Thursday, January 24, 2013

Too Many Drug Trade-marks

Thursday, January 24, 2013

Patients sometimes suffer and may even die because of prescription errors caused by confusion between drug names. To protect consumers from these kinds of mistakes, medical regulators are generally involved in the vetting of the names used for medications.  Rejection rates for invented drug names are reported to be as high as 40% and the cost of simply choosing an ethical name for a drug can be of the order of $1,000,000 to $2,000,000. Applicants often file multiple name applications with the regulators in case some are rejected.  Because of the value of the names, the applicants also file trade-mark applications in any significant jurisdictions.  

Once a name has been approved by the medical regulators, the other alternative names (and trade-mark registrations) generally become irrelevant, but if they have been registered as trade-marks they will remain on the register for a number of years. As a result the trade-mark registers can become cluttered with unused marks, all of which can be cited against future applications. A January 2013 research paper by G. v. Graevenitz (see Economics of IP: Trademark Cluttering)   has shown that in 2010 there were over 150,000 European Community Trademarks on file relating to pharmaceuticals, and there are over 21,000 new applications per year in pharmaceutical related classifications. The paper estimates that about 6% of these marks are surplus to requirements and that the likely cost of inventing all these extra names is at least about $20,000,000 to $50,000,000 a year.

A large part of the costs associated with new trade-marks are the costs of searching the register to identify conflicting names, so that an applicant does not waste money filing applications that are doomed to failure and does not adopt names that will infringe other registered trade-marks. An owner wants trade-marks to be uniform from one country to another so that a reputation can be built globally rather than piecemeal in different countries. But the costs of ensuring that a chosen mark is available in every jurisdiction of interest can be daunting.  Searches have to be conducted in multiple countries and multiple languages  before filings are made. Applicants will file applications for multiple marks as insurance against the rejection of one or more of the chosen candidate names, and most likely will file applications for a number of key translations of the name in question.

This all leads to a vicious cycle. The more marks are registered, the harder it gets to find a new name to register and the more incentive there is to file multiple applications as fallback positions.  The cost of protecting a trade-mark, and the importance of getting it right, makes it critical to obtain specialist professional advice before decisions are taken. MBM provides advice on all areas of trade-mark strategy, including the choice of marks, global filing strategies and the handling of disputes.