), pp. 1619-1621; MARK A. LEMLEY, The Modern Lanham Act and the Death of Common Sense, Yale Law Journal108 (1999), p. 1687 et seq., pp. 1690 and 1693.
13 Cf. RALPH S. BROWN (supra note 4), pp. 1634-1635 and 1640-1644, who refers to
"commercial magnetism" and a "persuasive advertising function".
14 See DAVJD VAVER, Brand Culture: Trade marks, Marketing and Consumption-Responding Legally to Professor Schroeder's Paper, in: Lionel Bently/Jennifer Davis/Jane C. Ginsburg (eds.), Trade Marks and Brands- An lnterdisciplinary Critique, Cambridge University Press 2008, p. 177 et seq.
15 See KARL-HEINZ FEZER (supra note 4), p. 457, who expresses the view that the purpose underlyingthe protection ofwell-known marks is "an intensive protection of commercial possibilities of exploiting the mark as an entrepreneurial achievement
132 Matthijs Mareil/Martin Senftleben/Manon Rieger-Jansen
sector, brand loyalty arising from marketing efforts and quality control can constitute an important asset. It may be central to the defence of market shares after the expiry of patent rights. This is particularly true in countries that follow a liberal approach to the use of pharmaceutical trademarks in comparative advertising.16
C. Need for Enforcement Measures
Trademarks relating to pharmaceutical products, however, can only fui-fil the outlined functions if they are properly enforced. Without appro-priate action against the use of identical or confusingly similar trade-marks, a trademark can hardly serve as a reliable indication of commercial source. By the same token, trademark enforcement is an in-tegral part of marketing strategies aiming at the creation of a particular brand imageY Against this background, the question arises which en-forcement tools trademark owners in the pharmaceutical sector have at their disposai.
in the market." JoNATHAN MosKIN, Victoria's Big Secret: Whither Dilution Und cr the Federal Dilution Act?, Trademark Reporter 93 (2004), p. 842 et seq., pp. 843-844, refers to "the expansion of trademark rights from a tort-based theory preventing direct diversion of sales between competitors to a broader set of rights resting on a recognition that trademarks themselves possess economie value."
16 For instance, the French Supreme Court decided in the Deroxat case that an advertisement for a" generic of Deroxat" was a permissible comparative advertising.
Instead of prescnting the generic drug as an imitation, the advertisement served the purpose of informing the public about an equivalent of the branded drug. Sec Cour de cassation, decision No 519 of 24 May 2011 (09-70.722), Sandoz v.
Beecham Group.
17 See Article 2(1)(b) WIPO Joint Recommendation Concerning Provisions on the Protection of Well-Known Marks, WIPO publication No 833, Geneva 2000, available online at http:/ /www.wipo.int/ abou t-ip/ en/ development_iplaw /, last accessed 28 June 2012, th at explicitly refers to "the record of successful enforcement of rights in the mark, in particular, the extent to which the mark was rccognized as weil known by competent authorities". For commentary, see ANNETTE KuR, Die WIPO-Vorschlage zum Schutz bekannter und berühmter Mark en, GRUR 1999, p. 866 et seq.
Trademark Enforcement Issues in the Pharmaceutical Industry 133
II. The tool box for trademark owners in the fight against counterfeit
To protect trademarks against infringement and more in particular, to combat counterfeit goods, owners of pharmaceutical trademarks can rely on various tools. However, before embarking on a doser examina-rion of the different tools for fighting counterfeit products, it is impor-tant to note that there are different notions of the term "counterfeit".
While "counterfeit" is often understood as a reference to trademark in-fringement in particular, the World Health Organisation (WHO) and the Medicrime Convention of the Council of Europe18 use the term in a more general sense for issues relating to the quality, safety and efficacy of medicines, even though this does not necessarily mean that counter-feit products in this broader sense also infringe trademark rights.
For present purposes, the EU Customs Regulation19 ("Customs Regu-lation") definition of" counterfeit" is used: counterfeit trademark goods means any goods, including packaging, bearing without authorization a trademark which is identical to the trademark validly registered in re-spect of su ch goods, or which cannot be distinguished in its essential as-pects from such a trademark, and which thereby infringes the rights of the owner of the trademark in question.20
As counterfeit goods, as already indicated above, not only encroach upon the legitimate business activities of trademark owners, but also constitute a severe threat to public health, the fight against counterfeit pharmaceuticals has two dimensions. On the one hand, it serves the pur-pose of defending private trademark rights that are granted to ensure fair competition, protect consumers against confusion and secure mar-ket transparency. On the other hand, it is in the public interest to offer protection against counterfeit pharmaceuticals. As counterfeit products constitute a serious risk for public health, appropriate counter-measures are required irrespective of the private interests of trademark owners.
Both dimensions must be borne in mind when considering measures against counterfeiting in the area of pharmaceutical products. These
di-18 Sec http://www.coe.int/t/DG HL!StandardSetting/MediCrime/Default_en.asp, last accessed 28 June 2012.
19 EU Regulation 1383/2003.
20 As defined in EU Regulation 1383/2003, article 2 sub la under I) and in the Anti-Countcrfeiting Trade Agreement, Article S(d).
134 Matthijs Mareil/Manin Senftleben/Manon Rieger-Jansen
mensions may complement each other. However, measures taken for reasons of public policy are not necessarily satisfactory from the private rights perspective of trademark owners and vice versa. In order to pro-tect public health, for instance, several initiatives have been taken, such as the Medicrime Convention and the Directive on Falsi:fied Medi-cines.21 The legal mechanisms offered under these instruments aim to provide states with the tools necessary to keep dangerous and unhealthy goods from the market. From a trademark owner's perspective, how-ever, the legal provisions offered by the Medicrime Convention and the Directive on Falsi:fied Medicines are not necessarily sufficient.
The Medicrime Convention and the Directive on Falsi:fied Medicines do not intend to protect intellectual property, but to protect public health and safety. Therefore, the legal provisions of these two initiatives are mostly meant for national and international authorities. Even though the Medicrime Convention does provide tools for trademark owners -for example, a trademark holder could file criminal complaints and in sorne countries even start criminal proceedings against parties involved in falsified medicines -, the Convention does not offer trademark own-ers control over these criminal measures to combat counterfeit medi-cines. Given the focus on public health instead of intellectual property protection, it is not surprising that additional tools have been developed which afford the trademark owner the opportunity to combat counter-feit pharmaceuticals more ef:ficiently. The Customs Regulation can serve as an example in this regard.
A. EU Customs Regulation as an important tool for combating counterfeit
The Customs Regulation is a central tool for trademark owners to pre-vent counterfeit goods from entering the EU market. The Customs Reg-ulation gives right owners broad protection not only against counterfeit pharmaceuticals but also against other kinds of intellectual property rights infringements, such as patent infringements.
In short the Customs Regulation gives right holders the opportunity to file requests with customs authorities to detain goods which infringe in-tellectual property rights. Such a request is submitted by the right holder
21 Directive 2001/83/EU, amended by Directive 2011/62/EC.
Trademark Enforcement Issues in the Pharmaceutical Industry 135
for one single country, severa! countries or even all EU member states.
It must be accompanied by ali information that could help customs to
It must be accompanied by ali information that could help customs to