Recent developments regarding trade marks used in the pharmaceutical industry

Whereas the ordinary man on the street would say two trade marks look and sound alike, those of us specializing in the field of trade mark law are required to raise a more substantiated argument when confronted with a similar situation.  Our weapons of choice? A specified list of grounds rendering trade marks unregistrable, as set out in Section 10 the Trade Marks Act 194 of 1993, each one meticulously formulated to grant protection in an array of scenarios.  One might even refer to them as the “Royal Family” of trade mark provisions.

If so, Sections 10(12) and 10(14) may be considered the King and Queen provisions.  While Section 10(12) of the Act states that a trade mark shall not be registered where it is inherently deceptive or where the use of such a trade mark would be likely to deceive or cause confusion, be contrary to law, be contra bonos mores, or be likely to give offence to any class of persons, Section 10(14) in essence prohibits the registration of a trade mark which is identical or similar to a registered trade mark, and where the use thereof is likely to cause confusion or deception.

What follows after a trade mark application is provisionally refused on either one of these grounds, are hours of contemplation as to how one would persuade the Registrar that the marks differ sufficiently to warrant co-existence on the Trade Marks Register, as well as in the marketplace. Deceptive and confusing trade marks used in relation to pharmaceutical products are of particular concern, considering the potentially harmful effects of an incorrect dispensing.

The application and effect of these sections have come under the spotlight in recent judgments, yet the approach thereto by the Tribunal of the Registrar of Trade Marks and the Supreme Court of Appeal (SCA) differ notably, specifically in the field of pharmaceutical products.

Decision by the Trade Marks Tribunal

In a recent decision in the Tribunal of the Registrar of Trade Marks handed down on 13 March 2012, Ranbaxy Laboratories opposed Sanofi-Aventis’s trade mark application for 2005/12493 RANTRAL in class 5 in respect of pharmaceutical and medicinal preparations for human and veterinary use.  The complainant in casu was the registered proprietor of trade mark registration no. 1985/08517 XATRAL in class 5 in respect of pharmaceutical products, and opposed the RANTRAL application on the grounds of Sections 10(12) and (14), submitting that it was confusingly similar to their XATRAL trade mark registration.  The tribunal referred to the case of Accurate Watch Co v Accurist Watches Ltd 2004 BIP 115 (RTM) where it was held that the applicant bears the onus to prove that a trade mark qualifies for registration, and should there be any doubt as to the possibility thereof, the application should be refused.  The opponent submitted that the comparison between the two marks involved an almost clinical comparison: firstly, a comparison between the opponent’s and applicant’s marks, and secondly, a comparison of the goods in relation to which the trade marks are or will be used.  In casu the goods covered by the applicant’s trade mark application wholly covered the goods in relation to which the opponent used its trade mark.

The tribunal further referred to the case of Plascon-Evans Paints v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A) where the court held that the comparison between two marks comprises an assessment of the impact which a defendant’s mark would make upon the average consumer of the relevant goods to which the marks are or would be applied.  The consumer must firstly be conceived as a person of average intelligence, having proper eyesight and buying with reasonable caution.  A further comparison  should  be made with reference to the sense, sound and appearance of the marks and be viewed as to how they would be encountered in the market place; not only side by side, but also separately.  Fourthly, there must be due allowance for possible imperfect recollection by the consumer, and finally, the manner in which the marks are likely to be used, such as the use of the marks in conjunction with the generic description of goods.  The tribunal furthermore referred to Cowbell Holdings AG v ICS Holdings Limited 2001 (SCA) where it was held that the comparison between two trade marks involved a value judgment based on aural, visual and conceptual similarities between the two marks.

In light of the above precedents, the Tribunal held that there were, firstly, no visual, conceptual or aural similarities between the two marks and, secondly, that the requirement of a prescription from a qualified medical practitioner prior to purchase prevents confusion between the two marks by the average consumer.  Accordingly, trade mark application no. 2005/12493 RANTRAL was allowed to proceed to registration.

Two weeks later, and the Supreme Court of Appeal hands down a judgment on 29 March 2012 that raises blood pressure in the boardrooms of all pharmaceutical companies – quite ironically, considering the subject matter…

Current position as held by the Supreme Court of Appeal

In Adcock Ingram v Cipla Medpro (265/2011) [2012] ZASCA 39, Adcock Ingram in a similar fashion  applied for an interdict against both Cipla Medpro and the Registrar of Trade Marks in 2004 for inter alia the removal of an entry, 2004/05322 ZEMAX, from the Trade Marks Register. The applicant in casu was the registered proprietor of trade mark registration no. 1998/14391 ZETOMAX.  Both marks were registered in class 5 with wide specifications, but used only in relation to a Schedule 3 hypertensive pharmaceutical product sold widely across South Africa.

In essence, the first applicant relied on both Sections 10(12) and (14) of the Act. In the founding affidavit, the first applicant alleged that there is every likelihood of deception or confusion arising through the use of the first respondent’s ZEMAX trade mark, based, firstly, on the aural and visual similarities between the two trade marks, secondly, the fact that both trade marks are used in relation to products intended to treat the same condition, and, thirdly, the possibility that the notional consumer, i.e. doctors, pharmacists and patients, may be confused between the two marks when presented with both in the marketplace.  Interestingly enough, the first applicant also alleged that the notorious bad handwriting of doctors should also be deemed a factor in determining the possibility of the likelihood of deception or confusion between two medical products.

The Western Cape High Court delivered judgment in favour of the applicants in February 2009 , and the first respondent subsequently launched an appeal.  The onus was on the applicant to prove on a balance of probabilities that a substantial number of persons would be deceived or confused through the use of the ZEMAX trade mark.

On appeal, the full bench considered the following factors in determining the likelihood of deception or confusion:

• Despite the trade mark registration for ZETOMAX, the applicant’s goods were marketed and sold under the name ADCO-ZETOMAX (therefore, the addition of the “ADCO-” prefix), as were a range of other products emanating from the applicants.  The combined use of the ZETOMAX trade mark and the ADCO prefix would therefore possibly further reduce any prospect of confusion arising.

• A list of 128 trade mark names in class 5 containing the prefix ZE submitted by the first respondent, together with a similar list of trade marks containing the MAX suffix.  This was indicative that it is commonplace for pharmaceutical products to incorporate similar letters and syllables, and the market for such goods is therefore adapted to distinguish based on small differences.  The first respondent accordingly submitted that no single proprietor can claim exclusive rights to either “ZE” or “MAX.”

• Since both ZETOMAX and ZEMAX are used in relation to schedule 3 medicines, Section 22A (5) of the Medicines and Related Substances Act 101 of 1965 is applicable, which states that a doctor’s prescription is required prior to dispensing by a qualified pharmacist.

• With reference to bad handwriting as a factor to be considered when determining the likelihood of deception or confusion, the first respondent correctly pointed out that ZETOMAX had to be written so illegibly that both the letters “T” and “O” are both obliterated.  Likewise, where a doctor prescribed ZEMAX, the prescription must be so illegible as to deceive the pharmacist into believing that it contains both a “T” and an “O.”

The full bench held that the key factor to be taken into account is that the dispensary process is one controlled by trained professionals, who are sensitive to potentially similar products.  In light of this, and the fact that that the applicant’s case was largely based on speculation (no incident of actual confusion had ever been reported), the court dismissed the application.

To illustrate that the outcome of this genre of cases largely depends on the facts of the case, Prinsloo J referred to the case of Organon Laboratories Ltd v Roche Products (Pty) Ltd 1976 1 SA 195 (TPD).  In casu the learned judge emphasized that the safeguards governing the dispensing of prescription medicine differ greatly from those governing non-prescriptive medicines, that is, pharmaceutical products freely available in seemingly unlimited quantities without the necessity of a doctor’s prescription.  Under these circumstances the test for the likelihood of deception or confusion should be applied more strictly, as the average consumer may be more prone to confusion by visually, aurally and/or conceptually similar trade marks.

The ZEMAX mark proceeded to registration and the applicants accordingly instituted expungement proceedings in the Supreme Court of Appeal.  Their claim was based on Section 24 of the Act, which permits any interested party to apply for the removal of an “entry wrongly made in or wrongly remaining on the Register”.

The Supreme Court of Appeal pointed to the fact that, although these marks were only used in relation to hypertensive medication, both marks were registered with a wide specification.  The proprietors of the respective marks were therefore not limited to using their trade marks in relation to prescription pharmaceutical products, and could effectively make available to the public pharmaceutical products otherwise than on the basis of a doctor’s prescription.  Malan JA referred to Bristol Laboratories Inc v Ciba Ltd 1960 (1) SA 864 (A) where Romer J had held that “the onus must be discharged by the applicant in respect of all goods coming within the specification applied for, and not only in respect of those goods on which he is proposing to use (the mark) immediately, nor is the onus discharged by proof only that any particular method of user will not give rise to confusion; the test is: What can the applicant do?”

The court furthermore referred to Sabel BV v Puma AG, Rudolf Dassler Sport [1998] RPC 199 (ECJ) where it was held that the likelihood of confusion must “be appreciated globally”, and that the “global appreciation of the visual, aural or conceptual similarity of the marks in question, must be based on the overall impression given by the marks, bearing in mind, in particular, their distinctive and dominant components” .  In short, what should be taken into account to determine the likelihood of confusion are both the fact that ZEMAX is sold as prescription medicine, and the nature of the notional consumer – which includes the patient.  The inquiry therefore goes further than asking whether the doctor prescribing, or pharmacist dispensing, the medicine will be confused by ZETOMAX.  In principle, a patient will have an imperfect recollection of ZEMAX when confronted with ZETOMAX, and confusion may very well arise.

On this basis, the appeal was upheld and the second respondent was ordered to remove trade mark registration no. 2004/05322 ZETOMAX from the Trade Marks Register.

Conclusion

It is clear that the wording in Section 10(14) of the Act provides for the protection of the consumer – it does not concern the impact one trade mark has on another proprietor, but rather the impact of a trade mark on consumers.  The SCA held that in light of the wide specifications, the trade marks may be used in relation to products freely available to the public, and as a result, doctors and trained pharmacists will not strictly be considered the notional consumers of these products.  Where prescription medicine is concerned, confusion is thought to be less likely, as these medicines are dispensed by highly qualified professionals who have knowledge of the serious consequences where the wrong product is dispensed to a patient.

As the stare decisis rule obliges our courts and tribunals to follow the precedents set by the Supreme Court of Appeal, the latter judgment seems to have set the standard for the time being.  It appears that the enquiry into the likelihood of confusion and deception involves a value judgment incorporating inter alia the specific goods in relation to which a trade mark is filed, the type of consumer, the manner of use and in which the goods are acquired – all judged on a case by case basis.  Of course, while the Supreme Court of Appeal is the court of final instance in all non-constitutional matters, the Trade Mark Tribunal was in fact incorporated by statute.  Some may therefore ask whether it was necessary for the SCA to go into such a complex analysis of the likelihood of confusion or deception, or whether the enquiry into the likelihood of confusion or deception should solely be based on the test as set out in Cowbell Holdings AG.  Their questions should, however, be deemed rhetorical (or at least responded to with a blank stare).  Confusion in the spice aisle will hardly ever have the same consequences as confusion or instances of confusion in a pharmacy; hence the stricter test for likelihood of confusion when pharmaceutical products are concerned.  After all, a life is at stake. Not a pot roast.

By Marius Roetz, Trademark Department