Procedures and strategies for pharmaceutical brands: United States
This is an Insight article, written by a selected partner as part of WTR's co-published content. Read more on Insight
Clearing and registering pharmaceutical trademarks in the United States are often more complex and challenging than in other countries. This is due in large part to the requirement that the Food and Drug Administration approve all pharmaceutical trade and generic names, the latter of which cannot be subject to trademark protection.
Selection, clearance and registration
Clearing and registering pharmaceutical trademarks in the United States are often more complex and challenging than in other countries. This is due in large part to the requirement that the Food and Drug Administration (FDA) approve all pharmaceutical trade and generic names, the latter of which cannot be subject to trademark protection. FDA approval of product names follows a separate, lengthy process from trademark registration and follows different rules. This presents navigational and strategic challenges and opportunities for pharmaceutical companies. Non-US pharmaceutical companies have a distinct advantage in their ability to register pharmaceutical trademarks in the United States while largely avoiding the competing timetables of the US Patent and Trademark Office (USPTO) and the FDA, although the rules still apply to them with regard to US trademarks and approvals.
Specificity in description of goods
It is not possible to apply for a US trademark registration that covers all of Class 5 (or any other class) or pharmaceuticals in Class 5 generally. Instead, a pharmaceutical company seeking to register a trademark must specify the particular goods or services in respect of which protection is sought, such as by referring to the types of diseases that a pharmaceutical product is used to treat.
Heightened likelihood of confusion standard
For pharmaceutical trademarks, the USPTO applies the likelihood of confusion test more strictly than it does for trademarks associated with other products. The policy underlying this approach is that consumer confusion as to pharmaceutical products can have serious and even catastrophic health consequences. This standard also informs the USPTO’s approach to determining similarity of goods or services. For example, pharmaceutical products for human and animal use are generally considered related goods for the similarity assessment. Direct-to-patient consumer advertising of pharmaceutical products also is uniquely prevalent in the United States (it is one of only two countries in the world where it is allowed for prescription-only as well as over-the-counter medications). As a result, for many (if not most) pharmaceutical products, consumer sophistication is considered from a patient standpoint.
FDA approval of product names
The FDA compares proposed product names only with product names that it has previously approved; it does not look at the USPTO Register. This has led to scenarios where an owner of a valid trademark registration cannot use it because another party with junior trademark rights was first to obtain FDA approval for the corresponding product name. The FDA’s similarity analysis focuses on the extent to which the product name looks (ie, appears in script) or sounds like previously approved names and does not follow the likelihood of confusion test applied by the USPTO. For example, even if a product name and a previous name could coexist on the Federal Trademark Register due to the previous name’s weakness as a trademark, that will likely have no bearing on whether the latter name will be approved by the FDA. The FDA’s analysis also has an orthographic element, focusing on how product names might appear on a handwritten prescription. For example, there is a presumption that pharmacists will rely more heavily on differences between the first few letters of product names, on the basis that doctors’ handwriting sometimes trails off at the end of words. This differs from the USPTO’s general approach, which is to compare the trademarks as a whole.
The FDA also considers whether the name might mislead and therefore cause medication errors in other ways. For example, a name that implies an unapproved indication, active ingredient, dosage or administration route will likely be rejected. The FDA has issued guidelines on its approach to product name approval and data sets, providing recommendations for selecting a suitable pharmaceutical product name. Companies can also use sophisticated clearance search technologies that mirror the FDA’s analysis through tools such as the FDA’s own Phonetic and Orthographic Computer Analysis software. Such an approach is not taken by the USPTO.
FDA approval occurs during the review of a final application and occurs late in the process, which can be a challenge for pharmaceutical companies seeking to register a trademark. With an important exception, the United States is one of the few countries that require proof of use in US commerce in order for a trademark application to proceed to registration. An application may be filed on an intent-to-use basis, but evidence that the trademark is in use in US commerce typically must be filed within three years of when a notice of allowance issues. Consumer sales are not necessarily required to prove use of a trademark in US commerce and use in a clinical trial may be sufficient in some circumstances, although historically companies have used code names in clinical trials to block competing trademark applications. That said, FDA approval is required to use a product name in both of these contexts, so most applications for pharmaceutical trademarks are filed on an intent-to-use basis.
However, non-US companies may file on the basis of a foreign registration or application for the trademark coupled with an intent to use it in US commerce. This can be a helpful strategy for non-US pharmaceutical companies awaiting FDA approval of the corresponding product name, because applications based on a foreign registration can proceed to registration without having to show evidence of use in US commerce. Once a trademark is registered, an owner will not be required to prove use until between the fifth and sixth anniversaries of registration.
Another strategy that is open to both US and non-US companies is to take advantage of all available timelines and extensions for prosecuting the trademark application. For example, if the USPTO examiner raises substantive or formality issues with an application, the applicant has up to six months to respond to the office action. Unlike other companies whose interest may be to secure trademark registration as quickly as possible, pharmaceutical companies awaiting FDA product name approval often benefit from an intentionally slower pace.
Non-traditional trademarks
A range of non-traditional trademarks that cannot be registered in other countries can be registered in the United States, including images in motion, sounds, three-dimensional and tactile marks, scents and (at least theoretically) flavours. That said, applications to register such trademarks often face considerable hurdles due to the requirements that trademarks be distinctive and non-functional. For companies that sell pharmaceutical products, these hurdles are particularly problematic (and to date apparently insurmountable) for flavour trademarks because flavour often has a utilitarian function, making a product more palatable and therefore increasing compliance.
Parallel imports and repackaging
The federal Food, Drug and Cosmetic Act provides that, as of 2015, no prescription drug may be marketed in the United States other than by a licensed and regulation-compliant drug manufacturer, wholesale drug distributor, third-party logistics provider or licensed medical practitioner (21 USC §§ 360eee-1, 360eee-4). Further, no prescription drug may be distributed in any immediate or container packaging or with labelling that has not been previously approved by the FDA (21 USC § 355).
Anti-counterfeiting and enforcement
From an FDA perspective, the field of control of counterfeit products substantially changed in 2015. Any entity transporting prescription drugs must now have or develop:
- uniform machine-readable marking of packages;
- systems to protect storage and handling;
- systems to enable inspection, assessment, governmental notice within 24 hours, quarantine, investigation and clearance or reporting of drug products that show evidence of tampering or are otherwise suspect or illegitimate;
- record-keeping of documents that record receipt, storage, shipment and delivery with a secure electronic database, which must be nationally interoperable by 2023;
- delivery only to trading partners subject to similar regulation;
- internal education and training systems to identify suspect and illegitimate products;
- sample retention for government testing;
- verification that such systems are operational; and
- receipt and delivery only to trading partners with the same systems and with whom information on exact location can be shared.
Since the manufacturer has access to the track-and-trace data, counterfeiting for purposes of trademark infringement may be a thing of the past, should the trademark owner have a vigorous enforcement programme as part of the track-and-trace system. The system will ensure that pharmacists can only dispense products with codes originating from the manufacturer and through which the manufacturer has real-time knowledge as to the product’s location in the distribution system. Manufacturers can also impose restrictions on trading partners to assure that the product is not diverted or that the drug in question is not sourced from outside the closed system. Additionally, distributors and pharmacists must now check that products in their possession are not counterfeit and maintain records of those assessments.
Unlike the Lanham Act, the Food, Drug and Cosmetic Act does not provide for private enforcement. However, the FDA enforces the regulations on distribution of substandard or counterfeit prescription products into commerce through FDA inspectional observations, warning letters and civil penalties. Additional judicial actions include seizures, injunctions and criminal penalties.
The Lanham Act permits a trademark owner to bring a civil action in federal court against counterfeiters. It also allows for an ex parte application for seizure of counterfeit products, meaning that a pharmaceutical company can seek court assistance to seize unauthorised counterfeit products with no notification to the counterfeiter. The Lanham Act further provides for enhanced damages and attorneys’ fees for wilful trademark infringement.
The federal Trademark Counterfeiting Act, which specifically contemplates the trafficking of counterfeit drugs, provides for criminal penalties. The penalties under the act range from $5 million to $30 million and include imprisonment of up to 30 years for the sale of counterfeit drugs and a life term for death caused by a counterfeit drug. Because these are criminal proceedings, they can be filed only by the US government.
Advertising
The FDA’s authority includes oversight of advertising of prescription drugs. Print advertising for prescription drugs must include:
- the trade and generic name of the product;
- its quantitative composition; and
- a brief summary of the approved labelling, including the indication and balancing information such as information relating to side effects, contraindications and effectiveness.
In addition, direct-to-consumer advertisements must contain a statement that encourages consumers to report negative side effects along with a phone number and other information that facilitates such reporting. Direct-to-consumer advertising is prohibited for drugs with dangerous side effects and must contain a brief summary of balancing adverse consequences of use, along with a referral to a location for obtaining more complete information. This information should be presented in consumer-friendly language.
Both the Lanham Act and the Food, Drug and Cosmetic Act govern the marketing of prescription drugs, but with different purposes. The Lanham Act is a remedy for unfair competition based on unfair trade practices including the use of false or misleading labelling. Consumer remedies are available under various state consumer protection laws. State governments can also enforce these laws. There is no private right of action under the Food, Drug and Cosmetic Act. However, the government may penalise companies or individuals for making false, misleading or unbalanced advertising claims. Neither the Food, Drug and Cosmetic Act nor FDA regulations contain provisions to pre-empt or act to the exclusion of the Lanham Act. However, courts may determine whether a particular federal agency action (eg, specific warning requirements) has pre-empted a private right of action. Otherwise, the standards for unfair trade practices under the Lanham Act must be applied independently of the FDA’s interpretations by the court. A court may also decide that agency action is probative or of evidentiary value in applying the Lanham Act claim.
Generic substitution
The FDA has issued a guidance document entitled “Non-proprietary Naming of Biological Products”, which addresses the process for generating a generic or proper name for a biological entity. The FDA guidance document proposes that biologics and biosimilars have non-proprietary or proper names that share a core drug substance name and an FDA-designated suffix composed of four lowercase letters that are unique for each sponsor. Biosimilar products would include the core name of the FDA-licensed biologic reference product and a four-letter suffix attached by a hyphen. The four-letter suffix must consist of at least three different letters, be a unique sequence that is devoid of meaning and not have a relationship to any other drug product or be misleading to consumers. Applicants are instructed to propose up to 10 suffixes in the order of the applicant’s preference. On a limited basis, the FDA may continue to assign prefixes to a unique proper name in addition to a suffix where necessary to ensure patient safety. By way of example, the Sandoz biosimilar Zarxio™ to Neulasta® has a proper name of filgrastim-sndz. The reference product’s original prefix is generated based on chemical conventions – the suffix “stim” references a stimulatory protein, “ib” an antibody and other parts of the name convey additional mechanistic information (eg, “gra” for granulocyte stimulation). While the reference product’s generic prefix is not subject to proprietary control, the name is subject to prior approval by the FDA to ensure its non-promotional nature and limit medication error.
Online issues
Domain names
Companies seeking to protect their trademarks from typosquatters, cybersquatters and unauthorised entities can use the Uniform Domain Name Dispute Resolution Policy (UDRP) or file claims in federal court alleging a violation of the Anti-cybersquatting Piracy Act.
Remedies available under the UDRP are limited to the cancellation or transfer of a domain name if it is determined that the domain name was registered in bad faith. If a registrant does not respond to a complaint (which is often the case), UDRP cases are determined on the basis of the complaint itself, which is cost and time effective. A review of decisions in UDRP complaints involving pharmaceutical, medical and pharmacy companies suggests a recognition that passive holding of domain names and domain names that link to websites that have no active business purpose can constitute bad faith.
The Anti-cybersquatting Piracy Act prohibits the registration of a domain name with a bad-faith intent to profit from a mark that is confusingly similar to a registered (or unregistered) mark or dilutes a famous mark. A trademark owner can file a claim under the act and seek damages, including fees and costs, provided that the court has jurisdiction over the registrar or authority where the domain name is registered. The act also provides for in rem jurisdiction (over a domain name itself) where the registrant is not subject to personal jurisdiction and cannot be located. In such actions, monetary damages are unavailable.
In determining how to protect one’s domain name from unauthorised registration, it is important to consider whether the goal is simply to gain control over the domain name, in which case a UDRP complaint may be appropriate, or whether the trademark infringement is more pervasive and disruptive, in which case federal court litigation may be advisable. Other factors to consider include the following:
- Timing – UDRP claims are typically resolved more quickly. However, when other considerations suggest that an Anti-cybersquatting Piracy Act claim is in the trademark owner’s interest, a party may seek immediate injunctive relief under the act.
- Cost – Anti-cybersquatting Piracy Act claims are more expensive and implicate federal court procedure, and are typically filed along with other IP claims.
- Remedies – a party cannot claim monetary damages in a UDRP claim. Under the Anti-cybersquatting Piracy Act, a plaintiff can recover monetary relief.
E-pharmacies
The FDA “BeSafeRx: Know Your Online Pharmacy” programme is a national awareness campaign that provides resources to inform and educate patients of the dangers of ordering and purchasing medication from questionable online pharmacies. Patients can find a safe online pharmacy through BeSafeRx and receive information to identify an illegal or questionable pharmacy. According to BeSafeRx, the only safe online pharmacies are those that:
- require a valid prescription from a doctor or other healthcare professional;
- are within the United States;
- have a licensed pharmacist available for consultation; and
- are licensed by the state board of pharmacy in the state in which the patient resides.
Many online pharmacies have historically provided drug products from sources outside the United States and may contain foreign labelling. The FDA has taken enforcement action when identified. Regulatory bodies consider many of these products to be substandard or counterfeit. As with many online activities, enforcement has lagged behind the market.
Neil O’Flaherty assisted in the preparation of this chapter.
Baker McKenzie
300 E Randolph Street
Suite 5000
Chicago IL 60601
United States
Tel +1 312 861 8000
Fax +1 312 861 8000
