Passing Off in Pharmaceutical Branding: Insights from Glaxo Wellcome UK Ltd v. Sandoz Ltd & Ors

Introduction

The case of Glaxo Wellcome UK Ltd & Anor v. Sandoz Ltd & Ors ([2019] EWHC 2545 (Ch)) revolves around the intricate issues of trademark law, specifically the tort of passing off within the pharmaceutical industry. Glaxo, a renowned pharmaceutical company, alleged that Sandoz had engaged in passing off by marketing a generic inhaler, AirFluSal Forspiro, which they claimed was deceptively similar to Glaxo's branded inhalers, Seretide Accuhaler and Seretide Evohaler, particularly in their use of the color purple.

The central contention was that Sandoz's inhaler could cause confusion among healthcare professionals (HCPs) and patients regarding the origin and equivalence of the product, thereby infringing on Glaxo's goodwill and established branding.

Summary of the Judgment

After a protracted trial involving extensive witness testimony and documentary evidence, the High Court dismissed Glaxo's claims of passing off against Sandoz, Aeropharm, and Hexal. The court found that Glaxo failed to establish that the color purple used by Sandoz's AirFluSal Forspiro was distinctive of Glaxo's products in the minds of HCPs and patients. Furthermore, the survey evidence presented by Glaxo to demonstrate the supposed distinctiveness and likelihood of confusion was deemed unreliable due to non-compliance with established survey guidelines.

The court also addressed allegations of recklessness on the part of Sandoz, concluding that there was no evidence to support claims that Sandoz acted in a manner that would deceive the public about the origin or equivalence of their inhaler. Additionally, claims of joint liability involving Aeropharm and Hexal were dismissed due to insufficient evidence of a common design or intent to further the tort.

Ultimately, Glaxo's case was dismissed, reinforcing the high threshold required to prove passing off, especially in cases involving non-traditional trademarks such as product color.

Analysis

Precedents Cited

The judgment referenced several key cases and legal principles that underpin the tort of passing off:

• Reckitt & Colman (Products) Ltd v Borden Inc [1990] 1 WLR 491: Defined the tripartite test for passing off, requiring proof of goodwill, misrepresentation, and damage.
• Hodgkinson & Corby Ltd v Wards Mobility Services Ltd [1994] 1 WLR 1564: Emphasized that passing off is fundamentally about deception.
• Phones 4U Ltd v Phone4U.co.uk Internet Ltd [2006] EWCA Civ 244: Clarified the distinction between mere confusion and actual deception.
• Imperial Group plc v Philip Morris Ltd [1984] RPC 293: Established the "Whitford Guidelines" for conducting reliable surveys in passing off cases.
• Rizla Ltd v Bryant & May Ltd [1986] RPC 389: Highlighted the challenges of proving distinctiveness based on product color.

These precedents collectively underscore the stringent requirements and the nuanced application of passing off in various contexts, particularly emphasizing the necessity of proving genuine deception and material damage to goodwill.

Legal Reasoning

The High Court meticulously evaluated Glaxo's claims against the backdrop of established legal principles:

• Distinctiveness of Color: Glaxo needed to demonstrate that the color purple was distinctive of their inhalers and that its use by Sandoz would mislead HCPs and patients. The court found that purple, in this context, lacked inherent distinctiveness and was part of broader color conventions in the industry, thereby failing to signify exclusive trade origin.
• Survey Evidence: Glaxo's reliance on surveys to establish distinctiveness was critically assessed. The court determined that the surveys did not comply with the Whitford Guidelines, rendering them unreliable and inadmissible as evidentiary support.
• Likelihood of Confusion: The court concluded there was no substantial evidence to indicate that the color similarity would lead to public confusion regarding the origin or characteristics of the inhalers.
• Recklessness: Glaxo's allegations that Sandoz acted recklessly in adopting the color purple were dismissed due to lack of evidence. The court found no indication that Sandoz intended to deceive or was indifferent to the potential for such deception.
• Joint Liability: Claims against Aeropharm and Hexal lacked sufficient evidence of common intent or design to further the tort, leading to their dismissal from liability.

The court's reasoning reflected a rigorous application of legal standards, emphasizing the necessity for concrete evidence of distinctiveness, genuine misrepresentation, and tangible damage to the claimant's goodwill.

Impact of the Judgment

This judgment has significant implications for trademark and passing off claims in the pharmaceutical sector:

• Reinforcement of High Evidential Standards: The decision underscores the necessity for precise and reliable evidence when alleging passing off, particularly concerning non-traditional trademarks like color schemes.
• Guidelines Compliance: Emphasizes the importance of adhering to established guidelines, such as the Whitford Guidelines, when conducting surveys intended to support legal claims.
• Clarification on Color Usage: Highlights that colors commonly used across an industry may not be sufficiently distinctive to warrant passing off claims unless they have acquired exclusive association through extensive use.
• Judicial Skepticism Towards Indirect Evidence: The judgment reflects a cautious approach towards indirect or associative evidence, prioritizing direct and clear evidence of misrepresentation and confusion.

Pharmaceutical companies must thus approach branding with an understanding of these standards, ensuring that their trademarks are sufficiently distinctive and that any claims of passing off are substantiated with robust and compliant evidence.

Complex Concepts Simplified

Passing Off

Passing off is a legal term used to protect the goodwill of a business from misrepresentation. It occurs when one party takes unfair advantage of another party's reputation or deceives the public into believing that its goods or services are those of the other party.

Goodwill

Goodwill refers to the reputation and customer loyalty that a business has built over time. In passing off cases, demonstrating goodwill is essential to show that the business is entitled to the protection being sought.

Distinctiveness

Distinctiveness relates to how uniquely a trademark identifies the source of goods or services. A distinctive trademark is easily recognizable and distinguishes a product from its competitors.

Misrepresentation

Misrepresentation involves presenting false information that leads others to believe something incorrect about a product or service, such as its origin, quality, or characteristics.

Recklessness

Recklessness in legal terms implies a disregard for a substantial and unjustifiable risk. In passing off, recklessness would mean that the defendant knowingly took a risk that their actions might deceive the public.

Survey Guidelines

The Whitford Guidelines were established to ensure that surveys conducted for legal purposes are reliable and unbiased. Key aspects include proper sampling methods, clear and non-leading questions, complete documentation, and avoiding influence on respondents' answers.

Conclusion

The judgment in Glaxo Wellcome UK Ltd v. Sandoz Ltd & Ors serves as a pivotal reminder of the rigorous standards required to successfully claim passing off, especially in sectors where non-traditional trademarks like color play a role. Glaxo's inability to convincingly demonstrate the distinctiveness of the color purple, coupled with unreliable survey evidence and lack of concrete evidence of public confusion, led to the dismissal of their claims.

Moving forward, this case underscores the necessity for businesses to ensure their trademarks are uniquely distinctive and that any claims of passing off are supported by solid, compliant evidence. Additionally, it highlights the judiciary's vigilance in scrutinizing the validity and reliability of indirect evidence, such as surveys, in trademark disputes.

For legal practitioners and businesses alike, the case elucidates the complexities involved in passing off claims and the critical importance of adhering to established legal guidelines when presenting evidence. It reinforces that mere similarity, without demonstrable distinctiveness and likelihood of deception, is insufficient to establish passing off.