Pharmaceutical companies: beware of revocation of EU trade marks for lack of ‘genuine use’ during clinical trials
A recent CJEU judgment serves as a useful reminder to pharmaceutical companies of the dangers of registering a trade mark prematurely in the development of pharmaceutical products.
Background of the case
On 28 November 2017, Viridis Pharmaceutical Ltd brought an appeal before the CJEU against the General Court’s verdict to uphold the EUIPO’s Board of Appeal decision to revoke Viridis’s BOSWELAN trade mark for pharmaceutical products. The trade mark was originally revoked by the EUIPO following a claim by Hecht-Pharma GmbH that Viridis’s trade mark had not been put to ‘genuine use’.
Viridis appealed the General Court’s decision before the CJEU on the following grounds:
- The BOSWELAN trade mark had been put to ‘genuine use’ during the course of clinical trials; and
- There was a ‘proper reason’ for non-use of the trade mark which was sufficient for the purposes of avoiding revocation of the mark.
What is the current position regarding ‘genuine use’ of a trademark?
The European Union Trademark Regulation 2007/1001 (EUTMR) provides that, if, within a period of 5 years following registration of a trade mark, the proprietor has not put an EU trade mark to ‘genuine use’ within the EU in connection with the goods or services for which it is registered, the EU trade mark will be subject to sanctions (Article 18 EUTMR).
Article 58 EUTMR further provides that, a EU trade mark may be revoked on application, if within a continuous period of 5 years, the trade mark has not been put to ‘genuine use’ within the EU in connection with the goods or services for which it is registered and no ‘proper reasons’ exist for non-use.
CJEU judgment
Genuine Use:
In response to Viridis’s argument that the BOSWELAN trade mark had been put to ‘genuine use’, the CJEU found that use of a trade mark in a clinical trial did not demonstrate ‘genuine use’.
Viridis’s use of the BOSWELAN mark during the clinical trial was purely internal in nature. Use of the mark took place outside of the competitive market and without the aim of obtaining or maintaining a market share.
The CJEU also made clear that use of a trade mark must relate to (a) products already marketed or (b) products where marketing is ‘imminent’. In the case of Viridis, no marketing authorisation application had been made and Viridis was unable to provide evidence that the clinical trial was about to be completed. On this basis, the CJEU ruled that use of the mark did not constitute a direct preparatory act contributing to an imminent launch onto the market and as such did not satisfy the requirements to establish ‘genuine use’ of the mark.
Proper reason for non-use:
In response to Viridis’s contention that the prohibition of advertising the BOSWELAN pharmaceutical product prior to securing a marketing authorisation was a ‘proper reason’ for non-use of the mark, the CJEU ruled that only obstacles which render it impossible or unreasonable to use the mark may be described as a ‘proper reason’ for non-use.
The CJEU stated that it was Viridis’s choice to apply for the BOSWELAN trade mark at such an early stage of the product’s development process. The CJEU found that at the time Viridis applied to register the trade mark, there was ‘considerable uncertainty’ as to the product marketability date and clinical trial end date. The time scales for application to register the trade mark, complete the clinical trials and apply for a marketing authorisation were all within Viridis’s control. On this basis, the CJEU found that Viridis’s reasoning for non-use of the mark was therefore not sufficient.
Conclusion
This CJEU judgment highlights the risks of premature trade mark registration. Pharmaceutical companies must carefully consider both timing and strategy before making an application to register a trade mark otherwise they risk losing registered rights at a later date.