Introduction
Facts
First-instance court
Federal Civil and Commercial Court of Appeals
Comment


Introduction

The Federal Civil and Commercial Court of Appeals has confirmed a first-instance decision that:

  • declared that the descriptive trademark HEPATIC was not registrable; and
  • rejected a cancellation action – filed by the owner of the HEPATIC trademark on grounds of lack of use – of the trademark LORHEPATIC.

This decision has put an end to a long-running trademark dispute between two pharmaceutical companies.(1)

Facts

On 16 March 2012, Bago Group SA applied to register the marks HEPATIC BAGO and HEPATIC, both to cover products in class 5, before the local Trademark Office. GP Pharm opposed both applications on the grounds that they were confusingly similar to its own trademark, LORHEPATIC, registered in the same class.

During the mediation process, the parties signed a partial agreement. This included the withdrawal of GH Pharm's opposition against HEPATIC BAGO, but not against HEPATIC. Bago initiated a legal action to try to overcome the impediment that was hindering the registration of HEPATIC in class 5. It sought:

  • the rejection of GP Pharm's opposition; and
  • the cancellation of the registration of the trademark LORHEPATIC.

In answering the complaint, GP Pharm alleged that it had agreed to withdraw its opposition against HEPATIC BAGO in the mediation agreement in exchange for the withdrawal of the HEPATIC trademark application. Despite receiving a negative email response from Bago with respect to the withdrawal of the HEPATIC trademark application – which was attached to the judicial files – GP Pharm proceeded to withdraw its opposition to HEPATIC BAGO, "on the understanding that this ensured an out-of-court settlement". As a consequence, GP Pharm allowed Bago to obtain exclusive rights over HEPATIC BAGO (the trademark remains registered).

To counter Bago's cancellation action, GP Pharm submitted evidence of use of the mark LORHEPATIC, such as:

  • copies of its packaging;
  • patient information leaflets;
  • medical journals; and
  • formal letters to the local food and drug administration (ANMAT).

Further, GP Pharm argued not only that the trademarks at issue were confusingly similar, but also that HEPATIC should be rejected as the term was of common use, indicative and misleading.(2)

First-instance court

The first-instance judge rejected Bago's demands, stating that GP Pharm had proved the use of the trademark LORHEPATIC. The judge also held that the trademark HEPATIC was indicative of the product for which it was intended and, therefore, that the trademark could not be granted.

The judge did not rule on the similarity of the trademarks, considering that this issue had become moot.

Bago filed an appeal, claiming that the judicial decision was unfounded and arbitrary since it had failed to consider the evidence which proved the lack of use of the trademark LORHEPATIC. Bago also argued that the judge had made an incomplete analysis of the ANMAT report and claimed that there was no evidence that the product identified by the trademark was a hepatic drug.

Federal Civil and Commercial Court of Appeals

Cancellation request
The Court first addressed the cancellation request.

The Court explained that since a cancellation action is a legal institute that pursues the annihilation of a right, it must have a restrictive interpretation and careful application. The Court proceeded to describe the three conditions that must be met for it to apply and whether they had been met in this case:

  • The first condition is that there has been no use of the trademark during the period specified in Law 22,362 (ie, five years prior to the notification of the mediation).
  • The second condition is that a lawsuit aimed at obtaining the cancellation of the trademark has been filed.
  • The third condition is that the lawsuit was filed by a party with a legitimate interest.

Although the last two conditions were met, the Court noted that in order to determine whether the first condition was met in the case of pharmaceutical products, "what is relevant to determine the 'use' is not the date of manufacture of the product but the 'availability' and 'supply' in the market".

For the judges, the evidence that the plaintiff had produced demonstrated only that the LORHEPATIC product had not been manufactured during certain intermittent periods. Otherwise, GP Pharm had succeeded in proving its use within the period required by law.

The Court also highlighted the ANMAT report, since a medicinal product cannot be offered on the market without ANMAT's prior authorisation.

Since the first condition mentioned above was not met, the Court confirmed the rejection of the cancellation request relating to the trademark LORHEPATIC on grounds of lack of use.

Opposition dispute
The Court subsequently turned to the opposition dispute.

Following the defendant's assertions, the Court had to analyse whether the trademark HEPATIC was in fact "of common use", "generic", "indicative" and "misleading". The defendant had put much effort into preventing the registration of HEPATIC, since GP Pharm had already withdrawn its opposition against HEPATIC BAGO.

The Court stated that HEPATIC was a "common use term" and, for this reason, it was "unmonopolisable".

Afterwards, it continued to examine the registrability of the sign HEPATIC based on the provisions of article 2(a), ruling out that Bago's trademark was the necessary designation of the product. Since "hepatic" is an English word, it was clear that, in local customs and practices, it was not used to designate the product in question.

The judges then contrasted the concepts of "indicative" and "evocative" trademarks: the former cannot be granted due to lack of originality but the latter can. The Court understood that the trademark HEPATIC did not evoke the drug, but that it was descriptive, or indicative. The fact that it was an English word did not prevent it from describing the nature of the product.

Finally, although the judges had already decided the fate of the trademark (ie, it was not registrable because it was descriptive), they concluded that HEPATIC was not misleading (under article 3(d)): since it had been applied for to identify all products in class 5, this allegation was merely conjectural and depended on a concrete application that the plaintiff could make in the future.

The Court thus declared the opposition well founded, confirming the first-instance ruling.

Comment

This case shows that the proof of use required to repel a cancellation action must demonstrate the availability and supply of a product in the market, regardless of the date of manufacture of the pharmaceutical products. Likewise, the authorisation issued by ANMAT is an important element to be considered – without it, medicinal products may not be commercialised.

It is also clear that relying on the other party to do something that is not expressly written in an agreement – and in this case, not even accepted by email – is a dangerous move and counter-productive to parties' interests.

In this case, GP Pharm was ultimately able to block Bago from "monopolising" the term "hepatic". However, in a way, the applicant was victorious as well – in getting the opposition against HEPATIC BAGO withdrawn, for nothing in return.

For further information on this topic please contact Abril Neiman or Camila Sirianni at Ojam Bullrich Flanzbaum by telephone +54 11 4549 4900 or email ([email protected] or [email protected]). The Ojam Bullrich Flanzbaum website can be accessed at www.ojambf.com.

Endnotes

(1) Bago Group SA v GP Pharm SA, File No. 4309/2015, 27 April 2022.

(2) Articles 2(a) and 3(d) of Law 22,362.