Biosimilars beware – Trademarks are important too!

The Federal Court of Appeal confirmed that the name BYOOVIZ (for an anti-vascular endothelial growth factor [anti-VEGF] biosimilar) infringed and passed off a trademark for BEOVU (for an anti-VEGF biologic). For biosimilar companies selecting a name for their new products, this decision is worthy of close attention.

BEOVU (the biologic) was approved in Canada for treating neovascular age-related macular degeneration. The drug must be administered by a qualified ophthalmologist by injection, using a syringe, directly into the eye. Although BYOOVIZ (the biosimilar) had not been sold at the time the litigation commenced, it was on the market by the time it ended.

The Defendants—Samsung Bioepis Co. Ltd., Biogen Inc., Biogen MA Inc. and Biogen Canada Inc—alleged three errors by the Federal Court below:

1. the application judge erred by treating patients as relevant consumers in the “likelihood of confusion” analysis;
2. the application judge erred by failing to take into account the consumer attitudes of ophthalmologists and pharmacists, which are characterized by specialized knowledge and heightened attention, in the “likelihood of confusion” analysis; and
3. the application judge erred in her consideration of the surrounding circumstances in assessing likelihood of confusion under s 6(5).

The Plaintiffs—Novartis AG and Novartis Pharmaceuticals Canada Inc.—cross-appealed and alleged that the Federal Court erred by awarding damages rather than allowing them to elect an accounting of profits.

To determine infringement under s 20 of the Trademarks Act, the Court will assess the likelihood of confusion based on the factors listed in s 6(5):

1. the inherent distinctiveness of the trademarks or trade names and the extent to which they have become known;
2. the length of time the trademarks or trade names have been in use;
3. the nature of the goods, services or business;
4. the nature of the trade; and
5. the degree of resemblance between the trademarks or trade names, including in appearance or sound or in the ideas suggested by them.

The ultimate question is whether “both trademarks in the same area would be likely to lead to the inference that the goods or services associated with those trademarks are manufactured, sold, leased, hired or performed by the same person,” (Trademarks Act, s 6(2)).

The parties disputed whether patients, or only ophthalmologists and pharmacists, were the consumers relevant to the confusion analysis. The relevant consumer may affect the likelihood of confusion due to their relative knowledge about particular products and care in selecting products to use. 

This test is a matter of first impression in the mind of a casual consumer somewhat in a hurry who sees the mark, at a time when they have no more than an imperfect recollection of the prior trade-marks, and do not pause to give the matter any detailed consideration or scrutiny, nor examine closely the similarities and differences between the marks.

Relevant Consumers

The Federal Court found that the patient, as the “ultimate end-user of the drug”, is a relevant consumer. This was so “even when patients do not request a specific anti-VEGF medication, which the evidence suggest occurs the majority of the time. They are informed of the ophthalmologists’ choice of drug and they consent to being injected with the drug that is identified by its trademark.”

The Court of Appeal upheld the lower Court’s decision and rejected the Defendants’ argument that prospective consumers must encounter the trademark as used by the owner. The Court found, in the hypothetical hurried consumer test, the relevant consumer is presumed to be aware of both marks. Moreover, the lower Court did not err in following precedent that patients have a choice in the drug they accept.

Consumer Attitude

The Federal Court declined to find that patients would approach a decision about anti-VEGF drugs with reduced care or attention, or that they were more likely to be confused due to their sensitive nature or their age. The Court also did not find, however, that the ordinary patient is equipped with knowledge or awareness (e.g. by consulting with their physician) that would lessen the likelihood of confusion on first impression.

Moreover, with respect to ophthalmologists and pharmacists, the Federal Court disagreed that they would effectively be more “hurried” due to the nature of their practice. Instead, because of their training and experience, they are more likely to perceive smaller differences in drug name trademarks than the average patient.

The Court of Appeal upheld the lower Court’s decision that Novartis had established a likelihood of confusion for all relevant consumers, even if likelihood of confusion is higher when considered from the patient’s perspective.

Confusion

The Federal Court considered the factors under s 6(5) of the Trademarks Act and found infringement under s 20 because:

• BEOVU was a coined word, and inherent distinctiveness favoured Novartis;
• Although BEOVU had been in use longer than BYOOVIZ, the length of time was neutral;
• BEOVU and BYOOVIZ were used with precisely the same goods and the nature of the goods and nature of the trade were essentially identical; and
• BEOVU and BYOOVIZ resembled each other visually to at least a moderate degree, and there was a high degree of resemblance in sound. The similarly in sound was an important factor because the spoken trademark is an important way consumers, particularly patients, encounter the trademarks in question.

The Federal Court also found passing off under s 7(b) of the Trademarks Act because:

• Novartis possessed goodwill in the BEOVU trademark;
• Novartis had established a likelihood of confusion, as set out above, which satisfied the element of misrepresentation; and
• Loss of control over the BEOVU trademark was sufficient to establish actual or potential damage.

The Court of Appeal upheld each of the lower Court’s findings on confusion, and therefore upheld the decisions on infringement and passing off.

The Defendants also argued that the Federal Court erred by finding infringement and passing off because the BYOOVIZ was not on the market when Novartis had commenced the litigation.

The Court of Appeal upheld that BYOOVIZ was in fact on the market by the time the litigation ended based on representations from counsel. “On the market” was found to include promotion and actual sales. Nonetheless, the Court of Appeal noted that promotion alone would have been actionable under the Trademarks Act.

Remedy

The Federal Court awarded $20,000 in nominal damages and granted an injunction against Samsung and Biogen from using the BYOOVIZ trademark. Novartis sought to vary the remedy on appeal to elect an accounting of profits.

The Court of Appeal declined to vary the remedy. It emphasized that Novartis was made aware that BYOOVIZ was on the market (which it claimed was a change in circumstance) before the hearing at the Federal Court. Novartis did not act on this information and instead “lay in the weeds until after the Federal Court rendered its decision and only then raised the change in circumstances in this Court as a ground of appeal”. Moreover, the Court of Appeal noted that a change in circumstances can be grounds to vary a decision but not to appeal one.

A copy of the Court of Appeal decision can be found here. For our thoughts on the underlying Federal Court decision, see our blog post here.