Flynn Pharma Ltd v Drugsrus Ltd and Another
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Rose |
| Judgment Date | 06 October 2015 |
| Neutral Citation | [2015] EWHC 2759 (Ch) |
| Date | 06 October 2015 |
| Docket Number | Case No: HC-2014-000040 |
| Court | Chancery Division |
[2015] EWHC 2759 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
INTELLECTUAL PROPERTY
Royal Courts of Justice
Strand, London, WC2A 2LL
Mrs Justice Rose
Case No: HC-2014-000040
MR. Guy Burkill QC and Mr. Nicholas Saunders (instructed by Pinsent Masons LLP) appeared on behalf of the Claimant.
MR. Martin Howe QC and Mr. Henry Ward (instructed by RR Sanghvi & Co.) appeared on behalf of the Defendants.
Hearing dates: 14, 15, 16 and 17 July 2015
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
This claim is brought by the Claimant ('Flynn Pharma') alleging that the Defendants are proposing to infringe its trade mark 'Flynn' by importing into the United Kingdom pharmaceutical products which have been sold in other EU member States under the brand name 'Epanutin' and affixing to them the name 'Phenytoin Sodium Flynn'. The relief sought is an injunction to restrain the Defendants from infringing the trade mark and either delivery up or destruction on oath of all infringing articles. Flynn Pharma also seeks damages or an account of profits and an order for the dissemination and publication of this judgment.
The Defendants contend that such imports would not be an infringement of Flynn Pharma's mark either because they would not be making trade mark use of the word 'Flynn' or because the reliance by Flynn Pharma on its trade mark rights under domestic legislation to stop these imports constitutes a disguised restriction on trade and is contrary to the free movement provisions of the Treaty on the Functioning of the European Union ('TFEU').
The parties and the witnesses in the case
Flynn Pharma is a speciality pharmaceutical company trading in both generic medicines and speciality brands. It has never operated as a research-based pharmaceutical company but works at the 'mature end' of the market, selling branded products once the patent on the product has expired so that generic versions of the drug are usually competing on the market. It acquires the rights to branded products from research-based pharmaceutical companies and promotes and sells them under the Flynn brand. As Mr Walters, a director of Flynn Pharma, describes it:
"Flynn has traditionally looked to 'rescue' such product lines. They are the tail end products that the major pharmaceutical companies no longer have in their focus; they are not core to their business. There is still a role for these products though and doctors and patients will still be relying on them. They do not want that product to disappear from the market, so that is really our role. We look for products that we can acquire the rights to, or enter into some kind of commercial deal, to ensure continuity of supply into the market. Obviously as part of that we make a margin."
Flynn Pharma currently markets about 14 different drugs including phenytoin sodium, the drug at the centre of this dispute. About 90 per cent of Flynn Pharma's total turnover comes from the UK market and in the last financial year, its UK sales were over £40 million. It remains a small company with about 15 employees and 25 field representatives who are trained to promote the products in Flynn Pharma's portfolio. It is a full service pharmaceutical company which means that it is responsible for the manufacture of its licensed and unlicensed products (although as described later it does not in fact carry out the manufacture in its own facilities), ongoing technical support and pharmacovigilance (that is the mechanisms by which information about the effects of, and any problems arising from, the use of the drug by patients is gathered and reviewed).
Flynn Pharma is the proprietor of registered trade marks for the word 'FLYNN':
i) A UK mark number UK2630656, filed on 3 August 2012 and entered onto the register on 2 November 2012. It is registered for Class 5, that is pharmaceutical and medical preparations and substances etc.
ii) A Community mark EU011097383 also filed on 3 August 2012 and entered on the register on 23 August 2015. It is registered for classes 5 (pharmaceutical preparations etc), Class 10 (suture material) and class 44 (medical and veterinary services).
All of Flynn Pharma's products carry the 'FLYNN' name and logo and Flynn branding is visible on the packaging of all its products in the UK. Flynn branding is also used on the company's business cards, promotional and educational material and patient leaflets. It also operates a website with the domain name www.flynnpharma.com.
The Defendants are two companies in the group established in about 1997 by Mr Naresh Shah and his wife to trade in the business of parallel imported pharmaceutical products. The role of the Second Defendant ('Tenolol') in the group is that it applies for, holds and maintains product licences for parallel imports ('PLPI's). The role of the First Defendant ('Drugsrus') is as a wholesaler of pharmaceutical products. It imports and sells parallel imported drugs using licences held by Tenolol. Drugsrus has a wholesale dealer's licence and has satisfied the stringent criteria applicable in relation to the storage, distribution, tracking and management of pharmaceutical products. The group employs about 80 people including four pharmacists and three regulatory staff responsible for PLPI applications and for maintaining the product licences. The group holds about 900 PLPIs making it one of the bigger parallel import licence holders in the UK market. Parallel imported products comprise about 80 per cent of its turnover.
The principal witness for Flynn Pharma at the trial before me was Dr David Fakes who is a director of Flynn Pharma and manages the day to day operations of the company with his colleague David Walters. He is a registered pharmacist and has been so for 32 years. He has a PhD in material science and a postgraduate qualification in business administration. After completing his PhD in 1985, he worked for another large pharmaceutical company in research and development. He was trained in all aspects of pharmaceutical pre-formulation, formulation and testing of drugs and in the design of the product which would eventually come to market. He also worked on post-approval and post-marketing development when new strengths, formulations presentations or indications were investigated and developed. After leaving that company he became director of R&D at a different pharmaceutical company for 10 years where he was responsible for all aspects of product development, regulatory and medical affairs. He also worked as a consultant in the industry for about 4 years, that work overlapping for two years with his work for Flynn Pharma. He has worked full time at Flynn Pharma since 2006. The other witness for Flynn Pharma was David Walters. He was one of the founders of Flynn Pharma when it was originally set up in 1994 and has been a director of the company ever since.
Evidence for the Defendants was given by Naresh Shah an employee of Jumbogate Ltd, a company within the same group as the Defendants. Mr Shah is a pharmacist who qualified in 1977 and worked in retail pharmacy between 1978 and 2012. From 1988 he was also involved in the wholesale importation and distribution of parallel imports from other EU Member States into the UK. He is the 'Responsible Person' in relation to Drugsrus' wholesale dealer's licence and is responsible for ensuing compliant distribution practices.
Both sides levelled some criticism at the other side's witnesses but I consider that all three witnesses were doing their best to assist the court. In any event, there is very little factual dispute to be resolved in this case.
The authorisation and sale of pharmaceutical products in the United Kingdom
In the UK the authority with responsibility for the review and approval of medicines is the Medicines and Healthcare Products Regulatory Agency ('MHRA'). The MHRA issues marketing authorisations, also referred to as product licences, when it approves a product application. That marketing authorisation is the regulatory permission to sell that particular product and it specifies how and where the product will be manufactured, for which patients and for which conditions it may be used and how the product is to be presented, including the product name and packaging. Once a product has been authorised it may then be considered by the National Institute for Health and Care Excellence ('NICE') which recommends to the Government whether the product represents value for money and so should be included on the list of drugs available in the NHS.
Dr Fakes described the responsibilities of the holder of a marketing authorisation as follows:
"100. Flynn is the marketing authorisation holder (the "MAH") for Phenytoin Sodium Flynn in the UK. … We own the licences so we are responsible in law for the product. We deal with every aspect of the regulation of that product and we would also be the party to notify customers, the NHS, if there were critical supply shortages (as there have been on two or three occasions for this product) or patient safety issues following receipt of an adverse event report (if sufficiently serious). We have an obligation to ensure the continued availability of the product. We must have in place arrangements for provision of technical support and medical information to healthcare professionals. We have staff whose sole job is to provide information and respond to technical and medical information enquiries, which can be of all types, typically from healthcare professionals, but occasionally from patients.
101. Flynn's ownership of the licence imposes...
To continue reading
Request your trial
-
Flynn Pharma Ltd v Drugsrus Ltd and Another
...APPEAL (CIVIL DIVISION) ON APPEAL FROM THE HIGH COURT OF JUSTICE CHANCERY DIVISION INTELLECTUAL PROPERTY THE HON MRS JUSTICE ROSE DBE [2015] EWHC 2759 (Ch) Royal Courts of Justice Strand, London, WC2A 2LL Before: The Chancellor of the High Court Lord Justice Kitchin and Lord Justice Floyd C......