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Maitland Walker LLP competition law team have won an important victory for parallel trade in pharmaceuticals

Maitland Walker LLP competition law team have won an important victory for parallel trade in pharmaceuticals in Speciality European Pharma Limited –v- Doncaster Pharmaceuticals Group Limited in which the Court of Appeal handed down the Judgment on 6 February 2015.

The case concerned Trospium chloride  an anti-muscarinic  agent for the treatment of over active bladder symptoms, manufactured by the Germany Company, Madaus Gmbh (“Madaus”).  Madaus sells its Trospium chloride in a number of EU countries through a distribution network using different trademarks.  In France Madaus’ Trospium chloride 20mg is marketed under the CERIS brand.  In Germany the extended release 60mg version of Madaus Trospium chloride product  is sold as URIVESC.  In the UK those products are sold as REGURIN and REGURIN XL respectively.

Madaus granted Speciality European Pharma Limited (“SEP”) an exclusive licence of the REGURIN mark in the UK and appointed SEP as its exclusive licensee.

Doncaster Pharmaceuticals Group Limited (“Doncaster”), a well known parallel importer, imported CERIS and URIVESC and since 2009 rebranded it as REGURIN and REGURIN XL respectively and sold it in the UK.  SEP sued Doncaster for trademark infringement through its use of the REGURIN brand.

Under EU law where a manufacturer uses different brands in different Member States, it is permissible for a parallel importer to rebrand by replacing the brand of export with the brand by which the product is known in the country of import, where it is necessary to do so in order to obtain effective market access.  Rebranding is not permitted where it is done to gain a commercial advantage.  For some years there has been doubt as to what constitutes effective market access.

In this case, SEP successfully argued  before the English Court (Mrs Justice Asplin) that Doncaster’s rebranding infringed the REGURIN trademark on the basis that:

Doncaster had immediate access to that part of the market (90% by number of prescriptions for the 20mg  product and 68% for the 60mg product)  where Trospium chloride is prescribed generically;
There was no significant resistance on the part of consumers or pharmacists to accepting a product other than REGURIN (or an overstickered product);
The fact that only 8.62% of prescriptions specified REGURIN 20mg by brand was an indicator that effective market access was not hindered;
Accordingly, exclusive use of the REGURIN mark by SEP in the UK did not contribute to the artificial partitioning of the market.

The Court of Appeal has overturned this ruling on the basis that the UK rules required a pharmacist to supply only branded REGURIN in supplying a REGURIN branded prescription.  The Court of Appeal concluded that access to the remainder of the Trospium chloride market, “is not an answer in law to exclusion from a part of it unless that part can be dismissed as insignificant”.  The Court of Appeal concluded that whether one looked at the 8.62% of REGURIN branded  prescriptions of the 20mg product or 68% of the 60mg product, the effect is that Doncaster is hindered from reaching a substantial part of the market.

The Court of Appeal rejected the argument accepted by the Court below that Doncaster could have persuaded doctors to prescribe the generic alternative of the 20mg product or develop its own brand of the XL product so that the market was contestable.  Neither of these options were realistic on the facts of the case.  Doncaster  was a parallel importer, not a generic manufacturer and imposing an obligation on it to adopt a different business model to access the market clearly gave rise to a hindrance to market access.

On that basis the Court of Appeal ruled that Doncaster must have the right of rebrand and that such rebranding goes no further than is necessary to overcome artificial barriers to effective market access.

Maitland Walker LLP with Martin Howe QC and Iona Berkley of Counsel acted for Doncaster in the case.

For advice on competition law please contact the EU and Competition Team