Using medicinal product trademarks in clinical trials prior to marketing authorization does not amount to genuine use, states Advocate General Szpunar
On January 9, 2019, Advocate General (AG) of the Court of Justice of the European Union (CJEU) Maciej Szpunar gave his opinion on case C-668/17 (“Opinion”), a trademark dispute that, while focusing on medicinal products, raised two other far-reaching issues concerning the scope and definition of the requirement of genuine use within the provisions of Article 58 of Regulation (EU) 2017/1001 of the European Parliament and of the Council of June 14, 2017 on the European Union trade mark (“EUTMR”).
The Opinion was given in the context of the appeal brought on November 28, 2017 by Viridis Pharmaceutical Ltd. (“Viridis”) against the judgment of the General Court (Second Chamber) delivered on September 15, 2017 in Case T-276/16, Viridis v European Union Intellectual Property Office (“EUIPO”). The primary proceedings concerned the revocation of the EU trademark Boswelan, registered by Viridis for class 5 of the Nice classification (Pharmaceutical and sanitary preparations), issued by the EUIPO following the application filed by Hecht-Pharma GmbH for a declaration of invalidity due to lack of genuine use.
Specifically, the grounds of Viridis’ appeal to the Court of Justice are as follows. Firstly, “the appellant claims that the General Court, in the judgment under appeal, infringed the EU trade mark Regulation […] in assuming that use of a registered EU trade mark for a medicinal product for the purpose of preserving the rights in that trade mark can exist only where the necessary authorisation under the law relating to medicinal products has been issued [and] by classifying the use of an EU trade mark in the context of a clinical study carried out in accordance with Article 8(3)(i) of Directive 2001/83/EC (2) as inherently mandatory and therefore as not constituting genuine use”. Secondly, Viridis “alleges [that the General Court] erred in law in assuming that a clinical study carried out for the purposes of preparing an application for authorisation of a new medicinal product under the law governing medicinal products cannot then be used to justify the non-use of a trade mark if the clinical study was not applied until a significant amount of time had elapsed since registration of the trade mark and/or if the financial resources spent were not sufficient to enable the clinical study to be completed as rapidly as possible”.
Simply put, in the primary proceedings, Viridis claimed that the challenged trademark should not be revoked since it had been put to genuine use over the course of a clinical study that it was required to conduct in order to obtain the necessary authorization to market the medicinal product in question. Alternatively, Viridis argued that the application to access the required clinical study should alone provide legitimate grounds for justifying the non-use of the challenged trademark. The General Court dismissed both arguments, confirming that the acts occurred during the clinical study conducted by Viridis, the only examples proving the use of the challenged trademark, could not amount to genuine use and that the clinical study per se provided no proper reason.; In other words, there is no reason independent of the trademark holder’s control, to justify the non-use of the Boswelan trademark. Consequently, the Court upheld the EUIPO’s decision declaring Viridis’ registration revoked for non-use.
Viridis challenged this ruling before the European Court of Justice, arguing that both the EUIPO’s and the General Court’s decisions are the result of a misinterpretation of the applicable provisions of the EUTMR defining the meaning and scope of genuine use. In fact, according to Article 58(1)(a) EUTMR, an EU trade mark is valid insofar as it is “put to genuine use in the Union in connection with the goods or services in respect of which it is registered,” by the trademark holder in the five years following its registration, unless the absence of said genuine use can be justified for, proper reasons.
Based on the grounds of Viridis’ appeal, AG Szpunar focused on the following two questions. First assessing whether, under the law, the use of an EU trademark for a drug in the clinical study phase prior to obtaining marketing authorization amounts to genuine use within the scope of Article 58(1)(a) of EUTMR. Second, whether the fact that the marketing and advertising of a drug prior to obtaining a marketing authorization constitutes a proper reason for non-use within the scope of the Article. In his Opinion, AG Szpunar concluded that the answer to both questions is no.
Regarding the first issue, AG Szpunar noted that the nature of the genuine use requirement, which has not yet been applied in court for the use of trademarks registered for medicinal products and only used within clinical studies, has been construed by EU case law as meaning that such use shall be directed at (i) creating and/or preserving a commercial outlet for the products or services for which a trademark is registered, as opposed to those offered by other companies; and (ii) complying with its essential function, which is to ensure that consumers and end users identify the commercial origin of such goods or services and distinguish them, with no risk of confusion, from those having a different source. This implies that genuine use shall always have an external nature, involving exposure of the trademark to the public, yet it cannot be inferred that marketing activity is essential for these purposes. Therefore, activities occurring prior to marketing a product or service, such as preparatory acts, may as well amount to genuine use. This is also the case if a trademark is used to identify the trademark holder’s products or services for the general public, even if only for promotional purposes.
Although similar actions do not necessarily constitute genuine use, they are external in nature and are proven to have an influence on the potential future consumers and end users of the products or services. In this regard, the AG observed that sector-specific EU and national provisions governing the advertisement and marketing of medicinal products tend to limit their accessibility to consumers and end users prior to their authorization, so as to limit the health risks the products may pose. Therefore, any use of a trademark a clinical study should be regarded as use that takes place before the marketing or promotion of a product to the general public.
In fact, only a limited and selected number of subjects, those taking part in the clinical study, may come across the trademark and be able to associate it with the products for which it is registered. Therefore, this use is inherently restricted by law under both a quantitative and qualitative perspective. According to the reasoning expressed in the Opinion, this kind of use does meet the requirement of creating an outlet for medicinal products insofar as it does not occur in the relevant market, but in a different environment that is created precisely to control access to such market due to regulatory requirements. For these reasons, AG Szpunar concludes that the use of an EU trademark in a clinical study should not amount to genuine use within the meaning of Art. 58(1)(a) EUTMR.
In dealing with the second question, the Advocate General refers to the conditions identified by EU case law whose occurrence shall cumulatively be assessed for a reason to be “proper” and thus justify the non-use of an EU trademark. Subsequently, a restriction to the use of a trademark may be invoked if (i) it is independent of the trademark holder’s will; (ii) it presents a sufficiently direct link to the trademark; (iii) it makes the use of the latter impossible or unreasonably burdensome. In this respect, AG Szpunar notes that the existence of a legal prohibition, such as the one to market unauthorized medicinal products subject to clinical studies, may theoretically be a proper reason for non-use of the relevant trademark. However, he argues that the latter conclusion should not necessarily or automatically occur. In other words, the existence of a barrier, even of a normative nature, to the genuine use of an EU trademark should not constitute a proper reason not to use it. In fact, the very access to a clinical trial, which is aimed at obtaining the necessary marketing authorization, implies the trademark holder’s intention to eliminate this barrier.
In this context, there are still a number of options within reach, such as the possibility to start, manage and fund the study or to speed up the clinical study as much as possible. In light of this, AG Szpunar concludes that Viridis simply did not prove any of the aforementioned aspects, and therefore there was no proper reason for non-use independent of the company’s will or control.
In conclusion, prompted by various industry-specific questions, the Opinion offers an interesting take on what seems to be a current trending topic in EU case law, revocation of trademarks for non-use. Contrary to the decisions recently issued by the EUIPO in the Big Mac and Polo Ralph Lauren proceedings, which essentially focused on evidentiary arguments (or the lack thereof), Viridis offered a chance to address the nature and scope of the specific requirements and limits for applying non-use as grounds for revocation within the scope of the EUTMR.
The forthcoming decision of the European Court of Justice will be the first of its kind applied to the drug industry regarding this specific subject and, for key players in other regulated markets, it is certainly one to look out for. What is certain is that in interpreting and enforcing Article 58(1)(a) of the EUTMR, judicial bodies keep raising the bar for trademark holders looking to preserve their proprietary rights.