What’s The Use? – AG Szpunar provides his view on what constitutes genuine use of a trade mark and valid reasons for non-use

Advocate General Szpunar recently issued an Opinion in Case C-668/17 P on the threshold to meet in order to show genuine use of a trade mark, and what constitutes a valid reason for non-use. 

The case in question concerned the mark BOSWELAN which had been registered in Class 5 since 2007. In particular, the proprietor sought to use the mark on a new medicine for the treatment of multiple sclerosis (MS). The proprietor had begun clinical trials of the medicine but evidence was not furnished that marketing authorisation had been applied for following the clinical trial – which is a legal requirement to market medicines in the EU. 

An action for revocation on the grounds of non-use were successfully taken against the mark before the EU Intellectual Property Office (EUIPO) Cancellation Division. This decision was upheld by the EUIPO Fifth Board of Appeal, and AG Szpunar is in agreement with the EUIPO, recommending that the General Court dismiss the appeal and uphold the decision to declare the mark invalid on the basis of non-use. 

The two key questions considered by AG Szpunar were: 

  1. What constitutes “genuine use” of a trade mark, in particular, do clinical trials constitute “genuine use” in the context of marks for medicinal goods; and
  2. What are valid reasons for “non-use” of a trade mark, in particular, is a lack of marketing authorisation a valid reason for “non-use”. 

AG Szpunar considered that clinical trials do not amount to genuine use of a trade mark, and a lack of marketing authorisation is not a valid reason for non-use of a trade mark. However, it is arguable that there are issues with this line of thinking. 

With regard to use of a trade mark in a clinical trial, it has been previously determined that use necessarily requires that the proprietor has carved out a market for the goods using the mark and that the mark functions as a badge of origin for the goods. AG Szpunar considered that clinical trials are a necessary to determine the effects of a medicine, whether it is efficient and whether it has any negative side effects – their purpose is not to create a market presence for the drug. Interestingly, AG Szpunar also accepted that pharmaceutical companies will often use the trade mark on the drugs being trialled so that trade professionals and experts become familiar with the branded version of the drug, rather than its generic/chemical name. This sentiment would appear to contradict AG Szpunar’s view that a clinical trial cannot does not carve out a place for a mark in the market or acts as an indication of origin for the goods against which it applies. 

The proprietor of the BOSWELAN mark claimed that it had not been used within the five year period because the mark had not obtained marketing authorisation. In the EU, it is necessary to obtain marketing authorisation before marketing medicines. AG Szpunar cited the decision in Case C246/05 Häpul where it was said that a valid reason for non use must satisfy three criteria: (i) that factor which prevented use of the mark must be independent of the trade mark proprietor and their intentions; (ii) there must be a link between this factor and the mark; and (iii) this factor must make use of the mark impossible or at least unreasonable. While AG Szpunar accepted that a lack of marketing authorisation satisfied tiers (ii) and (iii), he was not convinced that tier (i) was satisfied. In his opinion, all business activities are subject to legal restrictions, some may be valid reasons for non-use (such as import restrictions). However a lack of marketing authorisation was not a valid reason in this instance. AG Szpunar reached this conclusion on the basis that the lack of marketing authorisation could have been overcome by the proprietor, for example, by adopting an alternative commercial strategy. 

It might be argued that this view is somewhat short sighted. Obtaining marketing authorisation is not as simple as AG Szpunar would appear to make it out. He suggests that the commissioner of the clinical trial ought to use foresight in conducting a trial in order to ensure that the drug meets the criteria set out in the relevant legislation. However, if it was that simple, the authorisation of medicines would not be so stringent. Furthermore, the research and development of medicines is an expensive and time consuming process. It is not an easy, quick, or cheap task to simply switch a commercial strategy just like that! Indeed, for any business, there will always be alternative routes and commercial strategies. However, where there is no one route which more certain than any other, a commercial entity should not be penalised for the strategy which they chose to undertake (provided the strategy is in accordance with the law). 

Ultimately, the author believes that the mark ought to have been revoked for non-use on the basis that the proprietor was no able to show the precise dates of the clinical trial, and that the mark had been used within the five year period, or that an application for marketing authorisation had been obtained, and that the lack of marketing authorisation was in fact beyond their control rather than a result of their acquiescence. However, prima facie, we would argue that a clinical trial ought to be considered genuine use of a mark, and a lack of marketing authorisation (where the proprietor has applied for marketing authorisation) ought to be considered a valid reason for non-use.  

AG Szpunar was correct to say that such cases ought to be taken on a case-by-case basis, and indeed, we would agree with his Opinion to suggest upholding the EUIPO Cancellation Division’s decision, the focus of his Opinion was perhaps misguided and goes to show that technical goods such medicines and therapeutic treatments rely on a more technical analysis by a trade expert, rather than a strictly legal opinion.