SUPREME COURT, DECISION OF 24 MAY 2011, SANDOZ V. BEECHAM GROUP PLC AND LABORATOIRE GLAXOSMITHKLINE

The French Supreme Court recently issued its long-awaited decision in the "Deroxat" case. The court decided that generic drugs can be identified by reference to the name of the branded drug.

The French Deroxat saga is finally set to end.

Beecham Group Plc (Beecham), an English pharmaceutical company, is the owner of the French trademark "DEROXAT" which is used in France by Laboratoire GlaxoSmithKline (GSK) for an antidepressant.

The French generic pharmaceutical company G. Gam - now part of Sandoz - obtained authorization to sell its generic drug "Paroxetine G. gam 20 mg". In 2003, it published an advertisement in professional healthcare journals containing the following statement: "G. Gam is pleased to announce the sale of "Paroxetine G. Gam" (Generic of Deroxat published in the Official Journal of 1 November 2002) in the near future." Beecham and GSK sued G. Gam for infringement of trademark rights and unfair competition.

The Paris Court of Appeal held that the advertisement announcing the sale of a "Generic of Deroxat" was a valid comparative advertisement. The court considered that G. Gam had informed the public that the generic drug and the branded drug had the same qualitative and quantitative composition of active substance and the same pharmaceutical form and, therefore, that their bioequivalence had been demonstrated.

On further appeal, the French Supreme Court upheld the decision. The rationale was that the advertisement did not present the generic drug as an imitation of the branded drug but as a generic, which was the equivalent of the branded drug and not an imitation of it. Furthermore, the court found that the announcement "Generic of Deroxat published in the Official Journal of 1 November 2002)", in brackets and in small print, was not aimed at taking unfair advantage of the reputation of the trademark "DEROXAT" but provided immediate information to the targeted public - pharmacists and healthcare professionals - by specifying that this new product was the generic drug of the original drug "Deroxat." This ascertained the existence of an effective competition between the originators and the generic pharmaceutical companies.

The Supreme Court also ruled in favor of generic companies, in general, by partially overturning the decision of the Paris Court of Appeal and stating that a trademark owner cannot prevent a third party from using a sign identical or similar to its trademark if the use complied with the requirements for comparative advertising. Therefore, the court did not have to decide whether the "necessary reference" exception (to indicate the intended purpose of a product) of Article L.713-6 b) of the French Intellectual Property Code applied.

In conclusion, there is no need to check for the existence of trademark infringement if the comparative advertising is lawful.