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Tuesday, 20 March 2012

"ZEE WHIZZ!" ZYDUS and ZIMBUS slug it out in Luxembourg Court

Given that Blogmeister Jeremy is attending the Pharmaceutical Trade Marks Group Conference in Brussels this very week, this Kat thought it prudent to tell you about a recent decision of the General Court of Justice of the European Union involving just that: Cadila Healthcare Ltd v OHIM and Novartis AG (Case T-288/08, 15 March 2012).

On 18 July 2003 [yes, that's a long, long time ago] Cadila Healthcare Ltd filed a Community trade mark (CTM) application for the word ZYDUS in Class 5 for, inter alia, 'pharmaceutical, veterinary and sanitary preparations; dietetic substances adapted for medical use, … disinfectants; … fungicides …’.

The trade mark was accepted and published on 10 May 2004. On 3 August 2004 Novartis AG lodged a notice of opposition in respect of the goods listed above. In support, Novartis relied upon its earlier registered CTM ZIMBUS (2 356 954) in Class 5 for ‘pharmaceutical preparations’. This CTM was filed on 29 August 2001 and registered on 6 February 2003. By decision of 31 May 2007, the Opposition Division upheld Novartis's opposition in respect of ‘pharmaceutical, veterinary and sanitary preparations’ and ‘fungicides’, but rejected it in respect of ‘dietetic substances adapted for medical use’ and ‘disinfectants’.

Cadila appealed. The OHIM Second Board of Appeal (the Board) upheld the appeal in respect of ‘fungicides’. However, the Board confirmed the decision of the Opposition Division and upheld Novartis's opposition in respect of ‘pharmaceutical, veterinary and sanitary preparations’. In the view of the Board:
1. the specification of goods in the two marks were identical or highly similar.
2. the trade marks were visually dissimilar but phonetically similar and had no meaning conceptually.
3. there was a likelihood of confusion between the two trade marks in respect of ‘pharmaceutical, veterinary and sanitary preparations’.
Cadila appealed again. The matter came before General Court of the European Court of Justice (Fifth Chamber), which delivered its judgment last week, on 15 March 2012.

1. Comparison of the goods
The Court found that the goods were in part identical and in part very similar (at [45]). It was not controversial that ‘pharmaceutical preparations’ in both trade marks were identical (at [41]).As for the ‘veterinary preparations’ in Cadila's application, the Court agreed with the Board that ‘pharmaceutical preparations’ in Novartis's CTM was a broad and generic category which included both pharmaceutical preparations for human use and those for veterinary use (at [42]). Cadila's argument that ‘pharmaceutical preparations’ in Class 5 covered exclusively goods intended for the treatment of human beings was rejected (at [43]). Then, agreeing with the Board, the Court found 'a relatively high degree of similarity' between ‘sanitary preparations’ in Cadila's application and 'pharmaceutical preparations' in Novartis's CTM (at [44]). This was because the categories of goods were aimed at the same public (health care professionals and end consumers) and had the same intended purpose -- use in medical treatment or in a surgical operation. They are also the same in nature, given that they are perceived by consumers as goods belonging to the same general category of goods for health care. Further, they were closely complementary, in so far as certain sanitary preparations for medical use, such as antiseptics or antibacterial lotions, may prove to be indispensable when certain pharmaceutical preparations are administered. Finally, they may be made by the same economic operators (pharmaceutical companies) and are sold in the same establishments such as pharmacies and supermarkets.

2. Comparison of the trade marks
The Court found that the trade marks were similar overall (at [57]). Like the Board, the Court agreed this was because they had a certain degree of visual similarity and, at least for part of the relevant public, a strong degree of phonetic similarity, and that they have no meaning conceptually.

As to visual similarities, the Court pointed out (at [52]) that trade marks ZIMBUS and ZYDUS consisted of a single word comprising almost the same number of letters. Both trade marks began with the same letter ‘z’ and ended in the same group of letters ‘us’. Further, the letters ‘b’ (in Novartis's CTM) and ‘d’ (in Cadila's application) which directly preceded that group of letters were themselves very similar. Consequently, in visual terms, the only notable difference between the respective trade marks was the presence of the letters ‘i’ and ‘m’ (in Novartis's CTM) and of the letter ‘y’ (in Cadila's application). In the context of the overall visual assessment of both trade marks, that difference was not, however, sufficient to preclude all visual similarity between both trade marks.

As to a phonetic comparison, the Court highlighted (at [54]) that: each trade mark consisted of two syllables; in several European Union languages, the letters ‘i’ and ‘y’ were pronounced identically (with the result that both trade marks began with the same sound ‘zi’); the first syllables of both trade marks ('zim’ and ‘zy’) were very close phonetically in so far as the sound produced by the letter ‘m’ at the end of the first syllable of Novartis's CTM was absorbed by that produced by the consonant and more audible ‘b’; and that both trade marks ended in the same sound ‘us’ (even though the group of letters ‘us’ were preceded by a different letter, the letter ‘b’ in Novartis's CTM and by the letter ‘d’ Cadila's application, that difference will go unnoticed by most consumers since it affects the second syllable of each trade mark and was not the syllable on which the main stress fell). Thirdly, as regards the conceptual comparison, the Court agreed (at [56]) with the Board that neither trade mark was conceptually comparable because neither had a meaning which linked it to a specific concept.

3. Likelihood of confusion
The Court agreed with the Board in finding that there was a likelihood of confusion [62]). This was consistent with the Court's earlier decision that the specification of the goods were in part identical and in part very similar and that the trade marks were similar overall.

The Court considered the relevant public in some detail (at [30] to [36]). As for pharmaceutical preparations, the relevant public’s level of attention was relatively high. This was the case, even where pharmaceutical preparations were available to consumers over the counter, since those goods related to their health. Likewise, the relevant public displayed a relatively high level of attention with regard to veterinary preparations because they affected the state of health of animals. Lastly, the relevant public’s level of attention in respect of sanitary preparations, without being high, was above average, since those preparations included goods intended for both everyday use and medical use. Such a conclusion was borne out by the fact that Novartis's CTM was endowed with a higher than normal degree of distinctiveness as it was a created and invented sign with no particular meaning.

Cadila's argument that the phonetic similarity between the trade marks was of limited significance because pharmaceutical preparations and sanitary preparations were not generally purchased orally was rejected (at [63]). This was because the trade marks still displayed a certain degree of visual similarity (at [66]).

Accordingly, Cadila's appeal was dismissed.

The IPKat observes that Cadila seems to have invested heavily in the name 'Zydus' as a house mark for its business: its trading name is Zydus Cadila, it operates online from the web address and it maintains its corporate headquarters at 'Zydus Tower' in Gujarat India. In light if this, he wonders whether Cadila will take further legal action or make changes to its business.

Merpel thinks that all these Z marks must surely be for a product that induces sleep: ZZZZZZZZZ ….


Anonymous said...

Would the Novartis mark be the same one which expired on 29th August 2011?

Catherine Lee said...

Yes Cadila made an application to the Court on 5 October 2011 for a ruling that there was no longer a need to adjudicate as Novartis has not renewed its CTM registration before it expired on 29 August 2011 (at [16]). For Cadila, it followed that there could no longer be any likelihood of confusion between Novartis’ trade mark and Cadila’s trade mark application and so the present case had become devoid of purpose. That argument was dismissed by the Court (at [23]). It was common ground between the parties that Novartis had 6 months after 29 August 2011 to make a renewal request and pay the requisite fees (that is by 1 March 2012) (at [21]). However, even if the Novartis trade mark had expired, the Court held (at [23]) that the present action had not become devoid of purpose. This was because no account could be taken of a possible non-renewal of the earlier mark for the purpose of assessing the validity of the contested decision of the Board from 7 May 2008.

Anonymous said...

Judging from the corresponding US filings, it would appear that Novartis has a habit of applying for registration of the mark and when the time comes to show use thereof, simply abandoning and re-filing. One wonders why they went to the bother of filing an opposition at all. Is there not some form of gentleman's agreement in trade marks to the effect that it is more preferable, if the case is on the week side, to enter into an inter-parties agreement rather than start offensive action?

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