Sweeping amendments were made to the Trademarks Act two years ago, most of which will likely be implemented by 2018. These amendments will bring both benefits and challenges to applicants in all industries, and the pharmaceutical industry is no exception.
Selection, clearance and registration
Drug name approval in Canada is 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 considering both trademark registration issues under the Trademarks Act and regulatory issues handled by the Therapeutic Products Directorate of Health Canada. While both processes deal with confusion triggered by use of a proposed brand name, the underlying focus of each is different. Examiners in the Canadian Trademarks Office focus on the likelihood of confusion as to the source of manufacture of the trademarked products, while Health Canada assesses drug name confusion based on health and safety concerns.
Drug names, confusion and regulatory approval
Under the Food and Drug Regulations, a drug’s proposed brand name must be submitted to Health Canada as part of the approval process. 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 drug name approvals by regulatory bodies in other jurisdictions and a brand name approved and used internationally is not guaranteed to be allowed in the Canadian market.
In 2006 Health Canada released a guidance document dealing with the drug name review process for lookalike, soundalike (LASA) drug names. However, Health Canada subsequently recognised that this guidance lacked sufficient direction on the risk assessment methodology to be used to assess proposed brand names. In 2013 it released the 2013 Draft Revised Guidance Document for Industry – Review of Drug Names for LASA Attributes. This draft was intended to address some of the deficiencies in the 2006 guidance; however, it was criticised as mandating excessively onerous risk assessment methods, including psycholinguistic testing.
Health Canada then released a new Guidance Document for Industry – Review of Drug Brand Names, which replaces the 2013 draft, with a corresponding frequently asked questions sheet. The new guidance came into effect on June 13 2015.
Notable changes in the new guidance include the following:
- Non-prescription products and natural health products are excluded from the scope of the guidance.
- Raw data to be submitted is limited to database search results (although Health Canada reserves the right to request additional material where necessary).
- The orthographic and phonetic similarity threshold has been lowered from 65% to 50%.
- Psycholinguistic tests are no longer required.
Drug names, confusion and trademark registration
For a trademark to be registrable, it cannot be likely to cause confusion in the marketplace regarding the origin of products or services bearing that mark. While public health concerns (eg, drug name mistakes) are not strictly relevant to the issue of trademark registration, Canadian jurisprudence suggests that they may be considered when assessing the issue of confusion between drug names for trademark registration purposes.
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, finding the marks to be confusing even though they were associated with different pharmaceutical preparations and end uses.
However, if a trademark contains a formative common to the industry, the likelihood of confusion will likely be deemed 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 was highly suggestive of iron – consumers would focus on the suffix components of the marks ‘prox’ and ‘ing’, which were not similar. These differences were considered sufficient to prevent likelihood of confusion.
Upcoming changes to Trademarks Act and Regulations
In 2014 the government introduced major amendments to the Trademarks Act in Bill C-31. The bill is expected to be implemented in 2018.
The stated goal of the amendments is to bring Canada into line with international practices, allowing it to accede to the Madrid Protocol, the Singapore Treaty and the Nice Agreement.
The most notable change in Bill C-31 is the dispensation of use as a requirement for registration.
At present, trademark applications must be based on at least one filing ground. The most common grounds are use in Canada, proposed use in Canada and use and registration abroad. While an application can be filed in Canada on the basis of an intention to use there, it will not issue to registration until a declaration of use is filed attesting to commercial use in Canada, and then only for those goods or services for which the mark has been put to use.
The declaration of use requirement is often particularly onerous for pharmaceutical companies. Pharmaceutical products cannot be sold in Canada until the drug is approved by Health Canada, and neither sample shipments nor use of the mark in clinical trials ordinarily constitutes trademark use. Given Canada’s lengthy drug approval process, there is often a long delay between allowance of a pharmaceutical trademark application and filing of a declaration of use, necessitating the filing of multiple time extensions. Indeed, applications must often be re-filed once the maximum allowable extension period has expired.
The amendments will eliminate trademark application filing grounds, so that applicants need only “[be] using or propose to use, and be entitled to use” the applied-for mark in Canada. Under the new regime, applications will issue to registration simply on the expiry of the opposition period, regardless of whether use has commenced in Canada (or anywhere else). This means that trademarks covering pharmaceutical products could issue to registration long before the products are approved for sale by Health Canada. Further, the elimination of use as a prerequisite to registration will enable pharmaceutical companies to secure trademark registrations for marks covering virtually all pharmaceutical products and services without having used the mark in Canada.
However, under the new regime, registrations will still be vulnerable to cancellation for non-use, beginning three years from the registration date. Situations may thus arise where a registration for a pharmaceutical trademark could be challenged for non-use before the drug has been approved for sale in Canada. It is possible that the inability to market a product due to a pending regulatory approval process may be considered a special circumstance excusing non-use, which would permit the registration to be maintained. Regardless, even if a registration is cancelled for non-use, a fresh application can be filed and will issue to registration without use, subject to any intervening right. The new registration will then be immune from a non-use cancellation attack for three years following the registration date.
At present, registration of certain non-traditional marks (eg, colours, shapes and sounds) is permitted in Canada; however, the new legislation will permit registration of a wider variety of non-traditional marks, including moving images, scents, tastes and textures. However, applications to register such marks – and indeed all marks – will be subject to examination for distinctiveness, which is not presently the case. If the registrar holds that a mark is not inherently distinctive, the applicant will have to file evidence that it had acquired distinctiveness across Canada as of the trademark application filing date; the registration will be territorially restricted to the area in Canada where the mark is proven distinctive.
Examination for distinctiveness will be particularly relevant in the pharmaceutical field, where trademark protection is often sought for non-traditional marks such as colours applied to pharmaceutical tablets or capsules. Under the new regime, the Trademarks Office will likely apply the high threshold for distinctiveness currently required in opposition and litigation proceedings.
The recent decision in Pfizer Products Inc v Canadian Generic Pharmaceutical Assoc (2015 FC 493) highlights the high evidential burden on an applicant in establishing that a colour applied to a pharmaceutical tablet or capsule serves to distinguish the goods of the trademark owner from those of others. The case dealt with an application by Pfizer to register a trademark consisting of the colour blue applied to the visible surface of a diamond-shaped tablet (the Viagra tablet design). The Federal Court upheld the decision of the Opposition Board that the Viagra tablet design was not distinctive of Pfizer or any single source. The court agreed with Pfizer that distinctiveness need not be established in each consumer subgroup (ie, physicians, pharmacists and patients), but rather that a significant degree of recognition among the whole constituency of ordinary consumers was required. However, it nevertheless found that the limited use which physicians, pharmacists and patients made of the appearance of the Viagra tablet design for identification purposes was not sufficient to establish the distinctiveness required for trademark registration.
The case confirms that the test for distinctiveness is the same in the pharmaceutical industry as in any other industry. However, in the pharmaceutical context, the relevant consumer includes patients who use the products, physicians who prescribe them and pharmacists who dispense them; further, purchasing decisions are usually made by professionals or on the advice of professionals. Distinctiveness of pharmaceutical marks is hence difficult to establish. Examination for distinctiveness adds a further hurdle to securing registration of non-traditional marks.
Parallel imports and repackaging
Pharmaceutical preparations cannot be sold in Canada without prior Health Canada approval. Further, such preparations must comply with the labelling requirements set out in the Food and Drug Regulations – including Section C.01.005, which requires the inner and outer label of a drug to display the drug identification number assigned to that product. Accordingly, the parallel import of pharmaceutical preparations that do not have Health Canada approval or 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 of a parallel import being legally sold in Canada.
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. At present, 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.
Key to the Combating Counterfeit Products Act is a new procedure for requesting assistance from customs authorities, which 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 (less if the goods are perishable); however, if the rights holder elects to commence legal proceedings, the goods may remain in detention until disposition of the action, at the expense of the rights holder.
The request for assistance procedure is available only for owners of copyright and registered trademarks; accordingly, trademark owners would be well advised to register all marks that are potential counterfeiting targets in Canada and 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 of ‘infringement’ and new criminal penalties. The act’s remaining amendments are expected at a later date.
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 staying within the restrictions. However, depictions of easily recognisable product packages (eg, blister packs or inhalers) in reminder ads that lead to the identification of the therapeutic indication of a prescription drug are not permitted.
Help-seeking messages, where a disease 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 Distinction Between Advertising and Other Activities Policy are met.
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 upheld the validity of Ontario regulations prohibiting ‘private label products’ (ie, 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 have entitled the dispensing pharmacy to reimbursement from the government under the various provincial health plans.
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. While many reputable online pharmacies operate in Canada, the lack of personal contact between consumer and pharmacist may increase the risk of potential health and safety issues.
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 owners, may lodge complaints seeking the transfer of domain names registered in bad faith through the CIRA Domain Name Dispute Resolution Policy. Before it will order a domain name transfer, CIRA requires the complainant to demonstrate prior rights to the trademark, as well as the registrant’s bad faith and lack of legitimate interest in the domain name.
This article first appeared in World Trademark Review. For further information please visit www.worldtrademarkreview.com