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Dave Green – Trade mark erosion: Dangers, pitfalls and adaptation Brett Lewis | Partner Davies Collison Cave.

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Presentation on theme: "Dave Green – Trade mark erosion: Dangers, pitfalls and adaptation Brett Lewis | Partner Davies Collison Cave."— Presentation transcript:

1 Dave Green – Trade mark erosion: Dangers, pitfalls and adaptation Brett Lewis | Partner Davies Collison Cave

2 Its not easy raising a trade mark Dave Green –

3 Its not easy raising a trade mark Step 1: Creation and Registration Getting to plant the seeds can be difficult and costly

4 Its not easy raising a trade mark Step 2: Trade Mark Promotion Nurturing it requires skill, attention and money. Lots of it.

5 Its not easy raising a trade mark Step 3: Use it, or lose it Without constant care and use, the TM withers

6 Its not easy raising a trade mark Step 4: Hope that others dont use it too much!

7 Its not easy raising a trade mark Step 4: Hope that others dont use it too much!

8 Its not easy raising a trade mark Step 5: Defend yourself against hijackers

9 So – its NOT just about doing the ground work and sitting back and enjoying the fruits of your labour Other factors beyond your control: Regulatory decisions Regulatory changes For multinational trade marks, an issue in one jurisdiction can have global consequences. The fruits of your labour?

10 The erosion of trade marks Regulatory changes may drastically affect your mark Regulations may not specifically refer to trade marks (e.g. labelling laws) May limit the manner of exploitation, or increase the cost of maintaining and exercising trade mark rights. Potential to devalue.

11 Some recent examples Plain packaging of tobacco products Health warnings on alcohol and soft drinks

12 Plain packaging of tobacco products Reduces the brand to a name All forms of branding – trade marks, logos, colours, embossing and graphics – are removed from the packaging of tobacco products Just the brand name is left, in the same typeface for all other brands In many jurisdictions where tobacco advertising is otherwise restricted, packaging is one of the few remaining outlets for brand differentiation Plain-packaging, in effect, reduces tobacco trade marks and brands to their name Photo:

13 Plain packaging of tobacco products The aim To make health warnings more prominent, and reduce the ability of a cigarette packet to promote tobacco use. Where it has been considered United Kingdom and Canada: considered in the 1990s, but eventually abandoned Australia: Recently re-elected government has suggested that it will push ahead with its planned reforms. Photo:

14 Plain packaging of tobacco products Industry response Not unexpectedly, vocal Arguments have revolved around: -Trade issues (WTO and WIPO) -Potential TRIPS and Paris Convention breaches -Lack of evidence to suggest it will work -Constitutional arguments (in Australia): is it acquisition of property? Will it need to be compensated on just terms? Photo: Association of Australian Retailers

15 Collateral damage to tobacco mark regulation: fragrances? In 2004 Lithuanias State Tobacco Authority banned the sale of any product featuring brands that were similar to tobacco trade marks or brands in an attempt to stop brand extension. (See: Vilija Vesunaite and Aurelija Rukaskaite, Cigarettes, Clothes and Tobacco, Trademark World, March 2009, p 19) Overnight Cool Water aftershave became contraband.

16 Erosion of alcohol trade marks Any impact on the context in which a trade mark can be used can decrease its value Example: health warnings on alcohol products:

17 Other food warnings John Hopkins study: some energy drinks have up to 14 times the caffeine content of a can of Coca Cola should carry health warnings In the UK Food Standards Agency colour-coded warnings battle Photo:

18 The implications of these examples The value of a trade mark can change rapidly if the regulatory landscape alters Which means your beautifully tended tree may end up as a bonsai.

19 TM erosion in the pharmaceutical sector Dave Green –

20 But what about the pharmaceutical sector? 1.Tension between the US FDA and USPTO 2.EU repackaging of parallel imports

21 TM erosion in context Challenges facing the pharmaceutical industry declining R&D output conservative government spending on pharmaceuticals in the wake of the GFC fewer blockbuster drugs in the pipeline cuts in R&D, marketing and IP budgets

22 Caught between two masters: FDA and USPTO TM approval for registration can be hard, but approval for use can be even harder US Food and Drug Administration asserts increasing authority to refuse misbranded names, i.e. those that: incorrectly imply product benefits misrepresent drug characteristics have the potential for confusion with other pharma product names and therefore contribute to medication error Goal: public safety, not brand protection vs

23 Caught between two masters: FDA and USPTO FDA name approval process: expert panel examines existing names to find possible sources of confusion compare handwriting samples and examination for sound alike words look at other facts, such as whether the drugs are taken for different diseases, and whether a dosage mix up may have negative consequences for the patient Problems: Lack of transparency: FDA guidelines used to make determinations are not public Subjective measures based on opinion Unpredictable outcomes Name review is last step of approval process vs

24 Impact on mark value FDA may reject a registered pharma trade mark just before marketing launch phase If world-wide marketing campaign is scheduled, time constraints mean little time for appeal Pre-launch investment in mark lost Mark loses potential to be global

25 Repackaging of parallel imports Context: Prices of pharma products determined by each EU member state Price differences = business opportunities via parallel importers Packaging and labelling highly regulated Repackaging > tension with trade mark rights

26 Repackaging of parallel imports Whats the problem? Trade mark owners face increasing uncertainty: re-boxing under a generic name (de-branding) re-boxing under manufacturers and importers brand (co-branding) sticker on original box to identify the parallel importer of the product (overstickering) Clear detrimental effect on value of the original brand and trade mark. TM owners lose control of: branding and packaging of final product ability to set prices brand unity for the product.

27 EU legislative and judicial stance Bristol-Myers Squibb v Paranova; Boehringer and Others v Swingward Ltd; Communication 839 of 2003: Trade mark owners may not oppose sale of repackaged goods if: the repackaging is necessary to permit importation the repackaging does not adversely affect the original condition of the product; the presentation of the repackaged product is not likely to damage the reputation of the trade mark or its owner; the new packaging identifies the manufacturer and the repackager the trade mark owner receives prior notice and a specimen of the repackaged product before it is put on sale.

28 Strategies and defences Dave Green –

29 But now for the good news Brand owners and therefore in-house TM lawyers face ongoing challenges arising from external change. But there is hope: industry has huge potential to inform any debate and influence outcomes Attempts to introduce plain packaging legislation for tobacco products in Canada and the UK were thwarted largely because of the efforts of tobacco companies. Potentially fatal blow to the value of trade marks was averted through coordinated campaigning.

30 Preparing for, and adapting to, erosion 1.Recognise that the regulatory shifts can erode the value of your trade marks and respond accordingly: by proactively allocating resources. This doesnt mean only budget, but time and focus as well. 2.You cant adapt to or change what you dont know about, so: Make sure youre aware of any proposed regulatory changes at an early stage Subscribe to relevant trade law journals and alert services Allocate time each week to review these and flag any potential issues The sooner proposed regulations can be identified, the earlier the work can begin on informing the debate and ensuring your voice is heard.

31 Preparing for, and adapting to, erosion 3. Make friends and influence people Form networks with colleagues and competitors to fight for common causes Become involved in professional associations and their policy committees Be loud! Make sure your voice is heard by active participation in the media, engagement of PR firms and use of lobby groups

32 Dave Green – But most of all … enjoy the journey

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