At the EUIPO, the validity of any trade mark which has been on the register for over 5 years can be challenged. If this occurs, the trade mark proprietor must either provide evidence of genuine use of the mark on the market or provide legitimate reasons for not having used the mark. As providing proof of use isn’t compulsory to keep a trade mark on the register in the EU, proprietors are unlikely to need to prove use unless they are trying to enforce their rights in an opposition, or where a third party wants to clear the register to make way for an identical or similar mark.
On average it takes around 10 years to bring a new pharmaceutical drug to market, with clinical trials generally being the longest stage taking around 7 years to complete. Alongside drug development, pharmaceutical companies also must invest significant resources into choosing and clearing a suitable name for the drug. Securing a trade mark registration for a pharmaceutical drug in the EU can be a challenging task given the need to ensure the name does not mislead or confuse the public and is free to register in class 5. Further to this, the proprietor must obtain marketing authorisation from the European Medicines Agency. Given the length of time required to bring a pharmaceutical drug to market, trade mark registrations are often secured long before the mark is put to genuine use and are therefore vulnerable to non-use cancellation.
EU Regulation states that an EU trade mark will be revoked if, within a continuous period of 5 years, the trade mark has not been put to genuine use in the EU in connection with the goods or services in respect of which it is registered, provided there are no proper reasons for non-use. The proper reasons for non-use concept has long been relied upon by pharmaceutical companies, however, the CJEU decision of Viridis Pharmaceutical v EUIPO highlights the risks associated with securing a trade mark registration in the EU prematurely where pharmaceutical marks are concerned.
By way of background, in 2003 Viridis Pharmaceutical Ltd (hereinafter 'Viridis') filed an EU trade mark application for the mark BOSWELAN in class 5, which registered in 2007. Revocation proceedings were brought by Hecht-Pharma GmbH (hereinafter 'Hecht') in 2013 on the grounds that the mark had not been put to genuine use. The Cancellation Division of the EUIPO revoked Viridis’s mark, a decision that was supported by the Court of Appeal and the General Court of the EU. The case was finally appealed to the CJEU by Viridis but the decision to cancel the mark was upheld.
Are clinical trials independent of the holder’s control?
As per settled case law, only obstacles that have a sufficiently direct relationship with a mark making it impossible or unreasonable to use it and which are independent of the owner’s control can qualify as being a 'just cause' for non-use. The TRIPs Agreement provides the example of import restrictions as being beyond the trade mark owner’s control and hence are a valid reason for non-use of a mark. The Board of Appeal in Viridis’s case found that the completion of a clinical trial was not, on its own, independent of Viridis's control, given that its duration is largely dependent on its financial backing. Financial resources of the owner of the mark are considered to be within their control.
The CJEU agreed and confirmed that clinical trials can in some cases be capable of constituting a just reason for the non-use of a mark but will depend on the individual circumstances of the case. In the present case, the CJEU noted that Viridis placed its clinical trial application three years after the registration of the contested mark. The clinical trials were also delayed due to insufficient financial investment. The court considered various acts to be within the responsibility and control of the owner of the mark. Such acts include the time between trade mark registration date and the launch date of the clinical trial, as well as the financial resources behind the development of a drug which will affect the duration of the clinical trial.
Take home messages
There are three cumulative conditions which the CJEU require to make a finding of proper reasons for non-use of an EU registration:
(all assessed on a case-by-case basis).
While clinical trials can, in principle, be deemed a valid reason for the non-use of a mark, this is not guaranteed and will be considered within the context of a range of factors. A significant delay to the completion of the clinical trial due to lack of financial investment will not fulfil the first provision of the cumulative test.
Importantly, Viridis was criticised by the courts for seeking an EU trade mark registration prematurely, when they were uncertain as to the outcome of the clinical trials and whether marketing authorisation would even be successful. As such, pharmaceutical companies should carefully consider EU filing strategies in addition to when is best to seek marketing authorisation for a new drug name.
September 13, 2018
Finnegan is deeply saddened by the death of our colleague Donald R. Dunner, who passed away on October 16, 2019, after a life of dedication and inspiration to many in IP law. Don was in a category all his own with his talent and distinct knowledge of IP law. His direct approach and enthusiasm for work and life touched everyone who worked with him, and we will miss him dearly.