Judgment of the General Court of 11th January 2023 – Hecht Pharma GmbH v EUIPO (Gufic)

The General Court (EU) held that the proof of a pharmacological effect of a “medicinal product” is not decisive for the classification of the product under the Nice Classification.

In January 2023 the General Court of the European Union (T-346/21) provided an interesting clarification on the interpretation of the Nice Goods Classes. The Court elaborated on the public and external use and the product’s nature to prove genuine use and what constitutes a “medicinal product” under Class 5 of the Nice Classification.

The intervener – Gufic Pharmaceuticals - applied to the EUIPO for registration of “Gufic” as an EU word mark for Classes 3, 5, and 29. Hecht Pharma obtained revocation of the trademark for the goods in Classes 3 and 29 on the ground that the extent of trademark use had not been sufficiently demonstrated. After an initial successful revocation request with respect to all three classes, the EUIPO reinstated the trademark for “medicines” in Class 5 but maintained the revocation for the other types of goods upon appeal due to new evidence that was presented.

Hecht appealed to the GC, arguing that there was insufficient public and external use of the trademark and that the goods were not “medicinal products” within the meaning of Class 5. The decisive legal question was whether genuine use of the trademark for goods of a class under the Nice Classification was proven. The Court upheld the decision by the EUIPO emphasizing that the Board of Appeal did not make an error of assessment.

The applicant argued that:

• Public and external use of the trademark “Gufic” had not been sufficiently proven.
• The sign was being used as a company name and not as a trademark.
• The products Gufic distributed were not “medicinal products” within the meaning of Class 5.

Can genuine use be presented if the product’s distribution violates the law?

In detail, the applicant stated that

• The Gufic distribution model violated the Medicinal Products Act (AMG) since the products were imported through intermediaries and not pharmacies, as German law requires.
• Additionally, Gufic was not allowed to advertise its products in Germany according to the German Drug Advertising Act (HWG). Therefore, genuine use of the goods could not be demonstrated.

The Court opposed the applicant’s view. The illegality of the intervener’s distribution system did not prohibit them from presenting genuine use. The EUIPO is not authorized to apply the German AMG when assessing the revocation of a trademark. Furthermore, Art. 18 EUTM does not explicitly call for the legality of the distribution of the goods. Proof of genuine use did not have to originate from direct distribution to consumers. B2B relationships could just as well constitute proof for genuine use.

Just a company name and not a trademark?

Hecht claimed that Gufic’s logo was used as a mere company name and not as a trademark. Elements were added to the sign that on their own constituted a new independent sign impairing the distinctiveness of the trademark. The GC disagreed with Hecht’s assessment. It considered Gufic’s logo to be compliant with common practice in the pharma sector of using different marks (the product mark and the manufacturer’s) on the product packaging. The Court also denied the added features (yellow semicircle and alphanumeric code) to the trademark any distinctive character.

Does a medicinal product have to have a pharmacological effect?

Secondly and most importantly, the applicant claimed that the EUIPO had falsely interpreted the goods as medicinal products. Medicinal products may only be marketed if the products fall under the definition of medicine and have a license in one of the member states or all of the EU or if a pharmacological effect has been proven. The goods in question did not fulfill any of these criteria.

Despite the applicant’s line of argument, the Court applied a different interpretation of the Nice Classification. The classes display the needs of the market and should not lead to an artificial segmentation of goods. The class titles are generic terms generally encompassing the goods. They do not decide the product’s nature. Furthermore, the classes have purely administrative purposes. They are not suited to determine the nature of the goods at issue. An interpretation of the classes in light of other EU provisions is not decisive, whether the product is a medicinal product or not. The main function of the trademarks is not to be confused with other functions like the warranty of the quality of the goods.

Whether genuine use has been proven has to be determined by comparing the goods for which the mark was used and the goods for which it was registered. The appearance of the products through labeling or packaging is decisive for whether the same products have been used. The Court concludes that the Board of Appeal was entitled to assume that the relevant public perceives the products at issue as medicinal products under Class 5. The products in question were only sold in pharmacies on presentation of a doctor’s prescription. The packaging contained the indication “ayurvedic medicine” and inflammatory diseases for the treatment of which the products were intended. The fact that there was no marketing authorization as medicinal products by function with a pharmacological effect was irrelevant to the classification under trademark law since the consumer was not necessarily aware of this fact. Thus, the relevant public would view Gufic’s products as medicinal products.

Public perception is more important than the nature of the product

Consequentially the question of genuine use has to be determined by the perception of the relevant public. In this case, a product which may or may not have any pharmacological effect was rightfully used as a medicinal product under Class 5. On the other hand, products with a pharmacological effect may not fulfill this requirement if the public perceives them as for example mere “non-medicated toiletry preparations” within the meaning of Class 3. It is therefore crucial that the packaging and presentation of products align with the classification for which the trademark was obtained. This case showed that substantial arguments about the nature of the product do not affect whether trademark protection exists or not.

The Gufic decision is another interesting and consistent decision in the determination of genuine use. Especially in the pharmaceutical sector trademark owners have to be aware of the importance of choosing the right product classes for their trademark.