Trademarks – The HEPATIC trademark: a ‘strike’ on the applicant’s liver
By Abril Neiman and Camila Sirianni.
The Federal Civil and Commercial Court of Appeals confirmed the First Instance decision that declared the non-registrability of the descriptive trademark HEPATIC, and rejected the cancellation action on grounds of lack of use over the opponent’s trademark LORHEPATIC.
After seven years, Chamber II of the Court of Appeals declared the opposition lodged against the trademark HEPATIC as founded, and rejected the cancellation action on grounds of non-use of the trademark LORHEPATIC. This decision put an end to a long trademark dispute between two pharmaceutical companies (Case “BAGO GROUP S.A. c/GP PHARM S.A”, File No. 4309/2015, 27/4/2022).
Background and First Instance decision
On one hand, we have BAGO GROUP S.A. who, on March 16, 2012 had filed for two trademark applications before the local Trademark Office: HEPATIC BAGO and HEPATIC, both to identify all products included in class 5.
On the other, GP PHARM who opposed to both applications for HEPATIC BAGO and HEPATIC, on grounds that they were confusingly similar to their own trademark LORHEPATIC, registered in the same class.
During the mediation process, the parties decided to sign a partial agreement. This included the withdrawal of the opposition filed by GH PHARM only against HEPATIC BAGO, but not against HEPATIC.
Therefore, BAGO initiated a legal action seeking the rejection of the opposition and also the cancellation of the opposing registration, trying to overcome the impediment that was hindering the registration of HEPATIC in class 5.
When answering the complaint, GP PHARM alleged that they had agreed to withdraw the opposition against HEPATIC BAGO plain and simply in the mediation agreement, in exchange for the withdrawal of HEPATIC trademark application. Despite BAGO’s negative response received by email -which was attached to the judicial files-, GP PHARM filed such withdrawal against HEPATIC BAGO, “on the understanding that this ensured an out-of-court settlement”.
What is striking is that the opponent, without having succeeded in getting BAGO’s alleged withdrawal included in the agreement -BAGO had refused to do it, by email-, decided to withdraw the opposition against HEPATIC BAGO. As a consequence, GP PHARM allowed BAGO to obtain exclusive rights over HEPATIC BAGO (currently registered).
To repel the cancellation action, GP PHARM submitted evidence of use of the mark LORHEPATIC, such as copies of its packaging, patient information leaflets, medical journals, rogatory letters to ANMAT (local Food and Drug Administration). To prevail in the opposition, the defendant invoked not only that the trademarks at issue were confusingly similar, but also added that HEPATIC should be rejected as a sign of common use, indicative and misleading (Arts. 2 a) and 3 d), Law 22.362).
The First Instance judge rejected BAGO’s demands, stating that the defendant had proved the use of LORHEPATIC, and that the trademark HEPATIC was indicative of the product for which it was intended and, therefore, the trademark could not be granted.
The judge did not rule on the similarity of the trademarks, considering that this issue had become abstract.
Second Instance
The plaintiff filed an appeal, claiming that the judicial decision was unfounded and arbitrary, since it failed to consider the evidence proving the lack of use of the trademark LORHEPATIC. The claimant also argued that the judge had made an incomplete analysis of the ANMAT report and that there was no evidence that the product identified with the trademark was a hepatic drug.
Firstly, the Court of Appeals addressed the cancellation request:
It was explained that, since the cancellation action is a legal institute that pursues the annihilation of a right, it must have a restrictive interpretation and careful application. The Court of Appeals then, proceeded to describe the three conditions that must be met for it to be applicable, analyzing whether or not they fit the case.
The first condition is that there has been no use during the period foreseen in Law 22.362 (5 years prior to the notification of the mediation); the second condition is that there is a lawsuit aimed at obtaining the cancellation; and the third condition is that the lawsuit is filed by a party with a legitimate interest.
Although the last two conditions were present, in order to determine whether the first one was met, Chamber II noted that 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 produced by the plaintiff only demonstrated that the LORHEPATIC product had not been manufactured in certain intermittent periods. Otherwise, the defendant had succeeded in proving its use within the period of time required by law.
It must be mentioned that the Court of Appeals gave importance to the ANMAT report, since, without its prior authorization, a medicinal product could not be offered on the market.
Since the first condition mentioned above was not met, Chamber II confirmed the rejection of the cancellation request over LORHEPATIC on grounds of lack of use.
Secondly, the Court of Appeals solved the opposition dispute:
Following the defendant’s assertions, the Court of Appeals had to analyze if the trademark HEPATIC was in fact of “common use”, “generic”, “indicative” and “misleading”. It should be recalled that the defendant had launched all the artillery to prevent the registration of HEPATIC, since GP PHARM had already withdrawn the opposition against HEPATIC BAGO.
In a direct way, Chamber II stated that HEPATIC was a common use term, and for this reason, unmonopolizable.
Afterwards, they continued with the control of registrability of the sign HEPATIC based on the provisions of Art. 2 paragraph a), ruling out that BAGO’s trademark was the necessary designation of the product. Since HEPATIC is an English word, it seemed clear that in the local customs and practices, HEPATIC 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, and the latter, can be granted by the TMO.
Thus, Chamber II understood that HEPATIC did not evoke the drug, but 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 this trademark – its non-registrability for being descriptive – they concluded that HEPATIC was not misleading (art. 3 d): since it had been applied for to identify all the products of class 5, this allegation was merely conjectural and depended on the concrete application that the plaintiff could make in the future.
The Court of Appeals then declared the opposition well founded, confirming the First Instance ruling.
In view of the above, for our judges, the proof of use required to repel a cancellation action is the one that demonstrates the availability and supply in the market -regardless of the date of manufacture of the pharmaceutical products-. Likewise, the authorization issued by ANMAT is an important element to be considered, since without it, the product could not be commercialized.
It is also clear that relying on the other party to do something that was not expressly written in an agreement -not even accepted by email- is a dangerous move and counter-productive to the client’s interests.
In this case, GP PHARM was ultimately able to block BAGO from “monopolizing” the term HEPATIC plainly, but in a way, the applicant was victorious as well in getting the opposition against HEPATIC BAGO withdrawn… for nothing.
For further information please contact: aneiman@ojambf.com and/or csirianni@ojambf.com.
