Last month, the General Court of the European Union (GC) handed down the decision in case T-501/18 (not available in English). This decision concerns the validity of the word trade mark ‘Cinkciarz’ for goods and services in classes 9, 36 and 41 of the Nice classification for, among others, banking and exchanging money services.

‘Cinkciarz’ is a Polish word which, under the Polish People’s Republic, described people who illegally bought and sold foreign currency.

Background

On 26 January 2015, Cinkciarz.pl sp. Z o.o., successfully applied to register the word mark ‘Cinkciarz’. On 22 December 2015, Currency One S.A. challenged the validity of the trade marks claiming that it was descriptive and devoid of distinctive character. The action was rejected as both the Cancellation Division and the Board of Appeal of the European Intellectual Property Office found that the term ‘cinkciarz’ was not descriptive of the essential characteristics of the goods and services at issue. An appeal to the GC followed.

Analysis

The GC, having recalled that, under Article 7(1)(c) of Regulation 2017/1001, to be descriptive a sign:

“must suggest a sufficiently direct and concrete link to the goods or services in question to enable the public concerned immediately, and without further thought, to perceive a description of the category of goods and services in question or of one of their characteristics” (DeutschePost EURO EXPRESS/OHMI (EUROPREMIUM), T‑334/03)

In order to analyse the descriptive and distinctive character of the trade mark at issue, the GC noted the importance of establishing the meaning of the Polish word ‘cinkciarz’ from the perspective of the relevant public.

As mentioned, the GC noted that this word used to describe people who illegally bought and sold foreign currency. At the time of the Polish People’s Republic, currency exchanges fell under State monopoly and the term had a negative connotation, private parties performing it having a bad reputation. Since 1989, however, currency exchange operated by private parties has been lawful and the term seems to have acquired an historical connotation. The GC also pointed out that the word has been used in a contemporary meaning as implying cheating, ie a fraud connected to money exchange. A neutral meaning of the term, simply describing the service of currency exchange was not found. [32]

The GC recalled that one of the aims of Regulation 2017/1001 is to contribute to removing barriers to free movement of goods and services. This freedom, however, exclusively concerns goods and services lawfully introduced into the market. Trade mark protection cannot be granted to designate illegal products or services. In the case at issue, the relevant public is aware that the services concerned are not illegal. [53]

Moreover, according to the GC, it is not possible to base the descriptive character of the term at issue on the speculation than it might become a generic word to describe the services at issue. The action was therefore rejected. [63]

Comment

This decision, mostly based on the interpretation of the Polish word ‘cinkciarz’, underlines the importance of the connection between trade mark law and languages. In this particular case, the development of the word’s meaning was based on historical changes. Generally speaking, Article 7(1)(c) of Regulation 2017/1001 does not require a term to be positive or neutral in order to have a descriptive character. Hence, it cannot be ruled out that in the future the term ‘cinkciarz’ might acquire a generic meaning. It is now in the power of the trade mark holder to prevent this from happening.

Lord Justice Arnold (as he now is) has handed down his customarily chunky judgment in the latest stage of "Purple Inhaler Wars" [ideas for a better name on a postcard, please] in Glaxo Wellcome UK Limited and Anor v Sandoz Limited and Ors [2019] EWHC 2545.

This GuestKat finds the final result [spoiler alert: paragraph 316] - "all of Glaxo's claims are dismissed" - unsurprising. The author thought the writing was on the wall following the pre-trial review ([2019] EWHC 1528 (Pat) - not publicly available) in which Mr Justice Arnold (as he then was) excluded swathes of undeclared expert evidence from several of Glaxo's witnesses, although last week's judgment reminds us that this was just part of a "regrettable procedural history" going back to 2015, including "a great deal of interlocutory skirmishing".  

Background

Since 1999, Glaxo has sold purple "Evohaler" and "Accuhaler" (see below) inhalers for its blockbuster salmeterol / fluticasone propionate product, Seretide/Advair, a treatment for asthma and chronic obstructive pulmonary disease (COPD). Until 2015, Seretide inhalers were the only purple inhalers (and only inhalers sold in purple packaging) on the UK market; over 113 million had been sold by 2014. Glaxo also sells Accuhalers containing other active ingredients, which are distinguished from the Seretide Accuhaler by different colours (blue, green and orange); the earliest was sold in 1994.


Glaxo's combination patent has long expired, and a patent protecting the Seretide Accuhaler dry powder inhaler (DPI) device expired in the UK (and was revoked in other jurisdictions including Germany) more recently. The UK market accordingly saw its first generic entry in 2015, albeit via a different form of inhaler delivery system. Pulmonary-delivered drugs, it seems, are hard to mimic. Later in 2015, Sandoz launched a branded generic competitor to the Seretide Accuhaler, the AirFluSal Forspiro [it just rolls off the tongue], a proprietary DPI manufactured by Vectura, with a different mode of operation to the Accuhaler. Coincidentally, or perhaps not, the Forspiro device is predominantly purple, although it is a different shape to the Accuhaler:


Like the packaging for the Seretide Accuhaler, the AirFluSal Forspiro packaging is also purple and white.

Glaxo was, it seems, displeased. Its trade mark infringement action failed when GSK's EUTM for the colour purple was revoked on summary judgment. Therefore, passing off it would have to be. By the time of trial, the key battleground was over the colour purple [the most popular colour in IP disputes, scientifically-speaking, with the possible exception of orange].

The judgment

If you ever wanted to know more about the complex authorisation, prescribing and reimbursement systems and guidelines governing asthma and COPD treatments and their marketplace more generally, but were afraid to ask, this is your lucky day: enjoy paragraphs 8 to 155 of the judgment. For the sake of brevity, all that you really need to know is that both the Seretide Accuhaler and AirFluSal Forspiro are prescription-only medicines (POMs), the promotion of POMs to patients is highly restricted, and prescriptions are normally (and increasingly) written by brand name, not generically. This is because pulmonary-delivered products are not necessarily bioequivalent, and different inhalers have different modes of actuation and (potentially) variations in the dose delivered.

The parties agreed that informal colour conventions have developed in the UK in relation to certain types of inhaler (e.g. blue for SABA relievers), but Glaxo did not agree with the Defendants that such a convention had developed in respect of purple for salmeterol/fluticasone. The several other salmeterol/fluticasone combination inhalers launched in the UK since 2015, however, all featured purple and/or pink elements.

Glaxo's case outlined two forms of passing off, originally based on the entire "get-up" of the AirFluSal Forspiro, but later narrowed to just the colour purple:

1. "Traditional" misrepresentation i.e. deception as to trade origin. Originally, Glaxo alleged such deception in relation to healthcare professionals (HCPs) and patients; by the time of trial, this ground was confined to patients (the evidence given by HCPs showed that they would see the colour purple as denoting the combination of salmeterol and fluticasone, and not necessarily Seretide specifically).  
2. Misrepresentation to HCPs and patients as to equivalence between the products, on the basis that AirFluSal Forspiro (unlike the Seretide Accuhaler) (i) was not licensed for asthma (only COPD) prior to February 2017, and still is not licensed for adolescents; (ii) is only available in a single strength; and (iii) has a different mode of operation, so patients have to be trained to use it. The Defendants accepted that this is an established form of misrepresentation, but emphasised that it is necessary to consider carefully the goodwill actually owned by a claimant in the relevant indicia, and whether the misrepresentation would cause damage to this goodwill.  

There was copious evidence from trade witnesses, and survey evidence running to 16 expert reports in total. Glaxo's surveys had, however, been commissioned for earlier UK trade mark registry proceedings in 2015 and 2016. Consequently, none complied fully with the Whitford guidelines; the surveys were of HCPs, and not patients; only one question from the surveys provided any form of (indirect) evidence of patient identification of inhaler origin; and none of the surveys dealt with misrepresentation as to equivalence. As one might expect, the judge concluded that Glaxo's survey evidence was of limited value, and only established that HCPs would recognise the colour purple as a feature of Seretide inhalers (but not that HCPs would assume that any purple inhaler had the same trade origin). The judge also concluded, in pretty blunt terms, that he had seen no evidence that patients would perceive the colour purple as denoting any specific product characteristics. 

Unsurprisingly, the judge dismissed both forms of passing off claim in relation to patients with little difficulty. The question of misrepresentation of equivalence to HCPs was slightly more complex, but with the same result. The evidence showed high levels of awareness among HCPs regarding the differences in the mode of operation of different inhalers; this is precisely why inhalers (especially DPIs) are increasingly prescribed by brand. And both sides' evidence showed that HCPs would not make assumptions about the scope of a product's marketing authorisation on the basis of colour; they would instead check the Summary of Product Characteristics (SmPC), British National Formulary (BNF), etc..

The Defendants were also required to give extensive disclosure against their alleged intention to deceive / recklessness as to deception in adopting the colour purple. The evidence showed no such intention; to the contrary, the judge found that the Defendants had good and legitimate reasons to adopt the colour purple (see below).

Comment

If there is a golden thread running through the judge's reasoning, it is adherence to careful analysis of the precise nature of Glaxo's goodwill. Yes, the evidence suggested that HCPs and patients would expect a purple inhaler to contain familiar active ingredients (salmeterol/fluticasone), but not that the colour denoted product characteristics beyond this, or a particular trade origin. It makes sense in this context that the judge seemed convinced by the point that there were legitimate reasons for the Defendants to choose purple. In particular, many asthma/COPD patients have more than one inhaler (for immediate "rescue" and longer-term "maintenance" use), so it is important that they can tell these apart. More generally, in light of the evidence regarding informal colour coding conventions, the Defendants' use of purple would help to reassure patients that they are receiving the correct medication.

A cynic might say that this case was more about the fact that UK market for Seretide is still worth £400 million per year to Glaxo, and less about the merits. GSK has enjoyed a long and lucrative ride with Seretide/Advair, which is only just tailing off. There was scant evidence of actual confusion (even though more than 500,000 prescriptions for AirFluSal Forspiro have now been filled), much less even recognition of Glaxo's alleged goodwill in the colour purple and/or its association with certain product characteristics. 

In a dispute of this value, it stands out that Glaxo did not adduce survey evidence from patients. It is eminently possible, of course, that Glaxo attempted pilot surveys, but the results were not favourable. But perhaps the explanation is instead that because POMs cannot be marketed directly to patients and patients do not make the buying "decision" as such, what patients may or may not think is a secondary issue.

Overall, the judgment seems (to this GuestKat at least) a sane and predictable result based on well-established principles. The judgment turns entirely on the facts and therefore any appeal (if one is brought) is likely to be challenging.

Last week, it was reported that Liverpool Football Club's (LFC's) application to register LIVERPOOL as a UK trade mark was rejected by the UK Intellectual Property Office (IPO).

Apparently, and logically, this was on the basis that Liverpool is more "geographically significant" as a city than other place names that have previously been trade marked [unfortunately the IPO's full reasons are not available for perusal]. Everton, Chelsea and Tottenham (Hotspur) Football Clubs, for example, have managed to register several trade marks each for their respective area names. Fair enough, you might say: these are the names of areas; not of entire cities. But Southampton Football Club has managed to register SOUTHAMPTON as an EU trade mark... 

LFC has said it doesn't plan to appeal the decision. This seems sensible, given that the application upset everyone from Liverpool supporters to the Mayor of Liverpool. But of greater interest to this GuestKat is that there seems to be an additional application for LIVERPOOL lurking (and indeed now published) that has gone unnoticed by the press. The original application, covering classes 9, 16, 25, 28, 35, 38, 41 and 43 was divided into two applications on 1 August 2019, around a week after the public backlash began. One was refused following examination, but the "child" application (covering classes 9, 25 and 28 only) was published for opposition on 9 August 2019 and appears still to be pending on the register.

Perhaps the second application has already been withdrawn and the register simply hasn't been updated [and the writer needs to calm down (calm down), per the below]. If not, this will be an interesting story to monitor as the end of the opposition period approaches.


Attempting to cut through the noise and the valiant attempts by the mainstream press to engage with the intricacies of trade mark law, what can we take from this story?

1. Virtually all of the goods and services applied for were implicitly or explicitly (by limitation) related to the sport of football [obviously an attempt to register a broader specification would have been suicidal in light of Windsurfing Chiemsee etc.]. This was however insufficient to convince the examiner that the mark would be distinctive of LFC's goods/services in context (i.e. capable of designating commercial origin). Is the general historical association of football with the city of Liverpool (outside of LFC) just too strong? Perhaps. But Oxford University has managed to acquire various education and publishing related trade marks in spite of the city's association with education and abundance of educational institutions (such as Oxford Brookes, Oxford International Sixth Form College, etc.).  
2. The goods in the surviving "child" application all fall into the "merchandising" category (computer games; clothing; toys etc.). We don't yet know the fate of this application, but is it more reasonable to associate these goods exclusively with LFC in context? Perhaps. Interestingly, Southampton FC's EU trade mark covers only classes 25, 28 and 35, so there is a precedent. 
3. If LFC is indeed pursuing the child application in the face of public backlash, this illustrates the value it places in a well-developed trade mark portfolio. If there is an ill that this application seeks to cure, it is not immediately obvious - surely the overwhelming majority of counterfeits can be defeated using the existing portfolio (including variants of the club name, motto, logos etc.)? Perhaps LFC is aiming more for a deterrent effect. What, for example, if a group of disgruntled fans tried to set up their own rival/protest club, along the lines of FC United of Manchester? Other than this, what is the point? LFC has already publicly stated that the application was in "good faith" and it does not want to stop other local football clubs from using "Liverpool" in their names.