Flynn Pharma v Drugsrus: Court of Appeal says trademark can block rebranded parallel imports

What happened

Flynn Pharma got UK marketing approval and a trademark for "Flynn", used on phenytoin sodium capsules that Pfizer had previously sold under the name Epanutin. Once the drug became a generic, Flynn's price rose sharply. Drugsrus and a second importer wanted to bring in Epanutin from other EU countries and relabel it "Phenytoin Sodium Flynn" to match the UK's regulatory name for the product. Flynn said this use of its trademark on goods it had never approved for the UK market was infringement, and sued to stop it.

What did the court decide in Flynn Pharma v Drugsrus?

The Court of Appeal dismissed the importers' appeal. Enforcing the FLYNN trademark was not an unlawful block on free movement of goods under Article 36 TFEU, because Flynn had neither consented to the sale of the Pfizer-made Epanutin elsewhere in the EU nor had any control over its quality, and Pfizer had no say over how Flynn used its own mark. The two companies traded with each other at arm's length. They were not treated as one combined economic unit just because Pfizer made the underlying drug. The court also rejected arguments that Flynn's use of the mark wasn't really trademark use, and that relabelling fell within the defence for purely descriptive use under section 11(2)(b) of the Trade Marks Act 1994.

What we learned from this

• What I'd take from this is that simply sharing a manufacturer with another company's branded product doesn't give you any right to use that company's trademark, even if the underlying drug is identical.
• If you want to rebrand or relabel someone else's trademarked goods for parallel import, check whether the trademark owner actually consented to, or controls, the goods you're importing.
• Common sourcing of raw product isn't the same as common economic control. Courts look for genuine unitary control between companies, not just a shared supply chain.
• A trademark owner who has no connection to goods made or sold abroad can usually enforce its mark against anyone trying to rebrand those goods for the home market.

Things to be aware of

The businesses involved

What happened next

• Wedlake Bell's commentary described the High Court's earlier 2015 decision as providing lessons on how rebranding of an imported epilepsy drug interacted with UK trademark law.Source: Mondaq, February 2016

What others said about it

• Bristows: the Court of Appeal confirmed trademark owners can stop parallel imports of goods even when made by the same manufacturer as the owner's own branded product.Source: Bristows, April 2017
• Brick Court Chambers: the judgment confirmed trademark rights can be relied on to prevent pharmaceutical parallel imports in cases like this one.Source: Brickcourt, April 2017