Intellectual Property Rights (IPR) Recordation of Pharmaceuticals: The Underlying Trademark Issues

The Anti-counterfeit Authority (ACA) announced, through Public Notice No.1/2022, the commencement of the implementation of the recordation of Intellectual Property Rights (IPR), which was to come into effect from 1^st July 2022. According to the notice, recorded IPRs would be accorded ‘proactive protection against counterfeit imports.’¹ However, Public Notice No.2/2022 announced the deadline extension from 1^st July 2022 to 1^st January 2023. Once the deadline was over, section 34 B of the Anti-counterfeit Act would come into effect. This section of the Act deals with the recordation of trademarks.²

According to the ACA, generic pharmaceutical products that are legitimately manufactured and well labelled are not counterfeit.³ It further states that recordation requirements benefit trademark owners since they protect registered marks from infringement and consumers from consuming counterfeit drugs.⁴ ACA also states that ‘it is an offense to import goods that have not been recorded with ACA.’⁵ This move has, however, been challenged by the Kenya Pharmaceutical Distributors Association (KPDA) who claim that it will criminalise the importation of generic medicine.⁶

The World Health Organisation (WHO) has defined generic medicine as ‘a pharmaceutical product, usually intended to be interchangeable with an innovator product that is manufactured without a license from the innovator company and marketed after the expiry date of the patent or other exclusive rights.’⁷ The Anti-Counterfeit Act 2019 defines counterfeiting in relation to medicine as ‘the deliberate and fraudulent mislabeling of medicine with respect to identity or source, whether or not such products have correct ingredients, wrong ingredients, have sufficient active ingredients or have fake packaging.’⁸

Generic medicines are made using similar active ingredients as the innovator company’s medicine, but are sold under a different brand ‘from the innovator company’s brand for the particular medicine.’⁹ They are equally safe and efficient as the original brand name product since they undergo thorough scrutiny before they are licensed and approved by the appropriate national medicines authority.¹⁰

Intellectual Property Rights Recordation

The ACA defines IPR recordation as ‘the process of collecting and entering into an electronic database, information from Intellectual Property Right owners regarding their registered IPRs irrespective of their place of registration, for all goods to be imported into Kenya.’¹¹ The legal basis for IPR recordation can be found in section 34B¹² of the Anti-counterfeit Act, Anti-counterfeit (Recordation) Regulations and Anti-Counterfeit (Amendment) Regulations.

According to the ACA, IPR Recordation aims to prevent the importation of counterfeit goods into Kenya.¹³ IPR Recordation differs from IPR registration in that IPR registration entails filing intellectual property rights with the appropriate registering body to be ‘granted exclusive rights with respect to ownership and use.’¹⁴ Registered names or logos eliminate the possibility of confusion arising from similar goods or services thus causing dilution of the owner’s brand.¹⁵ However, trademark registration is insufficient to offer protection and compliance when importing goods into Kenya.¹⁶ Among the harms caused by counterfeit goods are that they deny consumers the ability to enjoy the benefits of genuine products and they lead to unfair commercial competition.¹⁷ Counterfeiting also undermines intellectual property rights and ‘restricts innovation and skills development.’¹⁸ This is why IP recordation is important.

Notably, counterfeit and imitation drugs were distinguished in the case of United States vs Articles of Drugs¹⁹ where the court noted that the Federal Food, Drug and Cosmetic Act (FDCA) was designed to protect public health and consumers. It also noted that an imitation drug passes off one substance ‘in imitation of another.’²⁰ On the other hand, a counterfeit drug is one that ‘simulates another’s label, container or identifying marks.’²¹

Trademark issues in branded and generic drugs

Three names designate drugs: the chemical name, generic and brand names. Since chemical names are complex, generic names were introduced.²² The generic name refers to the active ingredient used,²³ while generic drugs are ‘copies of brand-name drugs that have exactly same dosage.’²⁴ Brand names are protected as exclusive private property rights.²⁵ The brand name of a drug is also referred to as the trade name, and it is the name given by the company that makes it.²⁶ The trade name of a drug can be registered as a trademark as long as it complies with the relevant trademark law provisions.²⁷ The trademark of a drug may also contain words, graphics, letters and other elements.²⁸ Also, the marks on the drug packages can be registered as trademarks.²⁹

Although a patent can protect a drug, the originator can advertise the drug through the brand name, or trademark ‘to create brand-name recognition that continues to exist after the patent expires.’³⁰ Once a patent expires, competitors manufacture generic equivalents that are usually sold at a lower price than originator brands.³¹ In a nutshell, generic medicines are those whose patent protection has expired and may be produced by manufacturers different from the innovator company.³²

Brand-name drug companies manufacture drugs in specific shapes or colours for certain reasons.³³ Some of the reasons include that they may be easier to swallow, are cost-effective, or for no specific reason at all.³⁴ The trademark issue that arises with this is whether generic medicine companies can manufacture generic medicine using the same shape and colour as the brand name drug while avoiding trademark liability.³⁵ In this case, if the drug’s colour or shape is functional, or is non-functional and has not acquired secondary meaning, then the drug is not protected as a trademark, and therefore the generic drug may be manufactured in the same shape or colour.³⁶

A functional feature is one which serves other purposes other than identifying the source of the product. These features enable competitors achieve commercial success. Where the shape and colour are functional, trademark protection will not be granted and therefore generic manufacturers can use them.³⁷ A case which illustrates this is Smith, Kline & French v Clark & Clark³⁸ where the defendant manufactured generic medicine that was almost identical to the brand name drug. The plaintiffs sought an injunction against the manufacture and sale of the defendant’s patent-infringing amphetamine tablets. The court, in this case, found that the infringing tablets closely resembled those produced by the plaintiffs and that the two tablets were only distinguishable upon close examination. The court further refused to grant an injunction beyond the life of the plaintiff’s patent and also held that the various features of the amphetamine tablets were functional. This is because the scoring of the white tablets allowed the tablets to be broken into smaller dosages and the beveled and concave edges prevented crumbling and aided breakage. The court instead upheld the district court’s findings of unfair trade practices and required the defendant’s tablets to be stamped with a distinguishing mark such as C&C.

In some jurisdictions like the United States, shape and colour are protected as trade dress and, therefore, not available for generic use if they are non-functional and have ‘acquired secondary meaning.’³⁹ Secondary meaning establishes ‘sufficient consumer recognition of the mark or dress as a source indicator.’⁴⁰ Trade dress is a type of trademark law that protects the ‘look and feel of a product’,⁴¹ distinguishing it from similar products. Trade dress entails product packaging and product design and helps in the identification of a product’s source.⁴² The shape and colour of a pill are regarded as product design. An illustration of this is the case of Norwich Pharmacal Co. v Sterling Drug, Inc,⁴³ where the defendant used the same pink colour for a generic liquid medicine that the plaintiff had used for the brand name. The court did not issue an injunction even though the colour was non-functional. This is because it had not acquired secondary meaning as a source indicator and was not entitled to trade dress protection.

Finally, although the IP recordation requirement is a welcome move meant to curb the importation of counterfeit goods, it is fundamental to consider the repercussions of such a move on Kenyans’ general well-being. This is because the Constitution provides that ‘every person has the right to the highest attainable standard of health…’⁴⁴ The case of Patricia Asero Ochieng, Maurice Atieno and Joseph Munyi v The Republic⁴⁵ illustrates this point. In this case, the petitioners argued that sections 2, 32 and 34 of the Anti-Counterfeit Act,⁴⁶ at the time, denied individuals infected with HIV/AIDS the right to access affordable and essential drugs. Therefore, this would endanger the availability of generic medicine, and its overall effect would infringe on the right to life enshrined in the constitution. In the judgement, the judge held that failure to access affordable generic medicine would significantly affect people infected with HIV and AIDS, and many may risk losing their lives.⁴⁷ To facilitate the recordation of IPR, the ACA has established the Anti-Counterfeit Authority Integrated Management System (AIMS) portal which can be accessed through the ACA Public System.

image is from www.synergiafoundation.org