F-word not descriptive of pharma product, rules court

Now that the Kats have your attention, here's another note on a recent case which has, or at any rate should have, a predictable outcome.  It's Flynn Pharma Ltd v Drugsrus Ltd and Tenolol Ltd [2015] EWHC 2759 (Ch), a 6 October 2015 decision of Mrs Justice Rose sitting in the Chancery Division of the High Court, England and Wales. It is another pharma parallel importation case.  Readers will recall that, while trial courts are quite good at dealing with these matters and providing a respectable level of protection for trade mark owners and potentially confused or deceived consumers, appellate courts are more inclined to take a different view.  Merpel would not be at all surprised if this decision, which looks perfectly good to her, goes to the Court of Appeal and comes out looking somewhat different.

In this dispute Flynn traded in generic medicines and speciality brands, all of which carried its FLYNN name and logo, the former being registered both as a Community trade mark and as a United Kingdom trade mark for pharmaceutical substances. The defendants -- Drugsrus and Tenelol -- planned to import into the UK pharmaceutical products which had been sold in other Member States under the brand name Epanutin and affixing to them the name Phenytoin Sodium Flynn (phenytoin being used as a means of controlling excessive activity in the brain that leads to epilepsy).

Said Flynn, this proposed use of its name would infringe under the Trade Marks Act 1994 s 10(1) [= Trade Mark Directive 2008/95, Art. 5(1)(a)] since it constituted the use of an identical sign for goods identical to those for which the sign was registered.  No, said the defendants, we are only using the F-word as a description of the goods within s 11(2)(b) [= Art.6(1)(b) of the Directive]. They relied on a disclaimer on the packaging which stated that their products were not manufactured or sold by Flynn but were equivalent to Flynn's phenytoin sodium products. What's more, they said, Flynn had no right to sue them at all: its reliance on trade mark rights under domestic legislation to stop the imports constituted a disguised restriction on trade contrary to the free movement provisions of the Treaty on the Functioning of the European Union (TFEU).

Mrs Justice Rose may have been amused by this arguably imaginative but flaky attempt to avoid liability for trade mark infringement, but she was not taken in by it. In a long and patiently-articulated judgment she held fairly and squarely for the claimant.  In her view:

* The use of the word "Flynn" did not describe the goods that the defendants planned to import. "Flynn" was not a word associated with medicines or ingredients that denoted the medicine's qualities or characteristics. It would be perceived by consumers as a mark of origin, indicating that the product came from Flynn as the entity responsible for the goods' quality. That was clearly a trade mark use of the sign.

* The disclaimer was not sufficient to clarify for the consumer the nature of the relationship between the product and the claimant: this was because the use of a word in the name of a product, where that word was clearly a brand name, was not contradicted by small print explaining that the product had not actually been made or marketed by the entity which owned the right to use that name.

* Though Art. 34 of the TFEU prohibited quantitative restrictions on imports, or equivalent measures, between Member States, Art.36 tempered that apparently absolute provision by allowing prohibitions or restrictions on imports that were justified in protecting industrial or commercial property -- so long as they did not constitute a disguised restriction on trade.

Not everyone is fond of Flynn, a business
that, it is claimed, has a spot of 'previous'
when it comes to importing Epanutin

* In order to defeat a trade mark owner's infringement claim, a defendant had to show that the product it sought to import had been placed in the exporting Member State with the consent of or by the same entity that later tried to prevent its import. While Flynn was responsible for placing its phenytoin sodium on the market in the UK, it was another company that was responsible for placing Epanutin on the market in other Member States. On this basis, the trade mark rights were not exhausted in respect of Epanutin placed on the market in other Member States, and Flynn was perfectly entitled to prevent the relabelling of the defendants' parallel imports.