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Court of Appeal finds that trade mark rights can be relied upon to prevent pharmaceutical imports

07/04/17, EU/Competition

The Court of Appeal (Vos, Kitchin and Floyd LJJ) today gave judgment in Flynn Pharma v DrugsRUs which concerned whether a parallel importer was entitled to rely on EU free movement rights under Article 36 TFEU to prevent enforcement of Flynn Pharma’s trade marks.

Phenytoin sodium is an anti-epileptic drug which was sold by Pfizer in the UK before September 2012 under the brand name Epanutin. By a series of agreements between Pfizer and Flynn Pharma in early 2012 the UK marketing authorisations for phenytoin sodium were transferred to Flynn. Following this Flynn sold the product as Phenytoin Sodium Flynn. The market for phenytoin sodium in the UK at the trial before Rose J was that around 90% of prescriptions were written generically and 7-9% of prescriptions were written for the Flynn product.

DrugsRUs proposed to buy stocks of Epanutin sold by Pfizer in other Member States, rebrand them as Phenytoin Sodium Flynn, and sell them in the UK under a parallel import licence. On appeal it was argued that enforcement of Flynn’s trade mark rights would create a barrier to interstate trade and that Flynn had educated doctors and patients to the fact that Phenytoin Sodium Flynn was the product previously sold by Pfizer as Epanutin.

The Court considered in detail the scope of Article 36 TFEU and whether it could be relied upon to prevent enforcement of Flynn’s trade marks. This required a dual enquiry – firstly, whether the goods have been placed on the market by the trade mark owner by or with his consent; and secondly, even if the answer to the first question is ‘no’, whether the party who did place the goods on the market is in effective control of the trade mark which is sought to be enforced. The Court considered these questions in detail and concluded that Flynn Pharma had a legitimate interest in the enforcement of its trade mark against parallel imports of Epanutin.

DrugsRUs has indicated that it intends to seek permission to appeal to the Supreme Court.

The judgment appears under external links.

Nicholas Saunders appeared for Flynn Pharma instructed by Pinsent Masons LLP.

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