Keep Taking The Tablets: Flynn Pharma v DrugsRUs

This article summarises a recent trade mark judgment in the English High Court illustrating the legal problems that can arise when branded goods are traded and/or advertised across the internal borders of the European Union's single market.

The parties

Pfizer is a giant pharmaceutical manufacturer whose range of pharmaceuticals includes phenytoin sodium, an anti-epilepsy drug sold in the EU under the brand name EPANUTIN. Flynn Pharma (the claimant), a UK pharmaceutical supplier, purchased from Pfizer the UK marketing authorisations to the product, which, for regulatory reasons, it then rebranded to PHENYTOIN SODIUM FLYNN (the Rebrand). DrugsRUs, a British parallel importer, planned to purchase the product from EU sources and parallel-import it into the UK under and by reference to the Rebrand.

The litigation

Flynn Pharma was the registrant of UK and Community trade mark registrations for FLYNN in respect of pharmaceuticals, and therefore applied to the English High Court for a quia timet injunction to restrain the defendant's intended imports. Its application was countered by the defendant's reliance on the fundamental EU principle of free movement of goods, from which derives the wide-ranging defence of exhaustion of rights, which (when applicable) will negate allegations of IP infringement. Once a product has been placed on the market within the European Economic Area by an IP rights-holder or with its consent, the latter's entitlement to use those rights to control how the product is subsequently distributed will expire - or will be "exhausted", in legal parlance. Where (as in the instant case) a pharmaceutical parallel-importer re-packages that product to conform to local branding, jurisprudence has developed to lay down the conditions in which exhaustion of rights will, and will not, apply.

But the defendant's attempted reliance on those conditions failed. In order for them to be engaged, the learned judge ruled that...