In a decision that extends the law of geographical indications into the territory of the UK tort of passing off, the District Court of Hamburg (the ‘Court’) has prohibited the use of ‘Glen’ in the name of a whisky that did not originate from Scotland on the basis of the geographical indication protection associated with ‘Scotch Whisky’ . Continue reading
Key recent developments in the United Kingdom and Europe relating to patents and the pharmaceutical sector
This issue reports on several ground-breaking decisions from the UK courts on second medical use patents and skinny labels, infringement by equivalents and the possibility of global FRAND licences for standard essential patents (SEPs). We also look at some significant decisions from the CJEU on SPCs and reimbursements in relation to medicinal products and a few developments at the European Patent Office. Finally, we provide our usual round-up of the latest UPC developments (this time from Italy) and Brexit-related developments relevant to the pharma sector. Continue reading
Novartis Farma S.p.A. v Italian Medicines Agency and Roche Italia S.p.A.
On 21 November 2018, the CJEU issued an important decision in Novartis Farma v Italian Medicines Agency and Roche Italia et al. (C-29/17). The case was referred to the CJEU by the Italian Council of State and regarded an Italian law that allows the national healthcare insurance system (NHS) to reimburse a medicinal product for a use not covered by its marketing authorisation (off-label use) in order to reduce expenditure, notwithstanding the existence and market availability of a valid therapeutic alternative.
The latest tranche of “no deal” technical notices was released yesterday afternoon by the UK Government. Amongst them are several notices that highlight the Brexit issues faced by intellectual property right owners and, in some cases, confirm the Government’s approach to resolving them. The Government also released this news story today which comments on the guidance given in the technical notices and comments on the Government’s longer term aims for IP protection.
Key announcements, in the context of no deal, are:
- Provision of a new right to replace unregistered Community design rights, to be known as “the supplementary unregistered design right“.
- Existing EUTMs and Community registered designs will be replaced with new, equivalent rights in the UK at the end of the implementation/transition period, “with minimal administrative burden“.
- The SPC, compulsory licensing, pharmaceutical product testing exception and patenting of biotechnological inventions regimes will remain unchanged at least initially.
- If the UPC comes into force the UK will replace unitary patent rights with equivalent rights if the UK needs to withdraw from the new system, although the UK “will explore whether it is possible to remain within it“. The Government’s news story states that “The UK intends to stay in the Unified Patent Court and unitary patent system after we leave the EU.”
- UK originating sui generis database rights will no longer be enforceable in the EEA; “UK owners may want to consider relying on other forms of protection (e.g. restrictive licensing agreements or copyright where applicable) for their databases“
- The UK will set up its own GI scheme “which will be WTO TRIPS compliant“. The new rights “will broadly mirror the EU regime and be no more burdensome to producers“. Since the UK would no longer be required to recognise EU GI status, EU producers would be able to apply for UK GI status. Those wishing to protect UK GIs in the EU will need to submit applications on a third country basis.
- The UK will continue to accept the exhaustion of IP rights in products put on the market in the EEA by, or with the consent of, the rights holder. However, the EU will likely not consider that goods placed on the UK market are exhausted in the EEA, and thus permission may need to be sought from the rights holder to transfer goods to the EEA that have legitimately been put on the market in the UK. The Government news story says that “The UK looks forward to exploring arrangements on IP cooperation that will provide mutual benefits to UK and EU rights holders and we are ready to discuss issues the EU wishes to raise in the negotiations on our future relationship, including exhaustion of IP rights”.
Links to the notices:
More detail on each of these is provided below. For those with an interest in Life Sciences please also see our blog post on the notices related to that sector that were released last month.
On 25 July 2018, Advocate General Wathelet issued his opinion in an interesting case pending before the Court of Justice of the EU (CJEU) (C-310/17) concerning copyright over the taste of a food product.
The AG took the view that EU law precludes the taste of food from being protected by copyright, essentially because:
- the notion of “literary and artistic works” in the Berne Convention includes only subject-matter that can be perceived through sight or hearing, therefore implicitly excluding those perceivable through other senses like taste, smell or touch; and
- artistic works should be identified in a precise and objective manner in order to allow third parties to understand their scope of protection. This is not the case for the taste of food products.
This case is particularly interesting as it is the first time that the CJEU will rule on the copyright of the taste of a food product and, more generally, on the notion of copyright work which is not defined under Directive 2001/29/EC (“InfoSoc Directive”).
Food scientists in major food businesses may be disappointed not to obtain a new layer of protection for creating new tastes.
The opinion of the AG confirms the difficulty of ensuring copyright protection for the taste of a food product, as well as for perfumes, as observed in the field of trade marks. Even though the new EU Trade Mark Regulation does not require a sign (any longer) to be capable of being graphically represented in order to be registered as a trade mark, in practice it is not yet possible to register a taste or a smell as a trade mark as the subject-matter of protection cannot be determined with clarity and precision with generally available technology.
If the CJEU were to follow the opinion of the AG in its Judgment, many producers of food products and perfumes will remain disappointed that their creative efforts are not recognised by legal protection through copyright. Continue reading
The Court of Justice of the European Union (CJEU) has today delivered its decision on the interpretation of Article 3(a) SPC Regulation in Case C-121/17 Teva v Gilead.
The CJEU has said that in the case of an SPC for a combination product, Article 3(a) will be satisfied if, from the point of view of a person skilled in the art and on the basis of the prior art at the filing date or priority date of the basic patent:
- the combination of active ingredients necessarily, in the light of the description and drawings of that patent, falls under the invention covered by that patent, and
- each of those active ingredients is specifically identifiable, in the light of all the information disclosed by that patent.
The CJEU has made it clear that these are matters for national courts to decide.
This is a very important decision for all stakeholders in the pharmaceutical industry. It relates to the ability of patentees to obtain SPCs, a sui generis right, which effectively extends the duration of patent protection for products (i.e. active ingredients or combinations of active ingredients) of medicinal products covered by marketing authorisations (MAs).
It is the first time that the Grand Chamber of the CJEU (sitting as 15 judges) has provided guidance for national courts to interpret Article 3(a) of the SPC Regulation, although other Chambers of the CJEU have also tackled this issue in the past. Continue reading
The UK Government’s White Paper detailing its proposal for the future relationship between the UK and the EU (published on 12 July 2018) includes a limited number of proposals relating to intellectual property and cyber security as follows:
- The UK intends to explore staying in the Unified Patent Court (UPC) and Unitary Patent system post-Brexit. The UK will work with the member states that have signed up to the UPC Agreement to ensure that the UPC Agreement can continue on a firm legal basis;
- Arrangements on future co-operation on intellectual property are recognised as important to provide confidence and security to rights holders operating in and between the UK and the EU;
- The UK and EU will need to continue to co-operate on cyber security to counter cyber threats;
- The UK will establish its own Geographical Indications (GIs) scheme to provide continuous protection for UK GIs in the UK and protection for new GIs applied for by UK and non-UK applicants
UPC and Unitary Patent
Opinions vary on the likelihood of whether the UK could continue as part of the UPC and Unitary patent system post-Brexit. The Foreword to the White Paper by the Prime Minister states that the proposals in the White Paper would end the jurisdiction of the European Court of Justice in the UK. It is not clear whether the UK would nevertheless accept the role of the European Court of Justice in respect of references from the UPC on matters of European law.
Future Co-operation on intellectual property
The draft withdrawal agreement of 19 March 2018 (as supplemented by the joint statement on 19 June 2018) sets out the text (highlighted in green in the draft) agreed between the Commission and UK at negotiator level, in relation to the replacement of EU-wide rights with equivalent UK rights, which may indicate that there will be substantive future co-operation.
It is proposed that here will be close collaboration between the UK and the Network and Information Security (NIS) Cooperation Group, Computer Security Incident Response Team (CSIRT) Network (created under the NIS directive) and the European Union Agency for Network and Information Security (ENISA). While the UK’s desire to remain involved in the EU cyber security apparatus is welcome, no details of the legal mechanisms by which this will be achieved are provided at this stage.
The provisions in the draft withdrawal agreement relating to GIs have not yet been agreed at negotiator level. However, the White Paper states that the UK wants equivalence arrangements on a broad range of food policy rules, including GIs, noting that GIs provide legal protection against imitation and misrepresentations about quality or geographical origin for agri-food products that have a strong traditional or cultural connection to a particular geographical area. The UK will establish its own GI scheme consistent with (and going beyond) the provisions of the WTO Agreement on Trade-Related Aspects of Intellectual Property (TRIPS). The new scheme is to provide a clear and simple set of rules on GIs and continuous protection in the UK for UK GIs notwithstanding exit from the EU. The scheme will be open to new applications from both UK and non-UK applicants.
For further analysis of the impact of Brexit on IP rights and how to moderate this, see the IP section of the HSF Brexit Legal Guide in the Brexit hub of our website (https://www.herbertsmithfreehills.com/latest-thinking/hubs/brexit).
Compulsory energy labels on vacuum cleaners must strictly comply with an EU Labelling Regulation. In the case of Dyson Ltd, Dyson BV v BSH Home Appliances NV (C-632/16), the Advocate General of the EU Court of Justice held that there is no leeway within energy label regulations regarding the format or content of energy labels. This means that energy labels must contain only the classification of a vacuum cleaner’s energy consumption as required by the Regulation, and cannot specify the conditions under which the energy tests were performed. In addition, supplementary labels clarifying the information further are not acceptable.
Dyson brought this action against BSH, arguing that BSH’s energy labels were misleading consumers in breach of the Unfair Commercial Practices Directive 2005/29/EC, because they did not explain BSH’s tests were carried out with an empty dust bag. Dyson’s own products do not have a dust bag, and so there is no loss of energy efficiency during normal conditions of use. However, BSH’s vacuums do have a dust bag—and therefore Dyson argued become more energy inefficient the more the dust bag is filled. Dyson sought to force BSH to specify its testing conditions on its energy labels, or for its current energy labels to be declared misleading.
The Advocate General found that the specific, standardised information selected to be provided to consumers was a deliberate choice by the EU Legislature. The methodology for measuring energy efficiency of vacuum cleaners is not included in the information to be provided to consumers. Therefore, BSH cannot be required to include additional test procedures on its labels and it is not necessary to consider whether BSH’s current practice is misleading. He concludes that the Unfair Commercial Practices Directive does not apply in situations where a Regulation provides no lee way for the traders involved.
Dyson will have to wait to see if the Court of Justice leaves the competition in the dust.
A link to the decision can be found here.
Missed any of the big trade mark developments from 2017? Key developments include the Supreme Court finding that there is potential criminal liability for dealing in parallel imports under section 92(1) the Trade Marks Act 1994 and the Court of Appeal making it ever more difficult for brand owners to obtain shape mark protection in light of its judgments on acquired distinctiveness. We also review the impact of two particularly important areas of new legislation: the EUTM reforms and a new unjustified threats regime which both came into force on 1 October 2017.
Read our Trade mark update for the start of 2018, on the key trade mark cases and legislation from 2017 here.
In its hotly anticipated ruling in the Coty case, the Court of Justice of the EU (CJEU) has held that, in the context of a selective distribution system, a restriction imposed on an authorised retailer not to sell the goods through online third-party platforms does not infringe Article 101(1) TFEU provided that the following conditions are met:
- the objective of the restriction is to preserve the luxury image of the goods concerned,
- it is applied objectively and in a non-discriminatory manner, and
- the restriction is proportionate and does not go further than necessary.
The ruling will be welcomed by suppliers of branded and luxury goods who have increasingly expressed concerns over the potential erosion of the image of their products as a result of the recent growth in online sales, in particular on third-party online platforms such as Amazon and eBay.
In order to maintain a level of quality control over online sales of their products, suppliers of luxury goods are more frequently resorting to vertical integration and handle the distribution in-house. The Coty ruling now confirms that sales through third party distributors will allow suppliers the same level of quality control. Suppliers will still, however, need to show that their distribution system either meets the thresholds of the VABER or otherwise that their product is indeed a “luxury” or complex product which requires such a restriction to protect its image.
The CJEU decision treats the ban on third-party online platforms as a qualitative restriction that is necessary to protect the image of the goods concerned, rather than as a restriction of the customers to whom authorised distributors can sell the luxury goods at issue or as a ban of passive sales to end users, which would be in breach of Article 101(1) TFEU and amount to a restriction of competition by object.
According to the CJEU such a restriction is also not considered a “hardcore” restriction under the Vertical Block Exemption Regulation (VABER) and hence an agreement including such a restriction can benefit from the VABER if all other conditions are also met.
For the full ebulletin on this development see here.
See our previous commentary on the AG’s opinion in this case here.