In a case[i] involving the trade mark BOSWELAN for pharmaceutical and health care products, the Court of Justice (CJEU) has held that the trade mark owner’s use of the mark in relation to clinical trials did not qualify as genuine use for the purpose of maintaining the mark. The case highlights a potential risk for life sciences companies in applying for a trade mark too early.
‘Use it or lose it’
Under both UK and EU trade mark law a trade mark must be put to ‘genuine use’ within five years of completion of the registration procedure; failure to do so will normally render the mark vulnerable to cancellation for non-use prompting competitors to come in and apply for cancellation of the mark. CJEU case law establishes that ‘genuine use’ in this context means actual use that is not token, that serves to indicate the origin of the goods or services and which is aimed at establishing or maintaining an outlet or market share. This may include preparations to put the goods or services onto the market such as advertising and PR before a launch. However, internal use within the proprietor’s organisation will not normally qualify as genuine use – the use must be directed out towards the market.
No genuine use prior to marketing authorisation
Viridis Pharmaceuticals achieved registration of the word mark BOSWELAN as an EU trade mark in 2007. In 2010 it applied for authorisation for a clinical trial involving a treatment for multiple sclerosis. In November 2013 Hecht Pharma applied for cancellation of the trade mark on the grounds of non-use. At this time there was still no marketing authorisation. The Court emphasised that in order to qualify as genuine use the use must be in relation to goods/services that are on the market for those goods/services or which are about to be put onto the market. Viridis’s use of the mark had included advertising in relation to a clinical trial. The Court held that such use was tantamount to internal use as it was not aimed at establishing an outlet or market share for the goods on the relevant market. It would, in fact, have been illegal to advertise or market the goods to the public before obtaining marketing authorisation.
Proper reasons for non-use?
A trade mark cannot be cancelled for lack of genuine use if the proprietor can show that there are “proper reasons” for non-use. This is a relatively narrow concept mainly covering situations where the proprietor is prohibited from using the mark for some reason, examples often quoted being import restrictions or government regulations. Where “proper reasons” can be established, the proprietor will be able to preserve the validity of the mark and start using it again once the prohibition ends. The court will take all relevant circumstances into account when considering whether there are proper reasons for non-use. An important factor is, however, whether the obstacle to use arises “independently of the will of the owner of the trade mark” (TRIPS)[ii] rather than in relation to the trade mark owner’s commercial difficulties. Another way of putting this is to ask whether in the relevant circumstances, a requirement for use of the mark would have been unreasonable. In this case the Court considered, among other things, that Viridis could have anticipated at the date of filing that there might be delays and could have carried out the clinical trials more quickly; these were commercial difficulties that could have been managed. In these circumstances the need to carry out a clinical trial did not amount to a proper reason for non-use.
It is clear from the Court’s judgment that the need to carry out a clinical trial before obtaining a marketing authorisation could constitute a proper reason for non-use in some circumstances, and it is easy to feel that Court has been rather harsh towards Viridis in its assessment of the circumstances in this case. The take away point for trade mark owners is, however, that it will generally be up to the trade mark owner to manage the timing so that the mark will be ‘genuinely’ used within the five year period. This may, in practice, mean waiting to register the trade mark until nearer to achievement of a marketing authorisation and could have significant commercial implications.