Flynn Pharma v (1) Drugsrus and (2) Tenolol, High Court
The High Court has granted Flynn Pharma an injunction preventing the defendants from importing into the UK pharmaceutical products sold elsewhere in the EEA by Pfizer under the brand EPANUTIN, and rebranding and selling the products under the name, Phenytoin Sodium FLYNN. The Court ruled that such trade would infringe Flynn Pharma’s rights under UK and Community trade marks for FLYNN.
The active pharmaceutical ingredient in the product in question is phenytoin sodium. It is used in the treatment of epilepsy and to prevent other kinds of seizures. Pfizer sells the product under the EPANUTIN mark in various EU Member States outside the UK. Flynn acquired the rights for the UK from Pfizer and relaunched the product as Phenytoin Sodium FLYNN. The Medicines and Healthcare products Regulatory Agency insisted on the inclusion of FLYNN in the product’s name to differentiate it from other anti-epileptic drugs. The rebranding allowed Flynn Pharma to raise the price of the product. This increase attracted the interest of parallel traders.
The defendants put forward a number of defences to infringement, some of which were highly inventive. First, the defendants argued that Flynn Pharma was not using the word FLYNN as a trade mark at all. The Trade Marks Act 1994 provides that a trade mark is not infringed by, “the use of indications concerning the kind quality, quantity…or other characteristics of goods”. The Court rejected this argument and ruled that “FLYNN” is not a description of the goods, but will be perceived as a mark of origin.
Second, the defendants argued that their compliance with the five BMS trade mark conditions (ie the requirements for repackaging) was sufficient to provide a defence to infringement, irrespective of any connection between the brand owners in the countries of export and import. The Court rejected this argument and ruled that the BMS trade mark conditions should only be considered once a sufficiently close connection between the two rights holders has been established.
Third, the defendants argued there is indeed a sufficiently close connection between Pfizer and Flynn Pharma in respect of the goods at issue. Therefore, the defendants said Flynn Pharma’s UK trade mark rights were exhausted when Pfizer put the product onto the market in the EEA. In deciding this issue, the Court applied the test put forward by the Court of Justice of the European Union in the Ideal Standard case: have the goods in the countries of export and import been produced under the control of a single undertaking which is accountable for their quality? The Court answered in the negative and ruled that neither the corporate nor contractual links were such that either Pfizer or Flynn Pharma controls the manufacture of the other’s products.
Tom Cahill, a Solicitor at Matthew Arnold & Baldwin LLP, comments: “It is worth noting that the Court arrived at its conclusion on general exhaustion of rights notwithstanding that Pfizer is currently Flynn Pharma’s appointed manufacturer of the Phenytoin Sodium FLYNN products. The Court made this ruling because the key question is the ability to control manufacture, not the manufacture itself. Flynn Pharma ultimately controls the manufacture of the products because Pfizer manufactures the products in accordance with Flynn Pharma’s instructions. Furthermore, as the marketing authorisation holder, Flynn Pharma takes responsibility for its products.”