Developments in Canadian trademark law and practice during the past year, including the passage of legislation making sweeping amendments to the Trademarks Act, signal notable changes to the legal landscape, many of which are particularly relevant to the pharmaceutical trademark field.

Selection, clearance and registration

The drug name approval process in Canada is separate and distinct from trademark registration, and approval through one process will not necessarily lead to approval through the other. Therefore, brand names for prescription drugs must be selected bearing in mind not only trademark registration issues pursuant to the Trademarks Act, but also regulatory issues handled by the Therapeutic Products Directorate of Health Canada. While both processes deal with issues of confusion triggered by use of a proposed brand name, the underlying focus of each is quite different. Trademark examiners focus on the likelihood of confusion as to the source of manufacture of the products bearing the trademarks; while in contrast, Health Canada’s assessments of drug name confusion are governed by health and safety concerns.

Drug names, confusion and regulatory approval

Pursuant to the Canadian Food and Drug Regulations, the brand name of a proposed drug must be submitted to the Therapeutic Products Directorate of Health Canada as part of the drug approval process before the product will be approved for sale in Canada. Health Canada can refuse to issue a notice of compliance for new drugs or a drug identification number for new and existing drugs if confusion between a proposed drug name and an existing drug name is considered likely to result in health and safety issues.

Health Canada is not bound by approvals of the drug name by regulatory bodies in other jurisdictions and there is no guarantee that a brand name approved and used internationally will be allowed in the Canadian market.

In 2006 Health Canada released a guidance document dealing with the drug name review process for lookalike, soundalike drug names. However, over the course of the following years, Health Canada recognised that this guidance lacked sufficient direction on the risk assessment methodology to be used to assess proposed brand names. In 2013 Health Canada released draft guidance intended to address some of the deficiencies in the 2006 guidance; however, this draft guidance was criticised by many in the pharmaceutical industry as mandating excessively onerous risk assessment methods, including psycholinguistic testing.

On July 2 2014 Health Canada released new guidance entitled “Review of Drug Brand Names”. This new guidance is intended to replace the original 2006 guidance and will come into force on June 13 2015. Under the new guidance, psycholinguistic testing will be optional in the risk assessment analysis.

Drug names, confusion and trademark registration

For a trademark to be registrable, it cannot be likely to cause confusion in the marketplace as to the source of origin of the products or services bearing that mark. While public health concerns such as drug name mistakes are not strictly relevant to the issue of trademark registration, recent Canadian jurisprudence suggests that they may be considered when assessing the issue of confusion between drug names for trademark registration purposes, particularly when assessing distinctive marks.

In Sanofi-Aventis v GlaxoSmithKline Biologicals SA ((2010) 89 CPR (4th) 378 (TMOB)) the Trademarks Opposition Board (TMOB) considered the issue of medication errors as a surrounding circumstance contributing to the likelihood of confusion between the trademarks PACIRIX and PLAVIX, and found the marks to be confusing even though they were associated with different pharmaceutical preparations and end uses.

However, if a trademark consists of elements common to the industry, the likelihood of confusion will be considered quite low. In Ferring, Inc v Apotex Technologies, Inc (2013 TMOB 225) the trademark FERRIPROX was held not to be confusing with the trademark FERRING, although both marks covered related products. The TMOB held that since the first portion of the marks consisted of ‘fer’ – which is highly suggestive of a product associated with iron – consumers would focus on the suffix components of the marks ‘prox’ and ‘ing’, which were not similar. These differences were considered sufficient to avert a likelihood of confusion.

Use in normal course of trade: Before a trademark can be registered in Canada, it must have been “used in the normal course of trade”. Sample shipments do not ordinarily constitute trademark use in the normal course of trade.

However, more recently in Ferring, the TMOB noted that distribution of pharmaceutical preparations through Health Canada’s Special Access Programme may be considered use in the normal course of trade for the pharmaceutical industry. The programme, administered by Health Canada, allows medical practitioners to request access to drugs not yet approved for sale in Canada for patients with life-threatening conditions.

Although the TMOB’s comments were made in passing, the decision is perhaps the closest that the TMOB has come to stating that trademark use in the normal course of trade for the pharmaceutical industry may be quite different from that for other industries. These comments lend support to the position that use of a mark in the pharmaceutical field outside ordinary commercial trade channels, such as in the context of the Special Access Programme or in clinical trials, may constitute trademark use.

Upcoming changes to Trademarks Act and regulations: In March 2014 the federal government introduced major amendments to the Trademarks Act in Bill C-31. The amendments are designed to allow implementation of the Nice Agreement, the Singapore Treaty and the Madrid Protocol. Bill C-31 received royal assent in June 2014 and the amendments are expected to come into force in late 2015 or early 2016.

Most notably, Bill C-31 removes the requirement that an applicant use a trademark before registration. This represents a fundamental shift in Canadian trademark law and will prove useful for pharmaceutical companies wishing to secure registered trademark protection in Canada without use. At present, if a mark has not been used in Canada when the application is filed, a declaration attesting to use must been filed before registration can occur. Although extensions of time to file such declarations are available, once a final extension has been granted, an applicant’s only recourse is to file a fresh application. Under the new regime, however, applicants will no longer be required to file a declaration of use. Applications will automatically issue to registration following the expiry of the opposition period.

However, registrations will still be vulnerable to non-use cancellation beginning three years following the registration date. It is therefore conceivable that a pharmaceutical trademark registration could be attacked for non-use before the drug has been approved for sale in Canada. However, the inability to market a product due to a pending regulatory approval process is likely to be considered a special circumstance excusing non-use, which would permit the registration to be maintained.

Even if the registration is cancelled for non-use, a fresh application can be filed and, subject to an intervening right, will issue to registration without use. The new registration will then be immune from a non-use cancellation attack for three years following the registration date.

Non-traditional marks: In Canada, non-traditional marks (eg, colours, shapes and sounds) are registrable. Bill C-31 will permit the registration of various other non-traditional marks (eg, moving images, scents, tastes and textures). However, it will be more onerous to secure such registrations, since the Trademarks Office will be permitted to request evidence from an applicant establishing the distinctiveness of the mark. Such evidence is not currently required and, in effect, is likely to prevent registration of such marks unless there has been use in Canada sufficient to render the trademark distinctive.

For pharmaceutical marks consisting of colours or shapes, the Trademarks Office will likely apply the very high threshold for distinctiveness currently required in opposition and litigation proceedings.

The recent Federal Court decision in Distrimedic Inc v Dispill Inc (2013 FC 1043) highlights the difficulty in showing that colour marks applied to pharmaceutical-related products can function as trademarks. In Distrimedic the court rejected a counterclaim for passing off related to the use of a specific colour scheme on a pill dispenser, on the basis that the colour scheme served the functional purpose of a ‘code’ allowing patients to easily recognise which medication to take at what time of day, rather than as an indicator of source.

Parallel imports and repackaging

Pharmaceutical preparations cannot be sold in Canada without prior Health Canada approval. Moreover, such preparations must comply with the labelling requirements set out in the Food and Drug Regulations, including Section C.01.005, which requires that the inner and outer label of a drug display the drug identification number assigned for that product. Accordingly, the parallel import of pharmaceutical preparations into Canada that have not received Health Canada approval and that do not bear the requisite drug identification number is illegal, even if the drug has been approved for sale in another country.

Bilingual language requirements further reduce the likelihood that a parallel import could be legally sold in Canada. Moreover, the Food and Drug Regulations specifically prohibit the import and sale of drugs in Canada unless the importer’s name and the seller’s Canadian address appear on the inner and outer labels of the product.

Anti-counterfeiting and enforcement

On December 9 2014 Bill C-8, the Combating Counterfeit Products Act, received royal assent. The bill is intended to improve border measures for counterfeit goods in Canada. Currently, the sale of counterfeit health products is governed primarily by the Customs Act, the Trademarks Act, the Copyright Act and the Criminal Code. However, rights holders have found it difficult to use the relevant legislation effectively in the face of counterfeiting in Canada. Canada has no counterpart to the customs seizure regimes available in many other countries and no recordal regime for IP rights. Equally problematic is that customs officials in Canada will not act independently to search and seize goods that violate a trademark owner’s rights.

One of the most important features of the Combating Counterfeiting Products Act is a new procedure for requesting assistance from customs authorities that will significantly improve the ability to detain alleged counterfeit products at the border. The owner of a registered trademark or copyright may record its rights with the minister of public safety and emergency preparedness. Customs personnel may then seize and detain suspected counterfeit goods and provide information about the detained goods to the registered trademark or copyright owner. Detention is limited to up to 10 days, and less if the goods are perishable; however, if the trademark or copyright owner elects to commence legal proceedings, the goods may remain in detention until disposition of the action, at the expense of the rights holder.

However, the request for assistance procedure is available only for owners of copyright and registered trademarks; therefore, trademark rights holders would be well advised to register all marks that are potential counterfeiting targets in Canada and to record these rights with the minister. The provisions relating to the request for assistance procedure, including the required form for recording IP rights, came into force on January 1 2015, along with expanded definitions for infringement and new criminal sanctions. The remaining amendments provided for in the act are expected at a later date.

Advertising

Section C.01.044 of the Food and Drug Regulations restricts consumer-related advertising for prescription drugs to the mention of the name, price or quantity. Under this regulatory framework, Health Canada permits two types of prescription drug message directed to consumers: reminder ads and help-seeking messages.

Reminder ads, where only the name of a prescription drug is mentioned (not the disease), are interpreted as not going beyond the restrictions; however, depictions of easily recognisable product packages (eg, blister packs, inhalers) in reminder ads that lead to the identification of the therapeutic indication of a prescription drug are not permitted, as they are considered to exceed the limitations.

Help-seeking messages, where a disease state is discussed without reference to a specific prescription drug product, are considered to be information and not advertising, provided that the criteria outlined in Health Canada’s “The Distinction Between Advertising and Other Activities” policy are met.

Generic substitution

Both the federal and provincial governments regulate the pharmaceutical industry in Canada. The federal government has jurisdiction over IP rights, the approval of prescription drugs and labelling. The provincial governments oversee healthcare services funding. Each provincial drug plan sets specific price and other cost-containment guidelines (eg, drug product substitution laws and interchangeability designations) with respect to the pharmaceutical coverage provided.

Drug substitution regulations have been in place in most provinces for many years. These regulations typically focus on promoting the substitution of lower-priced generic drugs for brand-name drugs through implementation of product and price selection rules. Product selection involves switching from a branded to a generic drug, whereas price selection involves choosing the least costly generic available.

In Katz Group Canada Inc v Ontario(Health and Long-Term Care) (2013 SCC 64), the Supreme Court of Canada upheld the validity of Ontario regulations prohibiting “private label products” (generic drugs sold under the brand name of a pharmacy, but manufactured by a third party) from obtaining an interchangeability designation in Ontario, which would entitle the dispensing pharmacy to reimbursement from the government under the various provincial health plans.

Online issues

Online pharmacies

Canada does not prohibit the online sale of prescription drugs and, given the comparatively low cost of pharmaceuticals in Canada compared to many other countries, there is a market for pharmaceuticals sold through Canadian online pharmacies. However, ordering prescription pharmaceuticals over the Internet may result in serious health and safety issues.

Recently, two US senators introduced a bipartisan bill, the Safe and Affordable Drugs from Canada Act, which would amend the Federal Food, Drug and Cosmetic Act to require regulations permitting individuals to safely import prescription drugs purchased from Canadian pharmacies. The bill was read twice on introduction and has been referred to the Senate Committee on Health, Education, Labour and Pensions for consideration.

Domain names

The Canadian Internet Registration Authority (CIRA) administrates ‘.ca’ domain name registrations and restricts registrant eligibility through its Canadian Presence Requirements (CPRs) to certain qualifying parties, including those holding a Canadian trademark registration that corresponds to the domain name to be registered.

CPR-eligible parties, including trademark registration owners, may lodge complaints seeking the transfer of domain names registered in bad faith through the CIRA Domain Name Dispute Resolution Policy. As for all complainants, panels require that pharmaceutical trademark complainants demonstrate prior rights to the trademark, and the registrant’s bad faith and lack of legitimate interest in the domain name, before they will order a domain name transfer.

At international level, the Internet Corporation for Assigned Names and Numbers (ICANNN) manages generic top-level domain names (gTLDs), and has been launching new gTLDs, consisting of a variety of commonly used words (eg, ‘.culture’, ‘.pizza’), geographic indicators (eg, ‘.city’, ‘.town’) and non-English gTLDs (eg, ‘.??’ – Chinese for ‘enterprise’) since Autumn 2013. The expansion is intended to give companies and organisations more choice in crafting their online presence. Of note to the pharmaceutical community, ‘.pharmacy’ went live on September 5 2014, and is reserved for registration by pharmacies and related entities, including pharmaceutical manufacturers and prescription drug information and pharmacy referral sites.