The English Court of Appeal issued a ruling on 6 February 2015 which has significant implications for the pharmaceutical sector in the EU where products are sold under different trade marks in Member States. Arguably the implications are more wide reaching, but the outcome of the current ruling is dependant on the very specific circumstances in which pharmaceutical products are prescribed and dispensed. Below we discuss the implications ofSpeciality European Pharma Ltd v Doncaster Pharmaceuticals Group Ltd / Madaus GmbH (Case No. A3/2014/0205).

The second defendant, Madaus GmbH ("Madaus"), is the manufacturer of trospium chloride, an active ingredient for the treatment of over-active bladder symptoms, which is sold and distributed as REGURIN in the UK, CÉRIS in France and URIVESC in Germany. These products are sold either in 20mg or 60mg sizes and distributed in the UK by Speciality European Pharma Ltd ("SEP"), the claimant and exclusive licensee of the REGURIN trade mark.

The first defendant, Doncaster Pharmaceuticals Group ("Doncaster"), is a well known parallel importer. For many years Doncaster imported into the UK CÉRIS branded trospium chloride which had been put on the market with Madaus' consent in France and overstickered the packaging with the generic name. On expiry in 2009 of the patent for trospium chloride in 20mg form, Doncaster began to oversticker the CÉRIS products with the UK trade mark REGURIN and import URIVESC branded products from Germany which were overstickered in the same way.

Doncaster was sued by SEP for trade mark infringement, but claimed that it was entitled under Articles 34 and 36 of the Treaty on the Functioning of the EU to oversticker the REGURIN trade mark, as a restriction on such re-branding would constitute an arbitrary discrimination or a disguised restriction on trade between Member States and thus contrary to Article 36. In particular, it was Doncaster's argument that it was necessary for the products to be re-branded as REGURIN in this way in order to gain effective market access in the UK.

At first instance, SEP was successful. The evidence demonstrated that the vast majority of prescriptions for trospium chloride in the UK are written generically, nearly 90 percent for the 20mg product and 68% of the 60mg product (which remains under patent until 2024). Doncaster would therefore have access to all prescriptions written generically without the need to re-brand as REGURIN, although for the 60mg products this would require Doncaster to market the product under a different brand name. In view of this, it was held that Doncaster was merely trying to seek a commercial advantage by "piggy backing" on SEP's marketing without any investment of its own in establishing a brand.

On appeal, Doncaster put forward the rather convincing arguments that a parallel importer could not compete in price with generic manufacturers in relation to the 20mg product and it is not a realistic expectation for a parallel importer it establish its own brand, due to its lack of control of the supply chain. Furthermore, the 8.61 percent of the market to which Doncaster would otherwise have no effective access, namely the proportion of prescriptions for the 20mg products written for REGURIN, rather than generically, was not an insubstantial part. These arguments were upheld by the Court of Appeal and the appeal allowed on the grounds that adoption of an own brand is not a "real world alternative" and a significant portion of the market at both the prescribing doctor and pharmacist level remained inaccessible to Doncaster without re-branding as REGURIN.