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The strategic use of intellectual and industrial property laws to maintain and extend a dominant position… Rowland-Rouse, Jacqueline 1981

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THE STRATEGIC USE OF INTELLECTUAL AND INDUSTRIAL PROPERTY LAWS TO MAINTAIN AND EXTEND A DOMINANT POSITION IN THE PHARMACEUTICAL INDUSTRY by JACQUELINE ROWLAND-ROUSE L.L.B. (Hons) University of Southampton A THESIS SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF LAWS in THE FACULTY OF GRADUATE STUDIES (THE FACULTY OF LAW) We accept t h i s thesis as conforming to the required standard THE UNIVERSITY OF BRITISH COLUMBIA October 1981 (c) Jacqueline Rowland-Rouse, 1981 In presenting this thesis in partial fulfilment of the requirements for an advanced degree at the University of British Columbia, I agree that the Library shall make it freely available for reference and study. I further agree that permission for extensive copying of this thesis for scholarly purposes may be granted by the Head of my Department or by his representatives. It is understood that copying or publication of this thesis for financial gain shall not be allowed without my written permission. Department of The University of British Columbia 2075 Wesbrook Place Vancouver, B.C; Canada V6T 1W5 i i A B S T R A C T I t i s a s s u m e d a t t h e o u t s e t o f t h i s t h e s i s t h a t t h e r e i s a p u b l i c i n t e r e s t i n t h e p u r c h a s e o f p r e s c r i b e d d r u g s a t t h e l o w e s t a g g r e g a t e p r i c e c o n s i s t e n t w i t h t h e m a i n t e n a c e o f r e s e a c h a n d d e v e l o p m e n t i n t h e p h a r m a c e u t i c a l f i e l d . T h e t h e s i s i n v e s t i g a t e s t h e o p e r a t i o n o f i n t e l l e c t u a l p r o p e r t y l a w i n t h i s a r e a a n d i t s e f f e c t o n p r i c e s , i n v e s t m e n t , r e s e a r c h a n d t h e a v a i l a b i l i t y o f n e w d r u g s . T h e p r i n c i p a l f o c u s i s o n t h e U n i t e d K i n g d o m b u t t h e c o n c l u s i o n s r e a c h e d m a y b e v a l i d l y a p p l i e d t o o t h e r j u r i s d i c t i o n s . E a c h c h a p t e r i s d e v o t e d t o a s p e c i f i c b r a n c h o f t h e l a w w i t h a v i e w t o d e m o n s t r a t i n g h o w i t s e x p l o i t a t i o n b y p h a r m a c e u t i c a l f i r m s h a s o p e r a t e d i n t h e d e t r i m e n t o f t h e p u b l i c b y v i r t u a l l y e l i m i n a t i n g c o m p e t i t i o n a n d t h e r e b y i n c r e a s i n g p r i c e s . T h e u n i q u e n a t u r e o f t h e p h a r m a c e u t i c a l i n d u s t r y r e n d e r s t h e d e s i r a b i l i t y o f e x c l u s i v e r i g h t s i n t h i s a r e a h i g h l y q u e s t i o n a b l e a n d t h e a b o l i t i o n o r c u r t a i l m e n t o f a l l f o r m s o f p r o t e c t i o n f o r p h a r m a c e u t i c a l p r o d u c t s i s a d v o c a t e d . 1 1 1 CONTENTS CHAPTER I. THE PHARMACEUTICAL INDUSTRY CHAPTER II. PATENTS 1. Introduction to Patent Law i n the Pharmaceutical Industry 2. The Exclusion of Pharmaceutical Products & Processes from the Patent System 3. Limitation of Protection to Process only 4. Compulsory Licences 5. Crown Use CHAPTER I I I . TRADE SECRET PROTECTION 1. Introduction to the Law of Trade Secrets 2. The Nature of Trade Secrets 3. The Degree of Protection 4. Employer/Employee Relationships 5. Licensor/Licensee Relationships 6. Relative Merits of Trade Secrets and Patents 7. Should Both Alternatives be Available for the Newly Discovered Drug? iv -age CHAPTER IV. TRADE MARKS & PASSING OFF 1. The Two Forms of Action Considered 2. Protection for Names & Words 3. Protection for the Brand Names of Pharmaceutical Drug 4. Protection of the Total Appearance of the Product 5. Marks P a r t i a l l y Covering the Surface of the Goods & Functional Features 6. Product Simulation 7. Policy Considerations 76 77 81 83 91 105 112 114 CHAPTER V. COPYRIGHT & INDUSTRIAL DESIGNS 1. Introduction H i s t o r i c a l Background 2, 3, 5. 6. A r t i s t i c Copyright & Ind u s t r i a l Design Works of A r t i s t i c Craftsmanship L i t e r a r y Copyright Industrial Designs & Trade Marks 127 128 131 151 152 156 V CHAPTER VI. TERRITORIALITY & THE PROBLEM OF PARALLEL IMPORTATION 1. International Exhaustion of Patent Rights 2. Trade Marks i n International Law 3. Passing Off i n International Law 4. Impact of EEC. 5. Exhaustion of Patent Rights i n the EEC. 6. Exhaustion of Trade Marks i n the EEC. 7. Passing Off Actions i n the EEC. 8. Copyright i n the EEC. 9. Industrial Designs 10. Future Developments Page 164 168 174 182 185 187 191 196 198 199 200 CHAPTER VII. CONCLUSION 205 BIBLIOGRAPHY Books Journals Government Publications 207 210 215 \ - I -CHAPTER I THE PHARMACEUTICAL INDUSTRY In 1973 the Regulation of Prices (Tranqulizing Drugs) Order (No. 720)(UK) imposed a maximum s e l l i n g price upon the drugs Chlordiazepoxide and Diazepam. 1 The order followed an investigation by the UK Monopolies Commission into the p r i c i n g p o l i c i e s of the manufacturing firm 2 Hoffman-La Roche. The arguments presented by the report and the fi e r c e reaction they prompted from Hoffman-La Roche represented the continuation of a dispute which had surrounded the question of prices i n the pharmaceutical industry since the early 1950s and s t i l l continues today. It was a committee of the US Senate which f i r s t focused world wide attention on the e t h i c a l pharmaceutical 3 manufacturing industry. The Kefauver report had condemned as the root cause of high drug prices the manufacturing and d i s t r i b u t i o n p o l i c i e s of e t h i c a l drug 4 manufacturers i n the US. A B i l l was introduced into the US Senate which proposed to a l t e r d r a s t i c a l l y the patent - z -s y s t e m u n d e r w h i c h d r u g s w e r e m a n u f a c t u r e d t o m a k e c o m p u l s o r y l i c e n c e s m o r e r e a d i l y a v a i l a b l e , t o m o d i f y m e t h o d s b y w h i c h d o c t o r s r e c e i v e i n f o r m a t i o n a b o u t n e w d r u g s a n d t o i m p o s e s t r i n g e n t m e a s u r e s o f p r o t e c t i o n a n d q u a l i t y c o n t r o l . T h e p a t e n t a n d c o m p u l s o r y l i c e n s i n g p r o v i s i o n s o f t h e B i l l w e r e s u b j e c t e d t o a b a r r a g e o f c r i t i c i s m a n d w e r e f i n a l l y d e l e t e d . H o w e v e r , t h e a t t e n t i o n f o c u s e d o n t h e r e p o r t a n d t h e i n f o r m a t i o n c o n t a i n e d t h e r e i n p r o m p t e d o t h e r j u r i s d i c t i o n s t o l o o k i n t o t h e w o r k i n g s o f t h e p h a r m a c e u t i c a l i n d u s t r y , i n p a r t i c u l a r , t h e m a r k e t s t r u c t u r e u n d e r w h i c h d r u g s w e r e d i s t r i b u t e d a n d t h e p r i v a t e m o n o p o l i e s u n d e r w h i c h t h e y w e r e m a n u f a c t u r e d . I n C a n a d a , a n i n v e s t i g a t i o n w a s c o n d u c t e d u n d e r K t h e p r o v i s i o n s o f t h e C o m b i n e s I n v e s t i g a t i o n A c t . T h e R e s t r i c t i v e T r a d e P r a c t i c e s C o m m i s s i o n r e c o m m e n d e d t h e a b o l i t i o n o f p a t e n t s i n t h e p h a r m a c e u t i c a l i n d u s t r y a n d t h e i m p o s i t i o n o f s t r i n g e n t r e g u l a t i o n s t o c o n t r o l a l l a s p e c t s o f t h e m a n u f a c t u r e , p r o m o t i o n a n d i n t r o d u c t i o n o f d r u g s . I n B r i t a i n , t h e S a i n s b u r y C o m m i t t e e w a s a p p o i n t e d i n 1 9 6 5 t o e n q u i r e i n t o t h e r e l a t i o n s h i p o f t h e p h a r m a c e u t i c a l i n d u s t r y t o t h e N a t i o n a l H e a l t h S e r v i c e . L e a v i n g t h e q u e s t i o n o f t h e p a t e n t a b i l i t y o f d r u g s t o t h e s u b s e q u e n t B a n k s C o m m i t t e e i n v e s t i g a t i o n , t h e S a i n s b u r y C o m m i t t e e - j -7 c o n c e n t r a t e d o n m a r k e t i n g , p r o m o t i o n a l a n d c o s t i s s u e s . I t r e c o m m e n d e d t h e e s t a b l i s h m e n t o f a " M e d i c i n e s C o m m i s s i o n " t o t a k e o v e r f u n c t i o n s t h e n e x e r c i s e d b y t h e C o m m i t t e e o n S a f e t y o f D r u g s a n d t o a d v i s e t h e g o v e r n m e n t o n m a t t e r s s u c h a s c o m p u l s o r y l i c e n s i n g o f i n d i v i d u a l d r u g . I t a l s o p r o p o s e d t h e a b o l i t i o n o f b r a n d n a m e s f o r a l l d r u g s p r o d u c t s . N e w p r o d u c t s , w h e t h e r p a t e n t e d o r n o t , s h o u l d , t h e C o m m i t t e e s u g g e s t e d , b e m a r k e t e d u n d e r a g e n e r i c n a m e o n l y a p p r o v e d b y t h e C o m m i s s i o n a l t h o u g h t h e y m i g h t a l s o d i s p l a y t h e n a m e o r h o u s e m a r k o f t h e m a n u f a c t u r e r . T h e C o m m i t t e e a l s o r e c o m m e n d e d t h e a b o l i t i o n o f a d v e r t i s i n g f o r a l l m e d i c i n e s . O w i n g t o i n t e n s e l o b b y i n g b y t h e A s s o c i a t i o n o f t h e B r i t i s h P h a r m a c e u t i c a l I n d u s t r y ( A B P I ) n o n e o f t h e s e p r o p o s a l s w e r e p u t i n t o e f f e c t . P r o v i s i o n w a s m a d e i n t h e M e d i c i n e s B i l l ( 1 9 6 8 ) f o r t h e e s t a b l i s h m e n t o f a M e d i c i n e s C o m m i s s i o n b u t i t h a d n o w h e r e n e a r t h e i n f l u e n c e r e c o m m e n d e d b y t h e S a i n s b u r y C o m m i t t e e . P r o v i s i o n s d e a l i n g w i t h c o s t a n d m a r k e t i n g w e r e d e l e t e d f r o m t h e B i l l a n d t h e a b o l i t i o n o f b r a n d n a m e s w a s r e j e c t e d o n t h e g o u n d t h a t i t w o u l d h a v e s e r i o u s e c o n o m i c c o n s e q u e n c e s a n d w o u l d p u t B r i t i s h b a s e d f i r m s a t a d i s a d v a n t a g e i n e x p o r t m a r k e t s . - 4 -H o w e v e r , t h e h i g h p r o f i t m a r g i n s o f t h e l a r g e p h a r m a c e u t i c a l f i r m s h a v e c o n t i n u e d t o p r o v o k e h o s t i l e c r i t i c i s m a n d t h e r e c a n b e l i t t l e d o u b t t h a t i n t e l l e c t u a l p r o p e r t y l a w s p l a y a l a r g e p a r t i n m a i n t a i n i n g t h e s e h i g h p r i c e s . P a t e n t s g i v e a t e m p o r a r y m o n o p o l y t o t h e d r u g i n r e t u r n f o r d i s c l o s u r e o f t h e c h e m i c a l f o r m u l a i n v o l v e d w h i l e t h e l a w o f t r a d e s e c r e t s g u a r a n t e e s a p e r p e t u a l m o n o p o l y b u t r e q u i r e s e t e r n a l v i g i l a n c e t o a s s u r e t h a t t h e s e c r e t i s k e p t . P a t e n t m o n o p o l i e s a r e r e i n f o r c e d b y o t h e r i n t e l l e c t u a l p r o p e r t y r i g h t s : r e g i s t e r e d t r a d e m a r k s a r e p r o t e c t e d a g a i n s t i m i t a t i o n s o l o n g a s t h e y a r e e m p l o y e d i n t h e t r a d e ; u n r e g i s t e r e d e l e m e n t s o f n a m e o r d e s i g n m a y b e p r o t e c t e d u n d e r t h e l a w o f p a s s i n g o f f ; r e g i s t e r e d d e s i g n s p r o t e c t t h e n o v e l a p p e a r a n c e o f m a s s p r o d u c e d d r u g s a n d c o p y r i g h t w i l l p r o t e c t a r t i s t i c a n d l i t e r a r y e l e m e n t s o f t h e d r u g o r p a c k a g i n g . S u b s e q u e n t c h a p t e r s w i l l f o c u s o n t h e i n t e r a c t i o n o f a l l t h e s e r i g h t s a n d t h e m e t h o d s b y w h i c h t h e y m a y b e e m p l o y e d t o s e c u r e f o r t h e f i r m i n q u e s t i o n t h e m a x i m u m p o s s i b l e p r o t e c t i o n f o r t h e l o n g e s t p o s s i b l e t i m e . B e f o r e s t u d y i n g t h e s e l a w s i n d i v i d u a l l y i t i s n e c e s s a r y t o c o n s i d e r w h y t h e i r o p e r a t i o n i n t h e f i e l d o f p h a r m a c e u t i c a l s h a s g i v e n r i s e t o s u c h c o n t r o v e r s y . T h e p o l i t i c a l a n d e c o n o m i c c o n s e q u e n c e s o f e x c l u s i v e r i g h t s a r e s i g n i f i c a n t i n a n y i n d u s t r y . M o s t i n t e l l e c t u a l p r o p e r t y l a w s r e f l e c t a n a t t e m p t t o b a l a n c e t h e n e e d t o e n c o u r a g e i n n o v a t i o n b y r e w a r d i n g t h e i n v e n t o r w i t h t h e n e e d t o m a i n t a i n f r e e c o m p e t i t i o n a n d t h e f r e e g c i r c u l a t i o n o f g o o d s . Y e t a l t h o u g h t h i s c o n f l i c t o c c u r s i n e v e r y i n d u s t r y , p h a r m a c e u t i c a l s a r e s i n g l e d o u t f o r s p e c i a l t r e a t m e n t . T h e r e a s o n i s t h a t t h i s i n d u s t r y i s p a r t i c u l a r l y s u s c e p t i b l e t o m o n o p o l y c o n t r o l . C e r t a i n f a c t o r s w h i c h g e n e r a l l y l i m i t a m a n u f a c t u r e r ' s a b i l i t y t o e a r n s u p e r - c o m p e t i t i v e p r o f i t s d o n o t e x i s t i n t h i s f i e l d . T h e s t r u c t u r e o f t h e U . K . e c o n o m y i s t y p i c a l o f t h e w o r l d w i d e s t r u c t u r e . A f e w l a r g e p r o d u c e r s w i t h i n t e r n a t i o n a l c o n n e c t i o n s d o m i n a t e t h e m a r k e t i n b r a n d n a m e d r u g s . O n e x p i r y o f a p a t e n t a n u m b e r o f s m a l l e r f i r m s m a n u f a c t u r e s o c a l l e d " g e n e r i c d r u g s " o f t h e s a m e c o m p o s i t i o n a n d s e l l t h e m a t a f r a c t i o n o f t h e p r i c e o f t h e Q b r a n d n a m e d d r u g . H o w e v e r , w h e r e t h e p h y s i c i a n p r e s c r i b e s a d r u g b y i t s b r a n d n a m e t h e d i s p e n s i n g c h e m i s t m u s t s u p p l y t h a t d r u g . O n l y w h e r e t h e g e n e r i c n a m e i s o r i g i n a l l y e m p l o y e d m a y t h e c h e m i s t s u p p l y t h e c h e a p e s t e q u i v a l e n t d r u g . -6-I n a l m o s t a n y o t h e r i n d u s t r y w h e r e t w o p r o d u c t s a r e i d e n t i c a l t h e i r p r i c e s w i l l b e s i m i l a r . I t i s a n e l e m e n t a r y p r i n c i p l e o f e c o n o m i c s t h a t , a l l t h i n g s b e i n g e q u a l , t h e p r o d u c t s e l l i n g a t t h e l o w e r p r i c e i s l i k e l y t o c a p t u r e t h e m a r k e t . T h e p h a r m a c e u t i c a l i n d u s t r y , h o w e v e r , i s l e s s p r i c e s e n s i t i v e a s t h e c r e a t i o n a n d m a i n t e n a n c e o f d e m a n d d e p e n d s l a r g e l y o n p r e s c r i b i n g p h y s i c i a n s w h o d o n o t t h e m s e l v e s p a y f o r t h e d r u g . A f u r t h e r c h a r a c t e r i s t i c o f t h e U . K . m a r k e t i s t h a t t h e p a t i e n t d o e s n o t p a y e i t h e r ( e x c e p t , a t m o s t , a s m a l l f l a t r a t e p r e s c r i p t i o n c h a r g e . ) M o s t c o n s u m e r s k n o w l i t t l e a b o u t m e d i c i n e s ; t h e y o f t e n d o n o t k n o w w h a t h a s b e e n p r e s c r i b e d a n d c e r t a i n l y d o n o t k n o w o r c a r e w h e t h e r t h e p r e s c r i p t i o n i s t h e m o s t e c o n o m i c a l f r o m t h e t a x p a y e r ' s v i e w p o i n t . T h u s t h e p h a r m a c e u t i c a l m a r k e t i s " p r o d u c t c o m p e t i t i v e " r a t h e r t h a n " p r i c e c o m p e t i t i v e " . P r o d u c e r s c o n c e n t r a t e t h e i r a d v e r t i s i n g c a m p a i g n s o n t h e p r e s c r i b i n g p h y s i c i a n s e m p h a s i s i n g t h e b r a n d n a m e o f t h e i r p r o d u c t i n t h e h o p e t h a t p h y s i c i a n s w i l l p r e s c r i b e b y t h a t n a m e . A d v e r t i s i n g c o n s i s t s o f d i r e c t m a i l i n g o f b r o c h u r e s a n d s a m p l e s , v i s i t s f r o m d r u g c o m p a n y - 7 -r e p r e s e n t a t i v e s , a d v e r t i s e m e n t s i n m e d i c a l j o u r n a l s a n d e x h i b i t s a t m e d i c a l m e e t i n g s a n d c o n f e r e n c e s . T h e K e f a u v e r C o m m i t t e e f o u n d t h a t , i n t h e U . S . , t h e l a r g e s t s i n g l e i t e m o f e x p e n d i t u r e f o r a p h a r m a c e u t i c a l f i r m , n e x t t o t h e c o s t o f g o o d s s o l d , w a s a d v e r t i s i n g . T h e r e p o r t g i v e s f i g u r e s o f 2 5 % o f t o t a l p r o f i t s s p e n t o n a d v e r t i s i n g w h i l e o n l y 6% w a s s p e n t o n r e s e a r c h a n d d e v e l o p m e n t . " * " 0 F i g u r e s i n t h e U . K . a r e l e s s s t a r t l i n g . T h e M o n o p o l i e s C o m m i s s i o n f o u n d i n 1 9 7 0 t h a t t h e a m o u n t s p e n t o n a d v e r i s i n g i n E n g l a n d b y H o f f m a n - L a R o c h e w a s a p p r o x i m a t e l y 11% o f p r o f i t s . ^ E v e n s o , t h i s i s a s u b s t a n t i a l s u m a n d l e a v e s a l a r g e m a r g i n f o r e c o n o m y . T h e h i g h p r e s s u r e a d v e r t i s i n g c a m p a i g n s a r e g e n e r a l l y e m b a r k e d u p o n a s t h e p e r i o d o f p a t e n t p r o t e c t i o n d r a w s t o a n e n d w i t h a v i e w t o e x t e n d i n g t h e m o n o p o l y p e r i o d . W h i l e t h e d r u g i s p r o t e c t e d b y t h e p a t e n t , p r o v i d e d t h e r e a r e n o e q u i v a l e n t s a n d n o c o m p u l s o r y l i c e n c e s h a v e b e e n i s s u e d , t h e p h a r m a c e u t i c a l f i r m i s i n a n u n a s s a i l a b l e p o s i t i o n . N o s a v i n g s c a n b e e f f e c t e d b y e n c o u r a g i n g g e n e r i c p r e s c r i b i n g . T h e p h a r m a c e u t i c a l -»-c o m p a n y w i l l b e f r e e t o d e t e r m i n e p r i c e o n a c o o l c a l c u l a t i o n o f w h a t t h e t r a f f i c c a n b e a r . C o s t s o f p r o d u c t i o n a r e i r r e l e v a n t . I n a n y o t h e r i n d u s t r y , e v e n t h e s o l e p r o d u c e r o f a p r o d u c t w i l l b e r e s t r a i n e d t o s o m e e x t e n t b y t h e p o s s i b i l i t y o f p r i c i n g h i m s e l f o u t o f t h e m a r k e t ; b u t f o r a n e s s e n t i a l c o m m o d i t y s u c h a s d r u g s t h i s c h e c k i s m i n i m a l . D e m a n d i s l a r g e l y i n e l a s t i c , t h a t i s , 12 u n r e s p o n s i v e t o c h a n g e s i n p r i c e . E v e n w h e n t h e d r u g i s n o t p r e s c r i b e d o n a N a t i o n a l H e a l t h S e r v i c e p r e s c r i p t i o n a s i c k p e r s o n w i l l s p e n d ( w i t h i n h i s m e a n s ) w h a t e v e r i s n e c e s s a r y t o s e c u r e t h e d e s i r e d m e d i c a t i o n . T h e r e i s l i t t l e l i k e l i h o o d o f h i s " s h o p p i n g a r o u n d " f o r a c h e a p e r a l t e r n a t i v e o r " m a n a g i n g w i t h o u t " f o r a p e r i o d . I n E n g l a n d , s u c h p r i c e r e s t r a i n t w h i c h d o e s e x i s t c o m e s n o t f r o m m a r k e t f o r c e s b u t f r o m t h e V o l u n t a r y P r i c e R e g u l a t i o n S c h e m e ( V P R S ) n e g o t i a t e d b e t w e e n A B P I a n d t h e D e p a r t m e n t o f H e a l t h a n d S o c i a l S e c u r i t y ( D H S S ) . 1 3 P a r t i e s t o t h e a g r e m e e n t r e c o r d t h e i r c o m m o n i n t e r e s t i n s e c u r i n g n o t o n l y t h a t s a f e a n d e f f e c t i v e m e d i c i n e s a r e a v a i l a b l e o n r e a s o n a b l e t e r m s t o t h e N a t i o n a l H e a l t h S e r v i c e ( N H S ) b u t a l s o t h a t a s t r o n g a n d p r o f i t a b l e - 9 -p h a r m a c e u t i c a l i n d u s t r y i s c a p a b l e o f s u s t a i n e d r e s e a r c h a n d d e v e l o p m e n t e x p e n d i t u r e l e a d i n g t o f u t u r e n e w a n d i m p r o v e d m e d i c i n e s f o r t h e N H S a n d f o r e x p o r t . T h e l i m i t a t i o n l i e s i n t h e f a c t t h a t t h e V P R S , a s i t s n a m e i m p l i e s , i s a v o l u n t a r y s c h e m e ; H o f f m a n - L a R o c h e w a s o n e o f t h e m a j o r c o m p a n i e s w h o r e f u s e d t o j o i n t h e s c h e m e . I t a l s o o b j e c t e d s t r o n g l y t o c o m p u l s o r y l i c e n c e 1 4 p r o v i s i o n s i n t h e P a t e n t A c t 1 9 4 9 ( n o w r e p e a l e d ) a n d t o w h a t i t t e r m e d t h e " c o u n t e r p r o m o t i o n a l a c t i v i t i e s " o f t h e D H S S . T h e D H S S h a s b r o u g h t s t r o n g p r e s s u r e t o b e a r o n p h y s i c i a n s t o p r e s c r i b e g e n e r i c a l l y a l t h o u g h t h e r e i s n o c o m p u l s i o n t o d o s o . T h i s c o n t r a s t s w i t h t h e U . S . w h e r e 1 5 m a y s t a t e s h a v e p a s s e d m a n d a t o r y s u b s t i t u t i o n l a w s . T h e r e c a n b e n o d o u b t t h a t t h e D H S S d o e s e x e r c i s e i m p o r t a n t i n f l u e n c e i n t h e m a r k e t f o r a n y d r u g s w h i c h a r e s u p p l i e d t o t h e N H S . A s t h e u l t i m a t e p a y m a s t e r , i t i s i n a p o s i t i o n t o e x e r t s o m e p r e s s u r e o v e r p r i c e s b u t i t c a n n o t d e c i d e w h i c h d r u g s s h a l l a n d s h a l l n o t b e p r e s c r i b e d . N o r c a n i t e x e r t i t s b a r g a i n i n g p o w e r a s a n i n d e p e n d e n t b u y e r w o u l d d o b e c a u s e i t m u s t h a v e s o m e r e g a r d t o t h e e f f e c t - 1 0 -t h i s w o u l d h a v e o n t h e g e n e r a l p r o s p e r i t y o f t h e i n d u s t r y i n c l u d i n g e x p o r t s a n d r e s e a r c h p r o g r a m m e s . O n e a c h n e w a t t a c k t h e i n d u s t r y r e l i e s o n t h e n e e d t o r e i n v e s t i n r e s e a r c h p r o g r a m m e s a s a j u s t i f i c a t i o n f o r h i g h p r i c e s : " I t i s w i d e l y a c c e p t e d t h a t t h e b a s i c r i s k i n s u c h r e s e a r c h i s t h a t , n o m a t t e r w h a t i s s p e n t , a n e w r e m u n e r a t i v e b r e a k t h r o u g h m a y n o t r e s u l t . T h e r e s h o u l d b e a n a c c e p t a n c e t h a t e i t h e r e m b a r k i n g o n p h a r m a c e u t i c a l r e s e a r c h o r e x p a n d i n g i t , b o t h o f w h i c h i n v o l v e h e a v y i n v e s t m e n t s , c a n n o t t a k e p l a c e e x c e p t o u t o f r e s o u r c e s w h i c h c a n o n l y b g p r e v i o u s l y e a r n e d a n d t a x e d p r o f i t s . " T h e M o n o p o l i e s C o m m i s s i o n f o u n d t h a t l a r g e r e s e a r c h b a s e d c o m p a n i e s s p e n t a b o u t 7 - 1 2 % o f t u r n o v e r o n r e s e a r c h a n d d e v e l o p m e n t . H o w e v e r , w h e r e t h e c o m p a n y w a s f o r e i g n o w n e d n o t a l l o f t h i s s u m w a s s p e n t i n E n g l a n d . A 1 7 f i g u r e o f 1 0 % w a s g i v e n a s b r o a d l y r e p r e s e n t a t i v e . W h i l e n o g o v e r n m e n t e n q u i r i e s h a v e d e n i e d t h e i m p o r t a n c e o f r e s e a r c h , i t i s a r g u a b l e t h a t p r e s e n t p u r c h a s e r s o f p h a r m a c e u t i c a l p r o d u c t s a r e p a y i n g t o o m u c h t o w a r d s t h e f u t u r e e x p a n s i o n o f t h e i n d u s t r y . I n t h e H o f f m a n - L a R o c h e e n q u i r y t h e C o m m i s s i o n e x p r e s s e d t h e v i e w t h a t r e s e a r c h e x p e n d i t u r e h a d b e e n i n f l a t e d b y t h e u s e o f e x c e s s p r o f i t s t o a p o i n t a t w h i c h i t h a d c e a s e d t o b e r e a s o n a b l e t o r e g a r d t h e e x p e n d i t u r e a f u l l y r e c o v e r a b l e f r o m c u r r e n t s a l e s . I n t h e s p e c i f i c c a s e s o f L i b r i u m a n d V a l i u m t h e s u c c e s s o f t h e d r u g s h a d f a r e x c e e d e d t h e c o n s e r v a t i v e e s t i m a t e s u p o n w h i c h t h e i n i t i a l p r i c i n g p o l i c y h a d b e e n b a s e d . T h e r e t u r n w a s t h e r e f o r e a b n o r m a l l y h i g h e s p e c i a l l y a s H o f f m a n - L a R o c h e 18 h a d n o t s u b s e q u e n t l y r e d u c e d t h e i r p r i c e s . T h e C o m m i s s i o n s u g g e s t e d t h a t , i n o r d e r t o d e t e r m i n e a r e a s o n a b l e l i m i t t o e x p l o i t a t i o n i n a p a r t i c u l a r c a s e , i t w a s n e c e s s a r y t o l o o k a t t h e p r o f i t a b i l i t y o f a d r u g o v e r i t s p a t e n t l i f e a s a w h o l e . A f t e r a f e w y e a r s , w h e n s a l e s h a v e i n c r e a s e d a n d h i g h r a t e o f p r o f i t m a y h a v e b e e n a c h i e v e d , e x p l o i t a t i o n s h o u l d b e k e p t w i t h i n r e a s o n a b l e l i m i t s t h r o u g h a d e q u a t e r e g u l a r p r i c e r e d u c t i o n s . I n t h e i n s t a n t c a s e t h e r e h a d b e e n n o r e d u c t i o n f o r m o r e t h a n 2 / 3 o f t h e p a t e n t l i f e . A c c o r d i n g l y r e d u c t i o n s w e r e f o r c e d u p o n t h e c o m p a n y b y t h e 1 9 R e g u l a t i o n o f P r i c e s ( T r a n q u i l i z i n g D r u g s ) O r d e r 1 9 7 3 . U s e o f t h e r e s t r i c t i v e p r a c t i c e s l e g i s l a t i o n t o r e s t r a i n e x c e s s i v e p r i c i n g w a s s u c c e s s f u l i n t h i s i n s t a n c e a n d p r o b a b l y s e t a v a l u a b l e e x a m p l e t o o t h e r p h a r m a c e u t i c a l f i r m s . H o w e v e r , i t i s a c u m b e r s o m e a n d e x p e n s i v e w a y o f p r o c e e d i n g . T h e V P R S h e l p s t o s o m e e x t e n t t o k e e p p r i c e s d o w n b u t i t c a n b e s e e n f r o m t h e H o f f m a n - L a R o c h e c a s e t h a t i t i s n o t a l w a y s e f f e c t i v e . A s i m p l e r w a y t o k e e p p r i c e s d o w n w o u l d b e t o r e s t r i c t t h e a m o u n t o f p r o t e c t i o n c o n f e r r e d u p o n p h a r m a c e u t i c a l p r o d u c t s t h r o u g h t h e i n t e l l e c t u a l p r o p e r t y l a w s . P r i c e s i n t h e i n d u s t r y a r e s u f f i c i e n t l y h i g h a n d b a r r i e r s t o e n t r y s u f f i c i e n t l y d a u n t i n g t h a t , e v e n w i t h r e d u c e d p r o t e c t i o n , i t i s l i k e l y t h a t p r o f i t s w o u l d r e m a i n s u f f i c i e n t l y l u c r a t i v e t o e n c o u r a g e t h e d e v e l o p m e n t o f n e w p r o d u c t s . -1 j -NOTES TO CHAPTER I "'"Better known by t h e i r Trade Names - Valium and Librium (respectively) . 2 The Monopolies Commission Report on the Supply of Chlordiazepoxide and Diazepam presented to Parliament i n pursuance of S.9 of the Monopolies and R e s t r i c t i v e Practices (Inquiry and Control) Act 1948, 11th A p r i l , 1973 (Monopolies Commission Report). 3 Report of the Committee on the Ju d i c i a r y United States Senate made by i t s subcommittee on Anti-Trust and Monopoly pursuant to Senate Resolution 52, 87th Congress 1st Session, Report NO. 448 (1961)("Kefauver Report"). ^The term " e t h i c a l " denotes drugs which may only l e g a l l y be sold on pr e s c r i p t i o n . Drugs which are advertised to the public and usually bought without prescription are termed "proprietary drugs". ^ R e s t r i c t i v e Trade Practices Commission Report concerning the Manufacture D i s t r i b u t i o n and Sale of Drugs, Ottawa, 1963 ("RTPC Report"). ^Committe of Enquiry into the Relationship of the Pharmaceutical Industry with the National Health Service, 1965-70 HMSO Cmnd 3410 ("Sainsbury Report"). 7 Sainsbury Report at p.46. Q With the possible exception of trademark laws where the primary function i s to provide the consumer with an ind i c a t i o n of source. 9 For the d i s t i n c t i o n between brand name and generic name, see generally Chapter 4. 1 0Kefauver Report Part IV, Advertising and Promotion of Drugs, at p.15 6. 11 Monopolies Commission Report at p.39 para 141, p.67 para 226 and Appendix 5. 12 Kefauver Report at p.3; Sainsbury Report at p.73. - 1 4 -The f i r s t VPRS was devised i n 1957 by a negotiating committee of the Association of the B r i t i s h Pharmaceutiucal Industry ("ABPI") and o f f i c i a l s of the Ministry of Health. Members of the commitee were: Mr J V L Fergusson, Chairman and Managing Director of Evans Medical Supplies Ltd, Mr E D Carey, Managing Director of Allen & Hanburys Ltd, Mr T B Maxwell, Managing Director of May & Baker Ltd, Mr H W Palmer, Managing Director of Glaxo Laboratories Ltd, Mr J D Robinson, Director of the Wellcome Foundation Ltd, Mr L 0 Smith, European General Manager of Parke Davis & Co Ltd, Mr G F Williams, Managing Director of the B r i t i s h Drug Houses Ltd., Source: ABPI Annual Report 1956-7, p.15. :Patent Act 1949, S.41. 'Under many state substitution laws, the chemist i s compelled to use the cheapest generically equivalent drug, unless the physician s p e c i f i c a l l y expresses an alternative wish. Dispensing chemists are provided with an approved formulary l i s t i n g interchangeable products and t h e i r related prices. Between 1972 and 1979 t h i r t y one states and the D i s t r i c t of Columbia enacted various types of laws permitting substitution. See Alaska Stat. 08.80.295 (Supp. 1978); A r i z . Rev. Stat. Ann. 32-1963.01 (Supp. 1978); Ark. Stat. Ann. 72-1047 to -1048 (Supp. 1977); Cal. Bus. & Prof. Code 4047.6 (West Supp. 1978); Colo. Rev. Stat. 12-22-118.5 (Supp. 1976); Del. Code Ann. t i t . 24, 2589 (Supp. 1978); D.C. Code Ann. 33-832 (Supp. 1978); F l a . Stat. Ann. 465.30 (West Supp. 1978); Ga. Code Ann. 79A-408.2 (Supp. 1978); Iowa Code Ann. 155.37 (West Supp. 1978); KRS 217.822 (1977); Me. Rev. Stat. t i t . 32, 2806 (Supp 1978); Md. Ann Code art.43, 273A (Supp. 1978); Mich, Comp. Laws Ann. 338.1114a (Supp. 1978); Mo Ann. Stat. 338.056 (Vernon Supp. 1979); Mont. Rev. Codes Ann. 66-1528 to -1536 (Supp. 1977); Neb. Rev. Stat. 71-5401 to -5408 (Supp. 1978); N.J. Stat. Ann. 24:6E-7 and 8 (West Supp. 1978) N.Y. Educ. Law 6816-a (McKinney Supp. 1978); Ohio Rev. Code Ann. 4729.38 (Page Supp. 1978) Or. Rev. Stat. 689.830-.850(1977); Pa. Stat. Ann. t i t . 35, 960.2 - 7 (Purdon 1977); R.I. Gen. Laws 5-19-38 (Supp. 1978); S.C. Code R99-22 (1976); S.D. Codified Laws 36-11-46.1 to -11-46.4 (Supp. 1978); Tenn. Code Ann. 52-1211 to -1226 (Supp. 1978); Utah Code Ann. -15-58-17-29 to -17-35 (Supp. 1977); Vt. Stat. Ann. t i t . 18, 4605 (Supp. 1978); Va. Code 54-524.109:17 (1978); Wash. Rev. Code 69.41.100 - .41.180 (Supp. 1977); W. Va. Code 30-5-12b (Supp. 1978); Wis. Stat. Ann. 450.075 (West Supp. 1978). Roche Replies to Monopolies Commission. The Pharmaceutical Journal, A p r i l 28, 1973 at p.367. Monopolies Commission Report at p.44. i Monopolies Commission Report at p.69. Hoffman-La Roche i n i t i a l l y refused to obey the order and moved to have i t declared i n v a l i d but the Government obtained an interim injunction barring the s e l l e r of the drug from charging prices i n excess of those specified i n the order: Hoffman-La Roche A.G. v  Secretary of State for Trade and Industry [1973] 3  A.E.R. 945 (C.A.), a f f ' d [1975] A.C. 295 (H.L.) - l b -C H A P T E R I I P A T E N T S 1 . I n t r o d u c t i o n t o P a t e n t L a w i n t h e P h a r m a c e u t i c a l I n d u s t r y P a t e n t s c o n f e r u p o n t h e p a t e n t e e a l i m i t e d m o n o p o l y i n r e t u r n f o r t h e d i s c l o s u r e o f a n e w i n v e n t i o n . T h e o s t e n s i b l e a i m b e h i n d t h e i n t r o d u c t i o n o f t h e p a t e n t s y s t e m w a s t o e n c o u r a g e r e s e a r c h a n d t o s t i m u l a t e t h e d e v e l o p m e n t o f b o t h o l d a n d n e w i n d u s t r i e s b u t t h e m o n o p o l i e s t h e r e b y g r a n t e d h a v e r e m a i n e d s u b j e c t t o p e r s i s t e n t c r i t i s m a n d s u s p i c i o n . T h i s s u p i c i o n s t e m s f r o m t h e s e v e n t e e n t h c e n t u r y w h e n E l i z a b e t h I a n d J a m e s I g r a n t e d m a n y p a t e n t s a s " f a v o u r s " a n d a s a m e t h o d o f r a i s i n g r e v e n u e w i t h o u t r e c o u r s e t o P a r l i a m e n t . 1 I n 1 6 2 4 t h e S t a t u t e o f M o n o p o l i e s w a s p a s s e d i n a n a t t e m p t t o c u r b t h e s e a b u s e s . A l l f u t u r e m o n o p o l i e s w e r e d e c l a r e d n u l l a n d v o i d w i t h o n e i m p o r t a n t e x c e p t i o n c o n t a i n e d i n s e c t i o n 6 : -" P r o v i d e d a l s o . . . a n y d e c l a r a t i o n b e f o r e m e n t i o n e d s h a l l n o t e x t e n d t o a n y l e t t e r s p a t e n t a n d g r a n t s -17-o f p r i v i l e g e f o r t h e t e r m o f f o u r t e e n y e a r s o r u n d e r h e r e a f t e r t o b e m a d e o f t h e s o l e w o r k i n g o r m a k i n g o f a n y m a n n e r o f n e w m a n u f a c t u r e s w i t h i n t h i s r e a l m t o t h e t r u e a n d f i r s t i n v e n t o r a n d i n v e n t i o n s o f s u c h m a n u f a c t u r e r s w h i c h o t h e r s a t t h e t i m e o f m a k i n g s u c h l e t t e r s p a t e n t a n d g r a n t s s h a l l n o t u s e , s o a l s o t h e y b e n o t c o n t r a r y t o t h e l a w o r m i s c h i e v o u s t o t h e s t a t e b y r a i s i n g p r i c e s o f c o m m o d i t i e s a t h o m e , o r h u r t o f t r a d e , o r g e n e r a l l y i n c o n v e n i e n t . " T h i s s e c t i o n l a i d t h e f o u n d a t i o n s o f m o d e r n p a t e n t l a w w h i c h n o w c o n f e r s u p o n t h e i n v e n t o r a m o n o p o l y i n E n g l a n d o f t w e n t y y e a r s i n r e t u r n f o r f u l l d i s c l o s u r e o f h i s i n v e n t i o n . I t w i l l b e n o t e d h o w e v e r t h a t , e v e n a t t h a t e a r l y s t a g e , t h e l a w a t t e m p t e d t o l i m i t t h e s c o p e o f m o n o p o l y w h e r e t h e d e t r i m e n t t o t h e p u b l i c o u t w e i g h e d t h e b e n e f i t s a c c r u i n g t h r o u g h t h e i n c e n t i v e s t o i n n o v a t e . S i n c e t h e s t a t u t e w a s p a s s e d c o n t r o v e r s y h a s s u r r o u n d e d t h e q u e s t i o n o f w h e t h e r t h e g r a n t i n g o f p a t e n t s i s b e n e f i c i a l t o t h e n a t i o n . C o m p e t i t i o n i s g e n e r a l l y b e l i e v e d t o b e a " g o o d t h i n g " a n d p a t e n t s , b y t h e i r v e r y n a t u r e , r e s t r i c t c o m p e t i t i o n . T h e e x i s t e n c e o f a p a t e n t s y s t e m r e p r e s e n t s t h e r e f o r e a c o n s c i o u s d e c i s i o n t h a t t h e g a i n r e s u l t i n g f r o m t h e p r o m o t i o n o f i n v e n t i v e n e s s o u t w e i g h s t h e l o s s r e s u l t i n g f r o m t h e e l i m i n a t i o n o f c o m p e t i t i o n . - 1 8 -A n i n v e s t i g a t i o n i n t o t h e e f f e c t i v e n e s s o f t h e p a t e n t s y s t e m i n g e n e r a l a n d t h e p o s s i b l e c o n s e q u e n c e s o f 3 i t s a b o l i t i o n i s b e y o n d t h e s c o p e o f t h i s p a p e r . I n E n g l a n d , t h e s y s t e m h a s e x i s t e d f o r s o l o n g t h a t i t s r i g h t t o c o n t i n u e d e x i s t e n c e i s v i r t u a l l y u n a s s a i l a b l e . I n s t e a d , t h e w r i t e r e c h o e s t h e w o r d s o f P r o f e s s o r M a c h l u p : " I f w e d i d n o t h a v e a p a t e n t s y s t e m , i t w o u l d b e i r r e s p o n s i b l e o n t h e b a s i s o f p r e s e n t k n o w l e d g e o f i t s e c o n o m i c c o n s e q u e n c e s t o r e c o m m e n d i n s t i t u t i n g o n e . B u t s i n c e w e h a v e h a d a p a t e n t s y s t e m f o r a l o n g t i m e i t w o u l d b e i r r e s p o n s i b l e o n t h e b a s i s o f o u r p r e s e n t k n o w l e d g e t o r e c o m m e n d a b o l i s h i n g i t " H o w e v e r , w h i l e t h i s s t a n c e m a y j u s t i f y r e t e n t i o n o f t h e p a t e n t s y s t e m f o r m o s t i n d u s t r i e s , t h e w r i t e r i s o f t h e o p i n i o n t h a t i t i s l e s s v a l i d i n t h e s p e c i f i c c o n t e x t o f t h e p h a r m a c e u t i c a l i n d u s t r y . T h e e x i s t e n c e o f e v e n a l i m i t e d m o n o p o l y w h i c h m a y b e j u s t i f i a b l e , o r a t l e a s t e x c u s a b l e , i n m a n y i n d u s t r i e s i s q u e s t i o n a b l e h e r e i n v i e w o f t h e u n i q u e n a t u r e o f t h e p r o d u c t , v i z . , t h o s e q u a l i t i e s o f r e l i e v i n g s u f f e r i n g a n d p r e s e r v i n g l i f e w h i c h p l a c e t h e p h a r m a c e u t i c a l i n d u s t r y i n a p o s i t i o n o f s p e c i a l r e s p o n s i b i l i t y t o w a r d s t h e p u b l i c . - 1 9 -T h e K e f a u v e r R e p o r t i n t h e US f o u n d t h a t i n 1 9 6 1 m o s t c o u n t r i e s f r o m w h i c h i n f o r m a t i o n w a s o b t a i n e d d i d n o t a l l o w p a t e n t s o n d r u g p r o d u c t s a l t h o u g h m a n y a l l o w e d t h e m o n t h e p r o c e s s e s o f p r o d u c t i o n . O f t h e s e v e n t y s e v e n c o u n t r i e s i n v e s t i g a t e d , o n l y t w e n t y e i g h t g r a n t e d p r o d u c t p a t e n t s a n d s o m e o f t h o s e t w e n t y e i g h t s p e c i f i c a l l y e x c l u d e d p a t e n t s o n " c o m b i n a t i o n d r u g s " w h i c h a r e a m i x t u r e 5 o f k n o w n i n g r e d i e n t s . T h e e v i d e n c e c o l l e c t e d f o r s u b m i s s i o n t o t h e C a n a d i a n R T P C ( T h e G r e e n B o o k ) 6 d i s c l o s e d t h a t i n m a n y c o u n t r i e s d r u g p r o d u c t s w e r e i n e l i g i b l e f o r p a t e n t p r o t e c t i o n . I n E n g l a n d , p r i o r t o 1 9 1 9 , t h e l a w p e r m i t t e d t h e p a t e n t i n g o f c h e m i c a l s u b s t a n c e s b u t a p r o c e s s l i m i t a t i o n w a s i n t r o d u c e d i n t o t h e P a t e n t a n d D e s i g n s A c t , 1 9 1 9 . T h i s A c t a l s o p r o v i d e d f o r c o m p u l s o r y l i c e n s i n g o f p r o c e s s e s f o r p r o d u c i n g f o o d , m e d i c i n e a n d s u r g i c a l a p p l i c a n c e s . 7 I n 1 9 4 7 , t h e S w a n C o m m i t t e e r e c o m m e n d e d t h a t a l l c h e m i c a l s u b s t a n c e s , i n c l u d i n g m e d i c i n e s , s h o u l d b e e l i g i b l e f o r p a t e n t p r o t e c t i o n o n c e m o r e s u b j e c t t o r e t e n t i o n o f t h e c o m p u l s o r y l i c e n c e p r o c e d u r e s . T h e s e o r e c o m m e n d a t i o n s w e r e a d o p t e d i n t h e P a t e n t s A c t 1 9 4 9 . -20-The 1977 Act retained protection for drug products and repealed the compulsory licence provisions thereby placing pharmaceutical manufacturers i n the same position as manufacturers of any other product (subject to the Crown Use provisions considered below). This chapter discusses whether pharmaceuticals should enjoy patent protection at a l l , whether protection should be limited to the chemical process involved rather than the f i n a l product, the advantages of compulsory licences or licences of r i g h t and, f i n a l l y , the value, i n theory and i n practice, of the Crown Use provisions i n the English Patent Act. 2. The Exclusion of Pharmaceutical Products & Processes from the Patent System I t a l y i s the oft-quoted example of a country which, u n t i l recently, denied patent protection to both drug products and the processes of production. Few countries adopt such an unequivocal position although some, including Canada, deny protection to the product alone. In Canada, the R e s t r i c t i v e Trade Practices Commission (RTPC), 9 reporting i n 1963, found that even the limited - 2 1 -p r o t e c t i o n a v a i l a b l e i n C a n a d a h a d r e s u l t e d i n u n d u l y h i g h p r i c e s f o r d r u g s a n d t h o u g h t t h a t , w h i l e a p r o v i s i o n f o r l i c e n c e s o f r i g h t m i g h t a l l e v i a t e t h e s i t u a t i o n , t h e r e a l s o l u t i o n w o u l d b e t h e t o t a l a b o l i t i o n o f p a t e n t s o n d r u g s : -" A s t h e C o m m i s s i o n b e l i e v e s t h a t c l o s e c o n t r o l e x e r c i s e d b y p a t e n t s h a s m a d e i t p o s s i b l e t o m a i n t a i n c e r t a i n d r u g s a t l e v e l s h i g h e r t h a n w o u l d h a v e o b t a i n e d o t h e r w i s e a n d t h a t s u c h p a t e n t c o n t r o l h a s p r o d u c e d n o b e n e f i t t o t h e p u b l i c o f C a n a d a w h i c h w o u l d o u t w e i g h t h e d i s a d v a n t a g e s o f t h e m o n o p o l y , t h e C o m m i s s i o n r e c o m m e n d s t h a t p a t e n t s w i t h r e s p e c t t o d r u g s b e a b o l i s h e d . I n E n g l a n d , t h e S a i n s b u r y C o m m i t t e e w a s a p p o i n t e d 1 1 i n M a y 1 9 6 5 . A m o n g i t s t e r m s o f r e f e r e n c e w a s t h e c o n s i d e r a t i o n o f t h e e f f e c t s o f p a t e n t s . U n l i k e t h e C a n a d i a n R T P C , t h e S a i n s b u r y R e p o r t d i d n o t r e c o m m e n d t h e a b o l i t i o n o f p a t e n t p r o t e c t i o n . T h e C o m m i t t e e w a s f a r m o r e c a u t i o u s . I t r e c o m m e n d e d r e t e n t i o n o f p r o v i s i o n s d e a l i n g w i t h C r o w n U s e o f P a t e n t e d i n v e n t i o n s ( c o n s i d e r e d i n d e t a i l b e l o w ) b u t p r e f e r r e d t o r e f e r t h e q u e s t i o n o f p a t e n t 1 2 p r o t e c t i o n t o t h e B a n k s C o m m i t t e e . T h e B a n k s C o m m i t t e e l o o k e d f i r s t a t t h e i n t e r n a t i o n a l s c e n e w h i c h a p p e a r e d t o h a v e b e e n m o v i n g t o w a r d s i n c r e a s e d p r o t e c t i o n f o r c h e m i c a l s u b s t a n c e s . -2z-S i n c e t h e r e p o r t s o f K a f a u v e r a n d t h e R T P C , G e r m a n y h a d p a s s e d a n e w l a w p r o v i d i n g f o r t h e p r o t e c t i o n o f c h e m i c a l s u b s t a n c e s w h e r e a s p r e v i o u s l y o n l y p r o c e s s e s w e r e p a t e n t a b l e . N e w l a w s i n t h e S c a n d i n a v i a n c o u n t r i e s h a d e x t e n d e d p r o t e c t i o n t o c h e m i c a l s u b s t a n c e s a n d a n e w F r e n c h l a w w a s l e s s r e s t r i c t i v e t o w a r d s d r u g s . E v e n I t a l y w a s m o v i n g i n t h e d i r e c t i o n o f p a t e n t p r o t e c t i o n f o r d r u g 1 3 p r o c e s s e s . R e c e n t m o v e s w i t h i n E u r o p e t o w a r d s h a r m o n i z a t i o n o f i n d u s t r i a l p r o p e r t y r i g h t s w i l l l e a d t o t h e p a t e n t a b i l i t y o f d r u g p r o d u c t s i n a l l m e m b e r s t a t e s o f 1 4 t h e E E C . T h e B a n k s C o m m i t t e e , h a v i n g f o u n d t h a t t h e p a t e n t s y s t e m p l a y e d a s i g n i f i c a n t r o l e i n e n c o u r a g i n g i n d i v i d u a l s t o i n v e n t a n d c o m m e r c i a l o r g a n i s a t i o n s t o d e v e l o p i n v e n t i o n s , c o n s i d e r e d t h i s t o b e a s t r u e i n t h e p h a r m a c e u t i c a l f i e l d a s a n y o t h e r a n d s a w n o r e a s o n t o t r e a t t h a t i n d u s t r y d i f f e r e n t l y : " W e a r e c o n v i n c e d t h a t , a s a g e n e r a l p r o p o s i t i o n , r e s e a r c h a n d i n n o v a t i o n i n t h e p h a r m a c e u t i c a l i n d u s t r y a r e c a p a b l e o f b e n e f i t i n g t h e c o m m u n i t y a t l e a s t a s m u c h a s r e s e a r c h a n d i n n o v a t i o n i n o t h e r f i e l d s a n d t h a t a n y g e n e r a l d i m i n u t i o n o f p a t e n t p r o t e c t i o n f o r d r u g s w o u l d w o r k a g a i n s t t h e l o n g t e r m i n t e r e s t s o f t h e p u b l i c . " -25-T h e a n s w e r t o t h e q u e s t i o n o f w h e t h e r t o e x c l u d e d r u g s f r o m t h e p a t e n t s y s t e m d e p e n d s o n w h a t w e e x p e c t f r o m t h e s y s t e m a n d w h e t h e r t h o s e e x p e c t a t i o n s a r e b e i n g m e t . T h e r e a s o n s f o r t h e e x i s t e n c e o f t h e s y s t e m a p p e a r t o b e t h r e e f o l d : r e w a r d f o r b o t h t h e i n v e n t o r a n d t h e e n t r e p r e n e u r r e s p o n s i b l e f o r t h e p r o m o t i o n o f t h e i n v e n t i o n , s u p p l y o f t e c h n i c a l i n f o r m a t i o n t o t h e i n d u s t r y a n d t h e e n c o u r a g e m e n t o f r e s e a r c h a n d d e v e l o p m e n t . T h e p h a r m a c e u t i c a l c o m p a n i e s m a i n t a i n t h a t a l l t h r e e a i m s a r e b e i n g m e t a n d t h a t t h e m a i n t e n a n c e o f a p a t e n t s y s t e m i s v i t a l t o s e c u r e t h o s e a i m s . I t w i l l b e s e e n f r o m w h a t f o l l o w s t h a t t h i s a s s e r t i o n i s f a r f r o m p r o v e n a n d , i n t h e w r i t e r ' s o p i n i o n , t h e o n u s l i e s u p o n t h o s e a s s e r t i n g t h e m o n o p o l y ( i . e . , t h e p h a r m a c e u t i c a l f i r m s ) t o p r o v e t h e i r c a s e . T h e a i m o f r e w a r d i s c l e a r l y b e i n g s a t i s f i e d . B o t h K e f a u v e r a n d t h e C a n a d i a n R T P C f o u n d p r o f i t m a r g i n s i n t h e p h a r m a c e u t i c a l i n d u s t r y t o b e h i g h e r t h a n i n a n y o t h e r i n d u s t r y a n d c o n s i d e r e d p a t e n t s t o b e a s i g n i f i c a n t f a c t o r 1 fi i n t h e h i g h p r i c e s . I n B r i t a i n , p r i c e s a r e g e n e r a l l y l o w e r d e s p i t e t h e a v a i l a b i l i t y o f p a t e n t s o w i n g t o t h e 17 e x i s t e n c e o f t h e V P R S . - 2 4 -E v e n s o , K e f a u v e r f o u n d t h a t p r i c e s i n c o u n t r i e s w i t h o u t p a t e n t p r o t e c t i o n w e r e s i g n i f i c a n t l y l o w e r t h a n i n B r i t a i n . 1 8 T h e s e c o n d a i m i s t o p r o v i d e i n f o r m a t i o n t o t h e i n d u s t r y . T h e p a t e n t s p e c i f i c a t i o n s h o u l d " d i s c l o s e t h e i n v e n t i o n i n a m a n n e r w h i c h i s c l e a r e n o u g h a n d c o m p l e t e e n o u g h f o r t h e i n v e n t i o n t o b e p e r f o r m e d b y a p e r s o n s k i l l e d i n t h e a r t - 1 9 a n d m u s t c o n t a i n a c l a i m o r c l a i m s w h i c h " d e f i n e t h e m a t t e r f o r w h i c h t h e a p p l i c a n t s e e k s p r o t e c t i o n " 2 Q T h i s a s p e c t o f t h e s y s t e m a p p e a r s t o w o r k r e a s o n a b l y w e l l i n B r i t a i n . T h e c h i e f d e f e c t i s p r o b a b l y t h a t , a s a r e s u l t o f t h e f i r m s d e s i r e t o o b t a i n p a t e n t s o n m i n o r v a r i a t i o n s a n d d e r i v a t i v e s o f e x i s t i n g d r u g s , t h e r e a r e t o o m a n y o f t h e m a n d i t i s d i f f i c u l t t o e x t r a c t t h o s e s p e c i f i c a t i o n s w h i c h a r e w o r t h y o f d e t a i l e d s t u d y . T h e C a n a d i a n R T P C c o n s i d e r e d t h a t n o s u b s t a n t i a l b e n e f i t s f l o w e d f r o m d i s c l o s u r e b u t t h i s i s p r o b a b l y b e c a u s e t h e C a n a d i a n P h a r m a c e u t i c a l I n d u s t r y , u n l i k e t h e B r i t i s h , i s l a r g e l y f o r e i g n o w n e d . M o s t d i s c o v e r i e s a r e m a d e a b r o a d a n d - 2 b -p a t e n t e d i n t h e c o u n t r y o f t h e i n v e n t o r . B y t h e t i m e t h e y a r e f i l e d i n C a n a d a t h e y h a v e a l r e a d y b e e n m a d e k n o w n t o t h e w o r l d o r , a t l e a s t , k n o w l e d g e o f t h e m h a s b e e n m a d e a v a i l a b l e t o a l l i n t e r e s t e d p e r s o n s . B r i t a i n h a s a l a r g e n a t i v e d r u g m a n u f a c t u r i n g i n d u s t r y w h i c h b e n e f i t s f r o m t h e d i s c l o s u r e o f n e w i n v e n t i o n s a n d t o t h a t e x t e n t t h e s e c o n d j u s t i f i c a t i o n f o r t h e e x i s t e n c e o f p a t e n t p r o t e c t i o n m a y b e c o n s i d e r e d s a t i s f i e d . W i t h o u t s u c h p r o t e c t i o n i t i s a r g u a b l e t h a t f i r m s w o u l d r e l y h e a v i l y o n t r a d e s e c r e t p r o t e c t i o n t o t h e d e t r i m e n t o f t h e i n d u s t r y a s a w h o l e . S o w e c o m e t o t h e t h i r d , a n d m o s t f r e q u e n t l y q u o t e d , j u s t i f i c a t i o n f o r t h e p a t e n t s y s t e m - t h e p r o m o t i o n o f i n v e n t i v e n e s s a n d t h e e x p l o i t a t i o n o f n e w i n v e n t i o n s w i t h t h e m i n i m u m o f d e l a y . I f t h i s a i m i s a c h i e v e d i t i s a s t r o n g a r g u m e n t i n f a v o u r o f t h e r e t e n t i o n o f p a t e n t p r o t e c t i o n f o r p h a r m a c e u t i c a l s . I t i s m o r e i m p o r t a n t t o p r o v i d e s o c i e t y w i t h n e w a n d a d v a n c e d d r u g s t h a n t o p r e v e n t a n y o n e f r o m d e r i v i n g a p r o f i t t h r o u g h m a k i n g a c o n t r i b u t i o n t o t e c h n o l o g y . F u r t h e r m o r e , t h e m e r e d i s c o v e r y o f a d r u g w i l l n o t c u r e a n y o n e ; t i m e , e n e r g y a n d m o n e y m u s t a l s o b e d e d i c a t e d t o t h e t a s k o f d i s t r i b u t i o n a n d e d u c a t i o n . T h e C a n a d i a n R T P C w a s c o n v i n c e d t h a t t h e p a t e n t s y s t e m f a i l e d t o a c h i e v e t h i s a i m a n d t h e r e f o r e r e c o m m e n d e d t h e a b o l i t i o n -2b-o f p a t e n t s o n d r u g s . I t s h o u l d b e r e c a l l e d h o w e v e r t h a t t h e C a n a d i a n p h a r m a c e u t i c a l i n d u s t r y i s e n g a g e d p r i m a r i l y i n i m p o r t i n g t h e b a s i c c h e m i c a l i n g r e d i e n t s , t a b l e t i n g t h e m a n d p a c k a g i n g t h e m i n t h e i r f i n a l f o r m . V e r y l i t t l e i n n o v a t i v e r e s e a r c h i s c a r r i e d o u t i n C a n a d a i n a n y e v e n t . N e v e r t h e l e s s , t h e R T P C s a i d : -" T h e C o m m i s s i o n i n c l i n e s t o t h e v i e w t h a t t h e a b o l i t i o n o f p a t e n t s , w h i l e i t m a y p o s s i b l y h a v e s o m e e f f e c t u p o n f u t u r e r e s e a r c h d e v e l o p m e n t s , w o u l d n e i t h e r e l i m i n a t e t h e l i m i t e d a m o u n t o f r e s e a r c h c a r r i e d o n , n o r p r e v e n t f u r t h e r r e s e a r c h b e i n g u n d e r t a k e n i n t h e f u t u r e . " 2 1 T h e R T P C d i d n o t c o n f i n e i t s f i n d i n g s t o t h e C a n a d i a n I n d u s t r y . A f t e r l o o k i n g a t t h e i n t e r n a t i o n a l s c e n e t h e C o m m i s s i o n c o n c l u d e d t h a t p a t e n t s w e r e n o t t h e s i n e q u a n o n o f i n v e n t i o n i n t h i s a r e a . T h e R T P C p o i n t e d o u t t h a t t h e U . S . , w h i c h h a s a l w a y s e n j o y e d f u l l p r o d u c t p a t e n t p r o t e c t i o n , h a s o n l y c o m e t o t h e f o r e f r o n t i n t h i s f i e l d i n t h e l a s t t w e n t y y e a r s w h e r e a s m a n y E u r o p e a n c o u n t r i e s w h i c h g r a n t e d p r o c e s s p a t e n t s b u t n o t p r o d u c t p a t e n t s h a d a l o n g h i s t o r y o f n o t a b l e d e v e l o p m e n t s . I n d e e d t h e K e f a u v e r R e p o r t e v e n w e n t s o f a r a s t o s u g g e s t t h a t t h e v e r y e x i s t e n c e o f a p a t e n t s y s t e m d e t r a c t s f r o m i n n o v a t i v e r e s e a r c h b y e n c o u r a g i n g f i r m s i n s t e a d t o d e v o t e r e s o u r c e s - 2 7 -t o o b t a i n i n g p a t e n t a b l e d e r i v a t i v e s o f b a s i c d r u g s a l r e a d y 2 2 i n e x i s t e n c e . T o t h e e x t e n t t h a t t h e s a m e m a y b e s a i d o f o t h e r i n d u s t r i e s , t h i s i s a r e f l e c t i o n o n t h e p a t e n t s y s t e m p e r s e . H o w e v e r t h i s p a p e r i s c o n c e r n e d w i t h t h e p h a r m a c e u t i c a l i n d u s t r y w h e r e t h e c a s e a g a i n s t p a t e n t p r o t e c t i o n i s p a r t i c u l a r l y s t r o n g . K e f a u v e r f o u n d t h a t d r u g d i s c o v e r i e s i n c o u n t r i e s w i t h o u t p a t e n t p r o t e c t i o n o u t n u m b e r e d d i s c o v e r i e s i n c o u n t r i e s w i t h p r o t e c t i o n i n t h e o r d e r o f 1 0 : 1 a l t h o u g h p r i c e s w e r e c o n s i d e r a b l y h i g h e r i n c o u n t r i e s w i t h p a t e n t 2 3 p r o t e c t i o n . W h i l e t h e s e f i g u r e s a l o n e a r e n o t c o n c l u s i v e a n d m a y b e s u b j e c t t o a n u m b e r o f v a r i a b l e s t h e y l e n d s o m e s u p p o r t t o t h e v i e w t h a t h i g h p r i c e s g e n e r a t e d b y t h e p a t e n t s y s t e m a r e n o t j u s t i f i e d b y a c o r r e s p o n d i n g i n c r e a s e i n r e s e a r c h . T h e B a n k s C o m m i t t e e , w i t h o u t p r o v i d i n g d e t a i l e d e v i d e n c e i n s u p p o r t o f i t s c o n c l u s i o n s , f o u n d h o w e v e r t h a t t h e B r i t i s h P a t e n t S y s t e m d i d f o s t e r r e s e a r c h a n d i n n o v a t i o n i n t h e p h a r m a c e u t i c a l i n d u s t r y a s m u c h a s i n a n y o t h e r f i e l d a n d t h a t a n y d i m i n u t i o n i n p a t e n t p r o t e c t i o n w o u l d w o r k a g a i n s t t h e l o n g t e r m i n t e r e s t s o f t h e p u b l i c . T h e C o m m i t t e e c o n s i d e r e d t h a t t h e r e a s o n s f o r r e d u c i n g -28-p r o t e c t i o n i n C a n a d a d i d n o t a p p l y w i t h e q u a l f o r c e i n E n g l a n d w h e r e t h e r e w a s a w e l l e s t a b l i s h e d d r u g m a n u f a c t u r i n g i n d u s t r y w i t h a s u b s t a n t i a l B r i t i s h o w n e d c o m p o n e n t . 2 ^ T h e a n t i - p r o t e c t i o n l o b b y a r g u e s t h a t t h e u n i q u e p r o p e r t i e s o f d r u g s i n a l l e v i a t i n g s u f f e r i n g a n d p r e s e r v i n g l i f e j u s t i f y t h e a b o l i t i o n o f p a t e n t p r o t e c t i o n i n t h i s i n d u s t r y . O f c o u r s e , i f t h e p a t e n t s y s t e m i s a c h i e v i n g i t s e x p r e s s e d g o a l o f p r o m o t i n g i n v e s t m e n t i n t h e r e s e a r c h a n d d e v e l o p m e n t o f n e w d r u g s t h e u n i q u e n a t u r e o f t h e i n d u s t r y c o u l d b e a s t r o n g a r g u m e n t i n f a v o u r o f s t r e n g t h e n i n g p a t e n t p r o t e c t i o n . I f , a s t h e w r i t e r s u s p e c t s , t h e s y s t e m i s a c h i e v i n g i t s s u b s i d i a r y a i m o f r e w a r d i n g i n v e n t o r s a n d e n t r e p r e n e u r s w i t h o u t a c h i e v i n g i t s m a i n a i m o f p r o m o t i n g r e s e a r c h t h e s y s t e m i s o p e r a t i n g a g a i n s t t h e p u b l i c i n t e r e s t a n d s h o u l d b e a b o l i s h e d . A b o l i t i o n w o u l d b e a r a d i c a l m o v e a n d o n e i s i n s t i n c t i v e l y c a u t i o u s : " I f o n e d o e s n o t k n o w w h e t h e r a s y s t e m i s g o o d o r b a d , t h e s a f e s t p o l i c y c o n c l u s i o n i s t o m u d d l e t h r o u g h , e i t h e r w i t h i t , i f o n e h a s l o n g l i v e d w i t h i t , o r w i t h o u t i t i f o n e h a s l i v e d w i t h o u t i t . " 1 T : 25 -2y-The Banks Committee was possibly a l i t t l e overcautious, preferring to "muddle through" rather than propose a r a d i c a l change i n the law. The writer proposes ra d i c a l change but i s aware that the English l e g i s l a t u r e would have d i f f i c u l t y i n s t i t u t i n g such a change i n national patent laws without some support from her European partners. Indeed, one of the motivating forces behind the enactment of the 1977 Patent Act was the desire to bring English Patent Law into l i n e with the rest of the EEC. The present position i s that national laws are not yet u n i f i e d and no centralised procedure for the grant of patents currently e x i s t s . However, when the Community Patent Convention comes into force, an inventor or his assignee should be able to obtain patent protection i n a l l of the member states where he wishes to exploit his invention since p a t e n t a b i l i t y rules w i l l be the same p c. throughout Europe. The idea of a community patent i s that i t w i l l be unitary i n character, that i s , i t can be granted, transferred, revoked or allowed to lapse only i n respect of the whole of the Common Market t e r r i t o r i e s and w i l l be subject to the legal regime established by the Community Patent Convention i t s e l f . The s i t u a t i o n where a -By-product i s patented i n some member states and unpatented i n others w i l l become increasingly rare (although i t w i l l s t i l l be possible to seek separate national patents rather than a community patent). In the l i g h t of the Community Patent Convention, B r i t a i n would not be i n a position to deny patent protection to pharmaceutical products protected by a community patent. This p r a c t i c a l d i f f i c u l t y does not however affe c t the writer's opinion on the question of p r i n c i p l e . The main part of the present discussion focuses on the p a t e n t a b i l i t y of pharmaceuticals under the UK Patents Act yet the arguments apply with equal force to the entire EEC and i t i s therefore suggested that pharmaceuticals should also be excluded from the Community Patent Convention. 3. Limitation of Protection to Process only A less d r a s t i c proposal than t o t a l a b o l i t i o n i s the r e s t r i c t i o n of patent protection to processes of production. This used to be the position i n England as well as i n most European countries although the present trend i s i n favour of complete protection. -31-P r o c e s s p a t e n t s a r e a m u c h w e a k e r f o r m o f p r o t e c t i o n b e c a u s e o f t h e c o m p a r a t i v e e a s e w i t h w h i c h , b y a s l i g h t c h a n g e i n t h e p r o c e s s , t h e p a t e n t c a n b e a v o i d e d . T h e i d e a b e h i n d t h i s l i m i t a t i o n i s t h a t , i n s t e a d o f r e s t r i c t i n g a c c e s s t o l i f e s a v i n g d r u g s , i n v e n t o r s w i l l b e e n c o u r a g e d t o d e v e l o p c o n s t a n t l y b e t t e r a n d c h e a p e r m e t h o d s o f p r o d u c t i o n r e s u l t i n g i n l o w e r p r i c e s f o r t h e p r o d u c t s . T h i s w a s e x p l a i n e d i n t h e K e f a u v e r R e p o r t " T h e l i m i t a t i o n o f p r o t e c t i o n f o r c h e m i c a l p r o d u c t s i n g e n e r a l a n d p h a r m a c e u t i c a l p r o d u c t s i n p a r t i c u l a r t o p r o c e s s c l a i m s i s e s s e n t i a l l y a c o n t i n e n t a l E u r o p e a n c o n c e p t i o n a n d i t i s t i e d u p w i t h s o c i a l t h i n k i n g i n t h e 1 9 t h c e n t u r y d u r i n g t h e i n d u s t r i a l r e v o l u t i o n . I t b e c a m e a m a t t e r o f p r a c t i c a l l y u n a s s a i l a b l e d o g m a t h a t , i f t h e p u b l i c i s t o r e c e i v e t h e b e n e f i t o f n e w p h a r m a c e u t i c a l p r o d u c t s a t a r e a s o n a b l e p r i c e a n d i n a m o u n t s s u f f i c i e n t t o m e e t t h e d e m a n d , t h i s c o u l d o n l y b e a c c o m p l i s h e d b y r e s t r i c t i n g t h e i n v e n t o r t o h i s p r o c e s s s o t h a t o t h e r s w i l l b e e n c o u r a g e d t o i n v e n t n e w a n d i m p r o v e d p r o c e s s e s w h i c h w i l l m a k e t h e p r o d u c t c h e a p e r a n d a v a i l a b l e i n g r e a t e r q u a n t i t i e s . " 9 7 T h e r e p r e s e n t a t i v e o f C y a n a m i d o f C a n a d a s u b m i t t e d e v i d e n c e t o t h e R T P C c r i t i c i s i n g t h e r e s t r i c t i o n o f p a t e n t p r o t e c t i o n t o p r o c e s s e s o n l y e x p l a i n i n g t h a t t h e r e i s a n a l m o s t i n s u r m o u n t a b l e d i f f i c u l t y i n e s t a b l i s h i n g w h e t h e r o r 2 9 n o t t w o d r u g s h a v e b e e n m a d e b y t h e s a m e p r o c e s s . A r g u m e n t s f o r o r a g a i n s t t h i s r e s t r i c t i o n a r e s i m i l a r t o t h o s e s u r r o u n d i n g t h e q u e s t i o n o f w h e t h e r t o a l l o w p a t e n t p r o t e c t i o n a t a l l f o r p h a r m a c e u t i c a l s . I f t h e p a t e n t l a w a c h i e v e s i t s s t a t e d p u r p o s e o f p r o m o t i n g i n v e n t i o n a n d r e s e a r c h f u l l p r o t e c t i o n s h o u l d b e a f f o r d e d t o d r u g s . I f i t s e r v e s o n l y t o r e w a r d t h e i n v e n t o r w i t h o u t c o n t r i b u t i n g t o n e w d e v e l o p m e n t s i t s h o u l d b e a b o l i s h e d . T h e p r o p o s a l u n d e r c o n s i d e r a t i o n h e r e i s a h a l f w a y h o u s e s o l u t i o n . I t d o e s n o t r e s o l v e t h e i m p o r t a n t q u e s t i o n o f p r i n c i p l e , t h a t i s , w h e t h e r p a t e n t p r o t e c t i o n o p e r a t e s t o t h e b e n e f i t o r d e t r i m e n t o f s o c i e t y . A s t h e r e i s n o i n d i s p u t a b l e a n s w e r t o t h i s q u e s t i o n t h e p r o p o s a l t o l i m i t p r o t e c t i o n h a s s o m e m e r i t a s a n a t t e m p t t o o b t a i n t h e " b e s t o f b o t h w o r l d s " . I t i s a n a t t e m p t t o f o s t e r t h e a i m s o f t h e p a t e n t l a w b y p r o t e c t i n g a n d t h e r e b y e n c o u r a g i n g r e s e a r c h w h i l e a t t h e s a m e t i m e a v o i d i n g t h e d r a w b a c k s o f f u l l p r o t e c t i o n - m o n o p o l i e s o n t h e s a l e o f l i f e g i v i n g d r u g s a n d t h e c o r r e s p o n d i n g r i g h t t o c h a r g e h i g h p r i c e s f o r t h o s e d r u g s . I t m a y p r o v e e a s i e r t o s e c u r e a c c e p t a n c e o f t h i s c o m p r o m i s e . D u r i n g t h e y e a r s 1 9 1 9 - 4 9 p r o c e s s p r o t e c t i o n w a s t h e o n l y f o r m o f p r o t e c t i o n a v a i l a b l e i n B r i t i a n . W h e n t h e -3 J -Swan Committee recommended that the law be changed so that a l l chemical substances, including medicines, should be patentable the recommendation was subject to retention of the special compulsory licence procedure for food and 2 9 medicines. The Banks Committee however recommended retention of f u l l patent protection and the a b o l i t i o n of 3 0 compulsory licences. This was a strongly p r o t e c t i o n i s t measure. Considering the doubtfulness of the u t i l i t y of patents i n t h i s f i e l d , a compromise l i m i t i n g protection to processes would have been preferable. 4. Compulsory Licences It has been demonstrated that English law has moved d e c i s i v e l y i n the d i r e c t i o n of greater protection for pharmaceuticals. Not only does the 1977 Patent Act allow f u l l product protection, the special compulsory l i c e n s i n g procedures for food and medicine have been abolished. The compulsory licence i s a device employed i n many countries to l i m i t the exclusive rig h t s of a patentee. The usual grounds j u s t i f y i n g the grant of such a licence arise i n situations where the patentee i s abusing his patent, for example, by non-use where t h i s i s detrimental i n some way to the interests of the public. In -3*-s o m e c o u n t r i e s c o m p u l s o r y l i c e n c e p r o v i s i o n s a r e c o n t a i n e d i n p a t e n t l e g i s l a t i o n ; i n o t h e r s t h e y a r e f o u n d i n a n t i - m o n o p o l y l e g i s l a t i o n ; s o m e t i m e s t h e y a r e f o u n d i n b o t h . I n a d d i t i o n t o s i t u a t i o n s o f a b u s e , m a n y c o u n t r i e s a l s o p r o v i d e f o r c o m p u l s o r y l i c e n c e s i n c a s e s w h e r e n a t i o n a l d e f e n c e , p u b l i c h e a l t h a n d o t h e r p u b l i c p u r p o s e s a r e i n q u e s t i o n . I n E n g l a n d , t h e c o n c e p t o f s p e c i a l c o m p u l s o r y l i c e n c e p r o v i s i o n s f o r f o o d a n d m e d i c i n e s w a s i n t r o d u c e d i n t h e P a t e n t s a n d D e s i g n s A c t 1 9 1 9 . I n 1 9 4 7 t h e S w a n C o m m i t t e e r e c o m m e n d e d t h e r e t e n t i o n o f t h e s e p r o v i s i o n s a n d t h e y w e r e c o n s e q u e n t l y i n c o r p o r a t e d i n t o s . 4 1 o f t h e 1 9 4 9 P a t e n t s A c t . T h e s e c t i o n w a s c o n c e r n e d w i t h 1 . s u b s t a n c e s c a p a b l e o f b e i n g u s e d a s f o o d o r m e d i c i n e s 2 . p r o c e s s e s f o r p r o d u c i n g s u c h s u b s t a n c e s 3 . i n v e n t i o n s c a p a b l e o f b e i n g u s e d a s , o r a s p a r t o f , a s u r g i c a l o r c u r a t i v e d e v i c e . T h e C o m p t r o l l e r w a s o b l i g e d t o g r a n t a l i c e n c e u n d e r t h e s e p o w e r s o n t h e a p p l i c a t i o n o f a p e r s o n i n t e r e s t e d u n l e s s i t a p p e a r e d t o h i m t h a t t h e r e w e r e " g o o d reasons" for refusing the application. It was s u f f i c i e n t to e s t a b l i s h i n t e r e s t that the applicant intended to operate the licence and there were reasonable grounds for supposing that he would. "Good reasons" f o r refusing a licence had to be compelling reasons and not matters subject to compensation by adjustment of royalty. This section has been omitted from the 1977 Act on the recommendation of the Banks Committee which considered that "the benefit which might accrue to the public through the l i c e n s i n g of an alternative supplier did not outweigh the discouragement to research inherent i n a system which may deprive a successful researcher of a part of his expected return to the benefit of a manufacturer who may never have undertaken research of any k i n d . " ^ The Banks Committee did not present any evidence to prove that compulsory licences were a disincentive to research. There i s no doubt however that the section was most unpopular with the pharmaceutical industry which mounted a powerful lobbying campaign while the 1977 B i l l was i n Parliament. This resulted i n the section being repealed on the date of the Royal Assent making i t the only -36-part of the 1949 Patent Act to be repealed with immediate e f f e c t . One of the j u s t i f i c a t i o n s for the repeal was that the section was r a r e l y used. During the eighteen years from 1950-1967 i n c l u s i v e only nine licences were 33 granted. The Banks Committee took t h i s s t a t i s t i c as proof of the fact that section 41 had not worked i n the way i n which i t was intended. If t h i s was true one wonders why the Committee did not examine ways of making the section more e f f e c t i v e instead of recommending i t s t o t a l a b o l i t i o n . In any event, the evidence indicates that, while the section was r e l a t i v e l y unused i n the early years, during the years immediately p r i o r to the report and following the report there was a considerable increase i n 34 the number of licence applications. A l l applications under the section were vigorously contested but r a r e l y refused although some were withdrawn and some licences were 3 5 never worked. The Sainsbury Committee, when r e f e r r i n g the question of compulsory licences to the Banks Committee, had commented that i t was a section which "so f a r has been l i t t l e used" and that there appeared to be a "great reluctance on the part of most business firms to apply for 3 fi compulsory licences". The Banks Committee appears to - 3 / -h a v e a c c e p t e d t h e s e f i n d i n g s w i t h o u t c o n d u c t i n g i t s o w n i n v e s t i g a t i o n t o s e e w h e t h e r t h e n u m b e r o f a p p l i c a t i o n s h a d i n c r e a s e d s i n c e t h e S a i n s b u r y R e p o r t . 37 E v i d e n c e a d d u c e d b e f o r e t h e C a n a d i a n R T P C s u g g e s t e d t h a t t h e v e r y e x i s t e n c e o f c o m p u l s o r y l i c e n c e s l e d t o v o l u n t a r y l i c e n s i n g w h i c h w o u l d n o t o t h e r w i s e t a k e p l a c e . U n f o r t u n a t e l y , a s t h e r e i s n o r e q u i r e m e n t t o r e g i s t e r v o l u n t a r y l i c e n c e s a t t h e P a t e n t O f f i c e , n o p r e c i s e f i g u r e s a r e a v a i l a b l e t o v e r i f y t h i s h i g h l y p l a u s i b l e v i e w . K a f a u v e r r e c o m m e n d e d t h e i n s t i t u t i o n o f c o m p u l s o r y l i c e n c e p r o v i s i o n s i n t h e B i l l w h i c h e m b o d i e d t h e r e s u l t s 3 8 o f h i s s u b c o m m i t t e e ' s e n q u i r y b u t t h e A m e r i c a n P h a r m a c e u t i c a l A s s o c i a t i o n l e d a s t r o n g c a m p a i g n r e p r e s e n t i n g t h i s p r o p o s a l a s a n a t t a c k o n t h e p a t e n t s y s t e m i n g e n e r a l ( w h i c h a r g u a b l y i t w a s ) . M u c h p o w e r f u l l o b b y i n g b y A m e r i c a n i n d u s t r y r e s u l t e d i n t h e d e l e t i o n o f t h i s p r o v i s i o n . S i m i l a r l o b b y i n g i n E n g l a n d l e d t o t h e a b o l i t i o n o f c o m p u l s o r y l i c e n s i n g f o r f o o d a n d m e d i c i n e s i n t h e 1 9 7 7 P a t e n t A c t , a n u n f o r t u n a t e d e v e l o p m e n t i n E n g l i s h p a t e n t l a w . -38-T h e S a i n s b u r y C o m m i t t e e m a d e a t e n t a t i v e s u g g e s t i o n t h a t a s h o r t e r p e r i o d f o r t h e p a t e n t f o l l o w e d b y a r i g h t t o r e c e i v e r o y a l t i e s u n d e r l i c e n c e o f r i g h t m i g h t p r o v i d e a d e q u a t e p r o t e c t i o n w h i l e a t t h e s a m e t i m e r e d u c i n g t h e d e g r e e o f m o n o p o l y i n m a r k e t i n g . T h e B a n k s C o m m i t t e e d i d n o t e v e n c o n s i d e r t h e a d v a n t a g e s o f p r o v i d i n g f o r l i c e n c e s o f r i g h t w h i c h w o u l d s u r e l y h a v e b e e n p r e f e r a b l e t o t o t a l a b o l i t i o n . T h e C a n a d i a n R T P C a p p r o v e d i n p r i n c i p l e o f l i c e n c e s o f r i g h t b u t f e l t t h a t t h e e f f e c t s w o u l d b e m e r e l y p a l l i a t i v e a n d n o t t r u l y r e m e d i a l . T h e o n l y t r u e r e m e d y i n t h e i r e y e s w a s t o r e m o v e p a t e n t c o n t r o l f r o m d r u g s . O n e o f t h e r e a s o n s f o r t h e u n d e r u t i l i z a t i o n o f S . 4 1 h a s u n d o u b t e d l y b e e n t h e n e e d f o r t h e C o m p t r o l l e r o f P a t e n t s t o i n v e s t i g a t e w h e t h e r t h e r e e x i s t e d " g o o d r e a s o n s f o r r e f u s i n g t h e a p p l i c a t i o n " . A s m o s t a p p l i c a t i o n s h a v e b e e n s t r o n g l y o p p o s e d d e l a y s o f s e v e r a l y e a r s h a v e f r e q u e n t l y a r i s e n . T h e i n t r o d u c t i o n o f l i c e n c e s o f r i g h t w o u l d e l i m i n a t e t h e n e e d t o e x a m i n e t h i s q u e s t i o n a n d l i c e n c e s w o u l d b e o b t a i n e d r e l a t i v e l y q u i c k l y , t h e o n l y q u e s t i o n b e i n g t h e a m o u n t o f r o y a l t y p a y a b l e . T h e B a n k s -ay-C o m m i t t e e h o w e v e r d i d n o t e v e n c o n s i d e r t h e d e s i r a b i l i t y o f l i c e n c e s o f r i g h t . C o m p u l s o r y l i c e n c e s t o m a n u f a c t u r e p h a r m a c e u t i c a l s m a y s t i l l b e o b t a i n e d i f t h e a p p l i c a n t s h o w s t h a t t h e p a t e n t e e s a c t i o n s f a l l w i t h i n t h e " a b u s e " p r o v i s i o n s o f t h e 3 9 1 9 7 7 P a t e n t A c t , t h a t i s ; i f t h e i n v e n t i o n i s n o t b e i n g w o r k e d t o t h e f u l l e s t e x t e n t i n t h e U K . , i f U K d e m a n d i s n o t b e i n g m e t o n r e a s o n a b l e t e r m s o r i s b e i n g m e t t o a s u b s t a n t i a l e x t e n t b y i m p o r t a t i o n , o r i f r e f u s a l o f l i c e n c e s p r e v e n t s a n e x p o r t m a r k e t f r o m b e i n g s u p p l i e d b y U K p r o d u c t s . T h e s e p r o v i s i o n s a r e r e a s o n a b l e a n d , i n t h e w r i t e r ' s o p i n i o n , o p e r a t e i n t h e p u b l i c i n t e r e s t . E u r o p e a n c o m m e n t a t o r s h o w e v e r h a v e s u g g e s t e d t h a t t h e p r o v i s i o n s o f S . 4 8 c o n s t i t u t e a " d i s g u i s e d r e s t r i c t i o n o n t r a d e " a n d w i l l t h e r e f o r e b e u n e n f o r c e a b l e i n a n E E C c o n t e x t a s v i o l a t i o n s 40 o f A r t . 3 0 o f t h e T r e a t y o f R o m e . T h e E u r o p e a n C o u r t o f J u s t i c e h a s n o t y e t b e e n c a l l e d u p o n t o d e c i d e t h i s i s s u e a n d t h e a u t h o r s o f t h e C o m m u n i t y P a t e n t C o n v e n t i o n h a v e n o t a g r e e d t o a u n i f i e d c o n c e p t i o n r e g a r d i n g t h e e f f e c t o f c o m m u n i t y p a t e n t s . A t l e a s t d u r i n g a n i n i t i a l p e r i o d , t h e y w i l l b e s u b j e c t t o c o m p u l s o r y l i c e n s i n g u n d e r t h e l a w s o f t h e c o n t r a c t i n g s t a t e s . T o t h i s e x t e n t t h e r e f o r e c o m m u n i t y p a t e n t s w i l l n o t h a v e a u n i f o r m e f f e c t t h r o u g h o u t t h e E E C . -4U-5. Crown Use The pharmaceutical i n d u s t r y d i d not have t h i n g s a l l i t s own way i n the 1977 Patent Act. The Crown Use p r o v i s i o n s embodied i n S.46 of the 1949 Act were r e t a i n e d i n the new a c t . The grant of a patent was o r i g i n a l l y a Royal Grant i s s u e d under the p r e r o g a t i v e powers of the sovereign and f o r t h i s reason f o r the common law d i d not regard the monopoly c r e a t e d by a patent as a p p l y i n g to the Crown. When, i n the l a t e n i n e t e e n t h century, the a d m i n i s t r a t i o n of patents was p l a c e d on a more o f f i c i a l b a s i s , Parliament p r o v i d e d t h a t the owner of a patent was to have the same r i g h t s a g a i n s t the Crown as a g a i n s t any other person save f o r c e r t a i n p r i v i l e g e s which were reserved f o r the b e n e f i t of the Crown. Government departments were e n t i t l e d t o use or a u t h o r i s e o t h e r s t o use c e r t a i n patented i n v e n t i o n s " f o r the s e r v i c e s of the Crown". I t was not intended, of course, t h a t m i n i s t e r i a l departments should be able t o compete commercially with the patent owner but o n l y t h a t they should be able t o perform t h e i r d u t i e s i n the p u b l i c i n t e r e s t unimpeded by patent -41-r i g h t s . The i n c l u s i o n of Crown Use provisions i n the 1949 Patent Act highlighted a v i t a l d i s t i n c t i o n between the B r i t i s h Health Service and those of Canada and the US; the existence of a National Health Service. The establishment of the NHS has meant that the cost of p r e s c r i p t i o n drugs i s no longer the concern of the patient but has become the r e s p o n s i b i l i t y of the Department of Health. As the Sainsbury Committee said: "Medicines are developed, manufactured and supplied by the pharmaceutical industry. They are prescribed by doctors, they are consumed by patients and, through the National Health Service, the taxpayer eventually pays for them. But neither the doctor who prescribes nor the patient who consumes i s immediately concerned with p r i c e s . " 4 1 Thus the state bears the r e s p o n s i b i l i t y for obtaining drugs at the lowest possible prices. On 17th May 1961, Enoch Powell, then Minister of Health, announced to the House of Commons that the Government intended to invoke S.46 of the Patents Act 194 9 to obtain for the hospital service supplies of certain widely used drugs. S.46(l) of the 1949 Act reads as follows:-- 4 2 -" 4 6 ( 1 ) n o t w i t h s t a n d i n g a n y t h i n g i n t h i s A c t , a n y g o v e r n m e n t d e p a r t m e n t , a n d a n y p e r s o n a u t h o r i s e d i n w r i t i n g b y a g o v e r n m e n t d e p a r t m e n t m a y m a k e u s e a n d e x e r c i s e a n y p a t e n t e d i n v e n t i o n f o r t h e s e r v i c e s o f t h e C r o w n . " T h e d e c i s i o n t o u s e t h i s s e c t i o n t o a u t h o r i s e t h e p r o c u r e m e n t o f d r u g s f o r t h e h o s p i t a l s e r v i c e w a s a s e v e r e b l o w t o t h e p h a r m a c e u t i c a l i n d u s t r y i n G r e a t B r i t a i n . T h e d e c i s i o n i l l u s t r a t e s t h e l i m i t e d e x t e n t t o w h i c h t h e p h a r m a c e u t i c a l i n d u s t r y w a s a c k n o w l e d g e d t o b e a s p e c i a l c a s e , t h a t i s , n o t s u b j e c t t o t h e c o n s t r a i n t s o f a n o r m a l s u p p l i e r / c u s t o m e r r e l a t i o n s h i p . I n a s p e e c h t o t h e A B P I o n 2 6 t h A p r i l , 1 9 6 1 , M r P o w e l l a n n o u n c e d " I t i s n o t p o s s i b l e t o r e p r o d u c e p e r f e c t l y t h e c o n d i t i o n s o f a n o r m a l s u p p l i e r / c u s t o m e r r e l a t i o n s h i p i n t h e c i r c u m s t a n c e s c r e a t e d b y t h e N H S . H o w e v e r , t h a t i s n o r e a s o n f o r n o t d o i n g o u r b e s t t o g e t a s c l o s e t o n o r m a l c o n d i t i o n s a s p o s s i b l e . " „ M r P o w e l l i n v o k e d S . 4 6 a s p a r t o f h i s a t t e m p t t o o b t a i n d r u g s f o r t h e N H S o n t e r m s o n w h i c h t h e y w o u l d b e a v a i l a b l e i n t h e c o n d i t i o n s o f a f r e e a n d o p e n m a r k e t . T h e A B P I r e a c t i o n w a s p r e d i c t a b l e . I t c o n d e m n e d u s e o f S . 4 6 o n t h e g r o u n d s t h a t i t w o u l d r e d u c e p r i c e s t o -43-such an extent as to make p r o h i b i t i v e the maintenance of re s e a r c h and development. S.46 p r o v i d e s f o r compensation t o be assessed on a "reasonable r o y a l t y " b a s i s , v i z . , at whatever r a t e would be reasonable between a w i l l i n g patentee and a w i l l i n g l i c e n s e e . Such compensation would r a r e l y equal the p r o f i t s t o be enjoyed by a manufacturer as the e x c l u s i v e producer of a much needed drug. The l e g a l i t y of t h i s use of S.46 was t e s t e d before 43 the c o u r t s i n P f i z e r v M i n i s t e r o f Health. As the Crown Use p r o v i s i o n s have been maintained i n the 1977 Patents Act, the P f i z e r case i s s t i l l good law. There were three main i s s u e s before the House of Lords. The p l a i n t i f f s contended (1) t h a t the s a l e of drugs t o p a t i e n t s i n NHS h o s p i t a l s was not a use of an i n v e n t i o n f o r " s e r v i c e s of the Crown"; (2) t h a t the supply of drugs a g a i n s t a 2 s h i l l i n g p r e s c r i p t i o n charge was a " s a l e " which cou l d not be a u t h o r i s e d by the M i n i s t e r ; and (3) im p o r t a t i o n o f the drug i n t o England was not an a c t which cou l d be a u t h o r i s e d by the M i n i s t e r under S.46 as i t needed -44-n o a u t h o r i s a t i o n , a n d t h e r e f o r e i n f r i n g e m e n t o c c u r r r e d w h e n t h e i m p o r t e d d r u g s w e r e s o l d t o t h e p u b l i c , s o m e t h i n g w h i c h t h e M i n i s t e r c o u l d n o t a u t h o r i s e . O n t h e f i r s t p o i n t , t h e H o u s e o f L o r d s f o u n d b y a m a j o r i t y o f 3 : 2 t h a t t h e u s e o f p a t e n t e d d r u g s f o r b o t h i n a n d o u t p a t i e n t s o f N H S h o s p i t a l s w a s a u s e o f t h e i n v e n t i o n f o r " s e r v i c e s o f t h e C r o w n " . I t r e j e c t e d a n a r g u m e n t t h a t t h e r e w a s a n y d i s t i n c t i o n b e t w e e n s e r v i c e s o f t h e C r o w n i n t h e s e n s e o f s e r v i c e s r e l a t e d t o t h e f u n c t i o n s o f g o v e r n m e n t a s s u c h a n d s e r v i c e s o f t h e C r o w n i n t h e s e n s e o f t h e p r o v i s i o n o f f a c i l i t i e s c o m m e n d e d a n d d e f i n e d b y A c t o f P a r l i a m e n t f o r t h e g e n e r a l p u b l i c b e n e f i t . O n t h e s e c o n d p o i n t , t h e H o u s e o f L o r d s w a s u n a n i m o u s i n h o l d i n g t h a t t h e s u p p l y o f d r u g s o n p a y m e n t o f a s t a t u t o r y p r e s c r i p t i o n c h a r g e w a s n o t a s a l e . T h e r e i s n o e l e m e n t o f c o n s e n s u a l b a r g a i n i n g . T h e p a t i e n t h a s a s t a t u t o r y r i g h t t o d e m a n d t h e d r u g o n p a y m e n t o f t h e p r e s c r i p t i o n f e e a n d t h e h o s p i t a l o r d i s p e n s i n g c h e m i s t h a s a s t a t u t o r y o b l i g a t i o n t o s u p p l y i t o n s u c h p a y m e n t . T h e f e e c e r t a i n l y d o e s n o t r e p r e s e n t t h e p r i c e o f t h e d r u g . - 4 5 -On t h e t h i r d p o i n t , i m p o r t a t i o n was h e l d t o be a u s e o f t h e i n v e n t i o n w h i c h c o u l d be a u t h o r i s e d b y t h e M i n i s t e r u n d e r S . 4 6 . P f i z e r was t h e r e f o r e u n s u c c e s s f u l o n a l l t h r e e i s s u e s . The c a s e r e c o g n i s e d , t o a l i m i t e d e x t e n t , t h e s p e c i a l p o s i t i o n o f t h e p h a r m a c e u t i c a l i n d u s t r y . T h i s s p e c i a l p o s i t i o n a r i s e s o n l y b e c a u s e t h e NHS comes w i t h i n t h e d e f i n i t i o n o f " s e r v i c e s o f t h e C r o w n " . Were i t n o t f o r t h e NHS t h e p h a r m a c e u t i c a l c o m p a n i e s w o u l d be i n a n u n a s s a i l a b l e p o s i t i o n . H o w e v e r , t h e i n d u s r y h a s r e a s o n t o be g r a t e f u l f o r t h e i n c l u s i o n o f t h e NHS i n t h e C r o w n Use p r o v i s i o n s . W i t h o u t t h e d i s c r e t i o n a r y c h e c k o n m o n o p o l y p o w e r , s u p p o s e d l y e x e r c i s e d b y t h e D e p a r t m e n t o f H e a l t h , i t i s u n l i k e l y t h a t t h e B a n k s C o m m i t t e e w o u y l d h a v e r e c o m m e n d e d t h e a b o l i t i o n o f t h e c o m p u l s o r y l i c e n s i n g p r o v i s i o n s . P r i v a t e f i r m s h a v e shown t h e m s e l v e s more w i l l i n g t h a n t h e g o v e r n m e n t t o i n t r u d e o n t h e p a t e n t e e s m o n o p o l y b u t t h o s e f i r m s a r e no l o n g e r a b l e t o a p p l y f o r c o m p u l s o r y l i c e n c e s . I f t h e D e p a r t m e n t o f H e a l t h c o n t i n u e s i t s r e l u c t a n c e t o e m p l o y t h e C r o w n U s e p r o v i s i o n s t h e d r u g c o m p a n i e s w i l l c o n t i n u e t o e n j o y a m o n o p o l y o f p r o d u c t i o n f o r a t l e a s t - 4 6 -t w e n t y y e a r s . When t h e P f i z e r c a s e was f i r s t d e c i d e d i t l o o k e d l i k e a m a j o r i n c u r s i o n i n t o t h e r i g h t s o f p h a r m a c e u t i c a l f i r m s . L o r d W i l b e r f o r c e s a i d i n a s t r o n g d i s s e n t i n g j u d g m e n t : -" M y L o r d s , s u c h a d e f i n i t i o n o f t h e p o w e r s o f t h e C r o w n t o u s e o r a u t h o r i s e t h e u s e o f p a t e n t e d i n v e n t i o n s seems t o me t o be a l a r m i n g l y w i d e a n d t o make a f o r m i d a b l e i n c u r s i o n i n t o t h e s u p p o s e d l y v a l u a b l e m o n o p o l y r i g h t w h i c h t h e C r o w n h a s g r a n t e d t o t h e p a t e n t e e . . . a n e n o r m o u s b r e a c h i s made i n t h e r i g h t s o f p r o p r i e t o r s o f p a t e n t s o n d r u g s . " 4 4 T h e " e n o r m o u s b r e a c h " d i d n o t i n f a c t r e d u c e p a t e n t p r o t e c t i o n i n t h e p h a r m a c e u t i c a l i n d u s t r y t o a n y a p p r e c i a b l e e x t e n t . D e s p i t e i t s s u c c e s s , t h e D e p a r t m e n t o f H e a l t h made l i t t l e u s e o f S . 4 6 s e e m i n g c o n t e n t t o r e l y u p o n p r i v a t e e n t e r p r i s e t o i n v o k e t h e c o m p u l s o r y l i c e n s i n g p r o v i s i o n o f S . 4 1 . F u r t h e r m o r e t h e " b r e a c h " was n o t a s g r e a t a s i t m i g h t h a v e b e e n a t t h a t t i m e b e c a u s e t h e P f i z e r c a s e e s t a b l i s h e d t h a t o n l y t h e h o s p i t a l s e r v i c e s o f t h e NHS w e r e s e r v i c e s o f t h e C r o w n . G e n e r a l m e d i c a l and p h a r m a c e u t i c a l s e r v i c e s o f t h e NHS w e r e n o t w i t h i n t h e d e f i n i t i o n . T h i s was c l e a r l y a n o m o l o u s and t h e S a i n s b u r y C o m m i t t e e -47-recommended therefore that the NHS Acts be amended to bring the whole service within the scope of the d e f i n i t i o n . Consequently, S.59 of the Health Services and Public Health Act provided that a government department or person authorised by a government department may "make, use, exercise and vend" an invention for the production and supply of drugs and medicines "required for the provision of pharmaceutical services, general medical services or general dental services." It should be noted that t h i s provision, unlike S. 46, includes a s p e c i f i c power to "vend". This caused consternation among ABPI who voiced strong c r i t c i s m of t h i s further "discrimination" against the pharmaceutical industry. "The e f f e c t i s to make the pharmaceutical industry the only private sector industry which, i n times of peace, has to suffer i t s inventions being l a i d open to the power actually to s e l l patented goods to the wholesaler, r e t a i l e r s and consumers being given to both government and by the government to t h i r d parties.".!--48-T h e B a n k s C o m m i t t e e , h o w e v e r , f a v o u r e d t h i s l i m i t e d f o r m o f d i s c r i m i n a t i o n a g a i n s t t h e p h a r m a c e u t i c a l i n d u s t r y . T h e C o m m i t t e e a d m i t t e d t h a t p r i c e s w e r e d i s q u i e t i n g l y h i g h b u t , r a t h e r t h a n r e m e d y i n g t h e s i t u a t i o n t h r o u g h s t r o n g e r f o r m s o f s t a t u t o r y d i s c r i m i n a t i o n , t h e C o m m i t t e e p r e f e r r e d t o l e a v e t h e q u e s t i o n t o t h e d i s c r e t i o n o f t h e D e p a r t m e n t o f H e a l t h b y r e t a i n i n g t h e C r o w n U s e p r o v i s i o n s . " W e a r e c e r t a i n t h a t i f t h e D e p a r t m e n t o f H e a l t h i s o f t h e o p i n i o n t h a t a d r u g p a t e n t e e ' s p r i c e s a r e t o o h i g h , t a k i n g a l l f a c t o r s i n t o a c c o u n t , i t i s i n t h e p u b l i c i n t e r e s t t h a t a f i n a l s a n c t i o n s h o u l d b e a v a i l a b l e t o t h e D e p a r t m e n t w h e r e b y s u p p l i e s o f t h e d r u g c a n b e o b t a i n e d a t c o m p e t i t i v e p r i c e s . H o w e v e r , w e f i r m l y b e l i e v e t h a t t h i s r e s u l t s h o u l d b e s o u g h t o n a s e l e c t i v e b a s i s r a t h e r t h a n w e a k e n p a t e n t p r o t e c t i o n f o r d r u g s o v e r a l l . " T h e s t a t e m e n t a c k n o w l e d g e s t h e e x i s t e n c e o f a p r o b l e m b u t p r o p o s e s n o e f f e c t i v e m e a s u r e t o c o m b a t i t . T h e C r o w n U s e p r o v i s i o n s h a d b e e n e n a c t e d i n t h e P a t e n t A c t 1 9 4 9 . D u r i n g t h e y e a r s b e t w e e n t h e e n a c t m e n t o f t h a t s t a t u t e a n d t h e p u b l i c a t i o n o f t h e B a n k s R e p o r t , i n 1 9 7 0 , t h e D e p a r t m e n t o f H e a l t h h a d u s e d t h o s e p r o v i s i o n s o n l y o n c e - i n t h e P f i z e r c a s e i n 1 9 6 5 . I t m u s t s u r e l y h a v e b e e n a p p a r e n t t o t h e B a n k s C o m m i t t e e t h a t p a t e n t s w e r e - 4 9 -being abused and that S.46 was not proving to be an e f f e c t i v e sanction. ABPI made representations to the Banks Committee opposing the continuance of Crown Use provisions and suggested that i f they were to be retained at a l l the exercise by the Crown of i t s powers should not be lawful u n t i l the patentee had been given an opportunity to argue before an independent tribunal that the proposed exercise was not, on balance, i n the public i n t e r e s t . The Banks Committee, while expressing some sympathy for the patentee who, aggrieved by p a r t i a l loss of his patent r i g h t s , wished to question the authority depriving him of those r i g h t s , rejected t h i s proposal - i n the writer's opinion r i g h t l y . The procedure would involve both parties i n expense and would introduce lengthy delays i n the employment of Crown Use provisions. The Committee also pointed out that the pharmaceutical industry enjoys a measure of protection against the abuse of Crown Use powers by the terms of S.59 of the Health Services and Public Health Act 196 8. The powers are exercisable by Statutory Instrument only which i s subject to annulment by resolution of either House of Parliament. - 5 U -Crown Use provisions are contained i n S.55 of the new Act and include power to s e l l as well as use the 4 7 drug. Use i s not limited to hospital services of the NHS but extends to drugs which are required for pharmaceutical, general medical or dental services. It i s fortunate that Parliament acted on the recommendation of the Banks Committee and retained the Crown Use provisions. In view of t h e i r decision to allow f u l l patent protection for pharmaceuticals and to abolish compulsory licence provisions for food and medicines i t would have been a serious step i f t h i s l a s t b a r r i e r against t o t a l monopoly had been removed. Unfortunately t h i s power i s l i k e l y to be used sparingly p a r t i c u l a r l y i n the l i g h t of B r i t a i n ' s entry into the EEC. Crown Use provisions are viewed c r i t i c a l l y by other EEC countries which do not allow t h e i r governments so wide-ranging a weapon. One can only hope that the mere existence of S.55 w i l l be s u f f i c i e n t to deter firms from unreasonably ex p l o i t i n g patents. -51-NOTES TO CHAPTER I I See a l s o T e r r e l l on the Law of Patents, London, Sweet & Maxwell (12th ed.) 1971 at p.3; Fox, The Canadian Law and P r a c t i c e r e l a t i n g t o L e t t e r s Patent f o r I n v e n t i o n s , Toronto, The C a r s w e l l Co L t d (4th ed.) 1969 at p.3-4. S t a t u t e of Monopolies 1623 (21 Jac. 1, C.3). For a general d i s c u s s i o n of the nature and e f f e c t s of patents and t h e i r economic consequences see Edmund W. K i t c h , The Nature and F u n c t i o n of the Patent System, 20 Jo u r n a l of Law and Economics 265 (1977); Donald G. McFetridge and Douglas A. Smith, Patents, Prospects and Economic S u r p l u s : A Comment, 23 J o u r n a l of Law and Economics 197 (1980); Edmund W. K i t c h , Patents, Prospects and Economic S u r p l u s : A Reply, 23 J o u r n a l of Law and Economics 205 (1980). : F r i t z Machlup, Study 15 prepared f o r the O'Mahoney Sub-Committee of the Committee on the J u d i c i a r y , U.S. Senate p.79-80 (1961). 'Kefauver Report at p. 105. 'The Green Book - M a t e r i a l c o l l e c t e d f o r submission t o the R e s t r i c t i v e Trade P r a c t i c e s Commission i n the course of an I n q u i r y under S e c t i o n 4 2 Combines I n v e s t i g a t i o n Act r e l a t i n g to the Manufacture, D i s t r i b u t i o n and Sa l e of Drugs. Department of J u s t i c e , Ottawa 1961. r Departmental Committee on the Patents & Designs Act under the chairmanship of S i r Kenneth Swan Q.C. The Committee made th r e e r e p o r t s : f i r s t I n t e r i m Report p u b l i s h e d i n 1945 Cmd 6618; second I n t e r i m Report p u b l i s h e d i n 1946 Cmd 6 789; F i n a l Report p u b l i s h e d i n 1947 Cmd 7206. 'patents Act 1949, S.41. ' R e s t r i c t i v e Trade P r a c t i c e s Report concerning the Manufacture, D i s t r i b u t i o n and Sale of Drugs, Ottawa 1963 (RTCP Rep o r t ) . i b i d at p.516. -51-C o m m i t t e e o f E n q u i r y i n t o t h e R e l a t i o n s h i p o f t h e P h a r m a c e u t i c a l I n d u s t r y w i t h t h e N a t i o n a l H e a l t h S e r v i c e 1 9 6 5 - 7 H M S O C m n d 3 4 1 0 ( S a i n s b u r y R e p o r t ) . 1 2 i b i d a t p . 4 6 . 1 3 B a n k s R e p o r t a t p . 1 1 5 , p a r a 4 0 2 . 1 4 O n t h e h a r m o n i z a t i o n o f i n d u s t r i a l p r o p e r t y l a w s w i t h i n E u r o p e , s e e g e n e r a l l y C h a p t e r V I . W h e n t h e C o m m u n i t y P a t e n t C o n v e n t i o n c o m e s i n t o e f f e c t , a n a p p l i c a t i o n f o r a E u r o p a t e n t w h i c h d e s i g n a t e s a n y E . E . C . c o u n t r y w i l l l e a d t o t h e g r a n t o f a c o m m u n i t y p a t e n t v a l i d i n a l l c o m m o n m a r k e t c o u n t r i e s . 1 5 B a n k s R e p o r t a t p . 1 1 7 . 1 6 K e f a u v e r R e p o r t a t p . 2 5 . C a n a d i a n R T P C R e p o r t a t p . 3 7 1 . 1 7 S e e C h a p t e r I n . 1 3 . 1 8 K e f a u v e r R e p o r t a t p . 1 0 7 . 1 9 P a t e n t A c t 1 9 7 7 , s . l 4 ( 3 ) . 2 0 . , . , i b i d . 2 1 C a n a d i a n R T P C R e p o r t a t p . 5 2 1 . 2 2 K e f a u v e r R e p o r t a t p . 1 1 5 . 2 3 K e f a u v e r R e p o r t a t p . 1 3 1 . 2 4 B a n k s R e p o r t a t p . 1 1 6 . E v i d e n c e p r e p a r e d f o r s u p r a n . 4 a t p . 7 9 - 8 0 , F o r d e t a i l e d d i s c u s s i c C o n v e n t i o n , s e e g e n e r a l l y C h a p t e r V I . 2 S E v i d e n c e p r e p a r e d f o r U . S . S e n a t e b y F r i t z M a c h l u p F o r d e t a i l e d d i s c u s s i o n o f t h e C o m m u n i t y P a t e n t 2 7 K e f a u v e r R e p o r t a t p . 1 0 6 . 2 8 C a n a d i a n R T P C R e p o r t a t p . 1 0 0 . 2 9 P a t e n t A c t 1 9 4 9 , s . 4 1 . -53-30 Banks Report at p.119. 3 1 P a t e n t Act 1949, s . 4 1 ( l ) . 3 2 B a n k s Report at p.118-119. 33 Banks Report, i n Chapter 14. 3 4 J . R . Geigy S.A.'s Patent [1964] R.P.C. 391 (P.A.T.), Hoffman-La Roche A.G.'s Patents [1969] R.P.C. 504 (P.A.T.), [1971] R.P.C. 311 (P.A.T.) [1973] R.P.C. 130 (Q.B.). These three d e c i s i o n s r e l a t e t o the same a p p l i c a t i o n f o r a compulsory l i c e n c e concerning the drug "Librium", Hoffman-La Roche A.G.'s Patents and Berk  Pharmaceuticals L t d 1 s A p p l i c a t i o n f o r a Compulsory  L i c e n c e [1973] R.P.C. 587 (P.A.T.); Hoffman-La Roche &  Co. A.G.'s Patents [1973] R.P.C. 601 (P.A.T.) a p p l i c a t i o n f o r a compulsory l i c e n c e to produce the drug Valium; Fabwerke Hoechst A.G. (Sturm and Others) Patent [1973] R.P.C. 253 (P.A.T.). 35 See Blanco White, Patents f o r I n v e n t i o n s , London, Stevens & Sons (4th ed.) 1974 at p.379. 3 6 Sai n s b u r y Report at p.49. 3 7 T h e Green Book a t p.400. 3 8 S e n a t e B i l l No. s.1552. 3 9 P a t e n t Act 1977, s.48. 4 0 D e m a r r e t , Patents, T e r r i t o r i a l R e s t r i c t i o n s and E.E.C. Law (1978) at p.86. 4''"Sainsbury Report at p.5. 4 2 P h a r m a c e u t i c a l S o c i e t y of Great B r i t a i n , "The Indus t r y : M i n i s t e r s Speech at ABPI Dinner" Pharmaceutical J o u r n a l 6th May 1961 a t p.381. 4 3 [ 1 9 6 5 ] A.C. 512 (H. of L . ) , [1965] R.P.C. 261. 4 4 i b i d at p.567, R.P.C. p.316-7. - 5 4 -Memorandum by ABPI, Health Services and Public Health B i l l No. 552/68. 22nd May 1968 at p.3. Banks Report supra n.9 at p.117-8. Patent Act 1977, s.55(c). -55-CHAPTER I I I TRADE S E C R E T P R O T E C T I O N 1 . I n t r o d u c t i o n t o t h e Law o f T r a d e S e c r e t s A p h a r m a c e u t i c a l f i r m , h a v i n g d i s c o v e r e d a new p r o d u c t , n e e d n o t a p p l y f o r a p a t e n t . I n s t e a d o f d i s c l o s i n g t h e f o r m u l a t o t h e w o r l d i n r e t u r n f o r a m o n o p o l y l i m i t e d t o t w e n t y y e a r s o n l y , t h e f i r m may e l e c t t o k e e p t h e f o r m u l a a s e c r e t , t o e n j o y a p e r p e t u a l m o n o p o l y b y d i s c l o s i n g i t t o no one o u t s i d e a p r i v i l e g e d c i r c l e o f e m p l o y e e s a n d l i c e n s e e s a l l o f whom w i l l be b o u n d b y s t r i n g e n t r e s t r i c t i v e c o v e n a n t s . S u c h t r a d e s e c r e t p r o t e c t i o n w i l l be a v a i l a b l e f o r a l l f o r m u l a e r e g a r d l e s s o f w h e t h e r t h e y s a t i s f y t h e p a t e n t law r e q u i r e m e n t s o f n o v e l t y u t i l i t y a n d n o n - o b v i o u s n e s s . T h e m i n o r i t y r e p o r t a t t a c h e d t o t h e K e f a u v e r R e p o r t s t a t e d : 1 " I t i s n o t n e c e s s a r y f o r a f i r m t o s e c u r e a p a t e n t . On t h e c o n t r a r y t h e y c o u l d o p e r a t e a p l a n t a n d p r o d u c e a p r o d u c t u n d e r a s e c r e t p r o c e s s i n d e f i n i t e l y w h e r e a s a p a t e n t g r a n t s a l i m i t e d m o n o p o l y f o r s e v e n t e e n y e a r s i n r e t u r n f o r c o m p l e t e d i s c l o s u r e b y t h e i n v e n t o r . I n many c o u n t r i e s w h e r e p a t e n t p r o t e c t i o n s i m i l a r t o o u r own i s n o t a v a i l a b l e t h e r e i s a t e n d e n c y f o r more s e c r e c y i n t e r m s o f p r o d u c t i o n and p r o c e s s e s t h a n e x i s t s h e r e i n t h e U . S . " - 5 b -In t h i s chapter i t i s proposed to examine the nature of trade secrets and the degree of protection afforded to them, the r e l a t i v e advantage to a firm of choosing the trade secret rather than the patent route, and f i n a l l y whether, given the existence of a sophisticated patent system providing a twenty year monopoly for both products and processes with no special compulsory l i c e n s i n g provisions for food and medicines, i t i s necessary or desirable to leave alongside t h i s system an alternative method of protection which allows the producer to r e t a i n a perpetual monopoly without the corresponding obligations of disclosure. 2. Nature of Trade Secrets The law of trade secrets dates far back into English case law. The term i s not used i n any l e g i s l a t i o n . The rules are found i n various cases but no one case provides a generally accepted d e f i n i t i o n of the nature of the beast. In the U.S., the Restatement of Torts provides that a trade secret may consist of -57-" a n y f o r m u l a , p a t t e r n , d e v i c e , o r c o m p i l a t i o n o f i n f o r m a t i o n w h i c h i s u s e d i n o n e s b u s i n e s s a n d w h i c h g i v e s h i m an o p p o r t u n i t y t o o b t a i n an a d v a n t a g e o v e r c o m p e t i t o r s who do n o t know o r u s e i t . " , One o f t h e l e a d i n g E n g l i s h t e x t s d e s c r i b e s a t r a d e s e c r e t a s f o l l o w s : " T h e s u b j e c t m a t t e r c a p a b l e o f p r o t e c t i o n may be an i n d u s t r i a l s e c r e t , l i k e a s e c r e t m a c h i n e , p r o c e s s o r f o r m u l a o r i t may be i n d u s t r i a l knowhow (an i n c r e a s i n g l y i m p o r t a n t a n c i l l a r y o f p a t e n t e d i n v e n t i o n s ) ; i t may be i n f o r m a t i o n o f a n y s o r t ; i t may be a n i d e a o f a s c i e n t i f i c n a t u r e o r a l i t e r a r y n a t u r e . . . i t may be a s l o g a n o r s u g g e s t i o n f o r a m e t h o d o f a d v e r t i s i n g , l a s t l y t h e s u b j e c t m a t t e r may be t h e p r o d u c t o f w o r k o r e x p e n d i t u r e o f money o r o f t r i a l a n d e r r o r o r t h e e x p e n d i t u r e o f t i m e . " . D o e s t h i s mean t h a t t r a d e s e c r e t s a r e " p r o p e r t y " ? T h e a b o v e d e f i n i t i o n e v a d e s t h e i s s u e a n d t h e c a s e l a w y i e l d s no s a t i s f a c t o r y s o l u t i o n . I n some c a s e s t h e y h a v e b e e n r e f e r r e d t o as p r o p e r t y , i n o t h e r s a s c o n t r a c t a n d i n o t h e r s a g a i n t h e y h a v e b e e n t r e a t e d a s f o u n d e d u p o n t r u s t o r c o n f i d e n c e . 5 One l e a r n e d w r i t e r h a s s a i d : j -b«-" T h e a b o v e s t u d y o f c a s e s w h e r e t h e p l a i n t i f f s c o n f i d e n c e h a s b e e n b r e a c h e d r e v e a l s g r e a t c o n c e p t u a l c o n f u s i o n . P r o p e r t y , c o n t r a c t , b a i l m e n t , t r u s t , f i d u c i a r y r e l a t i o n s h i p , g o o d f a i t h , u n j u s t e n r i c h m e n t , h a v e a l l b e e n c l a i m e d a t o n e t i m e o r a n o t h e r a s t h e b a s i s o f j u d i c i a l i n t e r v e n t i o n . " T h e r e i s no d o u b t t h a t t r a d e s e c r e t s h a v e some a t t r i b u t e s o f p r o p e r t y i n t h a t t h e y may be a s s i g n e d o r l i c e n s e d a s p a r t o f a b u s i n e s s b u t t h e y a r e n o t p r o p e r t y i n t h e p a t e n t law s e n s e b e c a u s e o n e a t t r i b u t e - t h e r i g h t t o e x c l u d e a l l o t h e r s - d o e s n o t a c c r u e t o t h e t r a d e s e c r e t h o l d e r . One i n f l u e n t i a l w r i t e r h a s r e c e n t l y r e a s s e t e d t h e a r g u m e n t t h a t , when n o t b a s e d u p o n a n e x p r e s s o r i m p l i e d c o n t r a c t u a l r e l a t i o n s h i p , a n y a c t i o n f o r b r e a c h o f c o n f i d e n c e i s b a s e d o n a p r o v e n r e l a t i o n s h i p o f t r u s t a n d t h a t t h e r e a r e no p r o p e r t y r i g h t s , l e g a l o r e q u i t a b l e , i n i n f o r m a t i o n . 6 T h e p h a r m a c e u t i c a l c o m p a n y i s more l i k e l y t o f r a m e a n a c t i o n a s a n e q u i t a b l e one o f b r e a c h o f c o n f i d e n c e o r b r e a c h o f c o n t r a c t , e x p r e s s o r i m p l i e d . I n t h e U . S . S u p r e m e C o u r t c a s e o f Du P o n t de  N e m o u r s P o w d e r C o v M a s l a n d , H o l m e s J . s t a t e d : -59-"Whether the p l a i n t i f f s have any valuable secret or not the defendant knows the facts, whatever they are, through a special confidence that he accepted. The property may be denied but the confidence cannot be. Therefore the s t a r t i n g point for the present matter i s not the property or due process of law, but that the defendant stood i n con f i d e n t i a l r e l a t i o n s with the p l a i n t i f f s or one of them." The courts i n both England and the U.S. have seen f i t to protect the con f i d e n t i a l nature of trade secrets regardless of whether they are c o r r e c t l y described as "property". 3. The Degree of Protection Chemical formulae and processes have long been considered among the highest forms of trade secret but not every pharmaceutical formula w i l l q u a l i f y as such. The U.S. Restatement l i s t s six c r i t e r i a which have met with approval i n a number of cases:- 8 1 ) The extent to which the information i s known outside the business. 2) The extent to which information i s known by employees and others within the business. 3) The extent of measures taken to guard the secrecy of the information. 4) The value of the information to the business and to competitors. 5) The amount of e f f o r t and money expended i n developing the information. - 6 0 -6) T h e e a s e o r d i f f i c u l t y w i t h w h i c h i n f o r m a t i o n may be a c q u i r e d o r d u p l i c a t e d b y o t h e r s . I f a c h e m i c a l f o r m u l a q u a l i f i e s f o r t r a d e s e c r e t s t a t u s t h e f i r m r e s p o n s i b l e f o r t h e d e v e l o p m e n t o f t h e f o r m u l a c a n u s e i t f o r i t s own p u r p o s e s o n l y a n d i s u n d e r no o b l i g a t i o n t o d i s c l o s e i t . P r o t e c t i o n w i l l l a s t a s l o n g a s t h e s e c r e c y l a s t s and i s l o s t o n d i s c l o s u r e i n a p a t e n t s p e c i f i c a t i o n o r t r a d e j o u r n a l o r o n d i s c l o s u r e t o t h i r d p a r t i e s i n c i r c u m s t a n c e s w h i c h d o n o t i m p o r t a n o b l i g a t i o n o f c o n f i d e n c e . T r a d e s e c r e t p r o t e c t i o n i s no d e f e n c e a g a i n s t i n d e p e n d e n t c r e a t i o n o r r e v e r s e e n g i n e e r i n g b o t h o f w h i c h a r e a p a r t i c u l a r d a n g e r t o t h e p h a r m a c e u t i c a l f i r m . T h e d r u g i n d u s t r y i s h i g h l y s u s c e p t i b l e t o t h e " R i p e n e s s o f T i m e T h e o r y " . T h e s t a t e o f m e d i c a l k n o w l e d g e i s s u c h t h a t s e v e r a l l a b o r a t o r i e s may be w o r k i n g s i m u l t a n e o u s l y o n a c u r e f o r t h e same c o m p l a i n t and may a l l be o n t h e b r i n k o f m a k i n g a s i m i l a r d i s c o v e r y . T h e a p p e a r a n c e o f t h e f i r s t d r u g o n t h e m a r k e t w i l l a l e r t c o m p e t i t o r s t o t h e f a c t t h a t a s o l u t i o n i s a v a i l a b l e a n d , e v e n i f c a r e f u l s t u d y a n d r e v e r s e e n g i n e e r i n g d o e s n o t y i e l d t h e s e c r e t , t h e v e r y - 6 1 -existence of the drug w i l l provide an additional spur to research i n r i v a l firms. Disclosure to competitors through theft or breach of a c o n f i d e n t i a l relationship i n circumstances where proof of the theft or breach i s hard to come by may destroy trade secret status. Recent cases have focused attention on another l i m i t a t i o n of trade secret protection - public 8 a i n t e r e s t . The courts w i l l not intervene to r e s t r a i n disclosure of c o n f i d e n t i a l information i f the public inte r e s t l i e s i n disclosure. Cases on t h i s issue have revolved around the c o n f l i c t between the public int e r e s t i n promoting business confidence through the protection of 8b trade secrets and the public int e r e s t i n a free press. The most recent case i s Shering Chemicals Ltd v 9 Falkman Ltd. The pharmaceutical company were granted an injunction to prevent the t e l e v i s i o n broadcast of c e r t a i n information concerning t h e i r drug Primodos, suspected of causing deformity i n children before b i r t h . 1 0 The p r i n c i p l e was accepted however that i n certain circumstances the obligation of c o n f i d e n t i a l i t y may be overborne: - 6 2 -"If the subject matter i s something which i s inimical to the public inte r e s t or threatens in d i v i d u a l safety, a person i n possession of knokwledge of that subject matter cannot be obliged to conceal i t although he acquired that knowledge i n confidence." ^ Where a firm i s interested only i n protecting i t s chemical formulae from discovery by competitors trade secret law w i l l provide complete protection as long as the finished product cannot be reverse engineered, no other firm has been conducting research i n the same area, s t r i c t security measures minimise the chances of theft or i n d u s t r i a l espionage, the firm has issued no licences and the formula i s known by very few employees a l l of whom are bound by r e s t r i c t i v e covenants - a formidable l i s t of prerequisites. 4. Employer/Employee Relationships The fewer people with access to the secret information the greater w i l l be the firm's chance of preserving i t s monopoly over production of a drug. However, i n order to exploit a discovery commercially cert a i n employees must be allowed access to the information. The pharmaceutical firm w i l l usually ensure - 6 3 -t h a t t h o s e e m p l o y e e s a r e c o n t r a c t u a l l y b o u n d t o s e c r e c y , o f t e n w h e r e t h e y f a i l t o d o so t h e c o u r t w i l l i m p l y a n o b l i g a t i o n o f s e c r e c y : " W h e t h e r b o u n d b y e x p r e s s c o n t r a c t o r n o t , no e m p l o y e e i s e n t i t l e d t o f i l c h h i s e m p l o y e r s p r o p e r t y i n w h a t e v e r f o r m t h a t p r o p e r t y may b e , w h e t h e r i n t h e f o r m o f a s e c r e t p r o c e s s o r g o o d w i l l o r i n some o t h e r f o r m . " ^ To a v o i d u n c e r t a i n t y o n t h e q u e s t i o n o f w h a t c o n s t i t u t e s a p r o t e c t a b l e t r a d e s e c r e t , t h e p h a r m a c e u t i c a l f i r m w i l l e n t e r i n t o s p e c i f i c c o n t r a c t s w i t h e a c h e m p l o y e e c o n t a i n i n g t h e a p p r o p r i a t e r e s t r i c t i v e c o v e n a n t s . C o v e n a n t s w h i c h a r e t o o w i d e o r t o o v a g u e w i l l be v o i d a s i n r e s t r a i n t o f t r a d e u n l e s s t h e f i r m c a n e s t a b l i s h t h a t t h e y a r e r e a s o n a b l e , f o u n d e d u p o n g o o d c o n s i d e r a t i o n , a n d c l e a r a s t o t h e i r s c o p e i n t e r m s o f b o t h t i m e a n d p l a c e . The d i s t i n c t i o n b e t w e e n t h e e m p l o y e r ' s s e c r e t s a n d t h e e m p l o y e e ' s s k i l l a n d k n o w l e d g e p l a c e s a v e r y r e a l , a l t h o u g h i l l d e f i n e d , r e s t r i c t i o n o n t h e e x t e n t o f t h e p r o t e c t i o n . I n U n i t e d I n d i g o C h e m i c a l Company L t d v 13 R o b i n s o n , t h e p l a i n t i f f ' s f o r m e r c h e m i s t c o u l d n o t be e n j o i n e d f r o m u s i n g a f o r m u l a l e a r n t w h i l e i n t h e p l a i n t i f f ' s e m p l o y b e c a u s e t h e c o u r t r e f u s e d t o c o n s i d e r -64-the information secret. The defendant had not been t o l d when he joined the firm that he would be put i n possession of secret information and he had no d i f f i c u l t y i n discovering the exact quantities of the elements involved i n the manufacture of the chemical Algaloid. By contrast, 14 i n Printers and Furnishers Ltd v Hollaway and Others the f a c t that the defendant had been able to commit a chemical formula to memory did not make i t a part of the employee's s k i l l and knowledge. To minimise problems over what information i s protectable firms w i l l usually l i s t i n an appendix those formulae regarded as secret and the r e s t r i c t e d f i e l d s of a c t i v i t i y . 5. Licensor/Licensee Relationship The use of the term "licence" i n a trade secret context i s something of a misnomer - no doubt a term borrowed from patent law. "It should be remembered that i t i s not apt to speak of lic e n s i n g a trade secret (although t h i s i s the terminology most usually used.) What the dis c l o s e r i s i n fact doing i s d i s c l o s i n g secret matter to the disclosee with the undertaking that he w i l l not disclose i t to anyone else except pursuant to a secrecy agreement. In return, the disclosee undertakes to pay a royalty for use - 6 b -d u r i n g c o n t i n u e d s e c r e c y a n d n o t f u r t h e r t o d i s c l o s e t h e m a t t e r c o n t r a r y t o t h e t e r m s o f t h e a g r e e m e n t . " ^ T h e d i s t i n c t i o n b e t w e e n s u c h a c o n d i t i o n a l d i s c l o s u r e and a p a t e n t l i c e n c e a r i s e s f r o m t h e f a c t t h a t , a s e x p l a i n e d a b o v e , t r a d e s e c r e t s , w h i l e p o s s e s s i n g c e r t a i n a t t r i b u t e s o f p r o p e r t y , a r e n o t p r o p e r t y i n t h e p a t e n t s e n s e . " I n i t s o r i g i n a l a n d t r u e s e n s e , a l i c e n c e i s t h e g r a n t b y t h e p r o p r i e t o r o f a r i g h t o f a n a u t h o r i t y t o d o t h a t w h i c h , b u t f o r t h a t a u t h o r i t y , w o u l d c o n s t i t u t e a n i n f r i n g e m e n t o f h i s r i g h t . T h i s d e f i n i t i o n a s s u m e s t h e p r i o r e x i s t e n c e o f a r i g h t o f p r o p e r t y p r o t e c t e d b y common law o r s t a t u t e . I n t h e f i e l d o f I n t e l l e c t u a l P r o p e r t y t h e r i g h t s i n q u e s t i o n r e l a t e t o l e t t e r s p a t e n t , t r a d e m a r k s , r e g i s t e r e d d e s i g n s a n d c o p y r i g h t . ' ' , I f demand f o r a new d r u g i s h e a v y t h e p h a r m a c e u t i c a l f i r m may n o t be a b l e t o meet i t a n d w i l l " l i c e n s e " o t h e r f i r m s t o p r o d u c e t h e d r u g u p o n p a y m e n t o f a r o y a l t y . U n d e r t h e s e c i r c u m s t a n c e s d i s c l o s u r e w i l l n o t d e s t r o y t h e t r a d e s e c r e t s t a t u s o f a f o r m u l a . T h e c o u r t s , q u i t e r i g h t l y , p r o t e c t t h e c o n f i d e n t i a l i t y o f s e c r e t i n f o r m a t i o n r e g a r d l e s s o f w h e t h e r t h e a r r a n g e m e n t i s c o r r e c t l y t e r m e d a l i c e n c e . -66-6. Relative Merits of Trade Secrets and Patents The drug firm can choose to protect i t s new product either through the patent or trade secret law. The choice w i l l usually depend on the nature of the drug. Trade secret law i s wider and w i l l protect many formulae which do not have the required degree of novelty for a patent. Indeed trade secret protection extends further to such things as customer l i s t s and advertising programmes. For such material trade secret protection i s the only option and the firm r e l i e s heavily on i t . There i s also a grey area of formulae which the drug firm f e e l s may be patentable but are of doubtful novelty. The firm w i l l need to consider c a r e f u l l y the r e l a t i v e merits of the two forms of protection for such material. Trade secret protection w i l l c e r t a i n l y be available, i t w i l l be perpetual, and there are no obligations of disclosure. There w i l l be no need to expend time and money preparing detailed patent s p e c i f i c a t i o n s , protection w i l l be immediate on the terms and conditions specified by the trade secret holder. However, there are disadvantages; the firm choosing the trade secret route must exert strong pressure on licensees and employees to maintain c o n f i d e n t i a l i t y , there i s a - 6 7 -c o n s t a n t d a n g e r o f n e g l i g e n t o r i n a d v e r t e n t d i s c l o s u r e i n c i r c u m s t a n c e s w h i c h d o n o t i n d i c a t e t h e t r a d e s e c r e t n a t u r e o f t h e i n f o r m a t i o n . T h e r e w i l l be p r o b l e m s o f e n f o r c e m e n t a s X e r o x m a c h i n e s a n d a d v a n c e d p h o t o g r a p h i c e q u i p m e n t make t h e f t s c o n s t a n t l y h a r d e r t o d e t e c t . O n c e a s e c r e t i s o u t p r o b l e m s o f t r a c i n g w i l l p r a c t i c a l l y a s s u r e t h e v i c t i m ' s i n a b i l i t y t o s t o p c o m p e t i t i v e u s e . F u r t h e r m o r e , i f t h e f i r m e n t e r t a i n s g e n u i n e d o u b t s a b o u t t h e n o v e l t y a n d c o n s e q u e n t p a t e n t a b i l i t y o f a f o r m u l a t h e c h a n c e s a r e t h a t a n o t h e r f i r m w o r k i n g i n t h e same a r e a w i l l i n d e p e n d e n t l y d e v e l o p a s i m i l a r p r o d u c t . N o t o n l y w i l l t r a d e s e c r e t law p r o v i d e no p r o t e c t i o n t o t h e o r i g i n a l p r o d u c e r , a n y p u b l i c a t i o n o f t h e f o r m u l a b y t h e s e c o n d f i r m w i l l d e s t r o y t r a d e s e c r e c y f o r b o t h f i r m s . I n Kewanee v 17 B i c r o n C h i e f J u s t i c e B u r g e r s a i d o f t h e two f o r m s o f p r o t e c t i o n : -" W h e r e p a t e n t l a w a c t s a s a b a r r i e r , t r a d e s e c r e t law f u n c t i o n s r e l a t i v e l y a s a s i e v e . " T h i s a l l seems t o p o i n t i n f a v o u r o f p a t e n t p r o t e c t i o n b u t t h e d r u g f i r m s h o u l d e x e r c i s e c a u t i o n b e f o r e o p t i n g f o r t h i s a p p a r e n t l y a t t r a c t i v e a l t e r n a t i v e . N o t -68-o n l y w i l l t h e m o n o p o l y be l i m i t e d t o t w e n t y y e a r s d u r a t i o n , t h e p a t e n t e e w i l l be o b l i g e d t o d i s c l o s e t o t h e w o r l d f u l l d e t a i l s o f t h e f o r m u l a . On p u b l i c a t i o n o f t h e s p e c i f i c a t i o n t r a d e s e c r e t p r o t e c t i o n i s l o s t and c a n n e v e r be r e g a i n e d e v e n i f t h e p a t e n t i s s u b s e q u e n t l y f o u n d t o be i n v a l i d . T h i s i s a v e r y r e a l d a n g e r a s t h e mere i s s u e o f a p a t e n t i s n o t c o n c l u s i v e o n t h e q u e s t i o n o f v a l i d i t y a n d s t a n d a r d s o f p a t e n t a b i l i t y a p p l i e d b y t h e c o u r t s a r e s i g n i f i c a n t l y h i g h e r t h a n t h o s e a p p l i e d b y t h e P a t e n t O f f i c e . The d r u g f i r m t h e r e f o r e w i l l o n l y c h o o s e t h e p a t e n t r o u t e i f i t i s r e a s o n a b l y c e r t a i n t h a t t h e p a t e n t w i l l be v a l i d o r , a t l e a s t , h a s s u f f i c i e n t a p p e a r a n c e o f v a l i d i t y t h a t no r i v a l f i r m w i l l f e e l c o n f i d e n t t o e m b a r k o n t h e l e n g t h y a n d e x p e n s i v e p r o c e s s o f c h a l l e n g i n g t h e p a t e n t . I n t h e c a s e o f t h e c l e a r l y p a t e n t a b l e i n v e n t i o n t h e f i r m w i l l be w e l l a d v i s e d t o i g n o r e t h e t r a d e s e c r e t o p t i o n a n d a p p l y f o r a p a t e n t p r o v i d e d t h e y a r e p r e p a r e d t o e x p e n d t h e n e c e s s a r y r e s o u r c e s t o " p o l i c e " i t . T h e t i m e a n d e x p e n s e i n v o l v e d i n f i l i n g an a p p l i c a t i o n w i l l g e n e r a l l y be more t h a n c o m p e n s a t e d f o r b y e n j o y m e n t o f a n a b s o l u t e t w e n t y y e a r m o n o p o l y . F u r t h e r m o r e e n j o y m e n t o f t h e p o s i t i o n o f s o l e p r o d u c e r f o r t w e n t y y e a r s w i l l p l a c e t h e f i r m i n a s t r o n g p o s i t i o n t o e n g i n e e r an e x t e n s i o n o f t h e m o n o p o l y t h r o u g h m a n i p u l a t i o n o f o t h e r i n t e l l e c t u a l 18 p r o p e r t y l a w s . T h e d r u g i n d u s t r y i s i n a s t a t e o f p e r p e t u a l m o t i o n a n d many p a t e n t e d f o r m u l a e w i l l become a b s o l u t e w i t h i n t w e n t y y e a r s i n a n y e v e n t . T h e r e c a n be no d o u b t t h a t t h e s h o r t e r s t r o n g e r p a t e n t p r o t e c t i o n i s p r e f e r a b l e t o t r a d e s e c r e t p r o t e c t i o n . 7. S h o u l d b o t h A l t e r n a t i v e s be A v a i l a b l e f o r t h e N e w l y D i s c o v e r e d D r u g ?  G i v e n t h e e x i s t e n c e o f a s t r o n g p a t e n t s y s t e m a v a i l a b l e f o r b o t h p r o d u c t s a n d p r o c e s s e s a n d t h e a b o l i t i o n o f t h e s p e c i a l c o m p u l s o r y l i c e n c i n g p r o v i s i o n s f o r f o o d a n d m e d i c i n e s , i t i s n e c e s s a r y o r d e s i r a b l e t h a t t h e t r a d e s e c r e t a l t e r n a t i v e s h o u l d e x i s t ? S o c i e t y r e g a r d s m o n o p o l i e s p e r se a s u n d e s i r a b l e a n d t h e y a r e o n l y t o l e r a t e d i n t h e p a t e n t f i e l d b e c a u s e o f t h e b e l i e f t h a t s o c i e t y b e n e f i t s f r o m t h e r e s u l t i n g i n c e n t i v e s t o r e s e a r c h and t h e d i s c l o s u r e o f t e c h n i c a l i n f o r m a t i o n . S u c h m o n o p o l y p r o t e c t i o n i s o n l y a l l o w e d i f t h e f i r m s a t i s f i e s t h e s t r i n g e n t r e q u i r e m e n t s o f n o v e l t y , u t i l i t y a n d n o n - o b v i o u s n e s s . -70-What i s t h e j u s t i f i c a t i o n f o r r e t a i n i n g a l o n g s i d e t h i s h e a v i l y r e g u l a t e d s y s t e m o f p r o t e c t i o n a s u b s i d i a r y common law m e t h o d w h e r e b y t h e c o u r t s w i l l e n f o r c e a p e r p e t u a l m o n o p o l y w h i l e s o c i e t y e n j o y s n o n e o f t h e s u p p o s e d a d v a n t a g e s o f d i s c l o s u r e a n d e n h a n c e d r e s e a r c h p r o g r a m m e s ? T h e m a i n j u s t i f i c a t i o n i s a m o r a l one e x p r e s s e d b y t h e U . S . C o u r t i n E . I , d u P o n t de N e m o u r s & C o . I n c . v 19 C h r i s t o p h e r " T o o b t a i n k n o w l e d g e o f a p r o c e s s w i t h o u t s p e n d i n g t h e t i m e and money t o d i s c o v e r i n d e p e n d e n t l y i s i m p r o p e r u n l e s s t h e h o l d e r v o l u n t a r i l y d i s c l o s e s i t o r f a i l s t o t a k e r e a s o n a b l e p r e c a u t i o n s t o e n s u r e i t s s e c r e c y . " A l o n g s i d e t h e m o r a l i s s u e , t h e r e a r e e c o n o m i c a d v a n t a g e s i n r e t a i n i n g t r a d e s e c r e t p r o t e c t i o n f o r p r o c e s s e s w h i c h do n o t s a t i s f y t h e p a t e n t c r i t e r i a . One j u s t i f i c a t i o n i s t h a t m o s t f r e q u e n t l y c i t e d i n s u p p o r t o f p a t e n t s - t h e e n c o u r a g e m e n t o f i n v e n t i o n . U n l e s s a f i r m c a n k e e p i n f o r m a t i o n a b o u t i t s new p r o c e s s e s s e c r e t , r e g a r d l e s s o f t h e i r p o t e n t i a l p a t e n t a b i l i t y , i t w i l l be u n w i l l i n g t o i n c u r t h e r e s e a r c h c o s t s . I t w i l l a l s o be r e l u c t a n t t o a l l o w a n y b u t t h e m o s t v i t a l e m p l o y e e s t o h a v e - 7 1 -a c c e s s t o r e l e v a n t i n f o r m a t i o n a n d w o u l d be r e l u c t a n t t o g r a n t l i c e n c e s - a l l f a c t o r s r e s u l t i n g i n u n d e r - u t i l i s a t i o n o f t h e i n v e n t i o n . T r a d e s e c r e t l a w t h e r e f o r e e n c o u r a g e s i n v e n t i o n i n a r e a s w h e r e t h e p a t e n t law d o e s n o t r e a c h ; c o m p e t i t i o n i s f o s t e r e d a n d t h e p u b l i c i s n o t d e p r i v e d o f t h e u s e o f v a l u a b l e , i f n o t q u i t e p a t e n t a b l e , i n v e n t i o n s . T h e e x i s t e n c e o f t r a d e s e c r e t p r o t e c t i o n f o r c u s t o m e r l i s t s a n d a d v e r t i s i n g c o p y i s u n l i k e l y t o e n c o u r a g e r e s e a r c h a n d d e v e l o p m e n t b u t may, n o n e t h e l e s s , p r o m o t e b u s i n e s s e f f i c i e n c y a n d e n c o u r a g e f i r m s t o i n i t i a t e new a n d i n d i v i d u a l i s e d p l a n s o f o p e r a t i o n . F u r t h e r m o r e i t i s h a r d t o s e e how s o c i e t y w o u l d b e n e f i t f r o m f o r c e d d i s c l o s u r e o f s u c h m a t e r i a l . T h e a v a i l a b i l i t y o f t r a d e s e c r e t p r o t e c t i o n f o r u n p a t e n t a b l e o r d o u b t f u l l y p a t e n t a b l e f o r m u l a e p r e v e n t s t h e o v e r - b u r d e n i n g o f t h e p a t e n t o f f i c e w i t h d u b i o u s a p p l i c a t i o n s a n d t h e i s s u e o f many i n v a l i d p a t e n t s . E v e n t h o s e d u b i o u s a p p l i c a t i o n s w h i c h a r e f i n a l l y r e j e c t e d w i l l h a v e b e e n h e l d i n l i m b o f o r many m o n t h s w h e r e a s t h e y c o u l d h a v e b e e n made a v a i l a b l e f o r e x p l o i t a t i o n a t a n e a r l y s t a g e t h r o u g h t r a d e s e c r e t p r o t e c t e d l i c e n c e s . -11-T h e r e i s t h e r e f o r e no c o m p e l l i n g r e a s o n t o r e s t r i c t t r a d e s e c r e t p r o t e c t i o n f o r u n p a t e n t a b l e f o r m u l a e a n d t h e two s y s t e m s o f p r o t e c t i o n c a n o p e r a t e s i d e b y s i d e . T r a d e s e c r e t s a r e h a r d e r t o j u s t i f y when t h e f o r m u l a i n q u e s t i o n i s c l e a r l y p a t e n t a b l e . T h e f i r m h a s t h e o p t i o n o f p r o t e c t i n g i t s i n v e n t i o n t h r o u g h t h e p a t e n t l a w w i t h t h e c o r r e s p o n d i n g a d v a n t a g e t o s o c i e t y o f d i s c l o s u r e . A b o l i t i o n o f t r a d e s e c r e t p r o t e c t i o n f o r s u c h i n v e n t i o n s w i l l m e r e l y f o r c e a l l p r o d u c e r s o f new d r u g s t o o b t a i n p a t e n t s a n d d i s c l o s e t h e i r f o r m u l a e t o t h e w o r l d . T h e d e n i a l o f p r o t e c t i o n w o u l d n o t r e s u l t i n r e d u c e d i n c e n t i v e s f o r r e s e a r c h b e c a u s e t h e p a t e n t o p t i o n w i l l a l w a y s be a v a i l a b l e . F i r m s w i l l n o t h e s i t a t e t o g i v e l i c e n s e e s o r e m p l o y e e s f u l l a c c e s s t o a l l i n f o r m a t i o n a s a l l w i l l be d i s c l o s e d a n y w a y i n t h e p a t e n t s p e c i f i c a t i o n i f t h a t i s t h e o n l y o p t i o n . T h e s o l u t i o n i s a t t r a c t i v e b u t u n f o r t u n a t e l y c l e a r l y u n w o r k a b l e . I f t r a d e s e c r e t s s e r v e a v a l u a b l e f u n c t i o n i n t h e r e a l m o f n o n - p a t e n t a b l e m a t e r i a l t h e same p r o t e c t i o n m u s t be g i v e n t o a l l m a t e r i a l . A p a t e n t a b l e / n o n - p a t e n t a b l e d i s t i n c t i o n w o u l d mean t h a t no f i r m c o u l d be c e r t a i n o f t h e s t a t u s o f t h e i r t r a d e s e c r e t s -15-u n t i l t h e i r p a t e n t a p p l i c a t i o n h a d b e e n r e j e c t e d . N o t o n l y w o u l d t h i s l e a d t o c o n s i d e r a b l e u n c e r t a i n t y , i t w o u l d a l s o , i n many c a s e s , p r o m o t e t h e a n o m a l o u s s i t u a t i o n w h e r e b y t h e p a r t y w i t h m o s t t o g a i n f r o m t h e f a i l u r e o f a p a t e n t a p p l i c a t i o n w o u l d be t h e a p p l i c a n t h i m s e l f . So we a r e l e f t w i t h a s i t u a t i o n w h e r e t r a d e s e c r e t p r o t e c t i o n i s a v a i l a b l e f o r e v e r y t r a d e s e c r e t r e g a r d l e s s o f p a t e n t a b i l i t y . T h e i n h e r e n t w e a k n e s s o f t r a d e s e c r e t p r o t e c t i o n w i l l h o w e v e r e n c o u r a g e m o s t f i r m s t o s e e k t h e p a t e n t a l t e r n a t i v e w h e r e v e r p o s s i b l e . T h e r e i s no c o m p e l l i n g n e e d t o a b o l i s h o r r e s t r i c t t r a d e s e c r e t p r o t e c t i o n b e c a u s e t h e c h a n c e s o f a p h a r m a c e u t i c a l f i r m w h i c h h a s d i s c o v e r e d a new p a t e n t a b l e d r u g s i t t i n g b a c k a n d r e l y i n g o n t h e law o f t r a d e s e c r e t s t o p r o t e c t t h e i r d i s c o v e r y a r e r e m o t e i n d e e d . -74-NOTES TO CHAPTER I I I Report of the Committee on the J u d i c i a r y United S t a t e s Senate made by i t s sub-committee on A n t i t r u s t and Monopoly pursuant t o Senate R e s o l u t i o n 52, 87th Congress, 1st S e s s i o n , Report No. 448 (Kefauver Report) a t p.263. I n d i v i d u a l views of Senator E v e r e t t McKinley Dirksen and Senator Roman L. Hruska. 2 The U.K. Patents Act 1977 p r o v i d e s f o r a twenty year p e r i o d of p r o t e c t i o n . 3U.S. Restatement of T o r t s , 1st Ed., para 757 (1939). 4 Turner, The Law of Trade S e c r e t s . London, Sweet & Maxwell L t d 1962 at p.4. 5 F o r a r i , A Comparative O u t l i n e of the Law of Trade S e c r e t s i n A u s t r a l i a and the U.S.A., 54 J o u r n a l of Pat. - O f f i c e S o c i e t y , 8 August 1972. p.545-6. Stuckey, The E q u i t a b l e A c t i o n f o r Breach of Confidence Is Information ever Property? 1981 Sydney Law Review 402,404. 7 (1917) 244 U.S. 100, 37 Sup Ct Rep. 575. Q U.S. Restatement of T o r t s 1st Ed. para 757. 8a T h i s t o p i c a l i s s u e i s l i k e l y t o be con s i d e r e d i n the Law Commission Working Paper on Breach of Confidence due f o r p u b l i c a t i o n w i t h i n the next few weeks. 8b B r i t i s h S t e e l C o r p o r a t i o n v Granada T.V. L t d [1980] 3 W.L.R. 744 (H. of L . ) . 9[1981] 2 W.L.R. 848. 1 0 L o r d Denning M.R. d e l i v e r e d a s t r o n g d i s s e n t i n g judgment championing the cause of press freedom i b i d a t p.851. 11 supra n.9 per Lord Shaw at p.86 9. -75-T r i p l e x S a f e t y G l a s s Co v Scorah [1938] Ch. 211 a t p.217 (1938) 55 R.P.C. 21 at p.27 per F a r w e l l J . 1 3 ( 1 9 3 2 ) 49 R.P.C. 178 (Ch). 1 4 [ 1 9 6 5 ] R.P.C. 236. 15 Turner, the Law of Trade S e c r e t s , London, Sweet & Maxwell L t d 1962, p.463. 1 ft Lane, E n g l i s h Law and P r a c t i c e r e l a t i n g to I n t e r n a t i o n a l L i c e n s i n g Agreements, The B o b s - M e r r i l l Co., I n d i a n a p o l i s , New York 1965 a t p.87. 1 7 ( 1 9 7 4 ) 416 U.S. 470. 18 The methods by which a f i r m can achieve t h i s "extended monopoly" are d i s c u s s e d i n the succeeding c h a p t e r s . 1 9 ( 1 9 7 0 ) 431 F. 2nd 1012. -76-CHAPTER IV TRADE MARKS & P A S S I N G OFF A p h a r m a c e u t i c a l c o m p a n y , h a v i n g e n j o y e d a p r i v i l e g e d p o s i t i o n a s t h e p a t e n t e e o f a c h e m i c a l f o r m u l a f o r n e a r l y t w e n t y y e a r s , w i l l , a s t h e e x p i r y d a t e a p p r o a c h e s , l o o k a r o u n d f o r a n a l t e r n a t i v e t o p a t e n t p r o t e c t i o n . One o f t h e f i r s t a r e a s t o e x p l o r e i s t h e p o s s i b i l i t y o f p r o t e c t i n g t h e name and t h e a p p e a r a n c e o f t h e d r u g . W i t h t h i s a i m i n m i n d p h a r m a c e u t i c a l f i r m s h a v e p r o t e c t e d u n d e r t h e l a w o f t r a d e m a r k s a n d p a s s i n g o f f t h e i r b r a n d n a m e s , t h e c o l o u r c o m b i n a t i o n s o f t h e i r c a p s u l e s , t h e s h a p e o f t h e i r p i l l s and c a p s u l e s a n d t h e i r c o n t a i n e r s . T h e b e l i e f i s t h a t , d u r i n g t h e t e r m o f t h e p a t e n t , b o t h p h y s i c i a n s a n d p a t i e n t s w i l l h a v e come t o a s s o c i a t e t h e name a n d a p p e a r a n c e o f t h e d r u g i n q u e s t i o n w i t h i t s c h e m i c a l p r o p e r t i e s and t h e r a p a u t i c e f f e c t s . The h o p e d f o r r e s u l t i s t h a t p h y s i c i a n s w i l l c o n t i n u e t o p r e s c r i b e b y t h e -77-b r a n d name r a t h e r t h a n t u r n t o p o s s i b l y c h e a p e r g e n e r i c e q u i v a l e n t s a n d t h a t p a t i e n t s w i l l r e f u s e t o t a k e d r u g s w h i c h a r e n o t i d e n t i c a l t o t h o s e w h i c h h a v e a l r e a d y s u c c e s s f u l l y r e l i e v e d t h e i r s y m p t o m s . T h i s c h a p t e r e x p l o r e s how t h e p h a r m a c e u t i c a l f i r m s h a v e made u s e o f t h e l a w s o f p a s s i n g o f f a n d t r a d e mark r e g i s t r a t i o n t o e x t e n d t h e i r m o n o p o l y o n p r o d u c t i o n o f c e r t a i n p o p u l a r d r u g s . 1 . T h e Two F o r m s o f A c t i o n C o n s i d e r e d 1 T h e law o f p a s s i n g o f f and t h e l a w o f t r a d e mark i n f r i n g e m e n t a r e b o t h b a s e d o n t h e s i n g l e p r i n c i p l e t h a t no t r a d e r s h o u l d be a l l o w e d t o r e p r e s e n t h i s g o o d s o r b u s i n e s s 2 a s t h o s e o f a n o t h e r . A p a s s i n g o f f a c t i o n i n E n g l a n d i s g o v e r n e d b y t h e common law a n d e q u i t y a n d i s a g e n e r a l i s e d f o r m o f t h e a c t i o n t o r e s t r a i n i n f r i n g e m e n t o f t r a d e m a r k . I t i s t h e r i g h t o f a p e r s o n o r t r a d e r who u s e s a name o r mark o r d i s t i n g u i s h i n g g e t u p t o p r e s e n t h i s w a r e s t o t h e p u b l i c t o p r e v e n t a n o t h e r p e r s o n f r o m u s i n g a s i m i l a r name o r g e t u p t o d e c e i v e t h e p u b l i c . - 7 8 -A s t h i s i s a l s o t h e r a t i o n a l e b e h i n d t r a d e mark law t h e two a c t i o n s a r e f r e q u e n t l y c o m b i n e d a l t h o u g h t h e t e r m " i n f r i n g e m e n t " i s e m p l o y e d o n l y w h e r e t h e p l a i n t i f f b a s e s h i s c a s e o n a r e g i s t e r e d t r a d e m a r k . T h e s y s t e m o f t r a d e mark r e g i s t r a t i o n d e v e l o p e d o u t o f t h e l a w s o f p a s s i n g o f f . E a r l y c a s e s o f i n f r i n g e m e n t w e r e r e g a r d e d a s a s p e c i a l i s e d f o r m o f p a s s i n g o f f . I t was i n c u m b e n t u p o n t h e p l a i n t i f f t o e s t a b l i s h t h a t t h e a l l e g e d t r a d e mark d i d i n d e e d i d e n t i f y h i s g o o d s a n d s u c c e s s a g a i n s t one p a r t y was no i n s u r a n c e a g a i n s t f u r t h e r i n f r i n g e m e n t b y o t h e r t r a d e r s . T h e n e e d f o r s t a t u t o r y c o n t r o l was r e c o g n i s e d and t h e R e g i s t e r o f T r a d e M a r k s was e s t a b l i s h e d i n 1 8 7 5 . R e g i s t r a t i o n was p r i m a f a c i e e v i d e n c e o f t h e r i g h t o f a r e g i s t e r e d p r o p r i e t o r t o e x c l u s i v e u s e o f 3 t h e m a r k . T o d a y , t h e R e g i s t e r i s d i v i d e d i n t o two p a r t s , A a n d B , w i t h p a r t B c o n f e r r i n g l o w e r r i g h t s t h a n r e g i s t r a t i o n u n d e r p a r t A . T h e r e a r e c e r t a i n d i f f e r e n c e s b e t w e e n i n f r i n g e m e n t a c t i o n s a n d p a s s i n g o f f a c t i o n s , a s e x p l a i n e d b y G r e e n e 4 M . R . i n t h e S a v i l l e P e r f u m e r y C a s e ; " ( 1 ) I t [ t h e l a w o f i n f r i n g e m e n t ] i s c o n c e r n e d w i t h o n l y one m e t h o d o f p a s s i n g o f f n a m e l y , t h e -79-use of a trade mark and (2) the statutory protection i s absolute i n the sense that, once a mark i s shown to offend, the user of i t cannot escape by showing that, by something outside the actual mark i t s e l f he has distinguished his goods from those of the registered proprietor." Thus, when considering whether the firm "Gala Ltd of London" had infringed the trade mark "Goya", he said that, while the addition of the words "of London" may be adequate to d i f f e r e n t i a t e the name i n a passing o f f action, the addition was of no a v a i l i n an infringement action. In Hoffman-La Roche v DPSA however, the addition of the l e t t e r s DDSA to an otherwise i d e n t i c a l capsule were too small to amount to a v a l i d defence to a pssing off action. If they had been more s t r i k i n g they may have exonerated the defendants from l i a b i l i t y . One further cse i l l u s t r a t e s the d i s t i n c t i o n between the two actions; William H o l l i n s & Co Ltd v C o t e l l a L t d 6 "There i s a clear d i s t i n c t i o n i n my view between an action for infringement of trade mark and an action for passing o f f . In considering whether a p a r t i c u l a r device or design does constitute an infringement of trade mark, the trade mark and the offending design or device or word, whatever i t may be, must be considered together for the -80-p u r p o s e o f c o m p a r i s o n a n d n o t h i n g e l s e h a s t o be t a k e n i n t o c o n s i d e r a t i o n . One h a s t o l o o k a t t h e two m a r k s a n d s e e w h e t h e r t h e d e f e n d a n t ' s mark i s s u c h a s t o be c a l c u l a t e d t o d e c e i v e . . . . w h e r e a s i n t h e c a s e o f p a s s i n g o f f t h e c o u r t h a s t o t a k e i n t o c o n s i d e r a t i o n t h e w h o l e o f t h e s u b j e c t m a t t e r . '' 6a I f t h e d r u g c o m p a n i e s r e l y o n p a s s i n g o f f t o p r o t e c t t h e a p p e a r a n c e o f t h e i r c a p s u l e s t h e o n u s w i l l be o n t h e m t o e s t a b l i s h t h a t t h e g e t u p i s d i s t i n c t i v e o f t h e i r c a p s u l e o r p i l l e x c l u s i v e l y . The n e x t s t e p i s t o e s t a b l i s h t h a t t h e d e f e n d a n t ' s u s e o f a s i m i l a r g e t u p i s l i k e l y t o d e c e i v e o r c o n f u s e t h e p u b l i c . A p e r s o n o r c o m p a n y i s e n t i t l e d t o t h e e x c l u s i v e u s e o f a name o r mark f r o m t h e t i m e a t w h i c h i t c a n be e s t a b l i s h e d t h a t t h e mark d e n o t e s h i s g o o d s o r s e r v i c e s i n t h e m a r k e t . I f t h e d r u g c o m p a n i e s r e g i s t e r t h e i r c o l o u r c o m b i n a t i o n s a s t r a d e m a r k s t h e y n e e d n o t p r o v e a r e p u t a t i o n and c a n r e l y o n t h e i r t i t l e a s p r o p r i e t o r o f t h e m a r k . T h e c e r t i f i c a t e o f r e g i s t r a t i o n i s p r i m a f a c i e p r o o f o f t h e v a l i d i t y o f r e g i s t r a t i o n . H o w e v e r , n o t h i n g i n t h e T r a d e M a r k A c t w i l l a f f e c t a m a n u f a c t u r e r ' s r i g h t s i n p a s s i n g o f f . I t i s no b a r t o a p a s s i n g o f f a c t i o n t h a t t h e name o r g e t u p w h i c h h a s b e e n - 8 1 -imitated may have been registered as a trade mark and s i m i l a r l y i t w i l l be no defence to a passing off action that the defendants mark has been registered. (Such a r e g i s t r a t i o n would, however, provide some prima fa c i e evidence of a r i g h t to use the mark and may prevent the court from granting interlocutory r e l i e f . ) There i s a prospect of change i n both areas of law with the present trend i n Europe towards harmonisation of i n t e l l e c t u a l property laws. The Treaty of Rome has already overridden many of the r e s t r i c t i v e e f f e c t s of national trade marks and plans are afoot to e s t a b l i s h an EEC wide r e g i s t r a t i o n system to e x i s t alongside national schemes. No doubt many firms w i l l continue to r e l y on national law because of differences i n language or because t h e i r business i s purely l o c a l . However national trade marks may not be used as barr i e r s to trade within member states. 2. Protection for Names and Words In order to q u a l i f y for protection i n either a trade mark infringement action or passing off action the 7 name of a product must be i n d i c a t i v e of i t s source. Descriptive words are not registrable as trade marks nor w i l l they be protected under the law of passing off unless -82-t h e y h a v e a c q u i r e d a " s e c o n d a r y m e a n i n g " . The c a s e o f g R e d d a w a y v Banham i s i l l u s t r a t i v e o f how a d e s c r i p t i v e name many a c q u i r e a s e c o n d a r y m e a n i n g . The p l a i n t i f f s b r o u g h t a n a c t i o n t o r e s t r a i n t h e d e f e n d a n t s f r o m s e l l i n g b e l t i n g known a s " c a m e l h a i r b e l t i n g " o n t h e b a s i s t h a t " c a m e l h a i r b e l t i n g " meant e x c l u s i v e l y t h e b e l t i n g w h i c h t h e p l a i n t i f f s h a d m a n u f a c t u r e d u n d e r t h a t name f o r y e a r s . T h e d e f e n d a n t s a r g u e d t h a t t h e name was d e s c r i p t i v e a n d t h a t t h e y w e r e m e r e l y t e l l i n g t h e t r u t h when t h e y d e s c r i b e d t h e i r p r o d u c t a s " c a m e l h a i r b e l t i n g " . L o r d H e r s c h e l l s a i d : " I t h i n k t h e f a l l a c y l i e s i n o v e r l o o k i n g t h e f a c t t h a t a w o r d may a c q u i r e i n t r a d e a s e c o n d a r y s p e c i f i c a t i o n d i f f e r i n g f r o m i t s p r i m a r y o n e a n d t h a t i t i s u s e d t o p e r s o n s i n t h e t r a d e who w i l l u n d e r s t a n d i t a n d be known a n d i n t e n d e d t o u n d e r s t a n d i t i n i t s s e c o n d a r y s e n s e . I t w i l l n o n e t h e l e s s be a f a l s e h o o d b e c a u s e i n i t s p r i m a r y s e n s e i t may be t r u e . " (The f a c t s i n t h i s c a s e , h o w e v e r , w e r e s l i g h t l y u n u s u a l i n t h a t i t h a d b e e n b e l i e v e d b y m o s t p e o p l e , i n c l u d i n g t h e p l a i n t i f f , t h a t t h e name was a " f a n c y name" a n d i t o n l y e m e r g e d d u r i n g t h e c o n d u c t o f t h e t r i a l t h a t t h e m a i n c o m p o n e n t o f t h e b e l t i n g was i n f a c t c a m e l h a i r . ) - 8 3 -T h e m a i n c r i t e r i o n f o r p r o t e c t i o n i s t h a t t h e name o r mark m u s t be d i s t i n c t i v e o f t h e m a n u f a c t u r e r . A r e l a t i v e l y e a r l y c a s e i n t h e p h a r m a c e u t i c a l f i e l d was t h a t o f A . G . & G e n e r a l C o u n c i l o f M e d i c a l E d u c a t i o n v B a r n e t t 1 0 P r o p r i e t o r i e s L t d . T h e p u b l i s h e r s a n d o w n e r s o f B r i t i s h P h a r m o c o p o e i a f a i l e d t o p r e v e n t B a r n e t t P r o p r i e t o r i e s L t d , t h e m a k e r s a n d v e n d o r s o f m e d i c a l p r e p a r a t i o n s f r o m u s i n g t h e l e t t e r s BP i n c o n n e c t i o n w i t h t h e i r g o o d s . T h e r e was no e v i d e n c e t h a t t h e w o r d s BP w e r e d i s t i n c t i v e o f t h e p l a i n t i f f s g o o d s . 3 . P r o t e c t i o n f o r t h e B r a n d Names o f P h a r m a c e u t i c a l P r o d u c t s A s i n d i c a t e d i n c h a p t e r o n e , a d r u g may be d e s i g n a t e d b y v a r i o u s n a m e s . When f i r s t i d e n t i f i e d , i f d e r i v e d f r o m a n a t u r a l s o u r c e , a p o t e n t i a l l y u s e f u l compound r e c e i v e s a s y s t e m a t i c c h e m i c a l name w h i c h d e s c r i b e s t h e n a t u r e o f t h e d r u g i n c h e m i c a l t e r m s . T h e name must r e v e a l e v e r y o n e o f t h e c o m p o u n d s c o n c e r n e d a n d no o t h e r . T h e e n d r e s u l t i s t h a t t h e c h e m i c a l name w i l l be v e r y l o n g and v i r t u a l l y u n i n t e l l i g i b l e e x c e p t t o t h e s p e c i a l i s t i n t h e f i e l d . -84-D r u g s w h i c h a r e e i t h e r s i n g l e c h e m i c a l c o m p o u n d s o r n a t u r a l a g g r e g a t e s o f s u b s t a n c e s s u c h a s e x t r a c t s o f p l a n t a n d a n i m a l o r i g i n w i l l a l s o h a v e a " g e n e r i c " o r " n o n - p r o p r i e t a r y " n a m e . The t e r m " n o n - p r o p r i e t a r y " i s more a c c u r a t e a n d d e s c r i p t i v e b e c a u s e , c o n t r a r y t o w h a t o n e m i g h t e x p e c t , t h e name d o e s n o t r e l a t e t o a c l a s s o r " g e n u s " o f d r u g b u t t o o n e s p e c i f i c d r u g w h i c h may be m a n u f a c t u r e d b y a number o f d i f f e r e n t p r o d u c e r s . The t e r m " g e n e r i c d r u g " i s o f A m e r i c a n o r i g i n a n d h a s become p a r t o f t h e a c c e p t e d t e r m i n o l o g y t o d e s c r i b e a n u n b r a n d e d d r u g . I n t h e same way t h e e x p r e s s i o n " g e n e r i c m a n u f a c t u r e r " h a s b e e n u s e d t o d e s i g n a t e a m a n u f a c t u r e r s p e c i a l i s i n g i n t h e f a b r i c a t i o n o f g e n e r i c d r u g s . When many f i r m s m a n u f a c t u r e t h e i d e n t i c a l d r u g , e a c h u n d e r a b r a n d name o f i t s o w n , t h e n e e d f o r a g e n e r i c n o n - p r o p r i e t a r y name i s o b v i o u s . T h e d e t e r m i n a t i o n o f s u c h a name i s a m a t t e r o f i n t e r n a t i o n a l c o n c e r n . T h r e e b o d i e s ; T h e A m e r i c a n M e d i c a l A s s o c i a t i o n ' s C o u n c i l o n D r u g s , The B r i t i s h P h a r m o c o p o e i a C o m m i s s i o n a n d t h e W o r l d H e a l t h O r g a n i s a t i o n a l l p u b l i s h a p p r o v e d g e n e r i c o r n o n - p r o p r i e t a r y names i n a d v a n c e o f t h e a c c e p t a n c e o f m o n o g r a p h s i n t h e i r r e s p e c t i v e v o l u m e s . F i r m s a r e e n c o u r a g e d t o u s e t h e s e names t o g e t h e r w i t h t h e p r o p r i e t a r y o r b r a n d name a t t h e t i m e o f m a r k e t i n g t o e l i m i n a t e c o n f u s i o n b u t c e r t a i n f i r m s u s e t h e i r b r a n d names o n l y t h u s - 8 b -p r o m o t i n g a n d b e n e f i t i n g f r o m t h e c o n f u s i o n . G e n e r i c names may n o t be a p p r o p r i a t e d b y a n y f i r m s a s t i r a d e m a r k s n o r may 11 t h e c h e m i c a l name ( a l t h o u g h t h e c h e m i c a l f o r m u l a r e p r e s e n t e d b y t h e l a t t e r may be t h e s u b j e c t m a t t e r o f a p a t e n t ) . T h e l a r g e f i r m s t h e r e f o r e r e g i s t e r a s h o r t s n a p p y b r a n d name a s a t r a d e mark f o r t h e m a n u f a c t u r e o f t h e g e n e r i c d r u g . T h e u n r e g i s t r a b i l i t y o f g e n e r i c names was 12 i l l u s t r a t e d i n t h e " S h r e d d e d W h e a t " c a s e . A l t h o u g h t h i s c a s e c o n c e r n s t h e f o o d , r a t h e r t h a n t h e d r u g , i n d u s t r y t h e p r i n c i p l e i s t h e s a m e . The mark " S h r e d d e d W h e a t " was e x p u n g e d f r o m t h e R e g i s t e r o n t h e a p p l i c a t i o n o f t h e R e g i s t r a r o n t h e g r o u n d t h a t i t h a d become d e s c r i p t i v e o f t h e p r o d u c t i t s e l f a n d was n o t d i s t i n c t i v e o f t h e c o m p a n y ' s make o f t h e p r o d u c t . The c o u r t was p a r t i c u l a r l y i n f l u e n c e d b y t h e f a c t t h a t t h e name h a d o r i g i n a l l y b e e n u s e d t o d e s c r i b e a p a t e n t e d a r t i c l e . The q u e s t i o n was l i t i g a t e d i n 13 14 b o t h C a n a d a a n d t h e US w i t h t h e same o u t c o m e . Mr J u s t i c e B r a n d e i s d e l i v e r e d t h e o p i n i o n o f t h e US S u p r e m e C o u r t : " T h e p l a i n t i f f h a s no e x c l u s i v e r i g h t t o u s e ' S h r e d d e d W h e a t ' a s a t r a d e name f o r t h a t i s t h e " g e n e r i c " t e r m o f t h e a r t i c l e w h i c h d e s c r i b e s i t w i t h a f a i r d e g r e e o f a c c u r a c y . . . . s i n c e t h e t e r m i s -86-g e n e r i c t h e o r i g i n a l m a k e r o f t h e p r o d u c t a c q u i r e d no e x c l u s i v e r i g h t t o u s e i t . " 1 5 And l a t e r : " S i n c e d u r i n g t h e l i f e o f t h e p a t e n t s , s h r e d d e d w h e a t was t h e g e n e r a l d e s i g n a t i o n o f t h e p a t e n t e d p r o d u c t t h e r e p a s s e d t o t h e p u b l i c , o n t h e e x p i r a t i o n o f t h e p a t e n t , n o t o n l y t h e r i g h t t o make t h e a r t i c l e a s i t was made d u r i n g t h e p a t e n t p e r i o d , b u t a l s o t h e r i g h t t o a p p l y t h e r e t o t h e name b y w h i c h i t h a d become k n o w n . ' ' 16 T h u s , i t i s t h e b r a n d name u n d e r w h i c h t h e p r o d u c t i s m a r k e t e d w h i c h i s r e g i s t e r e d u n d e r t h e A c t . T h e p u r p o s e , a s w i t h a n y o t h e r t r a d e m a r k , i s t o d i s t i n g u i s h o n e f i r m ' s p r e p a r a t i o n o f a g e n e r i c d r u g f r o m t h o s e o f o t h e r f i r m s o r , w h e r e t h e r e i s no o t h e r m a n u f a c t u r e r , t o i d e n t i f y t h e p r o d u c t w i t h t h e s o l e m a n u f a c t u r e r . T h e r e i s , h o w e v e r , one d i f f e r e n c e b e t w e e n t h e u s e o f r e g i s t e r e d t r a d e names i n t h i s a r e a a n d a n y o t h e r i n d u s t r y : i n s t e a d o f u s i n g a r e g i s t e r e d mark o r name t o d e n o t e a l i n e o f p r o d u c t s , t h e f i r m w i l l s e l e c t a s e p a r a t e t r a d e mark f o r e a c h d r u g i t s e l l s w i t h t h e o b v i o u s a i m o f d i s p l a c i n g t h e c h e m i c a l o r g e n e r i c name. T h e c o n c u r r e n t e x i s t e n c e o f t h e g e n e r i c name ( f o r e x a m p l e , i n t h e B r i t i s h P h a r m o c o p o e i a ) w i l l r e d u c e t h e d a n g e r o f e x p u n g e m e n t f r o m t h e r e g i s t e r . -87-T h e C a n a d i a n RTPC c o n d e m n e d t h e u s e o f b r a n d n a m e s , a s a p p l i e d t o s i n g l e d r u g s , b e c a u s e t h e name i n d i c a t e s n o t h i n g a b o u t t h e n a t u r e o f t h e d r u g a n d may v a r y f r o m c o u n t r y t o c o u n t r y t h e r e b y c a u s i n g c o n f u s i o n . F u r t h e r m o r e , b r a n d n a m e s , i n t h e o p i n i o n o f t h e C o m m i s s i o n , r e s u l t e d i n i n c r e a s e d e x p e n d i t u r e o n a d v e r t i s i n g a n d p r o m o t i o n a n d a r e d u c t i o n i n c o m p e t i t i o n t h r o u g h t h e p h a r m a c i s t ' s i n a b i l i t y t o d i s p e n s e a n y t h i n g b u t t h e b r a n d e d d r u g i f p r e s c r i b e d b y name. T h e C o m m i s s i o n , w h i l e n o t a d v o c a t i n g t h e a b o l i t i o n o f t r a d e mark p r o t e c t i o n , r e c o m m e n d e d t h a t l a b e l s , o r d e r s a n d o t h e r d e s c r i p t i v e m a t e r i a l be r e q u i r e d t o c a r r y t h e g e n e r i c name o f t h e d r u g p r o m i n e n t l y a n d i n t y p e a t l e a s t 18 a s l a r g e a s t h a t u s e d f o r t h e b r a n d name. T h e S a i n s b u r y C o m m i t t e e w e n t e v e n f u r t h e r : -"We t h e r e f o r e recommend t h a t t h e r e s h o u l d be n o b r a n d names f o r new p h a r m a c e u t i c a l p r o d u c t s l i c e n s e d o n t h e a d v i c e o f t h e m e d i c i n e s c o m m m i s s i o n w h i c h we p r o p o s e s h o u l d be s e t up a n d t h a t a l l s u c h p r o d u c t s , w h e t h e r t h e s u b j e c t o f p a t e n t s o r n o t , s h o u l d be m a r k e t e d o n l y u n d e r a name a p p r o v e d b y t h e C o m m i s s i o n w i t h o r w i t h o u t t h e name o r h o u s e mark o f t h e m a n u f a c t u r e r . T h e T r a d e M a r k s A c t s h o u l d be a p p r o p r i a t e l y a m e n d e d . I t w o u l d t h e n be o p e n t o a n y p e r s o n t o u s e t h e a p p r o v e d name so l o n g a s no p a t e n t was v i o l a t e d . " _ -88-N o t s u r p r i s i n g l y , t h i s b o l d r e c o m m e n d a t i o n was n o t a d o p t e d . I t w i l l be r e c a l l e d f r o m c h a p t e r one t h a t one o f t h e m a i n r e a s o n s g i v e n f o r r e t a i n i n g p r o t e c t i o n f o r b r a n d names was t h e n e e d t o p r o t e c t t h e B r i t i s h p h a r m a c e u t i c a l i n d u s t r y . H o w e v e r , B r i t i s h f i r m s h a v e a g o o d r e p u t a t i o n a b r o a d a n d t h e r e i s no r e a s o n why a B r i t i s h m e d i c i n e s h o u l d be more d i f f i c u l t t o s e l l b e c a u s e i t i s a d v e r t i s e d u n d e r a s i n g l e a c c e p t e d name p r o v i d e d t h e r e p u t a t i o n o f t h e B r i t i s h c o m p a n y i s c l e a r l y a s s o c i a t e d w i t h i t . O p p o n e n t s o f t h e a b o l i t i o n o f t r a d e mark p r o t e c t i o n ( i n p a r t i c u l a r t h e A s s o c i a t i o n o f t h e B r i t i s h P h a r m a c e u t i c a l I n d u s t r y ) m a i n t a i n t h a t g e n e r i c d r u g s a r e n o t as s a f e a s t r a d e m a r k e d p r o d u c t s . T h e y a l s o m a i n t a i n t h a t p h y s i c i a n s a r e more c o s t - c o n s c i o u s t h a n t h e v a r i o u s r e p o r t s h a v e g i v e n t h e m c r e d i t f o r , a n d t h a t when t h e y p r e s c r i b e a p a r t i c u l a r b r a n d t h e y d o s o b e c a u s e t h e y h a v e f a i t h i n t h e c o m p a n y a n d t h e q u a l i t y o f i t s p r o d u c t . I f p h y s i c i a n s a r e g e n u i n e l y c o n c e r n e d a b o u t t h e s o u r c e o f t h e d r u g , t h e r e w o u l d , h o w e v e r , be n o t h i n g t o p r e v e n t t h e m f r o m s p e c i f y i n g a p a r t i c u l a r m a n u f a c t u r e r ' s -89-name a l o n g s i d e t h e g e n e r i c name o n t h e p r e s c r i p t i o n . T h i s w o u l d r e q u i r e p o s i t i v e a c t i o n f r o m t h e p h y s i c i a n a n d w o u l d a v o i d t h e s i t u a t i o n w h e r e he p r e s c r i b e s a b r a n d name s i m p l y f r o m h a b i t . T h e g e n e r i c p r o d u c e r s m a i n t a i n t h a t f e a r s a b o u t t h e q u a l i t y o f g e n e r i c d r u g s a r e l a r g e l y e x a g g e r a t e d . Many d r u g s a r e m a n u f a c t u r e d a n d s o l d i n b u l k b y l a r g e p r o d u c e r s s o t h a t t h e g e n e r i c h o u s e s o f t e n d e a l o n l y i n b o t t l i n g , l a b e l i n g a n d p a c k a g i n g . I n t h e s e c a s e s i d e n t i t y o f t h e q u a l i t y o f t h e p r o d u c t i s g u a r a n t e e d b y i d e n t i t y o f s o u r c e . I n o t h e r c a s e s q u a l i t y c o n t r o l a n d t e s t i n g c o u l d be c a r r i e d o u t b y t h e M e d i c i n e s C o m m i s s i o n o r a s i m i l a r b o d y t o e n s u r e t h a t a l l d r u g s p a c k a g e d u n d e r t h e same g e n e r i c name c o n f o r m t o t h e same s t a n d a r d . T h e c o s t s a v i n g a d v a n t a g e s o f g e n e r i c p r e s c r i b i n g h a v e b e e n a c c e p t e d i n t h e US b u t t h e y h a v e a d o p t e d a d i f f e r e n t m e t h o d f r o m t h a t p r o p o s e d b y t h e S a i n s b u r y C o m m i t t e e t o a c h i e v e t h i s a i m . I n s t e a d o f a b o l i s h i n g t r a d e mark p r o t e c t i o n f o r p h a r m a c e u t i c a l b r a n d n a m e s , many s t a t e s h a v e p a s s e d m a n d a t o r y d r u g s u b s t i t u t i o n l a w s w h e r e b y , e v e n when a b r a n d name d r u g i s p r e s c r i b e d , t h e p h a r m a c i s t i s o b l i g e d t o s u b s t i t u t e t h e c h e a p e s t g e n e r i c e q u i v a l e n t 20 u n l e s s t h e p h y s i c i a n s p e c i f i c a l l y s t a t e s o t h e r w i s e . -90-T h e B r i t i s h a p p r o a c h h a s b e e n l e s s c o e r c i v e . H o s p i t a l s (by f a r t h e l a r g e s t c o n s u m e r s ) h a v e a l w a y s p u r c h a s e d b y t h e g e n e r i c name. A s f a r a s t h e i n d e p e n d e n t g e n e r a l p r a c t i t i o n e r s a r e c o n c e r n e d , t h e D e p a r t m e n t o f H e a l t h a n d S o c i a l S e c u r i t y p r o v i d e s t h e m w i t h a l i s t o f a p p r o v e d p r o p r i e t a r y m e d i c i n e s a n d a r e c o m m e n d a t i o n t o a v o i d p r e s c r i b i n g b r a n d e d p r o p r i e t a r i e s f o r w h i c h a s t a n d a r d e q u i v a l e n t i s a v a i l a b l e a t a l o w e r c o s t . I t s e e m s , h o w e v e r , t h a t many g e n e r a l p r a c t i t i o n e r s c o n t i n u e t o p r e s c r i b e b y b r a n d name p r o b a b l y o u t o f h a b i t a n d b e c a u s e t h e names a r e more e a s i l y m e m o r a b l e . I t i s n o t t o o l a t e t o f o l l o w t h e S a i n s b u r y C o m m i t t e e ' s p r o p o s a l a n d a b o l i s h p r o t e c t i o n f o r b r a n d n a m e s . T h e w r i t e r i s aware t h a t t h i s may c o m p l i c a t e p r e s e n t e f f o r t s t o h a r m o n i s e t r a d e mark law i n t h e E E C . H o w e v e r , t h e p r o p o s a l i s i n c o n f o r m i t y w i t h t h e g e n e r a l t r e n d d i s c e r n a b l e i n t h e US a n d C a n a d a a n d a n a t t e m p t s h o u l d be made t o p e r s u a d e member s t a t e s t o e x c l u d e p h a r m a c e u t i c a l names f r o m r e g i s t r a t i o n a s E u o p e a n T r a d e M a r k s . - 9 1 -4. P r o t e c t i o n o f t h e T o t a l A p p e a r a n c e o f t h e D r u g B r a n d names a r e p r e s e n t l y s t i l l r e g i s t r a b l e a s t r a d e m a r k s , s o , i t a p p e a r s , a r e t h e d r u g s t h e m s e l v e s . R e g i s t r a t i o n o f t h e name w i l l n o t a s s i s t t h e p h a r m a c e u t i c a l m a n u f a c t u r e r i f t h e p h y s i c i a n t a k e s h e e d o f t h e DHSS p r e s s u r e c a m p a i g n a n d p r e s c r i b e s g e n e r i c a l l y . T h e p h a r m a c i s t may d i s p e n s e t h e c h e a p e s t e q u i v a l e n t and t h e c o n s u m e r , t h e p a t i e n t , w i l l t r u s t t h e p h a r m a c i s t ' s c h o i c e -o r w i l l h e ? I f t h e p h y s i c i a n , when w r i t i n g a r e p e a t p r e s c r i p t i o n , s w i t c h e s f r o m a b r a n d name t o a g e n e r i c name ( p r o b a b l y b e c a u s e t h e p a t e n t h a s r e c e n t l y e x p i r e d ) t h e p a t i e n t w i l l s t i l l e x p e c t h i s n e x t s u p p l y t o l o o k t h e same. I f t h e a p p e a r a n c e o f t h e d r u g i s a r e g i s t e r e d t r a d e mark t h e g e n e r i c m a n u f a c t u r e r w i l l be b a r r e d f r o m i m i t a t i n g t h a t a p p e a r a n c e . E v e n w i t h o u t r e g i s t r a t i o n , t h e g e n e r i c m a n u f a c t u r e r may be b a r r e d , u n d e r t h e l a w s o f p a s s i n g o f f , f r o m i m i t a t i n g t h e g e t u p . C o n s e q u e n t l y t h e g e n e r i c d r u g may be r e j e c t e d b y t h o s e p a t i e n t s who w a n t " t h e same a g a i n " . The b u s y g e n e r a l p r a c t i t i o n e r o r p h a r m a c i s t may n o t h a v e t i m e t o c o n v i n c e t h e u n h a p p y p a t i e n t t h a t t h e d r u g i n q u e s t i o n i s i d e n t i c a l t o t h a t r e c e i v e d p r e v i o u s l y a n d t h e GP may a v o i d p r o b l e m s o f r e j e c t i o n b y s i m p l y p r e s c r i b i n g t h e o r i g i n a l b r a n d e d d r u g . -92-T h e f u n d a m e n t a l i s s u e i s w h e t h e r t h e p a t i e n t who d e m a n d s " t h e same a g a i n " w a n t s t h e same d r u g i n t h e s e n s e o f a d r u g o f t h e same c h e m i c a l c o m p o s i t i o n a n d t h e r a p e u t i c e f f e c t o r t h e same d r u g e m a n a t i n g f r o m t h e same s o u r c e . I f t h e l a t t e r i s c o r r e c t t h e n g e n e r i c m a n u f a c t u r e r s a r e r i g h t l y b a r r e d f r o m i m i t a t i n g t h e g e t up o f t h e b r a n d name d r u g a n d t h e r e b y d e c e i v i n g t h e p u b l i c a s t o s o u r c e . I n t h i s p a p e r , t h e p o s i t i o n i s t a k e n t h a t t h e p a t i e n t i s more c o n c e r n e d w i t h t h e t h e r a p e u t i c q u a l i t y o f t h e d r u g t h a n i t s m a n u f a c t u r i n g s o u r c e . T h e c o n s u m i n g p u b l i c a r e n o t r e c i p i e n t s o f t h e d r u g c o m p a n y ' s a d v e r t i s i n g m a t e r i a l a n d c o n s e q u e n t l y know l i t t l e a b o u t t h e v a r i o u s c o m p a n i e s . I n m o s t c a s e s t h e y d o n o t know o r c a r e b y whom a c e r t a i n d r u g i s m a n u f a c t u r e d b u y t h e y c a r e v e r y much w h e t h e r t h e d r u g i s o f t h e c o r r e c t c h e m i c a l c o m p o s i t i o n . T h e w e a k n e s s o f t h i s p o s i t i o n , a s t h e w r i t e r a c k n o w l e d g e s , i s t h a t i n no E n g l i s h c a s e h a s e v i d e n c e b e e n s u b m i t t e d t o i n d i c a t e w h a t t h e p u b l i c u n d e r s t a n d b y t h e d i s t i n c t i v e name a n d a p p e a r a n c e o f a d r u g . I n t h e a b s e n c e o f s u c h e v i d e n c e , h o w e v e r , t h e o n u s s u r e l y r e s t s u p o n t h o s e s e e k i n g t o a s s e r t a n e x c l u s i v e - 9 3 -r i g h t t o j u s t i f y t h a t r i g h t a n d t h i s t h e d r u g c o m p a n i e s h a v e so f a r f a i l e d t o d o . T h e y r e l y h e a v i l y o n t h e 21 Y o r k s h i r e R e l i s h C a s e t o s u p p o r t t h e i r c o n t e n t i o n t h a t t h e p u b l i c c a r e a b o u t t h e s o u r c e o f a p r o d u c t e v e n when t h e y d o n o t know t h e i d e n t i t y o f e i t h e r t h e o r i g i n a l m a n u f a c t u r e r o r i t s i m m i t a t o r s : " A p e r s o n whose name i s n o t known i s j u s t a s much i n j u r e d i n h i s t r a d e a s i f h i s name was known a s w e l l a s h i s m a r k . H i s m a r k , a s u s e d b y h i m , h a s g i v e n a r e p u t a t i o n t o h i s g o o d s . H i s t r a d e d e p e n d s g r e a t l y o n s u c h r e p u t a t i o n . H i s mark s e l l s h i s g o o d s . " 2 2 T h e p r i n c i p l e i s now e m b o d i e d i n t h e T r a d e M a r k A c t 193 8 23 (UK) a n d i n t h e c o n t e x t o f t h e a b o v e c a s e i t i s no d o u b t v a l i d . B u t c a n a d r u g be e q u a t e d w i t h a r e l i s h ? Many v a r i a t i o n s o f t a s t e a n d s m e l l may f l o w f r o m t h e c o n c o c t i o n o f a r e l i s h b y d i f f e r e n t c h e f s . E a c h w i l l endow i t w i t h s o m e t h i n g o f h i s own p e r s o n a l i t y a n d s u b t l e d i s t i n c t i o n s w i l l be n o t i c e a b l e t o t h e p u r c h a s e r . I n t h e c a s e o f p r e s c r i p t i o n d r u g s h o w e v e r , t h e p u r c h a s e r w i l l n o t i c e no d i s t r i n c t i o n s o f t a s t e o r s m e l l . T h e o n l y d i s t i n c t i o n s w i l l be s u p e r f i c i a l m a r k i n g s d e l i b e r a t e l y i m p o s e d b y t h e p h a r m a c e u t i c a l c o m p a n y w i t h a v i e w t o f o s t e r i n g t h e m i n d s o f t h e p u b l i c an a s s o c i a t i o n b e t w e e n t h e m a r k i n g s and t h e n a t u r e o f t h e d r u g . -94-T h e r e c i p e f o r Y o r k s h i r e R e l i s h was a s e c r e t a n d no o n e e l s e c o u l d m a n u f a c t u r e i t t o p r e c i s e l y t h e same r e c i p e . I t i s u n d e r s t a n d a b l e t h e r e f o r e t h a t t h e c o n s u m e r s h o u l d be c o n c e r n e d a b o u t s o u r c e : "Now t h e t h i n g t h a t i s s o l d a s Y o r k s h i r e R e l i s h i s n o t Y o r k s h i r e R e l i s h i n t h e s e n s e o f b e i n g t h e same c h e m i c a l c o m p o s i t i o n , t h e s e n s e o f i t h a v i n g t h e same t a s t e , i n t h e s e n s e o f i t b e i n g s o p r o p e r l y a s s i m i l a t e d t o t h e p r e f e r e n c e o f t h e p e r s o n s who t a k e i t , e i t h e r i n s m e l l o r i n t a s t e , a s t h e o r i g i n a l c o m p o s i t i o n . " G e n e r i c d r u g s h o w e v e r w i l l be o f t h e same c h e m i c a l c o m p o s i t i o n a s t h e b r a n d named d r u g s a n d t h e r e w i l l be no v a r i a t i o n s i n s m e l l o r i n t a s t e . A d m i t t e d l y , i n t h e 25 n i n e t e e n t h c e n t u r y c a s e o f M a s s a m v T h o r l e y ' s F o o d , t h e D e f e n d a n t s w e r e e n j o i n e d f r o m u s i n g t h e name " T h o r l e y " w i t h o u t q u a l i f i c a t i o n t o m i s l e a d t h e p u b l i c i n t o s u p p o s i n g t h a t t h e a r t i c l e s o l d b y t h e m was m a n u f a c t u r e d a t t h e o r i g i n a l e s t a b l i s h m e n t o f o n e J o s e p h T h o r l e y . I t was c o n s i d e r e d i r r e l e v a n t t h a t t h e p r o d u c t was made u s i n g t h e same i n g r e d i e n t s a n d t o t h e i d e n t i c a l r e c i p e b e c a u s e t h e p u b l i c h a d f a i t h i n t h e name a s i n d i c a t i v e o f a r e p u t a b l e m a n u f a c t u r e r . -9b-T h e p r i n c i p l e o f t h e c a s e i s n o t , h o w e v e r , a p p l i c a b l e t o t h e p h a r m a c e u t i c a l i n d u s t r y b e c a u s e t h e r e i s no e v i d e n c e t h a t t h e p u b l i c a r e a w a r e o f , o r p u t t h e i r f a i t h i n , t h e name o f a p a r t i c u l a r m a n u f a c t u r e r . U n t i l t h e p h a r m a c e u t i c a l i n d u s t r y c a n a d d u c e p o s i t i v e e v i d e n c e i n s u p p o r t o f i t s c a s e , i t s h o u l d n o t be p r e s u m e d , i n i t s f a v o u r , t h a t p a t i e n t s know o r c a r e a b o u t t h e s o u r c e o f t h e i r d r u g s . T h e m o s t e f f e c t i v e way f o r p h a r m a c e u t i c a l c o m p a n i e s t o s e c u r e a m o n o p o l y o n t h e a p p e a r a n c e o f t h e i r d r u g s i s t o r e g i s t e r t h e i r g e t u p a s a t r a d e m a r k . I n t h e w r i t e r ' s o p i n i o n , r e g i s t r a t i o n o f t h e a p p e a r a n c e o f a d r u g i s n o t o n l y u n d e s i r a b l e , i t r e s t s o n a d u b i o u s l e g a l f o u n d a t i o n . T h e d e f i n i t i o n o f " m a r k " i n t h e 1938 A c t i n c l u d e s " a d e v i c e , b r a n d , h e a d i n g , l a b e l , t i c k e t , name, s i g n a t u r e , w o r d , l e t t e r , n u m e r a l , o r a n y c o m b i n a t i o n t h e r e o f . " T h e d e f i n i t i o n i s n o t e x h a u s t i v e b u t d o e s i n d i c a t e a n i n t e n t i o n o n t h e p a r t o f P a r l i a m e n t t o p r o v i d e f o r r e g i s t r a t i o n o f m a r k s w h i c h a r e c a p a b l e o f e x i s t i n g i n d e p e n d e n t l y o f t h e g o o d s t h e m s e l v e s . - 9 b -I n o r d e r t o b e r e g i s t r a b l e u n d e r p a r t A o f t h e r e g i s t e r , t h e m a r k m u s t c o n t a i n o n e o r m o r e o f t h e f i v e e s s e n t i a l p a r t i c u l a r s e n u m e r a t e d i n s . 9 ( l ) o f t h e A c t . T h e l a s t c a t e g o r y i s a " s w e e p i n g u p " p r o v i s i o n p r o v i d i n g f o r r e g i s t r a t i o n o f " a n y o t h e r d i s t i n c t i v e m a r k " . I t i s u n d e r t h i s s e c t i o n t h a t p h a r m a c e u t i c a l f i r m s h a v e s u c c e e d e d i n r e g i s t e r i n g t h e p h y s i c a l a p p e a r a n c e o f a d r u g . " D i s t i n c t i v e " i s d e f i n e d i n s s . 9 ( 2 ) a n d 9 ( 3 ) o f t h e * * . 2 8 A c t . T h e l e a d i n g c a s e i n t h i s a r e a i s S m i t h K l i n e & 2 9 F r e n c h L a b o r a t o r i e s L t d v S t e r l i n g W i n t h r o p G r o u p L t d . T h e a p p e a l l a n t s w i s h e d t o r e g i s t e r t e n t r a d e m a r k s i n r e s p e c t o f p h a r m a c e u t i c a l s u b s t a n c e s s o l d i n p e l l e t f o r m w i t h i n c o l o u r e d c a p s u l e s . T h e r e s p o n d e n t s o p p o s e d r e g i s t r a t i o n o n t h e g r o u n d t h a t t h e c o l o u r c o m b i n a t i o n s w e r e n o t " m a r k s " o r " t r a d e m a r k s " w i t h i n t h e d e f i n i t i o n c o n t a i n e d i n s . 6 8 o f t h e A c t a n d w e r e n o t " a d a p t e d t o d i s t i n g u i s h w i t h i n s . 9 . F u r t h e r m o r e i t w a s a l l e g e d t h a t t h e c o l o u r c o m b i n a t i o n s c o n t r a v e n e d s . l l i n t h a t t h e y w e r e l i k e l y t o c a u s e d e c e p t i o n a n d c o n f u s i o n a m o n g s t p e r s o n s t a k i n g t h e m e d i c i n e i n c a p s u l e f o r m w i t h t h e r i s k o f 3 0 s e r x o u s c o n s e q u e n c e s . \ -97-Lord Diplock did not find that r e g i s t r a t i o n of the marks would cause confusion. He had no hesitation i n holding that a mark could be three-dimensional and could cover the entire surface of the goods. Furthermore, the trade mark was held to be d i s t i n c t i v e within section 9. The judgment requires careful scrutiny p a r t i c u l a r l y i n view of the fact that when a sim i l a r application was previously consdered by Windeyer J. i n the High Court of A u s t r a l i a the mark was held to be unregistrable because i t could not be described and depicted as something apart from the goods to which i t was ap p l i e d . 3 ^ Lord Diplock considered the d e f i n i t i o n s of trade mark and mark i n s.68 and continued: "My Lords, I see nothing i n t h i s context that requires one to exclude from the d e f i n i t i o n of trade mark a mark which covers the whole of the v i s i b l e surface of the goods to which i t i s applied. Such a mark i s as capable of ind i c a t i n g a connection i n the course of trade between the goods and the proprietor of the mark as i t would have been i f i t had only covered half or three quarters of the v i s i b l e surface. No one has been able to point to any business purpose that would be served by drawing a d i s t i n c t i o n between marks that cover the whole and those which cover a part of the surf ace. " 1 „ - 9 8 -L o r d D i p l o c k a l s o c o n s i d e r e d t h e T r a d e M a r k R u l e s 1938 w h i c h r e q u i r e t h e a p p l i c a t i o n f o r r e g i s t r a t i o n t o c o n t a i n a r e p r e s e n t a t i o n o f t h e mark w h i c h i s u s u a l l y a d r a w i n g b u t may, a s i n t h i s c a s e , be a s p e c i m e n o f t h e m a r k . He s a i d : " I s e e n o t h i n g i n t h e s e r u l e s t o r e q u i r e a t r a d e mark t o be two d i m e n s i o n a l o n l y , o r t o e x c l u d e f r o m r e g i s t r a t i o n a mark w h i c h c o v e r s t h e w h o l e o f t h e v i s i b l e s u r f a c e o f t h e g o o d s ."3^^ I n t h e w r i t e r ' s o p i n i o n , t h e r e i s a d i s t i n c t i o n b e t w e e n a mark w h i c h c o v e r s a p a r t o f t h e a r t i c l e a n d t h e e n t i r e g e t up o f t h e a r t i c l e . The d e f i n i t i o n o f mark c o n t a i n e d i n t h e s t a t u t e , a l t h o u g h n o t e x h a u s t i v e , d o e s i m p l y s o m e t h i n g s e p a r a t e f r o m t h e t h i n g i t i s a f f i x e d t o . A l l t h e e x a m p l e s g i v e n a r e c a p a b l e o f p h y s i c a l a p p l i c a t i o n t o a n a r t i c l e . T h e C o u r t o f A p p e a l , g r a p p l i n g w i t h t h e same 32 p r o b l e m o f i n t e r p r e t a t i o n , r e f e r r e d t o v a r i o u s d i c t i o n a r y d e f i n i t i o n s o f " m a r k " b u t c o u l d n o t f i n d o n e w h i c h i n c l u d e d t h e e n t i r e a p p e a r a n c e o f an a r t i c l e w i t h o u t q u a l i f i c a t i o n . - y y -"The d e f i n i t i o n of 'mark' i n the statute i s not confined to the items i t i s said to include and we were in v i t e d to consider a number of dictionary d e f i n i t i o n s . Chambers (1901) includes 'a v i s i b l e sign, that by which anything i s known, a badge1 Chambers (1952) includes 'a v i s i b l e i n d i c a t i o n or sign; a d i s t i n c t i v e device; a brand; a streak; smears or other l o c a l modification of appearance* Murrays Oxford Dictionary has a main heading III 'a sign, token, i n d i c a t i o n ' and thereunder numbered arabic 10 'an appearance action or event that indicates something, a sign, token, symptom' and further numbered arabic 11 'a sign affixed or impressed for d i s t i n c t i o n ' and '(a) a device, stamp, seal, l a b e l , brand, i n s c r i p t i o n , written character or the l i k e placed upon an a r t i c l e as an i n d i c a t i o n of ownership or o r i g i n 1 " , . A consideration of the remainder of the statute throws no l i g h t on the question. Section 16 i s the only one to deal s p e c i f i c a l l y with colours but the section c l e a r l y does not envisage the r e g i s t r a t i o n of colours per 34 se as trade marks. Lord Diplock accepted the authority of Reddaways 35 Application for the proposition that a mark need not be d i s t i n c t from the a r t i c l e . In that case Warrington J. held that three coloured l i n e s which extended throughout the entire length of a hose were capable of r e g i s t r a t i o n provided the mark was limited to the colours red and blue and extended throughout the f a b r i c . -10U-"My L o r d s , I c a n s e e no s e n s i b l e d i s t i n c t i o n b e t w e e n t h e mark r e g i s t e r e d i n t h e R e d d a w a y c a s e a n d o n e w h i c h , i n a d d i t i o n t o t h e b l u e a n d r e d s t r i p e s , i n v o l v e d t h e a p p l i c a t i o n o f some c o l o u r t o t h e r e m a i n i n g e x t e r n a l s u r f a c e o f t h e h o s e t h r o u g h o u t i t s l e n g t h , n o r c a n I s e e a n y s e n s i b l e d i s t r i n c t i o n b e t w e e n s u c h a mark a n d t h e m a r k s s o u g h t t o be r e g i s t e r e d i n t h e i n s t a n t c a s e . " , I n t h e w r i t e r ' s o p i n i o n , R e d d a w a y s c a s e may w e l l h a v e b e e n d e c i d e d d i f f e r e n t l y i f t h e e n t i r e e x t e r n a l s u r f a c e o f t h e h o s e h a d b e e n c o l o u r e d . S u c h r e p e t i t i o n w o u l d n o t h a v e b e e n a " m a r k " a s i t w o u l d h a v e a m o u n t e d t o 37 t h e a p p e a r a n c e o f t h e h o s e i t s e l f . The c l e a r e s t i l l u s t r a t i o n o f t h i s was g i v e n b y B u c k l e y L . J . i n t h e C o u r t o f A p p e a l : " I f a r e d p i l l a r box was p a i n t e d b l u e no one c o u l d , i n my o p i n i o n , s a y t h a t i t b o r e a b l u e mark o r t h a t i t h a d b e e n m a r k e d b l u e . I f , o n t h e o t h e r h a n d , a b l u e b a n d o f p e r h a p s two i n c h e s w i d e was p a i n t e d a r o u n d i t s w a i s t one m i g h t v e r y w e l l r e a s o n a b l y s a y t h a t i t h a d b e e n m a r k e d w i t h a b l u e m a r k . I n t h e o n e c a s e i t h a s c e a s e d t o be a r e d p i l l a r b o x , i n t h e o t h e r i t r e m a i n s a r e d p i l l a r box b u t d i s t i n g u i s h e d b y a b l u e mark o n i t . " _ I t i s w o r t h n o t i n g , h o w e v e r , t h a t i n a s u b s e q u e n t c a s e t h e c o u r t a l l o w e d r e g i s t r a t i o n o f t h e w o r d s " B l u e P a r r a f i n " a l t h o u g h t h e y w e r e d e s c r i p t i v e o f t h e p r o d u c t i n 3 9 i t s e n t i r e t y a n d n o t a s e v e r a l e l e m e n t t h e r e o f . -101-I n Re J a m e s T r a d e M a r k t h e p l a i n t i f f s r e g i s t e r e d a s a t r a d e mark a d e s i g n f o r dome s h a p e d b l o c k s o f l e a d w h i c h was i m p r e s s e d u p o n a l l l e a d s o l d r e g a r d l e s s o f s h a p e . T h e r e g i s t r a t i o n was a l l o w e d t o s t a n d o n l y b e c a u s e t h e a p p l i c a n t s w e r e n o t c l a i m i n g t h e s o l e r i g h t o f s e l l i n g l e a d i n t h a t s h a p e b u t m e r e l y t h e r i g h t t o u s e t h e dome s h a p e a s a t r a d e mark o n a l l l e a d s o l d b y t h e m . L i n d l e y L . J . b e g a n h i s j u d g m e n t b y s a y i n g : "We m u s t be c a r e f u l t o a v o i d a c o n f u s i o n o f i d e a s . A mark m u s t be s o m e t h i n g d i s t i n c t f r o m t h e t h i n g m a r k e d . The t h i n g i t s e l f c a n n o t be a mark o f i t s e l f . " ^ T h e C o u r t o f A p p e a l i n t h e S m i t h K l i n e & F r e n c h c a s e r e j e c t e d t h e t r a d e mark a p p l i c a t i o n o n t h e s t r e n g t h o f Re J a m e s b u t , i n L o r d D i p l o c k ' s v i e w , t h i s c a s e was i r r e l e v a n t . He c o n s i d e r e d t h a t t h e " t h i n g m a r k e d " was t h e p h a r m a c e u t i c a l s u b s t a n c e a n d t h e " m a r k " t h e v a r i o u s c o l o u r s a p p l i e d t o i t . T h e r e a p p e a r , h o w e v e r , t o be no o t h e r r e p o r t e d c a s e s i n w h i c h t h e t o t a l e x t e r n a l a p p e a r a n c e o f t h e a r t i c l e i n q u e s t i o n h a s b e e n r e g i s t e r e d . -102-I n t h e I r i s h c a s e o f P a r k e D a v i s v C o m p t r o l l e r o f 4 2 P a t e n t s D e s i g n s a n d T r a d e M a r k s , d e c i d e d u n d e r s i m i l a r l e g i s l a t i o n , a c o l o u r e d b a n d e n c i r c l i n g t h e m i d d l e o f p h a r m a c e u t i c a l c a p s u l e s was h e l d t o be a m a r k . The c a s e i s a n a l a g o u s t o B u c k l e y L . J . ' s r e d p i l l a r box w i t h a b l u e b a n d and i s a more s o u n d a p p l i c a t i o n o f t h e s t a t u t e . I t a p p e a r s , h o w e v e r , t h a t t h e S m i t h K l i n e & F r e n c h c a s e h a s now made i t p o s s i b l e f o r t h e d r u g c o m p a n i e s t o o b t a i n a t r a d e mark r e g i s t r a t i o n o n t h e t o t a l a p p e a r a n c e o f t h e i r c a p s u l e s . The v i e w i s r e i n f o r c e d b y t h e p r e s e n t d r a f t o f t h e E u r o p e a n T r a d e M a r k C o n v e n t i o n w h i c h p r o v i d e s t h a t n o t o n l y w i l l t r a d i t i o n a l e l e m e n t s s u c h a s names a n d p r i n t s s e r v e a s t r a d e m a r k s b u t a l s o " s h a p e s a n d a r t i c l e s o f p a c k i n g a n d a l l o t h e r s i g n s w h i c h d i s t i n g u i s h t h e g o o d s 43 o r s e r v i c e s o f a n u n d e r t a k i n g . " I f a f i r m n e g l e c t s t o r e g i s t e r t h e a p p e a r a n c e a s a t r a d e m a r k , o r i s u n s u c c e s s f u l i n i t s a p p l i c a t i o n , t h e g e t u p w i l l s t i l l be p r o t e c t a b l e u n d e r t h e l a w o f p a s s i n g o f f . I n d e e d , e v e n c o u n s e l f o r t h e d e f e n d a n t s c o n c e d e d i n t h e S m i t h K l i n e & F r e n c h c a s e t h a t t h e u s e o f m a r k s so n e a r l y r e s e m b l i n g S m i t h K l i n e a n d F r e n c h ' s a s t o be d e c e p t i v e 44 w o u l d amount t o a p a s s i n g o f f a t common l a w . No d o u b t - 1 0 3 -c o u n s e l h a d i n m i n d t h e c a s e o f H o f f m a n - L a R o c h e v 45 D P S A . T h e p l a i n t i f f s i n t h a t c a s e s u c c e e d e d i n e n j o i n i n g P P S A f r o m m a n u f a c t u r i n g g r e e n a n d b l a c k c a p s u l e s c o n t a i n i n g t h e d r u g C h l o r d i a z e p o x i d e ( C D P ) . T h e p l a i n t i f f s s o l d t h e d r u g , u n d e r t h e b r a n d name L i b r i u m , i n g r e e n a n d b l a c k c a p s u l e s . " L i b r i u m " was a r e g i s t e r e d t r a d e mark b u t t h e c a p s u l e was n o t . (No d o u b t , i f t h e S m i t h K l i n e & F r e n c h c a s e h a d b e e n d e c i d e d f i v e y e a r s e a r l i e r t h e c a p s u l e , a s w e l l a s t h e name, w o u l d h a v e b e e n r e g i s t e r e d . ) P P S A , a f t e r c o n s i d e r a b l e a r g u m e n t , managed t o s e c u r e a c o m p u l s o r y l i c e n c e a n d p r o c e e d e d t o m a n u f a c t u r e t h e d r u g s i n s i m i l a r c o l o u r e d c a p s u l e s , t h e o n l y d i s t i n c t i o n was t h a t , i n s t e a d o f t h e w o r d " R o c h e " , t h e c a p s u l e s b o r e t h e l e t t e r s " P P S A " . N e i t h e r c o u n s e l n o r t h e c o u r t p a i d much a t t e n t i o n t o t h e m a r k i n g o f t h e c a p s u l e s d e s p i t e t h e 46 f i n d i n g i n S c h w e p p e s v G i b b o n s t h a t t h e p l a c i n g o f t h e d e f e n d a n t ' s name u p o n a n a l l e g e d l y c o p i e d p r o d u c t p r e c l u d e d t h e p o s s i b i l i t y o f d e c e p t i o n and a b s o l v e d t h e d e f e n d a n t s f r o m l i a b i l i t y i n p a s s i n g o f f . T h e DPSA m a r k i n g was p r o b a b l y t o o s m a l l t o be c o n s i d e r e d s i g n i f i c a n t b u t more c o u l d h a v e b e e n made o f t h i s p o i n t p a r t i c u l a r l y a s o n e o f 47 t h e d o c t o r s t e s t i f y i n g i n a s i m i l a r c a s e m a i n t a i n e d t h a t p a t i e n t s t e n d t o i n s p e c t t h e i r d r u g s c a r e f u l l y a n d a r e a p t t o n o t i c e d e t a i l s o f m a r k i n g s o n t h e t a b l e t s a n d a n y m i n o r d i f f e r e n c e s . - 1 0 4 -I t w i l l be more d i f f i c u l t t o w i n a p a s s i n g o f f a c t i o n w h e r e t h e c a p s u l e d e s i g n o r t a b l e t i s " o r d i n a r y " i n a p p e a r a n c e . R o c h e w e r e u n a b l e t o p r e v e n t B e r k P h a r m a c e u t i c a l s c o p y i n g t h e i r y e l l o w o r w h i t e V a l i u m 4 8 t a b l e t s . B e r k P h a r m a c e u t i c a l s , h a v i n g o b t a i n e d a c o m p u l s o r y l i c e n c e t o m a n u f a c t u r e D i a z e p a m , p r o c e e d e d t o e m p l o y t h e R o c h e c o l o u r s c h e m e ; w h i t e o r y e l l o w t a b l e t s a c c o r d i n g t o d o s a g e . A l t h o u g h t h e y f r e e l y a d m i t t e d t h a t t h e y h a d c o p i e d t h e R o c h e c o l o u r scheme w i t h a v i e w t o s e c u r i n g a c c e p t a n c e f r o m c o n s u m e r s , t h e y w e r e n o t g u i l t y o f p a s s i n g o f f b e c a u s e , i n t h e w o r d s o f R u s s e l l L . J . ; " t h e e v i d e n c e d o e s n o t s u f f i c i e n t l y e s t a b l i s h t h a t t h e v e r y o r d i n a r y a p p e a r a n c e o f t h e p l a i n t i f f s w h i t e a n d y e l l o w DZP t a b l e t s h a s l e d c o n s u m i n g p a t i e n t s t o a t t r i b u t e t h e m t o one m a n u f a c t u r i n g t r a d e s o u r c e o r p r o v e n a n c e ; a n d u n l e s s t h e r e be s u c h a n a t t r i b u t i o n t h e d e f e n d a n t s s u b s t a n t i a l c o p y i n g o f t h a t v e r y o r d i n a r y a p p e a r a n c e c a n n o t be more t h a n a r e p r e s e n t a t i o n t h a t i t c o n t a i n s t h e m e d i c a m e n t D Z P . " T h e r e a s o n t h a t R o c h e f a i l e d was t h a t t h e t a b l e t s w e r e n o t s u f f i c i e n t l y d i s t i n c t i v e . T h e c o u r t d i d n o t q u e s t i o n w h e t h e r t h e p u b l i c a r e c o n c e r n e d a b o u t t h e s o u r c e o f a d r u g r a t h e r t h a n i t s t h e r e a p e u t i c c o n t e n t . - 1 0 b -5 . M a r k s P a r t i a l l y C o v e r i n g t h e S u r f a c e o f t h e G o o d s & F u n c t i o n a l F e a t u r e s P u r e l y f u n c t i o n a l f e a t u r e s a r e o p e n t o t h e w o r l d a p a r t f r o m t h e p r o t e c t i o n o f t h e p a t e n t l a w . T h e p o s i t i o n b e c o m e s c o m p l i c a t e d when t h e f u n c t i o n a l f e a t u r e i s c l o t h e d i n a d i s t i n c t i v e g u i s e . C a n t h a t d i s t i n c t i v e g u i s e be p r o t e c t e d e v e n t h o u g h i t s e r v e s a p u r p o s e ? 4 9 I n J . B . W i l l i a m s & C o v B r o n n l e y , F l e t c h e r M o u l t o n L . J . s a i d t h a t t h e g e t u p o f a n a r t i c l e means a " c a p r i c i o u s a d d i t i o n " s u c h a s t h e c o l o u r o r s h a p e o r t h e w r a p p e r . He w o u l d n o t g r a n t p r o t e c t i o n t o a n y t h i n g w h i c h h a d a v a l u e o r u s e a s p a r t o f t h e g e t u p . H o w e v e r , o n l y o n e y e a r l a t e r t h e H o u s e o f L o r d s 50 m o d i f i e d t h i s r u l e i n E d g e v N i c c o l l s . T h i s c a s e i n v o l v e d t h e i m i t a t i o n o f t h e g e t u p o f t h e p l a i n t i f f s l a u n d r y b l u e . The b l u e was p a r c e l l e d up i n a p o r o u s c l o t h b a g w i t h a h a n d l e i n t h e f o r m o f a s t i c k w h i c h e n a b l e d t h e c o l o u r t o be d i s s o l v e d i n w a t e r w i t h o u t s t a i n i n g t h e h a n d s o f t h e o p e r a t o r . T h e p l a i n t i f f ' s p r e d e c e s s o r h a d i n i t i a l l y t a k e n o u t a p a t e n t o n t h e b l u e b u t i t was r e v o k e d b e f o r e t h e p l i n t i f f s t o o k o v e r t h e b u s i n e s s . T h e C o u r t o f 51 A p p e a l a t t a c h e d i m p o r t a n c e t o t h e r e v o k e d p a t e n t a n d - 1 0 b -found that the st i c k was useful and therefore not protectable. Cozens-Hardy said: "I do not think that the useful part of an a r t i c l e , as d i s t i n c t from an ornamental addition can be regarded as part of the get up of the a r t i c l e . No length of exclusive use can e n t i t l a man to a monopoly i n the manufacture and sale a useful combination not protected by a patent S i m i l a r l y Farwell L.J. said: "The claim i s , i n my opinion, founded upon a misconception of the meaning of 'get up', that word implies something extraneous to the a r t i c l e not the a r t i c l e i t s e l f . " - , This i s consistent with the Williams v Bronnley approach, but the decision was reversed by the House of 54 Lords. Lord G o r r e l l paid no attention to the revoked patent and found a d i s t i n c t i o n between any stick and "the s t i c k " as used by the p l a i n t i f f s . An injunction was granted r e s t r a i n i n g the defendants from imitating the p l a i n t i f f s ' s t i c k although they were free to manufacture the product with a stick of a d i f f e r e n t shape. English authority therefore indicates that a feature may be protectable notwithstanding that i t also - 1 0 / -s e r v e s a f u n c t i o n . I n t h e p h a r m a c e u t i c a l c o n t e x t , C a n a d i a n law h a s d e v i a t e d f r o m t h i s p r i n c i p l e . I n P a r k e D a v i s Co 5 5 L t d v E m p i r e L a b o r a t o r i e s L t d a b l u e g e l a t i n b a n d e n c i r c l i n g p h a r m a c e u t i c a l c a p s u l e s was n o t r e g i s t r a b l e a s a t r a d e mark b e c a u s e , a l t h o u g h i t was d i s t i n c t i v e o f t h e p r o d u c t , i t a l s o s e r v e d a f u n c t i o n i n s e a l i n g t h e c a p s u l e . The g e l a t i n b a n d s h a d , a t o n e s t a g e , b e e n t h e s u b j e c t o f a US p a t e n t a n d t h e t r a d e mark r e g i s t r a t i o n was made o n e x p i r y o f t h e p a t e n t . H a l l J . r e c o g n i s e d t h e a p p l i c a t i o n a s a d e v i c e t o u n l a w f u l l y e x t e n d t h e p a t e n t m o n o p o l y a n d h e l d t h a t t h e i r f u n c t i o n a l i t y a l o n e was s u f f i c i e n t t o p r e c l u d e r e g i s t r a t i o n . " t h e v a l i d i t y o f t h e t r a d e m a r k s may, i n my v i e w , be d i s p o s e d o f o n t h e g r o u n d t h a t c o l o u r e d b a n d s h a v e a f u n c t i o n a l u s e o r c h a r a c t e r i s t i c a n d c a n n o t t h e r e f o r e be t h e s u b j e c t o f a t r a d e m a r k . " , 56 T h i s i s n o t c o n s i s t e n t w i t h t h e E n g l i s h a u t h o r i t y o f E d g e v N i c c o l l s . I n t h e l o w e r c o u r t , N o e l J . h a d r e f u s e d r e g i s t r a t i o n n o t o n t h e b a s i s o f f u n c t i o n a l i t y a l o n e b u t t h e " m o n o p o l i s t i c f u n c t i o n a l f e a t u r e s " o f t h e b a n d . 5 7 - 1 0 8 -T h e a p p l i c a t i o n h a d d e n o t e d n o t j u s t o n e c o l o u r e d b a n d , b u t t e n d i f f e r e n t c o l o u r e d b a n d s w h i c h more t h a n c o v e r e d t h e s p e c t r u m . T h e p l a i n t i f f was a l s o u s i n g v a r i o u s s h a d e s o f t h o s e c o l o u r s w h i c h , i n N o e l J . ' s o p i n i o n , a m o u n t e d t o a m o n o p o l y n o t o n l y i n t h o s e t e n c o l o u r s b u t a m u l t i t u d e o f d i f f e r e n t s h a d e s a n d h u e s o f t h e t e n c o l o u r s . He d i d n o t s u g g e s t h o w e v e r t h a t a l l f u n c t i o n a l f e a t u r e s w e r e u n r e g i s t r a b l e : "Now a f u n c t i o n a l p a r t p e r se i s o p e n t o t h e w o r l d a p a r t f r o m t h e p a t e n t l a w . A t r a d e r c a n h o w e v e r o b t a i n a v a l i d t r a d e mark o n a d i s t i n c t i v e f o r m o f t h e f u n c t i o n a l p a r t o r p a r t s s u c h as t h e H a i g C a s e p r o v i d e d t h a t , b y so d o i n g , he d o e s n o t h o l d a m o n o p o l y o n a l l f o r m s o f t h e f u n c t i o n a l p a r t o r p a r t s . " Q H a l l J . i n t h e S u p r e m e C o u r t d i d n o t make t h i s d i s t i n c t i o n : " T h e law a p p e a r s t o be w e l l s e t t l e d t h a t , i f w h a t i s s o u g h t t o be r e g i s t e r e d a s a t r a d e mark h a s f u n c t i o n a l u s e o r c h a r a c t e r i s t i c , i t c a n n o t be t h e s u b j e c t o f t h e t r a d e m a r k . " I n f a c t t h e law i s f a r f r o m w e l l s e t t l e d i n e i t h e r E n g l a n d o r C a n a d a . M c C l e a n J . s a i d i n I m p e r i a l T o b a c c o 61 Company o f C a n a d a v R e g i s t r a r o f T r a d e M a r k s t h a t a c o m b i n a t i o n o f e l e m e n t s w h i c h a r e p r i m a r i l y d e s i g n e d t o p e r f o r m a f u n c t i o n i s n o t a f i t s u b j e c t m a t t e r f o r a t r a d e - 1 0 9 -m a r k , b u t o t h e r a u t h o r i t i e s i n d i c a t e t h a t , w h e r e a f u n c t i o n a l e l e m e n t i s c l o t h e d i n a d i s t i n c t i v e s t y l e , t h a t a s p e c t o f t h e s t y l e may be p r o t e c t e d p r o v i d e d t h a t c o m p e t i t o r s may c o p y t h e i d e a o f t h e f u n c t i o n a l f e a t u r e . T h u s , i n t h e P a r k e D a v i s c a s e t h e p l a i n t i f f s c o u l d p o s s i b l y h a v e r e g i s t e r e d g r e y g e l a t i n b a n d s o f a c e r t a i n w i d t h . C o m p e t i t o r s w o u l d t h e n be a b l e t o c o p y t h e f u n c t i o n a l f e a t u r e , n a m e l y t h e g e l a t i n b a n d , b u t c o u l d n o t c o p y t h e p r e c i s e d i m e n s i o n s a n d c o l o u r o f t h e b a n d . ( R e g i s t r a b i l i t y w o u l d , o f c o u r s e , a l s o be d e p e n d a n t u p o n t h e p l a i n t i f f ' s e s t a b l i s h i n g t h e d i s t i n c t i v e n e s s o f t h e g r e y b a n d -s o m e t h i n g t h e y f a i l e d t o d o i n t h i s c a s e . ) T h e q u e s t i o n o f t h e f u n c t i o n a l i t y o f c o l o u r s i n a p h a r m a c e u t i c a l c o n t e x t h a s a r i s e n more f r e q u e n t l y i n t h e US t h a n i n E n g l a n d . I n I v e s L a b o r a t o r i e s v D a r b y D r u g Co 6 2 I n c t h e p l a i n t i f f s a l l e g e d t h a t i m i t a t i o n o f t h e i r c o l o u r s c h e m e s a m o u n t e d t o a " f a l s e d e s i g n a t i o n o f o r i g i n " 6 3 p u r s u a n t t o s.4 3a o f t h e L a n h a m A c t . U n d e r US law a c o l o u r a l o n e may n o t be r e g i s t e r e d a s a mark b u t may be p r o t e c t e d i f p a r t o f a d i s t i n c t i v e c o m b i n a t i o n o r c o l o u r c o n f i g u r a t i o n . T h e c o l o u r i t s e l f may a c q u i r e p r o t e c t i o n s i m i l a r t o t h a t o f a t r a d e mark i f i t i s n o n - f u n c t i o n a l a n d h a s a c q u i r e d a s e c o n d a r y m e a n i n g . The c l a i m o f f a l s e -110-d e s i g n a t i o n o f o r i g i n c l o s e l y r e s e m b l e s a n i n f r i n g e m e n t a c t i o n a l t h o u g h t h e p l a i n t i f f i s d e n i e d t h e p r e s u m p t i v e s o u r c e a s s o c i a t i o n o f a r e g i s t e r e d t r a d e mark a n d m u s t t h e r e f o r e e s t a b l i s h s e c o n d a r y m e a n i n g . T h e c o u r t f o u n d t h e c o l o u r s t o be f u n c t i o n a l i n s e v e r a l r e s p e c t s : " f i r s t , many e l d e r l y p a t i e n t s a s s o c i a t e t h e a p p e a r a n c e o f t h e i r m e d i c a t i o n w i t h i t s t h e r a p e u t i c e f f e c t . . . . w h e n p a t i e n t s a s s o c i a t e t h e a p p e a r a n c e o f a d r u g w i t h i t s t h e r a p e u t i c e f f e c t i n t h i s m a n n e r , t o i n s i s t t h a t t h e d e f e n d a n t s u s e a d i f f e r e n t c o l o u r w o u l d p u t t h e m a t a c o m p e t i t i v e d i s a d v a n t a g e . . . . s e c o n d , some p a t i e n t s c o - m i n g l e t h e i r d r u g s i n a s i n g l e c o n t a i n e r a n d t h e n r e l y o n t h e a p p e a r a n c e o f t h e d r u g t o f o l l o w t h e i r d o c t o r ' s i n s t r u c t i o n s some d o c t o r s u s e t h e a p p e a r a n c e o f a d r u g i n c o m m u n i c a t i n g w i t h t h e i r p a t i e n t s a n d i n a s s i s t i n g t h e m t o t a k e t h e c o r r e c t m e d i c a t i o n s a t t h e a p p r o p r i a t e t i m e s t h i r d , t o some e x t e n t , c o l o u r i s a l s o u s e f u l t o d o c t o r s a n d h o s p i t a l e m e r g e n c y r o o m s i n i d e n t i f y i n g o v e r d o s e o f d r u g s . " A n o t h e r US c a s e o n t h e same p o i n t i s N o r w i c h 64 P h a r m a c a l Company v S t e r l i n g D r u g I n c . The p l a i n t i f f s m a r k e t e d a p i n k l i q u i d c a l l e d " P e p t o B i s m a l " t o r e m e d y m i n o r s t o m a c h d i s o r d e r s . A l t h o u g h n o n - f u n c t i o n a l i n t h e t h e r a p e u t i c s e n s e i t was a p p a r e n t l y s o o t h i n g a n d p l e a s i n g t o t h e e y e o f t h e s u f f e r e r and t h e r e f o r e more a c c e p t a b l e t o t h e s t o m a c h . T h e f u n c t i o n a l i t y l a y i n t h e g e t up o f t h e e n t i r e a r t i c l e , n o t i n some s p e c i f i c a s p e c t o f t h e g e t up - 1 1 1 -(as i n the g e l a t i n band i n the Park Davis case). I t was impossible to separate the d i s t i n c t i v e aspect of the alleged trade mark from i t s functional aspect and protection was therefore refused. In the opinion of the court, imitation of cer t a i n successful features of another's product was not unlawful and to that extent a "free ride" was permitted. The present draft of the proposed European Trade Mark Convention indicates that, within the EEC, features which are purely fu n c t i o a l w i l l not be r e g i s t r a b l e . A r t i c l e 8 provides that elements of design which are dictated s o l e l y by the goods themselves or e f f e c t t h e i r essential value or r e s u l t i n technical e f f e c t may not be registered - presumably however, where a functional element i s clothed i n a d i s t i n c t i v e guise i t w i l l continue to be r e g i s t r a b l e . The English cases dealing with protection of the get up of pharmaceutical products have generally been decided on the basis of distinctiveness not f u n c t i o n a l i t y . For example, i n Hoffman-La Roche v Berk Pharmaceuticals 6 6 the functional nature of the tablets was clear. Yellow tablets indicated a lOmg dose and white tablets a 2mg - 1 1 2 -d o s e . The p l a i n t i f f s l o s t , h o w e v e r , n o t b e c a u s e o f t h e f u n c t i o n o f t h e c o l o u r c o d e b u t b e c a u s e , i n t h e w o r d s o f W h i t f o r d J . i n t h e l o w e r c o u r t ; " A n y t h i n g l e s s l i k e l y t o s t r i k e o n e a s o u t o f t h e way t h a n e i t h e r t h e w h i t e p i l l o r y e l l o w p i l l I c a n s c a r c e l y i m a g i n e . " ^ ^ T h u s t h e q u e s t i o n o f w h e t h e r f u n c t i o n a l f e a t u r e s a r e p r o t e c t a b l e u n d e r E n g l i s h law h a s n o t b e e n c o n c l u s i v e l y c o a n s w e r e d . T h e r e a s o n i n g i n E d g e v N i c c o l l s s u g g e s t s t h a t t h e u t i l i t a r i a n f e a t u r e m u s t be p r e s e n t e d i n a n o v e l a n d d i s t i n c t i v e m a n n e r . Y e t t h e f a c t s o f t h e c a s e r e f u t e t h i s , t h e p l a i n t i f f s h a d made no a t t e m p t t o d r e s s t h e s t i c k i n a d i s t i n c t i v e m a n n e r . 6 . P r o d u c t S i m u l a t i o n P r e s e n t t r e n d s a l l o w i n g p r o t e c t i o n f o r t h e t o t a l a p p e a r a n c e o f a n a r t i c l e o r f u n c t i o n a l f e a t u r e s o f a n a r t i c l e a r e s t e p s o n t h e way t o a s i t u a t i o n w h e r e b y t h e l a w s o f t r a d e m a r k s a n d p a s s i n g o f f may be u s e d t o p r o t e c t a m a n u f a c t u r e r a g a i n s t p r o d u c t s i m u l a t i o n . H o w e v e r , t r a d e mark law d e v e l o p e d a s a means o f p r o t e c t i n g t h e i d e n t i f y i n g f e a t u r e s a f f i x e d t o a p r o d u c t n o t t h e p r o d u c t i t s e l f . S i m i l a r l y , a p a s s i n g o f f a c t i o n i s i n t e n d e d t o p r o t e c t t h e - 1 1 j -" g e t u p " o n l y , a t e r m w h i c h i m p l i e s s o m e t h i n g e x t r a n e o u s t o 6 Q t h e a r t i c l e . T h e C o u r t o f A p p e a l i n E d g e v N i c c o l l s f o l l o w e d t h e W i l l i a m s v B r o n n l e y a p p r o a c h b e c a u s e t h e p r o t e c t i o n s o u g h t w o u l d amount t o be p r o t e c t i o n o f t h e 70 p r o d u c t i t s e l f , b u t i n t h e H o u s e o f L o r d s no r e a l d i s t i n c t i o n was d r a w n b e t w e e n t h e g e t u p a n d t h e p r o d u c t : " T h e r e a l q u e s t i o n i s w h e t h e r t h e d e f e n d a n t ' s g o o d s so r e s e m b l e t h e p l a i n t i f f s a s t o d e c e i v e t h e p e r s o n s who b u y . " ^ ^ T h e H o u s e o f L o r d s d i d n o t d i s t i n g u i s h b e t w e e n a f u n c t i o n a l f e a t u r e w h i c h i s a l s o p a r t o f t h e g e t up a n d a f u n c t i o n a l f e a t u r e o f t h e p r o d u c t i t s e l f i n a s i t u a t i o n w h e r e i m i t a t i o n o f e i t h e r f e a t u r e w i l l c a u s e t h e p u b l i c t o be d e c e i v e d a s t o t h e o r i g i n o f t h e g o o d s . A n y t h i n g w h i c h f u l f i l s a f u n c t i o n must be p a r t o f t h e p r o d u c t a n d n o t m e r e l y g e t u p . I f i t i s c l o t h e d i n a d i s t i n c t i v e g u i s e i t may be i m p o s s i b l e t o s e p a r a t e t h e g u i s e f r o m t h e f u n c t i o n a l f e a t u r e . P r o t e c t i o n o f t h e f o r m e r w i l l t h e r e f o r e i n e v i t a b l y r e s u l t i n p r o t e c t i o n o f t h e l a t t e r , b u t E d g e v N i c c o l l s g o e s f u r t h e r t h a n t h i s . The s t i c k was n o t a d o r n e d i n a d i s t i n c t i v e g u i s e i t was m e r e l y t h e c h e a p e s t e f f e c t i v e m e t h o d o f a c h i e v i n g t h e - 1 1 4 -d e s i r e d r e s u l t . I t was p u r e l y f u n c t i o n a l b u t , b e c a u s e i t h a d become a s s o c i a t e d i n t h e m i n d s o f t h e p u b l i c w i t h t h e g o o d s o f t h e p l a i n t i f f , t h e d e f e n d a n t s c o u l d n o t c o p y i t n o t w i t h s t a n d i n g t h a t a d o p t i o n o f a n y o t h e r s t i c k w o u l d i n v o l v e a d d i t i o n a l e x p e n d i t u r e . I t a p p e a r s t h e r e f o r e t h a t a m a n u f a c t u r e r w i l l now be a b l e t o w i t h d r a w f r o m t h e p u b l i c d o m a i n a n y f e a t u r e o f h i s p r o d u c t w h i c h m o t i v a t e s t h e p u b l i c t o b u y p r o v i d e d he c a n p r o v e i t s d i s t i n c t i v e n e s s . S u c h p r o t e c t i o n i s a v a i l a b l e w i t h o u t t h e c o s t l y a n d t i m e c o n s u m i n g p r o c e s s o f o b t a i n i n g a p a t e n t a n d r e p r e s e n t s a c o n s i d e r a b l e e x t e n s i o n o f t h e law o f p a s s i n g o f f . 7. P o l i c y C o n s i d e r a t i o n s A r e d u c t i o n o r c u r t a i l m e n t o f p r o t e c t i o n f o r t h e g e t up o f p h a r m a c e u t i c a l s w i l l no d o u b t be v i g o r o u s l y o p p o s e d b y A B P I a s a m e a s u r e d i s c r i m i n a t o r y o f t h e p h a r m a c e u t i c a l i n d u s t r y b u t s u c h m e a s u r e s a r e j u s t i f e d i n v i e w o f t h e u n i q u e n a t u r e o f t h e i n d u s t r y . P r o m o t i o n a l a d v e r t i s i n g a n d o t h e r m e a s u r e s u s e d t o g e n e r a t e s o u r c e i d e n t i f i c a t i o n i n o t h e r s p h e r e s a r e , i n t h e p h a r m a c e u t i c a l i n d u s t r y , a i m e d a t t h e p h y s i c i a n n o t t h e u l i t m a t e p u r c h a s e r . - 1 1 5 -H a r m a n L . J . a c k n o w l e d g e d t h i s u n i q u e m a r k e t i n g s i t u a t i o n i n t h e DDSA c a s e b u t , i n h i s o p i n i o n , t h i s o n l y r e i n f o r c e d t h e v i e w t h a t i m i t a t i o n o f t h e b l a c k a n d g r e e n c a p s u l e s w o u l d amount t o p a s s i n g o f f . " I f t h i s w e r e a n a r t i c l e s o l d t o t h e p u b l i c o v e r t h e c o u n t e r , t h e r e c o u l d h a r d l y be a d o u b t t h a t t h e g r e e n a n d b l a c k c a p s u l e s s o l d i n m i l l i o n s w o u l d l o n g ago h a v e b e e n a s s o c i a t e d w i t h t h e p l a i n t i f f s who w o u l d h a v e b e e n e n t i t l e d t o r e s t r a i n t h e i r r i v a l s f r o m i t s u s e n o t w i t h s t a n d i n g t h a t t h e p l a i n t i f f s name was n o t a d v e r t i s e d o r known t o t h e p u b l i c . " ^ T h e same c a p s u l e s w e r e t h e s u b j e c t o f a p a s s i n g o f f a c t i o n i n t h e C a n a d i a n C o u r t s b u t t h e r e t h e c o u r t was p r e p a r e d t o l o o k a t t h e e f f e c t o f t h e m a r k e t i n g s i t u a t i o n i n t h e p h a r m a c e u t i c a l i n d u s t r y and c o n s e q u e n t l y r e f u s e d t o f i n d t h a t t h e c o l o u r o f t h e c a p s u l e s was i n d i c a t i v e o f 74 o r i g i n . T h e a c t i o n was b r o u g h t u n d e r s e c t i o n 7 ( c ) o f 75 t h e C a n a d i a n T r a d e M a r k s a n d U n f a i r C o m p e t i t i o n A c t . T h e c o u r t d i s t i n g u i s h e d b e t w e e n t h e p h a r m a c e u t i c a l a n d o t h e r t r a d e s b y q u o t i n g f r o m t h e a f f i d a v i t o f t h e p r e s i d e n t o f t h e d e f e n d a n t c o m p a n y : " C e s d e u x p r o d u i t s s o n t d e s p r o d u i t s q u i c o n t i e n n e n t d u C h l o r d i a z e p o x i d e e t p a r t e n t ne p e u v e n t e t r e v e n d u s que s u r p r e s c r i p t i o n de - 1 1 6 -m e d e c i n , p r e s c r i p t i o n que t o u t p h a r m a c i e n e s t o b l i g e de r e m p l i r f i d e l e m e n t s o u s p e i n e de p e r d r e s a l i c e n c e de p h a r m a c i e n . " T h e c o u r t h e l d t h e r e f o r e t h a t f o r m a n d g e t up w e r e o f no r e l e v a n c e s i n c e t h e w o u l d - b e u s e r s h a d no c h o i c e o v e r t y p e o f d r u g p u r c h a s e d . T h e US C o u r t i n t h e I v e s c a s e a c c e p t e d t h a t p a t i e n t s a s s o c i a t e t h e c o l o u r o f t h e i r d r u g s w i t h t h e i r t h e r a p e u t i c e f f e c t r a t h e r t h a n t h e i r m a n u f a c t u r i n g s o u r c e : " D o c t o r s who t e s t i f i e d b e l i e v e d t h a t p a t i e n t s d o n o t a s s o c i a t e t h e a p p e a r a n c e o f a d r u g w i t h t h e m a n u f a c t u r e r o r o t h e r s o u r c e b u t w i t h t h e d r u g ' s e f f e c t o n t h e p a t i e n t ' s d i s a b i l i t y . P a t i e n t s t e n d t o i d e n t i f y c a p s u l e s w i t h t h e i r a i l m e n t s , f o r e x a m p l e , 'my r e d h e a r t p i l l ' . I v e s made n o s h o w i n g t o i n d i c a t e t h a t a n y p a t i e n t t o o k t h e c o l o u r s t o mean t h a t t h e d r u g came f r o m a p a r t i c u l a r s o u r c e . " fi I t w o u l d a d m i t t e d l y be i m p r a c t i c a l t o e x p e c t t h e d r u g c o m p a n i e s t o p r o d u c e a r a n d o m s e l e c t i o n o f p a t i e n t s t o t e s t i f y o n t h e i r b e h a l f . P o s s i b l y e v i d e n c e c o u l d be a d d u c e d b y means o f a s u r v e y . I v e s L a b o r a t o r i e s d i d p r e s e n t s u r v e y e v i d e n c e , b u t i n s u c h an u n s a t i s f a c t o r y manner t h a t i t was deemed t o be o f l i t t l e e v i d e n t i a l v a l u e . - 1 1 / -7 9 I n S m i t h K l i n e & F r e n c h v S t e r l i n g W i n t h r o p L o r d D i p l o c k c o n s i d e r e d t h a t no o t h e r t r a d e r c o u l d p o s s i b l y h a v e a l e g i t i m a t e r e a s o n f o r u s i n g t h e p l a i n t i f f ' s c o l o u r 8 0 s c h e m e . T h e r e a r e , h o w e v e r , many l e g i t i m a t e r e a s o n s f o r c o p y i n g a f a m i l i a r c o l o u r s c h e m e . I f , a s s u s p e c t e d , p a t i e n t s w r o n g l y a s s o c i a t e c o l o u r s c h e m e s w i t h t h e t h e r a p e u t i c q u a l i t i e s o f a d r u g i m i t a t i o n w i l l m e r e l y r e d u c e t h e r i s k o f m i s t a k e n r e j e c t i o n . I f a l l g e n e r i c d r u g s o f t h e same c o m p o s i t i o n l o o k e d a l i k e p a t i e n t s w o u l d be a b l e t o i d e n t i f y t h e d r u g t h e y w e r e t a k i n g p a r t i c u l a r l y i f t h e i r symptoms r e c u r some y e a r s l a t e r when t h e name o f t h e d r u g ( i f i t was e v e r known) w i l l h a v e b e e n f o r g o t t e n . The a d v a n t a g e s o f u n i f o r m c o l o u r c o d e s w i l l a l s o be a p p a r e n t i n c a s e s o f o v e r d o s e . T h e y w o u l d a l l o w f o r q u i c k an e a s y i d e n t i t i c a t i o n o f d r u g s . I n t h e w r i t e r ' s o p i n i o n t h e r e f o r e , n o t o n l y s h o u l d t r a d e mark a n d p a s s i n g o f f p r o t e c t i o n be d e n i e d t o p h a r m a c e u t i c a l p r o d u c t s , m a n u f a c t u r e r s s h o u l d be a c t i v e l y e n c o u r a g e d t o e m p l o y u n i f o r m c o l o u r c o d e s f o r a l l d r u g s o f t h e same c h e m i c a l c o m p o s i t i o n p r o v i d e d t h e y c o r r e s p o n d w i t h s t r i n g e n t q u a l i t y c o n t r o l r e q u i r e m e n t s . - 1 1 8 -T h e f e a r o f E n g l i s h C o u r t s i s t h a t , b y a l l o w i n g s u c h i m i t a t i o n t h e g e n e r i c m a n u f a c t u r e r s w i l l be " f r e e r i d i n g " o n t h e r e p u t a t i o n o f l a r g e p h a r m a c e u t i c a l f i r m s . 81 I n H o f f m a n - L a R o c h e v DDSA Harman L . J . s a i d : "Now I m y s e l f n e v e r r e c e i v e d f r o m t h e d e f e n d a n t s a s a t i s f a c t o r y a n s w e r t o t h e p l a i n q u e s t i o n ' w h y t o t h e y w a n t t o m a n u f a c t u r e t h e i r d r u g s i n g r e e n a n d b l a c k ? ' I c a n o n l y a n s w e r t h a t t h e y w i s h t o d o so i n o r d e r t o a t t r a c t t o t h e m s e l v e s some p a r t o f t h e p l a i n t i f f ' s g o o d w i l l a n d t r a d e o n t h e i r r e p u t a t i o n . I n f a c t , t o r e p r e s e n t t o t h e p u b l i c t h a t t h e i r g o o d s a r e t h e g o o d s o f t h e p l a i n t i f f s . T h a t , i n my j u d g m e n t i s e x a c t l y t h e c l a s s i c c a s e o f p a s s i n g o f f . " a 9 Y T h i s a r g u m e n t b e g s t h e q u e s t i o n o f w h e t h e r t h e f e a t u r e i m i t a t e d i s e l i g i b l e f o r p r o t e c t i o n . I f p a t i e n t s a s s o c i a t e c o l o u r s o f a d r u g w i t h t h e i r t h e r a p e u t i c e f f e c t i t w i l l o f c o u r s e be t o t h e d e f e n d a n t ' s a d v a n t a g e t o i m i t a t e t h o s e f e a t u r e s b u t i f t h e p a t i e n t s a r e n o t c o n c e r n e d a b o u t t h e m a n u f a c t u r i n g s o u r c e and a r e t h e r e f o r e n o t d e c e i v e d a s t o t h e o r i g i n o f g o o d s , c o m m e r c i a l a d v a n t a g e s h o u l d n o t , w i t h o u t m o r e , g i v e r i s e t o a p a s s i n g a c t i o n . I n t h e I v e s c a s e t h e f a c t t h a t c o l o u r was a n i m p o r t a n t i n g r e d i e n t i n t h e s u c c e s s o f a p r o d u c t l e d t h e - l i y -c o u r t t o a l l o w i m i t a t i o n s i m p l y b e c a u s e t o d o o t h e r w i s e w o u l d p l a c e t h e d e f e n d a n t s a t a c o m m e r c i a l d i s a d v a n t a g e . The j u d g e q u o t e d f r o m t h e j u d g m e n t o f J u d g e B r a n d e i s i n K e l l o g g C o v N a t i o n a l B i s c u i t C o . ; " S h a r i n g i n t h e g o o d w i l l o f a n a r t i c l e u n p r o t e c t e d b y p a t e n t o r t r a d e mark i s t h e e x e r c i s e o f a r i g h t p o s s e s s e d b y a l l a n d i n t h e f r e e e x e r c i s e o f w h i c h t h e c o n s u m i n g p u b l i c i s d e e p l y i n t e r e s t e d . " . A f u r t h e r c a s e i l l u s t r a t i n g t h e d i f f e r e n c e o f a p p r o a c h b e t w e e n A m e r i c a n a n d E n g l i s h C o u r t s i s N o r w i c h 8 5 P h a r m a c a l C o v S t e r l i n g D r u g I n c . T h e c o u r t d i f f e r e n t i a t e d b e t w e e n a d e l i b e r a t e a t t e m p t t o d e c e i v e a n d a d e l i b e r a t e a t t e m p t t o c o m p e t e s a y i n g : " I m i t a t i o n o f c e r t a i n s u c c e s s f u l f e a t u r e s i n a n o t h e r ' s p r o d u c t i s n o t u n l a w f u l a n d t o t h a t e x t e n t a ' f r e e r i d e ' i s p e r m i t t e d . ' ' , O D T h u s , t h e c o l o u r p i n k c o u l d n o t be a p p r o p r i a t e d b y t h e d e f e n d a n t s f o r t h e i r u p s e t s t o m a c h r e m e d y . T h e US C o u r t s a p p e a r t h e r e f o r e t o h a v e a d o p t e d a more l a i s s e z f a i r e a t t i t u d e t o c o m p e t i t i o n t h a n t h e E n g l i s h C o u r t s a n d a r e i n c l i n e d t o a l l o w t h e d e f e n d a n t s a l i m i t e d - 1 2 0 -" f r e e r i d e " . I t i s an e x a m p l e t h e E n g l i s h C o u r t s s h o u l d f o l l o w . I n d e e d , t h e E n g l i s h C o u r t s h a v e h i n t e d s e v e r a l t i m e s t h a t t h e y a r e a w a r e o f t h e p o l i c y r e a s o n s f o r a l l o w i n g and e v e n e n c o u r a g i n g t h e u s e o f u n i v e r s a l c o l o u r c o d e s . I n t h e DPSA c a s e , R u s s e l l L . J . s a i d : " I am f u l l y p r e p a r e d t o assume t h a t t h e r e a r e many g o o d r e a s o n s why i t w o u l d be d e s i r a b l e t h a t CDP lOmg c a p s u l e s s h o u l d , f r o m w h a t e v e r s o u r c e , h a v e t h e same c o l o u r c o d e a n d t h a t , i n p a r t , t h e d e f e n d a n t s a r e m o t i v a t e d i n t h e i r i n t e n t i o n t o u s e b l a c k a n d g r e e n b y t h e s e r e a s o n s . Q _ So f a r h o w e v e r , t h e c o u r t s ' d i s l i k e o f " f r e e r i d i n g " h a s b e e n s t r o n g e n o u g h t o o v e r c o m e t h e d e s i r e t o s e e u n i v e r s a l l y a p p l i e d c o l o u r c o m b i n a t i o n s . - 1 2 1 -NOTES TO CHAPTER IV For a d e t a i l e d account of the development of p a s s i n g o f f a c t i o n s and a c t i o n s of trade mark inf r i n g e m e n t see Blanco White, T.A. and Jacob, Robin: K e r l y ' s Law of Trade Marks & Trade Names (10th ed) 1972 2Reddaway v Banham [1896] A.C. 199 (H. of L.) 13 R.P.C. 218 at p.224 3 Trade Mark R e g i s t r a t i o n Act 1875, s.3 4 S a v i l l e Perfumary L t d v June P e r f e c t L t d & F.W.  Woolworth & Co L t d (1941) 58 R.P.C. 147 (H. of L.) 5 Hoffman-La Roche & Company A.G. and Others v PPSA  Pharmaceuticals L t d [1972] R.P.C. 1 (C.A.) 6 (1937) 54 R.P.C. 81 (Ch.P.) 6a 7 8 i b i d , per F a r w e l l J . a t p.90. supra n.1 supra n.2 9 supra n.2 a t p.229 1 0 ( 1 9 3 3 ) 50 R.P.C. 45 (Ch. P.) 1 : L T r a d e Mark Act 1938. s. 15(3): "No word which i s the commonly used and accepted name of any s i n g l e chemical element or s i n g l e chemical compound, as d i s t i n g u i s h e d from a mixture, s h a l l be r e g i s t e r e d as a trade mark i n r e s p e c t of a chemical substance or p r e p a r a t i o n . . . . p r o v i d e d t h a t the f o r e g o i n g p r o v i s i o n s o f t h i s s u b s e c t i o n s h a l l not have e f f e c t i n r e l a t i o n to a word which i s used to denote o n l y a brand or make o f the element or compound as made by the p r o p r i e t o r or r e g i s t e r e d user of the trade mark as d i s t i n g u i s h e d from the element or compound as made by o t h e r s and i n a s s o c i a t i o n with a s u i t a b l e name or d e s c r i p t i o n open t o p u b l i c use." 12 The Shredded Wheat Co L t d v K e l l o g g Co of Great  B r i t i a n L t d (1940) 57 R.P.C. 37 (H. of L.) -122-13 The Canadian Shredded Wheat Company L t d v K e l l o g g Co  of Great B r i t i a n L t d (1938) 55 R.P.C. 125 (P.C.) 1 4 K e l l o g g Co v N a t i o n a l B i s c u i t Co 305 US 111 (Sup. Ct.) 1 5 i b i d at p.116 1 6 i b i d at p.118 17 R e s t r i c t i v e Trade P r a c t i c e s Commission Report concerning the Manufacture, D i s t r i b u t i o n and Sale of Drugs. Department of J u s t i c e , Ottawa 1963 (RTPC Report) 1 8 i b i d at p.496 19 Committee of E n q u i r y i n t o the R e l a t i o n s h i p of the Pharmaceutical Industry with the N a t i o n a l H e a l t h S e r v i c e 1965-67. HMSO Cmnd 3410 (1967) (The S a i n s b u r y Report) at p.79 para 279 20 For a d e t a i l e d d i s c u s s i o n of US drug s u b s t i t u t i o n laws see: Warner, J i l l i a n A, Consumer P r o t e c t i o n and Generic Drugs: The Generic Drug S u b s t i t u t i o n Laws, (1978-7 9) 67 Kentucky Law J o u r n a l 384; Haddad, W i l l i a m P, Generic Drugs - Tomorrows Market, 1978 Food Drug and Cosmetic Law J o u r n a l 488; Knapp, Gene, The Issues of Generic S u b s t i t u t i o n , 1979 Food Drug and Cosmetic Law J o u r n a l 98; McCarey, Michael C, Generic S u b s t i t u t i o n P o l i c y , 1979 Food Drug and Cosmetic Lav/ J o u r n a l 103; R u g g i e r i , N i c h o l a s L, Manufacturers View of Generic S u b s t i t u t i o n L e g i s l a t i o n , 1979 Food Drug and Cosmetic Law J o u r n a l 108 21 The Birmingham Vinegar Brewery Company L t d v Powell [1877] A.C. 710 (H. of L.) 2 2 i b i d at p.714 2 3 " T r a d e Mark" i s d e f i n e d i n s.68(l) of the Act as "a mark used or proposed to be used i n r e l a t i o n t o goods f o r the purpose of i n d i c a t i n g or so as t o i n d i c a t e a c o n n e c t i o n i n the course of t r a d e between the goods and some person having the r i g h t , e i t h e r as p r o p r i e t o r , or as r e g i s t e r e d user, to use the mark whether with or  without any i n d i c a t i o n of the i d e n t i t y of the person." -123-supra n.21 a t p.713 2 5 ( 1 8 8 0 ) 14 Ch. D. 748 2 8 T r a d e Mark Act 1938, s.9 "(2) f o r the purposes of t h i s s e c t i o n " d i s t i n c t i v e " means adapted, i n r e l a t i o n t o the goods i n r e s p e c t o f which a tr a d e mark i s r e g i s t e r e d or proposed t o be r e g i s t e r e d , t o d i s t i n g u i s h goods with which the p r o p r i e t o r o f the trade mark i s o r may be connected i n the course of trade from goods i n the case of which no such c o n n e c t i o n s u b s i s t s , e i t h e r g e n e r a l l y , o r , where the trade mark i s r e g i s t e r e d or proposed t o be r e g i s t e r e d s u b j e c t t o l i m i t a t i o n s , i n r e l a t i o n t o use w i t h i n the extent of the r e g i s t r a t i o n (3) In determining whether a trade mark i s adapted to disti n g u i s h as aforesaid the tribunal may have regard to the extent to which -(a) the trade mark, i s inherently adapted to disti n g u i s h as aforesaid; and (b) by reason of the use of the trade mark or of any other circumstances the trade mark i s i n fact distinguished as aforesaid" 2 9[1975] 1 W.L.R. 914 (H. of L.) 3 0Trade Mark Act 1938, s . l l " " I t s h a l l not be lawful to regi s t e r as a Trade Mark or part of a Trade Mark any matter, the use of which would, by reason of i t s being l i k e l y to deceive or cause confusion or otherwise, be d i s e n t i t l e d to protection i n a court of j u s t i c e or would be contrary to law or morality or any scandalous design." 3 1Smith Kline & French Laboratories (Australia) Ltd v  Register of Trade Marks [1972] R.P.C. 519 (H.C. Australia) 3 1 a s u p r a n.29 at p.918 3 1 b s u p r a n.29 at p.919 32 Smith Kline & French Laboratories Ltd's Applications [1974] 1 W.L.R. 861 -124-33 i b i d per R u s s e l l L . J . at p.866 34 Trade Mark Act 1938, S.16 "A t r a d e mark may be l i m i t e d i n whole or i n p a r t to one or more s p e c i f i e d c o l o u r s and i n any such case the f a c t t h a t i t i s so l i m i t e d s h a l l be taken i n t o c o n s i d e r a t i o n by any t r i b u n a l having t o decide on the d i s t i n c t i v e c h a r a c t e r of the trade mark. I f and so f a r as a trade mark i s r e g i s t e r e d without l i m i t a t i o n of c o l o u r i t s h a l l be deemed to be r e g i s t e r e d f o r a l l c o l o u r s . " 35 In Re A p p l i c a t i o n of F. Reddaway & Co L t d [1914] 1 Ch 856 supra n.29 per Lord D i p l o c k a t p.920 37 T h i s was the o p i n i o n of Lawton L . J . i n the Court of Appeal supra n.32 at p.876 3 8 s u p r a n.32 a t p.874 3 9 B l u e P a r r a f i n Trade Mark [1976] F.S.R. 29 (C.A.) 40 In Re James Trade Mark James v Soulby (1886) 33 Ch D 392 4 1 i b i d at p.395 42 1971 - Unreported case, r e f e r r e d to by R u s s e l l L . J . i n Smith K l i n e & French L a b o r a t o r i e s L t d ' s A p p l i c a t i o n s supra n.32 a t p.868 43 European Trade Mark Convention A r t . 8 see a l s o Chapter VI 44 supra n.29 per Lord D i p l o c k a t p.92 2 45 E. Hoffman-La Roche & Company A.G. and Another v DDSA  Pharmaceuticals L t d [1972] R.P.C. 1 (C.A.) 4 6 ( 1 9 0 5 ) 22 R.P.C. 113 (Ch. D.) 47 Roche Products L t d and Another v Berk Pharmaceuticals  Lt d [1973] R.P.C. 473 4 8 i b i d 4 9 (1909) 26 R.P.C. 481 (Ch. D.) -125-5 0 1 9 1 1 [A.C] 693 (H. of L.) 5 1 [ 1 9 1 1 ] 1 Ch. D. 5 (C.A.) 5 2 i b i d at p.10 5 3 i b i d at p.14 54 supra n.50 5 5 P a r k e Davis & Co L t d v Empire L a b o r a t o r i e s L t d (1964) 45 D.L.R. (2nd) 97 (Supreme Court of Canada) 5 6 i b i d at p.100 57 Parke Davis & Co L t d v Empire L a b o r a t o r i e s L t d (1963) 24 Fox. Pat. C. 88 (Ex Ct of Canada) 5 8 J o h n Haig & Co L t d v F o r t h B l e n d i n g Co L t d (1953) 70 R.P.C. 259 (C. of Sess. Scotland) 5 9 i b i d at p.106 6 0 i b i d n.55 a t p.100 6 1 [ 1 9 3 9 ] 2 D.L.R. 65 a t p.67 6 2 ( 1 9 8 0 ) 206 USPQ 238 ( D i s t r i c t Court E.D. New York) 6 3Lanham Act, 15 U.S.C. para 1125(a) 6 4 (1959) 271 F. 2nd 573 (US Court of Appeals, second c i r c u i t ) 6 6 s u p r a n.48 6 7 [ 1 9 7 3 ] R.P.C. 461 a t p. 470 (Ch. D.) ft 8 supra n.50 6 9 s u p r a n.51 70 supra n.50 71 supra n.50 per Lord G o r r e l l a t p.701 73 supra n.45 a t p.8 - 1 2 b -7 4Hoffman-La Roche Ltd v Rocke-William Cie Ltee (1970) 62 C.P.R. 233 (Ex. Ct. of Canada) 7 51952-53 (Can) c.49 "7 No person s h a l l (c) pass o f f other wares or services as and for those ordered or requested." 7 ft supra n.74 at p.235 77 c ~ supra n.62 7 8 i b i d at p.242 79 supra n.2 9 8 0 i b i d at p.922 81 supra n.5 8 2 i b i d at p.10 83 supra n.6 2 8 4(1938) 305 US 111 at p.122 8 5(1959) 271 F. 2nd 567 8 6 i b i d at p.572 8 7 supra n.5 p.11 - 1 2 7 -CHAPTER V COPYRIGHT AND I N D U S T R I A L DESIGNS 1 . I n t r o d u c t i o n T h e r e a r e two r e m a i n i n g a r e a s o f I n t e l l e c t u a l P r o p e r t y Law w h i c h , w h i l e n o t p r o t e c t i n g t h e f o r m u l a o f a d r u g o r m e d i c i n e , may c o n f e r p r o t e c t i o n u p o n t h e p h y s i c a l a p p e a r a n c e o f t h e p r o d u c t t h e r e b y i n d i r e c t l y p r o l o n g i n g t h e m o n o p o l y o v e r t h e p r o d u c t i t s e l f . T h e s e two a r e a s a r e c o p y r i g h t and i n d u s t r i a l d e s i g n s . I n d u s t r i a l d e s i g n l e g i s l a t i o n e x i s t s p r i m a r i l y t o p r o t e c t t h e n o v e l a p p e a r a n c e o f mass p r o d u c e d g o o d s . T h e p r o t e c t i o n c o n f e r r e d i s a f u l l m o n o p o l y a g a i n s t b o t h c o p y i n g and i n d e p e n d e n t c r e a t i o n . T h e law o f c o p y r i g h t c o n f e r s l o n g e r l a s t i n g r i g h t s a n d was o r i g i n a l l y i n t e n d e d t o p r o t e c t o n l y l i t e r a r y , a r t i s t i c , m u s i c a l o r d r a m a t i c c r e a t i o n s . A l t h o u g h l o n g e r l a s t i n g t h e p r o t e c t i o n i s l i m i t e d t o c o p y i n g . The two a r e a s o v e r l a p t o a c o n s i d e r a b l e e x t e n t a n d a r e t h e r e f o r e c o n s i d e r e d t o g e t h e r i n t h i s c h a p t e r . I n a d d i t i o n , f e a t u r e s o f t h e p r o d u c t w h i c h a r e p r o t e c t e d b y a r t i s t i c c o p y r i g h t o r i n d u s t r i a l -izo-d e s i g n r e g i s t r a t i o n may be t h e s u b j e c t o f a v a l i d t r a d e mark r e g i s t r a t i o n . T h e s e c o n d a r e a o f o v e r l a p i s c o n s i d e r e d s e p a r a t e l y a t t h e e n d o f t h e c h a p t e r . 2 . H i s t r o c i a l B a c k g r o u n d ^ T h e law o f c o p y r i g h t s t a r t e d w i t h t h e p r o t e c t i o n o f b o o k s and moved f r o m t h a t t o e n c o m p a s s a l l f o r m s o f l i t e r a r y , a r t i s t i c a n d m u s i c a l e n d e a v o u r . I t h a s more r e c e n t l y b e e n e x t e n d e d i n t o t h e f i e l d o f i n d u s t r i a l d e s i g n . T h e e a r l i e s t f o r m o f c o p y r i g h t p r o t e c t i o n was i n t h e l i t e r a r y f i e l d a n d t o o k t h e f o r m o f p r i n t e r s l i c e n c e s . 2 The f i r s t C o p y r i g h t A c t , e n a c t e d i n 1709 g a v e a u t h o r s o f b o o k s t h e s o l e r i g h t o f p r i n t i n g f o r f o u r t e e n y e a r s . T h e law d e v e l o p e d f r o m t h a t i n a p i e c e m e a l m a n n e r t o c o v e r v a r i u s a s p e c t s o f t h e f i n e a r t s b u t i n d u s t r i a l d e s i g n s w e r e o u t s i d e t h e s c o p e o f c o p y r i g h t p r o t e c t i o n . W i t h t h e a d v e n t o f mass p r o d u c t i o n came a d e s i r e t o p r e v e n t p l a g i a r i s m o f m a n u f a c t u r e d g o o d s . T h e h a z a r d was f i r s t a p p r e c i a t e d i n t h e t e x t i l e t r a d e a n d a s e a r l y a s 1787 a n A c t was p a s s e d g r a n t i n g p r o t e c t i o n t o n o v e l d e s i g n s . T h i s s t a t u t e a d o p t e d a " c o p y r i g h t a p p r o a c h " r a t h e r t h a n a " p a t e n t a p p r o a c h " i n t h a t i t c o n f e r r e d p o w e r t o p r e v e n t o t h e r s f r o m c o p y i n g an o r i g i n a l p a t t e r n w i t h o u t -129-3 a u t h o r i t y . However, between 1833 and 1949 d e sign p r o t e c t i o n was given through s u c c e s s i v e Patents and Designs Acts, a system of r e g i s t r a t i o n was e s t a b l i s h e d and the p r o t e c t i o n c o n f e r r e d was a f u l l monopoly - a "patents approach". In 1949 d e s igns and p atents were each gi v e n p r o t e c t i o n under separate s t a t u t e s . The R e g i s t e r e d Designs Act 194 9 i s s t i l l the governing s t a t u t e i n the realm of i n d u s t r i a l designs c o n f e r r i n g p r o t e c t i o n upon " f e a t u r e s of shape c o n f i g u r a t i o n p a t t e r n or ornament" a p p l i e d to any a r t i c l e . The Act speaks o f "design c o p y r i g h t " but the form of p r o t e c t i o n c o n f e r r e d i s s t i l l more a k i n to patent p r o t e c t i o n . I t i s f u l l monopoly p r o t e c t i o n based upon n o v e l t y i n the patent sense r a t h e r than c o p y r i g h t p r o t e c t i o n which i s based on o r i g i n a l i t y i n the sense of o r i g i n a t i n g from the author and p r o t e c t s o n l y a g a i n s t copying. C o p y r i g h t law was d e veloping contemporaneously along s l i g h t l y d i f f e r e n t l i n e s . The f i r s t comprehensive Co p y r i g h t Act was passed i n 1911. U n t i l t h a t time the law had been co n t a i n e d i n a number of s t a t u t e s d e a l i n g w i t h d i f f e r e n t aspects of the a r t s . The primary r i g h t c o n f e r r e d by the Act of 1911 was -13U-" t h e s o l e r i g h t t o p r o d u c e o r r e p o d u c e t h e w o r k o r a n y s u b s t a n t i a l p a r t t h e r e o f i n a n y m a t e r i a l f o r m w h a t s o e v e r . " T h i s was h e l d t o i n c l u d e r e p r o d u c t i o n o f a two d i m e n s i o n a l 4 work i n a t h r e e d i m e n s i o n a l f o r m . C l e a r l y , many d e s i g n s a p p l i e d , o r t o be a p p l i e d , t o m a n u f a c t u r e d a r t i c l e s c o u l d c o n c e i v a b l y come w i t h i n t h e s c o p e o f b o t h t h e C o p y r i g h t A c t a n d t h e R e g i s t e r e d D e s i g n s A c t . T h e r e f o r e S . 2 2 o f t h e C o p y r i g h t A c t p r o v i d e d t h a t i f , when a work was f i r s t m a d e , i t was " i n t e n d e d " t h a t i t s h o u l d f o r m t h e b a s i s o f a d e s i g n t o be u s e d i n d u s t r i a l l y t h e r i g h t o f c o m p l a i n t b y way o f 5 a l l e g e d i n f r i n g e m e n t o f c o p y r i g h t was f o r f e i t e d . T h e t e s t was t h e i n t e n t i o n o f t h e d e s i g n e r a n d t h e H o u s e o f L o r d s h e l d i n K i n g F e a t u r e s S y n d i c a t e v 0 . & M . K l e e m a n L t d t h a t i t was t h e o r i g i n a l i n t e n t i o n o f t h e a r t i s t a t t h e t i m e o f f i r s t m a k i n g t h i s d r a w i n g w h i c h p r e v a i l e d . T h u s , c o p y r i g h t p r o t e c t i o n was g a i n e d o r l o s t a t t h e t i m e o f c r e a t i o n . T h i s i s s t i l l t h e p o s i t i o n w i t h 7 r e g a r d t o w o r k s w h i c h w e r e made b e f o r e J u n e 1 s t , 1 9 5 7 . p T h e G r e g o r y C o m m i t t e e o n C o p y r i g h t was c o n c e r n e d b y t h e d i s p a r i t y b e t w e e n t h e p e r i o d o f r e g i s t e r e d d e s i g n p r o t e c t i o n (15 y e a r s ) and t h a t o f c o p y r i g h t -131-protection which lasted for the l i f e of the author plus f i f t y years. It was f e l t that those designers who did not i n i t i a l l y intend i n d u s t r i a l exploitation received undue favour from the law. Furthermore, the difference encouraged subterfuge on the part of a r t i s t s as to t h e i r o r i g i n a l intention. Consequently, when the Copyright Act 1956 became law section 10 provided that, as soon as a regi s t r a b l e design was applied i n d u s t r i a l l y or a design was registered, the copyright became i n e f f e c t i v e immediately i n the f i e l d of the design and, not l a t e r than f i f t e e n years after marketing, i n the f i e l d of a l l associated designs. Section 10 was sub s t a n t i a l l y altered by he Design Copyright Act 196 8 so that the loss of copyright i n the i n d u s t r i a l sphere i s now delayed for f i f t e e n years from the f i r s t marketing of the products. Thereafter i t w i l l not infringe copyright to do any act within the scope of a notional set of registered designs. Neither t h i s section or i t s predecessor have been interpreted according to the o r i g i n a l intention of the l e g i s l a t u r e as w i l l be demonstrated below. 3. A r t i s t i c Copyright and Ind u s t r i a l Design The design of a pharmaceutical product, the product dispenser or the packaging may a l l be protected by a r t i s t i c copyright or an i n d u s t r i a l design r e g i s t r a t i o n . - 1 3 2 -T h e J o h n s t o n e C o m m i t t e e r e p o r t c o n t a i n s a l i s t o f t h e t y p e s o f g o o d s f o r w h i c h d e s i g n s h a v e b e e n r e g i s t e r e d . T h a t l i s t i n c l u d e s , u n d e r t h e h e a d i n g " c o n t a i n e r s " b o t t l e s , f l a s k s , 9 c a p s u l e s , c a r t o n s . R e g i s t r a t i o n o f s u c h i t e m s may be o f c o n s i d e r a b l e v a l u e t o t h e p h a r m a c e u t i c a l f i r m . W h e r e t h e p h a r m a c e u t i c a l c o m p a n y s e e k s t o r e g i s t e r t h e d e s i g n o f a new p r o d u c t n o v e l t y , i n t h e p a t e n t s e n s e , i s r e q u i r e d . O r i g i n a l i t y , i n t h e c o p y r i g h t s e n s e o f o r i g i n a t i n g f r o m t h e a u t h o r , i s n o t s u f f i c i e n t . S e c t i o n 1(2) o f t h e R e g i s t e r e d D e s i g n s A c t 1949 s t a t e s : " a d e s i g n s h a l l n o t be r e g i s t r a b l e u n l e s s i t i s new o r o r i g i n a l . " G r a h a m J . h e l d i n a r e c e n t p h a r m a c e u t i c a l a p p l i c a t i o n 1 0 t h a t t h e s e c t i o n meant "new a n d o r i g i n a l " . " T h e w o r d o r i g i n a l d o e s n o t t o my m i n d i n t h i s c o n t e x t c a r r y t h e m a t t e r much f u r t h e r t h a n new b u t i t d o e s i m p o r t s o m e t h i n g more t h a n mere n o v e l t y s t r i c t o s e n s o . I t i s d i r e c t i n g t h e m i n d a n d e y e t o t h e f a c t t h a t t h e r e i s a d i f f e r e n c e o f f o r m o r c h a r a c t e r w h i c h i s a d e p a r t u r e f r o m p r e v i o u s d e s i g n s and w h i c h i s t h e r e f o r e o f some s i g n i f i c a n c e o r s u b s t a n c e . " ^ - 1 3 3 -T h e n o v e l t y r q u i r e m e n t w i l l i n v o l v e t h e a p p l i c a n t i n a s e a r c h o f p r e v i o u s r e g i s t e r e d d e s i g n s . F u n c t i o n a l f e a t u r e s a r e n o t r e g i s t r a b l e . A d e s i g n i s d e f i n e d i n s e c t i o n 1(3) o f t h e R e g i s t e r e d D e s i g n s A c t 1 9 4 9 : -" I n t h i s A c t , t h e e x p r e s s i o n " d e s i g n " means f e a t u r e s o f s h a p e , c o n f i g u r a t i o n , p a t t e r n o r o r n a m e n t a p p l i e d t o a n a r t i c l e b y a n y i n d u s t r i a l p r o c e s s o r m e a n s , b e i n g f e a t u r e s w h i c h , i n t h e f i n i s h e d a r t i c l e a p p e a l t o a n d a r e j u d g e d s o l e l y b y t h e e y e b u t d o e s n o t i n c l u d e a m e t h o d o r p r i n c i p l e o f c o n s t r u c t i o n o r f e a t u r e s o f s h a p e o r c o n f i g u r a t i o n w h i c h a r e d i c t a t e d s o l e l y b y t h e f u n c t i o n w h i c h t h e a r t i c l e t o be made i n t h a t s h a p e o r c o n f i g u r a t i o n h a s t o p e r f o r m . " T h e a d v a n t a g e t o a p h a r m a c e u t i c a l c o m p a n y o f o b t a i n i n g r e g i s t r a t i o n u n d e r t h i s A c t i s t h a t i t w i l l e n j o y a c o m p l e t e m o n o p o l y o v e r t h e r e g i s t e r e d d e s i g n f o r f i f t e e n y e a r s e n f o r c e a b l e a g a i n s t a l l o t h e r d r u g m a n u f a c t u r e r s w i t h o u t p r o o f o f c o p y i n g . H o w e v e r , t h e s t a n d a r d s i z e d two t o n e c a p s u l e d i s c u s s e d i n t h e p r e v i o u s c h a p t e r i s p r o b a b l y n o t e l i g i b l e f o r r e g i s t r a t i o n . S m i t h K l i n e & F r e n c h L a b o r a t o r i e s r e c e n t l y a p p l i e d t o r e g i s t e r two d e s i g n s t o be 12 a p p l i e d t o p h a r m a c e u t i c a l p r o d u c t s . T h e y w e r e b o t h f o r d r u g c a p s u l e s c h a r a c t e r i s e d b y a s p e c k l e d e f f e c t a n d t h r e e d i f f e r e n t c o l o u r e d b a n d s . T h e s t a t e m e n t o f n o v e l t y i n t h e c a s e o f e a c h a p p l i c a t i o n was i n t h e f o l l o w i n g t e r m s : - 1 3 4 -" T h e f e a t u r e o f t h e d e s i g n f o r w h i c h n o v e l t y i s c l a i m e d i s t h e o r n a m e n t c r e a t e d b y t h e c o m b i n a t i o n o f c o l o u r s o f t h e p e l l e t s a s s e e n t h r o u g h t h e v a r i o u s p o r t i o n s o f t h e t r a n s p a r e n t c a p s u l e . " R e g i s t r a t i o n was r e f u s e d a n d S m i t h K l i n e & F r e n c h a p p e a l e d t o t h e R e g i s t e r e d D e s i g n s A p p e a l T r i b u n a l . Mr J u s t i c e G r a h a m f o u n d , u p h o l d i n g t h e R e g i s t r a r s r e f u s a l , t h a t t h e c a p s u l e s i n q u e s t i o n d i d n o t p o s s e s s s u f f i c i e n t n o v e l t y a n d o r i g i n a l i t y t o m e r i t r e g i s t r a t i o n T h e d e c i s i o n , h o w e v e r , d o e s n o t n e c e s s a r i l y mean t h a t a l l f u t u r e a p p l i c a t i o n s f r o m p h a r m a c e u t i c a l f i r m s a r e doomed t o f a i l u r e . M u c h a r g u m e n t c e n t r e d a r o u n d w h e t h e r c o l o u r s h o u l d be t a k e n i n t o a c c o u n t i n d e t e r m i n i n g r e g i s t r a b i l i t y . The A c t c o n t a i n s no r e f e r e n c e t o c o l o u r b u t w o r d s s u c h a s " p a t t e r n " o r " o r n a m e n t a t i o n " s u g g e s t t h a t c o l o u r may be r e l e v a n t . G r a h a m J . c o n c e d e d t h a t i n c e r t a i n c i r c u m s t a n c e s c o l o u r may be a n e s s e n t i a l f e a t u r e o f a d e s i g n a n d g a v e a s an e x a m p l e t h e I s h i h a r a C a r d s , o f t e n 13 u s e d i n d i a g n o s i n g c o l o u r b l i n d n e s s . I n t h i s c a s e he f o l l o w e d w h a t he t e r m e d t h e "common s e n s e a p p r o a c h " o f F a r w e l l J . i n C a l d e r V a l e M a n u f a c t u r i n g C o v L a p p e t  M a n u f a c t u r i n g C o - 1 3 b -" W h i l e I am v e r y f a r f r o m s u g g e s t i n g t h a t t h e r e may n o t be c a s e s w h e r e d i f f e r e n c e s i n c o l o u r may be o f i m p o r t a n c e , a n d i n d e e d , s u f f i c i e n t t o d i f f e r e n t i a t e t h e d e s i g n s , p r i m a f a c i e i n my v i e w c o l o u r i s n o t a m a t t e r o f a n y g r e a t i m p o r t a n c e i n c o n s i d e r i n g a q u e s t i o n o f t h i s k i n d . " I t i s u n l i k e l y t h a t a n y o f t h e c o l o u r e d o r b a n d e d c a p s u l e s d i s c u s s e d i n p r e v i o u s c h a p t e r s w o u l d d e m o n s t r a t e s u f f i c i e n t n o v e l t y t o be r e g i s t r a b l e a s a n i n d u s t r i a l d e s i g n , b u t i t i s n o t b e y o n d t h e w r i t e r ' s i m a g i n a t i o n t o e n v i s a g e f u t u r e d e s i g n r e g i s t r a t i o n s f o r d i a m o n d s h a p e d c a p s u l e s w i t h n u m e r o u s m u l t i c o l o u r e d s t r i p e s e x t e n d i n g i n v a r i o u s d i r e c t i o n s o v e r t h e i r e x t e r i o r . I n d e e d , t h e c o u r t s h a v e i n o n e i n s t a n c e a l l o w e d r e g i s t r a t i o n o f a d e s i g n w h i c h c o n s i s t e d p r i m a r i l y o f c o l o u r e d s t r i p i n g a p p l i e d t o a n a r t i c l e o f c o n v e n t i o n a l s h a p e . C o o k & H u r s t ' s 16 A p p l i c a t i o n c o n c e r n e d a f o o t b a l l s h i r t w o r n b y t h e E n g l i s h T e a m . I t was o f a s t a n d a r d d e s i g n b u t d i s t i n g u i s h e d b y c o n t i g u o u s r e d a n d b l u e b a n d i n g ( t h e t e a m c o l o u r s ) . W h i t f o r d J . c o n s i d e r e d t h e s t r i p e s t o be o f p a r t i c u l a r s i g n i f i c a n c e i n a s p o r t i n g c o n t e x t b e c a u s e o f t h e i r p u r p o s e i n d i s t i n g u i s h i n g one t e a m f r o m a n o t h e r . He c o n s i d e r e d t h a t , h a v i n g r e g a r d t o b o t h t h e p a r t i c u l a r c o l o u r s i n v o l v e d and t h e i r l o c a t i o n o n t h e s h i r t , " i t w o u l d n o t be a p p r o p r i a t e a t t h i s s t a g e t o r e f u s e t h e 17 a p p l i c a t i o n . " - 1 3 b -W h i l e t h e p h a r m a c e u t i c a l f i r m s may d e r i v e some e n c o u r a g e m e n t f r o m t h i s c a s e , i t s v a l u e i s l i m i t e d , p a r t l y b e c a u s e t h e j u d g m e n t i s f r a m e d i n s u c h c a u t i o u s t e r m s a n d p a r t l y b e c a u s e , a s W h i t f o r d J . a d m i t t e d , t h e c o l o u r s i n q u e s t i o n w e r e f u n c t i o n a l , s e r v i n g t o i d e n t i f y t h e t e a m . F u n c t i o n a l f e a t u r e s o f a d e s i g n a r e n o t p r o p e r s u b j e c t s f o r r e g i s t r a t i o n . I f t h e p h a r m a c e u t i c a l c o m p a n i e s a t t e m p t e d , o n t h e b a s i s o f t h i s c a s e , t o e m p l o y c o l o u r e d b a n d i n g s t o i d e n t i f y c e r t a i n d r u g s t h e y may f i n d t h e i r a p p l i c a t i o n s r e f u s e d o n t h e g r o u n d s o f t h e i r f u n c t i o n a l i t y . S i n c e t h e s u c c e s s o f t h e S m i t h K l i n e & F r e n c h t r a d e mark a c t i o n t h e p h a r m a c e u t i c a l f i r m s w i l l no d o u b t c h o o s e i n s t e a d t o r e g i s t e r t h e i r d i s t i n c t i v e c a p s u l e s a s t r a d e m a r k s . H o w e v e r , i f , a s s u g g e s t e d a b o v e , t r a d e mark p r o t e c t i o n i s a b o l i s h e d f o r p h a r m a c e u t i c a l s t h e f i r m s w i l l no d o u b t t u r n t o i n d u s t r i a l d e s i g n l e g i s l a t i o n f o r p r o t e c t i o n . T h e m o s t c o n v e n i e n t m e t h o d t o r e g i s t e r a c a p s u l e d e s i g n w o u l d be t o f i l e a s p e c i m e n o f t h e c a p s u l e i n s u p p o r t o f t h e A p p l i c a t i o n . T h e D e s i g n s R e g i s t r y h a v e i n d i c a t e d a w i l l i n g n e s s t o a c c e p t s u c h a p p l i c a t i o n s : -- 1 3 / -" I n a r e l a t i v e l y s m a l l number o f c a s e s a p p l i c a n t s f i l e c o l o u r e d r e p r e s e n t a t i o n s o r s p e c i m e n s i n s u p p o r t o f a n a p p l i c a t i o n t o g e t h e r w i t h a s t a t e m e n t o f n o v e l t y w o r d e d t o t h e e f f e c t t h a t ' t h e f e a t u r e o f t h e d e s i g n f o r w h i c h n o v e l t y i s c l a i m e d i s t h e p a t t e r n o r o r n a m e n t c r e a t e d b y t h e t o n a l c o n t r a s t o f t h e c o l o u r s a p p l i e d t o t h e a r t i c l e a s shown i n t h e r e p r e s e n t a t i o n s * . W h i l s t t h e o f f i c e i s i n some d o u b t a s t o t h e v a l i d i t y o f s u c h a c l a i m t h e a p p l i c a t i o n i s a c c e p t e d f o r r e g i s t r a t i o n p r o v i d e d t h a t t h e d e s i g n p o s s e s e s t h e n e c e s s a r y s u b s t a n t i a l n o v e l t y . " _ A s p r o N i c h o l a s a t t e m p t e d t o r e g i s t e r a s a c a p s u l e 19 d e s i g n , a c o l u m n o f c o n v e n t i o n a l t a b l e t s c o n t a i n e d w i t h i n a t r a n s p a r e n t two p a r t c a p s u l e . T h i s a p p l i c a t i o n was r e f u s e d b u t G r a h a m J . b e g a n h i s j u d g m e n t b y s a y i n g : " T h e r e seems p r i m a f a c i e t o be no a p r i o r i r e a s o n why a d e s i g n f o r a t r a n s p a r e n t c o n t a i n e r a n d t h e a r t i c l e o r a r t i c l e s i t c o n t a i n s s h o u l d n o t be r e g i s t r a b l e p r o v i d e d t h e c o n d i t i o n s o f n o v e l t y a n d o r i g i n a l i t y c a l l e d f o r i n t h e A c t a r e f u l f i l l e d b y t h e c o m b i n a t i o n o f c o n t a i n e r a n d a r t i c l e a s a w h o l e . " T h e a p p l i c a n t ' s m a i n p r o b l e m was t h a t t h e i r d e s i g n c o n s i s t e d o f a c o m b i n a t i o n o f two s h a p e s b o t h o f w h i c h w e r e s o w e l l known a s t o be common k n o w l e d g e ( a l t h o u g h t h e i d e a o f c o m b i n i n g t h e two was a d m i t t e d l y n o v e l ) . I f t h e s h a p e o f t h e p i l l s t o be i n s e r t e d i n t h e c a p s u l e h a d b e e n n o v e l --138-h e a r t shaped or animal shaped t a b l e t s , f o r example - the outcome may w e l l have been d i f f e r e n t . An i n t e r e s t i n g q u e s t i o n , however, i s whether the a p p l i c a n t s a c t u a l l y wanted the outcome to be d i f f e r e n t . Once i t has been a s c e r t a i n e d t h a t a c e r t a i n d e s i g n i s u n r e g i s t r a b l e the p o s i t i o n seems to be t h a t c o p y r i g h t i n the o r i g i n a l drawings of the u n r e g i s t r a b l e d e s i g n w i l l be u n a f f e c t e d by S.10 of the 1956 Act and w i l l remain v a l i d f o r the l i f e t i m e of the draughtsmen p l u s f i f t y y e a rs. Copyright w i l l not prevent independent i n v e n t i o n by a r i v a l manufacturer but i s , none the l e s s , a u s e f u l "nuisance weapon" i n the armoury of the pharmaceutical f i r m s . The c o p y r i g h t Act 1956 p r o t e c t s drawings as 2 0 a r t i s t i c works " i r r e s p e c t i v e of a r t i s t i c q u a l i t y " . P r t o t e c t i o n extends t o the making of three dimensional 21 o b j e c t s resembling the drawings s u b j e c t to the defence contained i n s e c t i o n 9(8) t h a t the a r t i c l e must be r e c o g n i s a b l e by someone not expert i n such a r t i c l e s as a r e p r o d u c t i o n of the c o p y r i g h t drawings. Copyr i g h t i n any drawings belongs, as a general r u l e , t o the author. However, S e c t i o n 4(4) of the 1956 - 1 3 9 -A c t p r o v i d e s t h a t w h e r e a w o r k i s made i n t h e c o u r s e o f t h e a u t h o r ' s e m p l o y m e n t b y a n o t h e r p e r s o n u n d e r a " c o n t r a c t o f s e r v i c e " t h a t o t h e r p e r s o n s h a l l be e n t i t l e d t o a n y c o p y r i g h t s u b s i s t i n g i n t h e w o r k . T h e m e a n i n g o f t h e e x p r e s s i o n " c o n t r a c t o f s e r v i c e " h a s b e e n t h e s u b j e c t o f much j u d i c i a l comment a n d v a r i o u s c r i t e r i a h a v e b e e n s e l e c t e d a s d e t e r m i n i n g t h e e x i s t e n c e o f a c o n t r a c t o f 23 s e r v i c e . T h e m o s t i m p o r t a n t c r i t e r i o n a p p e a r s t o be t h e d e g r e e o f c o n t r o l e x e r c i s e d b y t h e m a s t e r o v e r h i s s e r v a n t . " T h e g r e a t e r t h e amount o f d i r e c t c o n t r o l e x e r c i s e d o v e r t h e p e r s o n r e n d e r i n g s e r v i c e s b y t h e p e r s o n c o n t r a c t i n g f o r t h e m t h e s t r o n g e r t h e g r o u n d f o r h o l d i n g i t t o be a c o n t r a c t o f s e r v i c e a n d s i m i l a r l y t h e g r e a t e r t h e d e g r e e o f i n d e p e n d e n c e o f s u c h c o n t r o l , t h e g r e a t e r t h e p r o b a b i l i t y t h a t t h e s e r v i c e s r e n d e r e d a r e o f t h e n a t u r e o f p r o f e s s i o n a l s e r v i c e s and t h a t t h e c o n t r a c t i s n o t o n e o f s e r v i c e . " 2 4 I n o r d e r t h a t c o p y r i g h t may v e s t i n t h e e m p l o y e r i t i s a l s o i m p o r t a n t t h a t t h e w o r k be made b y t h e s e r v a n t " i n t h e c o u r s e o f h i s e m p l o y m e n t " . I f t h e wor k i s made w h i l e t h e s e r v a n t i s d o i n g s o m e t h i n g w h i c h i s a n c i l l a r y t o 25 h i s e m p l o y m e n t c o p y r i g h t w i l l r e m a i n w i t h t h e e m p l o y e e . -14U-A d r a u g h t s m a n who d e s i g n s a new c a p s u l e f o r a p h a r m a c e u t i c a l f i r m w i l l a l m o s t i n v a r i a b l y be e m p l o y e d b y t h e f i r m u n d e r a c o n t r a c t o f s e r v i c e . F u r t h e r m o r e , t h e c o n t r a c t i t s e l f w i l l u s u a l l y s t i p u l a t e t h a t c o p y r i g h t i n a l l d e s i g n s made d u r i n g t h e c o u r s e o f e m p l o y m e n t w i l l b e l o n g t o t h e p h a r m a c e u t i c a l c o m p a n y . R e t u r n i n g t o a c o n s i d e r a t i o n o f t h e A s p r o c a s e i n t h e c o n t e x t o f a r t i s t i c c o p y r i g h t p r o t e c t i o n , t h e f i r s t q u e s t i o n t o c o n s i d e r i s w h e t h e r t h e r e a r e i n e x i s t e n c e a n y d r a w i n g s i n w h i c h t h e a p p l i c a n t s may c l a i m c o p y r i g h t . T h e r e p o r t c o n t a i n s t h r e e s i m p l e d i a g r a m s d e p i c t i n g t h e a r t i c l e i n q u e s t i o n . The d i a g r a m s , w h i c h d i d n o t p o r t r a y a n y t h i n g " n e w " o r " o r i g i n a l " i n t h e c o n t e x t o f t h e R e g i s t e r e d D e s i g n A c t , a r e o r i g i n a l i n t h e c o p y r i g h t s e n s e t h a t t h e y o r i g i n a t e d f r o m t h e d r a u g h t s m a n who d r e w t h e m . T h e d i a g r a m s c e r t a i n l y d e m o n s t r a t e no a r t i s t i c m e r i t b u t t h e c o u r t s h a v e i n t e r p r e t e d t h e w o r d s " i r r e s p e c t i v e o f a r t i s t i c q u a l i t y " a s a b s o l v i n g t h e m f r o m t h e r e s p o n s i b i l i t y o f m a k i n g a e s t h e t i c j u d g m e n t s . One j u d g e , when c o n s i d e r i n g w h e t h e r " p o i n t p a t t e r n s " w e r e a r t i s t i c w o r k s c o n c l u d e d t h a t t h e y w e r e , b e i n g " l i n e s d r a w n o n p a p e r " . F u r t h e r m o r e , t h e y w e r e i n f r i n g e d b y a t h r e e d i m e n s i o n a l r e p r o d u c t i o n when t h e d e f e n d a n t s made t h e m up i n t o f i n i s h e d f a b r i c s . - 1 4 1 -2 7 S i m i l a r l y , i n M e r c h a n t A d v e n t u r e r s v M . Grew & C o L t d t h e c o u r t s a c c e p t e d t h e p l a i n t i f f ' s c l a i m t h a t a r t i s t i c c o p y r i g h t s u b s i s t e d i n s i m p l e l i n e d r a w i n g s o f a n e l e c t r i c l i g h t f i t t i n g a n d t h i s c o p y r i g h t was i n f r i n g e d b y t h e d e f e n d a n t s s u b s e q u e n t p r o d u c t i o n a n d s a l e o f s i m i l a r l i g h t f i t t i n g s . T h e s e c a s e s i n d i c a t e t h a t t h e w o r d s " d i a g r a m map c h a r t a n d p l a n " c o n t a i n e d i n t h e d e f i n i t i o n o f d r a w i n g i n 2 8 t h e C o p y r i g h t A c t 1 9 5 6 , i n c l u d e a n y s i m p l e p r o d u c t d r a w i n g w h i c h w i l l t h e r e f o r e be e l i g i b l e f o r p r o t e c t i o n a s a n a r t i s t i c w o r k f o r t h e l i f e o f t h e e m p l o y e e d r a u g h t s m a n p l u s f i f t y y e a r s . The p r o b l e m i s k n o w i n g how f a r t h i s p r i n c i p l e e x t e n d s . B y p r o t e c t i n g s i m p l e l i n e d r a w i n g s a s a r t i s t i c w o r k s t h e c o u r t s a r e c o m i n g d a n g e r o u s l y c l o s e t o p r o t e c t i n g t h e i d e a i t s e l f r a t h e r t h a n t h e e x p r e s s i o n o f t h e i d e a . I n B r i t i s h N o t h o r p a n d O t h e r s v T e x t e a m B l a c k b u r n  L t d a n d A n o t h e r Megamy J . s a i d : " P r i m a f a c i e i f t h e r e i s a n y t h i n g w h i c h c a n f a i r l y be c a l l e d a d i a g r a m i t i s a d r a w i n g a n d may be t h e s u b j e c t o f a c o p y r i g h t . I t may be i n d e e d t h a t s o m e t h i n g may be a d r a w i n g w h i c h c a n n o t f a i r l y be c a l l e d a d i a g r a m o r a d r a w i n g o f a n y k i n d . A s i n g l e s t r a i g h t l i n e d r a w n w i t h t h e a i d - 1 4 2 -o f a r u l e r w o u l d n o t seem t o me t o be a v e r y p r o m i s i n g s u b j e c t f o r c o p y r i g h t . " 2. y I f e v e r y d r a w i n g w h i c h i s s l i g h t l y more s o p h i s t i c a t e d t h a n a s i n g l e s t r a i g h t l i n e d r a w n w i t h a r u l e r i s e n t i t l e d t o c o p y r i g h t p r o t e c t i o n w h a t i s t o p r e v e n t a f i r m m a n u f a c t u r i n g , f o r e x a m p l e , o v a l s h a p e d p i l l s f r o m m a k i n g a s i m p l e d r a w i n g o f an o v a l s h a p e a n d c l a i m i n g c o p y r i g h t p r o t e c t i o n f o r t h e s h a p e . I n s u c h a s i t u a t i o n t h e d r a w i n g l e n d s n o t h i n g i n p o r t r a y a l t o t h e a c t u a l i d e a . T h e d r a w i n g i s t h e i d e a a n d p r o t e c t i o n o f t h e d r a w i n g i s t a n t a m o u n t t o p r o t e c t i o n o f t h e i d e a . T h e f u n d a m e n t a l d i s t i n c t i o n i n c o p y r i g h t law b e t w e e n f o r m a n d e x p r e s s i o n was e x p l a i n e d b y W i l l s J . i n t h e c a s e o f K e n r i c k 30 & C o v L a w r e n c e & C o . A d i a g r a m o f a h a n d h o l d i n g a p e n c i l i n t h e p r o c e s s o f m a r k i n g a c r o s s i n a b o x ( a i m e d a t p r o v i d n g i n s t r u c t i o n f o r i l l i t e r a t e v o t e r s ) was n o t c o p y r i g h t a b l e . " A s q u a r e c a n o n l y be d r a w n a s a s q u a r e , a c r o s s c a n o n l y be d r a w n a s a c r o s s , a n d f o r s u c h p u r p o s e s a s t h e p l a i n t i f f ' s d r a w i n g was i n t e n d e d t o f u l f i l t h e r e a r e s c a r c e l y more ways t h a n o n e o f d r a w i n g a p e n c i l o r t h e h a n d t h a t h o l d s i t . I f t h e p a r t i c u l a r a r r a n g e m e n t o f s q u a r e c r o s s h a n d o r p e n c i l i s r e l i e d u p o n i t i s n o t h i n g more t h a n a c l a i m o f c o p y r i g h t f o r t h e s u b j e c t w h i c h , i n my o p i n i o n , c a n n o t p o s s i b l y be s u p p o r t e d . " 1 - 1 4 J -W i l l s J . was r e l u c t a n t t o g r a n t c o p y r i g h t p r o t e c t i o n b e c a u s e t h e k i n d o f m o r a l c l a i m w h i c h s u c h a d r a w i n g h a d t o p r o t e c t i o n " w a s f a r more o f t h e n a t u r e w h i c h a t t a c h e d t o a t r a d e d e s i g n t h a n t o t h a t w h i c h b e l o n g s t o a w o r k o f a r t " . T h e c o u r t s i n r e c e n t y e a r s h a v e b e e n more w i l l i n g t o g r a n t p r o t e c t i o n t o t r a d e d e s i g n s . I n L . B . 32 ( P l a s t i c s ) L t d v S w i s h P r o d u c t s L t d L o r d H a i l s h a m was a w a r e t h a t , b y g r a n t i n g p r o t e c t i o n t o t h e p l a i n t i f f ' s d e s i g n d r a w i n g s , t h e c o u r t was i n d a n g e r o f p r o t e c t i n g t h e i d e a b u t c o n s i d e r e d t h a t i f s p e c i f i c d e t a i l s o f t h e p l a i n t i f f ' s d e s i g n w h i c h w e r e " s u b s t a n t i a l " w e r e c o p i e d t h i s a m o u n t e d t o more t h a n c o p y i n g o f t h e i d e a : " o f c o u r s e , i t i s t r i t e law t h a t t h e r e i s n o c o p y r i g h t i n i d e a s . . . . B u t . . . . a s t h e l a t e P r o f e s s o r J o a d u s e d t o o b s e r v e , i t a l l d e p e n d s o n w h a t y o u mean b y i d e a s . What t h e r e s p o n d e n t s i n f a c t c o p i e d f r o m t h e a p p e l l a n t s was no mere g e n e r a l i d e a , i t w a s , t o q u o t e t h e r e s p o n d e n t s own l a n g u a g e t o ' f o l l o w t h e p a t t e r n ' o r p r i n c i p l e ' i n p a r t o r i n w h o l e ' w i t h ' m i n o r c h a n g e s ' t o t h e d e s i g n , w i t h t h e same c h o i c e o f p r i n c i p l e members i n t e r f i t t i n g i n t h e same way t o t h e same c r i t i c a l d i m e n s i o n s . " , T h u s , i n t h e A s p r o c a s e a c l a i m f o r c o p y r i g h t i n f r i n g e m e n t c o u l d be b r o u g h t p r o v i d e d t h e d e f e n d e n t s c o p i e d more t h a n t h e i d e a o f p u t t i n g t a b l e t s i n s i d e a - 1 4 4 -c a p s u l e . I f t h e d e f e n d e n t s c a p s u l e was o f s i m i l a r d i m e n s i o n s c o n t a i n i n g t h e same number o f t a b l e t s a c a s e f o r i n f r i n g e m e n t m i g h t s u c c e e d . F u r t h e r m o r e , G r a h a m J . h e l d i n 34 M e r c h a n t A d v e n t u r e r s v Grew t h a t s e v e r a l d r a w i n g s may be t a k e n i n c o m p o s i t e i n c o n s i d e r i n g t h e q u e s t i o n o f i n f r i n g e m e n t . A s p r o t h e r e f o r e c o u l d r e l y o n a l l t h r e e o f t h e d e s i g n s d e p i c t e d i n t h e r e p o r t s t o b r i n g a n i n f r i n g e m e n t a c t i o n . A r g u m e n t s s u r r o u n d i n g t h e i d e a / e x p r e s s i o n d i c h o t o m y a r e g e n e r a l l y s u b m e r g e d b e n e a t h a r e l a t e d , b u t more t a n g i b l e p r o b l e m - t h a t o f a c t u a l l y p r o v i n g c o p y i n g o f t h e e x p r e s s i o n . A n y m a n u f a c t u r e r may i n d e p e n d e n t l y c o n c e i v e t h e same d e s i g n . I n t h e c a s e o f a v e r y s i m p l e d e s i g n ( s u c h a s t h e o v a l s h a p e d t a b l e t ) a n y p r e s u m p t i o n o f c o p y i n g a r i s i n g f r o m a s t r i k i n g s i m i l a r l y b e t w e e n t h e d r a w i n g and t h e a l l e g e d l y i n f r i n g i n g p r o d u c t may be r e b u t t e d b y an a s s e r t i o n o f i n d e p e n d e n t c r e a t i o n . T h e more s i m p l e t h e s i g n t h e more d i f f i c u l t i t w i l l be t o e s t a b l i s h c o p y i n g . T h e A s p r o d r a w i n g s a r e s l i g h t l y more c o m p l i c a t e d t h a n a n o v a l s h a p e d p i l l . T h u s a s t r o n g r e s e m b l a n c e b e t w e e n t h e A s p r o d r a w i n g s a n d a r i v a l m a n u f a c t u r e r ' s - 1 4 b -c a p s u l e t o g e t h e r w i t h an o p p o r t u n i t y t o c o p y a n d a m o t i v e w i l l r a i s e a p r i m a f a c i e i n f e r e n c e o f c o p y i n g w h i c h i t w i l l t h e n be f o r t h e d e f e n d a n t s t o r e b u t . I f t h e d e f e n d a n t d o e s n o t e n t e r t h e w i t n e s s box o r a p p e a r s t o be a l e s s t h a n h o n e s t w i t n e s s t h e p r e s u m p t i o n b e c o m e s v i r t u a l l y i r r e b u t t a b l e . E x p e r t e v i d e n c e may be a d d u c e d i f n e c e s s a r y t o e s t a b l i s h w h e t h e r t h e s i m i l a r i t i e s a r e s u f f i c i e n t l y d e t a i l e d t o r a i s e a n i n f e r e n c e o f c o p y i n g . ( A l t h o u g h t h e A s p r o d r a w i n g s a r e so s i m p l e t h a t e x p e r t e v i d e n c e w o u l d n o t be n e c e s s a r y . ) A s p r o w o u l d n e e d t o e s t a b l i s h t h a t a " s u b s t a n t i a l " p a r t o f t h e i r d r a w i n g s h a d b e e n c o p i e d . T h e c o n c e p t o f " s u b s t a n t i a l i t y " r e f e r s t o t h e q u a l i t y r a t h e r t h a n t h e q u a n t i t y o f t h e m a t e r i a l c o p i e d . " S u b s t a n t i a l i t y f o r t h e p u r p o s e s o f t h e C o p y r i g h t A c t i s t o be j u d g e d b y q u a l i t y r a t h e r t h a n q u a n t i t y and t h e c r i t i c a l d i m e n s i o n s c a n h a r d l y be j u d g e d t o be l e s s t h a n s u b s t a n t i a l j u s t b e c a u s e t h e y a r e m e a s u r e d i n c e n t i m e t e r s . 1 ' c J b I f A s p r o c a n e s t a b l i s h t h a t t h e i r d r a w i n g s r e p r e s e n t a n o r i g i n a l , a r t i s t i c , c o p y r i g h t a b l e w o r k ; i f t h e y c a n a l s o e s t a b l i s h t h a t a s u b s e q u e n t m a n u f a c t u r e r h a s c o p i e d a s u b s t a n t i a l p a r t o f t h e d e s i g n o f t h e i r c a p s u l e s , t h e r e b y i n f r i n g i n g c o p y r i g h t i n t h e i r d r a w i n g s , t h e y w i l l s t i l l h a v e o n e f u r t h e r h u r d l e t o o v e r c o m e . T h i s i s t h e d e f e n c e -14b-provided by S.9(8) of the 1956 Act. The making of an object i n three dimensions s h a l l not be taken to infrin g e copyright i n an a r t i s t i c work of two dimensions i f the object would not appear to persons who are not experts to be a reproduction of the a r t i s t i c work. Section 9(8) has been the subject of much j u d i c i a l c r i t i c i s m . Dankwerts L.J. has referred to i t as "an extraoridinary provision". The problem l i e s i n establishing the standard of the notional non expert. Parties to the various actions have avoided the problems of adducing non expert evidence and have l e f t i t to the judges to decide the issue. Lord Wilberforce recently endorsed t h i s approach i n the L.B. P l a s t i c s case. He considered that the judge should decide the matter i n the context of his role as a "non expert". He should not consider the expert evidence which would already have been adduced i n deciding the question of copying. This w i l l involve the judge i n some t r i c k y mental gymnastics as, having decided the issue of copying on the basis of expert evidence, he w i l l , by t h i s stage of the t r i a l , have become something of an expert himself. The judge, i n h i s role as "non expert", should, according to Lord Wilberforce, be credited with "some - l i -a b i l i t y t o i n t e r p r e t d e s i g n d r a w i n g s " . I n t h e c a s e o f t h e A s p r o d r a w i n g s h o w e v e r n o " a b i l i t y t o i n t e r p r e t " i s n e c e s s a r y . T h e d r a w i n g s a r e so s i m p l e t h a t t h e i s s u e may be d e c i d e d o n t h e b a s i s o f a s i m p l e c o m p a r i s o n . H a v i n g e s t a b l i s h e d t h a t A s p r o h a v e c o p y r i g h t i n t h e i r d e s i g n d r a w i n g s , w h a t w i l l be t h e c o n s e q u e n c e s o f p u t t i n g t h e d e s i g n i n t o mass p r o d u c t i o n ? U n d e r S . 1 0 o f t h e 1956 A c t a s o r i g i n a l l y d r a f t e d , c o p y r i g h t was l o s t a s s o o n a s a d e s i g n was r e g i s t e r e d u n d e r t h e R e g i s t e r e d D e s i g n s A c t 37 o r " a p p l i e d i n d u s t r i a l l y " . A f t e r t h e 1968 amendment t h e l o s s o f c o p y r i g h t was d e l a y e d u n t i l f i f t e e n y e a r s a f t e r f i r s t m a r k e t i n g . H o w e v e r , t h e A c t was n o t c l e a r o n t h e c o p y r i g h t a b l e s t a t u s o f t h e u n r e g i s t r a b l e d e s i g n and t h e c o u r t s h a v e i n t e r p r e t e d t h e p r o v i s i o n s o f S . 1 0 a s a p p l y i n g o n l y t o r e g i s t r a b l e d e s i g n s . The c a s e o f D o r l i n g v H o n n o r 3 8 M a r i n e was d e c i d e d b e f o r e t h e 1968 a m e n d m e n t . I t was an a c t i o n f o r i n f r i n g m e n t o f c o p y r i g h t i n p l a n s o f a b o a t . No d e s i g n r e g i s t r a t i o n h a d b e e n o b t a i n e d f o r t h e s h a p e o f t h e b o a t a n d t h e d e f e n d a n t s r e l i e d u p o n S . 1 0 f o r a d e f e n c e . T h e c o u r t f o u n d h o w e v e r t h a t t h e p l a n s w e r e p u r e l y f u n c t i o n a l a n d t h e r e f o r e u n r e g i s t r a b l e . T h e -140-p l a i n t i f f s c o p y r i g h t was h e l d t o r e m a i n u n i m p a i r e d a n d u n a f f e c t e d b y a n y p r o v i s i o n s o f t h e R e g i s t e r e d D e s i g n s A c t a n d S . 1 0 was a c c o r d i n g l y i r r e l e v a n t . Harman L . J . s t a t e d t h e r e a s o n s b e h i n d t h i s a p p r o a c h : " T o h o l d o t h e r w i s e w o u l d , I t h i n k , amount t o s a y i n g t h a t no a r t i s t i c c o p y r i g h t e x i s t e d i n t h e p l a n s w h i c h c o u l d t h e r e f o r e be f r e e l y t a k e n a n d c o p i e d a n d w h i c h a t t h e same t i m e c o u l d n o t be p r o t e c t e d a s a d e s i g n e i t h e r . I do n o t t h i n k t h e l e g i s l a t u r e i n t e n d e d a n y s u c h r e s u l t . " 3 8a T h e r e w o u l d seem t o be no h a r m , h o w e v e r , i n a l l o w i n g t h e c o p y i n g o f d e s i g n s w h i c h a r e a p p l i e d i n d u s t r i a l l y i f t h e y do n o t p o s s e s s t h e n e c e s s a r y c r i t e r i a f o r d e s i g n r e g i s t r a t i o n . I t i s c l e a r f r o m t h e J o h n s t o n e 39 C o m m i t t e e R e p o r t t h a t , when t h e y p r o p o s e d a new s y s t e m o f d e s i g n c o p y r i g h t t o o p e r a t e a l o n g s i d e d e s i g n m o n o p o l y , t h e y b e l i e v e d t h a t t h e s y s t e m w o u l d p r o t e c t n o n r e g i s t r a b l e d e s i g n s w h i c h o t h e r w i s e w e n t u n p r o t e c t e d . T h e r e i s no i n d i c a t i o n t h a t t h e C o m m i t t e e b e l i e v e d i t w o u l d be c u t t i n g down a n e x i s t i n g c o p y r i g h t p e r i o d o f t h e a u t h o r ' s l i f e p l u s f i f t y y e a r s . When S . 1 0 was amended i n 196 8 no d i s t i n c t i o n was d r a w n b e t w e e n d e s i g n s a c t u a l l y r e g i s t e r e d a n d t h o s e n o t , -149-nor was anything s p e c i f i c s a i d about designs which were 40 i n c a p a b l e of r e g i s t r a t i o n . However, i n Sifam v Sangamo Graham J . assumed t h a t the p r i n c i p l e of D o r l i n g v Honnor  Marine continued to apply to the s e c t i o n i n i t s p o s t 196 8 form. The somewhat b i z a r r e r e s u l t i s t h a t a r e g i s t e r e d d e s i g n monopoly and i n d u s t r i a l c o p y r i g h t l a s t f o r roughly the same p e r i o d (15 years) but an u n r e g i s t r a b l e d e s i g n w i l l r e t a i n f u l l a r t i s t i c c o p y r i g h t f o r the l i f e of the author p l u s f i f t y y e a rs. I f we r e t u r n to the Aspro drawing and apply the above p r i n c i p l e s i t seems t h a t Aspro are now i n a p o s i t i o n t o c l a i m a r t i s t i c c o p y r i g h t i n the capsule drawings f o r the l i f e of the draughtsman p l u s f i f t y years, whereas i f they had been s u c c e s s f u l i n t h e i r a p p l i c a t i o n t h e i r c o p y r i g h t p r o t e c t i o n would o n l y have l a s t e d f o r f i f t e e n years, the same p e r i o d as the design r e g i s t r a t i o n . I t i s t h e r e f o r e abundantly obvious which route the pharmaceutical f i r m s should take when seeking p r o t e c t i o n f o r new p r o d u c t s . They should attempt to r e g i s t e r t h e i r product as an i n d u s t r i a l d e s i g n . I f s u c c e s s f u l , they w i l l o b t a i n a v a l u a b l e f i f t e e n year p e r i o d of monopoly p r o t e c t i o n . I f they are u n s u c c e s s f u l , then, p r o v i d e d they - 1 5 0 -h a v e a n o r i g i n a l s e t o f d e s i g n d r a w i n g s , t h e y w i l l e n j o y c o p y r i g h t i n t h e d r a w i n g s f o r t h e l i f e o f t h e d r a u g h t s m a n p l u s f i f t y y e a r s . T h i s w i l l a d m i t t e d l y be a w e a k e r f o r m o f p r o t e c t i o n t h a n t h a t c o n f e r r e d b y a r e g i s t e r e d d e s i g n b u t w i l l be o f c o n s i d e r a b l e a n d l o n g l a s t i n g " n u i s a n c e v a l u e " . T h i s t h e s i s i s c o n c e r n e d p r i m a r i l y w i t h t h e o p e r a t i o n o f i n t e l l e c t u a l p r o p e r t y l a w s a s t h e y a p p l y t o p h a r m a c e u t i c a l p r o d u c t s . I n t h i s a r e a h o w e v e r , t h e law i s o p e r a t i n g i n a n u n s a t i s f a c t o r y m a n n e r w i t h r e g a r d t o a l l mass p r o d u c e d a r t i c l e s . P r o t e c t i o n f o r s u c h a r t i c l e s b e l o n g s p r o p e r l y i n t h e r e a l m o f r e g i s t e r e d d e s i g n s a n d p a t e n t l a w . I t i s s u r e l y a n o m a l o u s t h a t a d r a w i n g s u c h a s t h e A s p r o c a p s u l e d i a g r a m w h i c h i s so u t i l i t a r i a n a n d so l a c k i n g i n a r t i s t r y t h a t i t i s n o t e l i g i b l e f o r r e g i s t r a t i o n u n d e r t h e R e g i s t e r e d D e s i g n A c t s h o u l d q u a l i f y a s a n " a r t i s t i c w o r k " and t h u s f o r t h e f u l l t e r m o f c o p y r i g h t p r o t e c t i o n . N o t o n l y d o e s t h i s r e s u l t i n a n u n d e s i r a b l y l o n g p e r i o d o f c o p y r i g h t p r o t e c t i o n f o r i n d u s t r i a l i t e m s , i t a l s o c a u s e s s e v e r e p r o b l e m s f o r m a n u f a c t u r e r s who w i s h t o c o p y a mass p r o d u c e d a r t i c l e . A s e a r c h o f t h e e x i s t i n g p a t e n t s a n d d e s i g n s r e g i s t r i e s w i l l i n f o r m t h e m w h e t h e r t h e -151-a r t i c l e i s covered by a v a l i d patent or i n d u s t r i a l design but, i f the search i s clear, they w i l l have no way of knowing whether the a r t i c l e began i t s l i f e as a design drawing i n which case they w i l l be i n danger of i n f r i n g i n g a r t i s t i c copyright. Various writers and one government committee have suggested ways to remedy t h i s anomalous si t u a t i o n but i t i s beyond the scope of t h i s paper to review the potential 41 reforms. In the writer's opinion a r t i s t i c copyright i s an inappropriate vehicle for protection of the design of pharmaceutical substances. Such products should be protected, i f at a l l , by r e g i s t r a t i o n under the Registered Design Act 1949. If they f a i l to s a t i s f y the requirements for r e g i s t r a t i o n the design should be f r e e l y available. 4. Works of A r t i s t i c Craftsmanship Section 3(l)(c) of the 1956 Act includes i n the d e f i n i t i o n of " a r t i s t i c work" "works of a r t i s t i c craftsmanship". If the pharmaceutical firm i s unable to produce even the crudest set of working drawings i n order to take advantage of S.3(l)(a) can the firm assert that t h e i r capsule i s a "work of a r t i s t i c craftsmanship"? In the writer's opinion such a claim i s doomed to f a i l u r e . - 1 5 2 -U n l i k e S e c t i o n 3 ( 1 ) ( a ) s u b s e c t i o n (c) d o e s n o t i n c l u d e t h e b r o a d e n i n g p h r a s e " i r r e s p e c t i v e o f a r t i s t i c q u a l i t y " , o n t h e c o n t r a r y , i t s p e c i f i e s t h a t t h e w o r k o f c r a f t s m a n s h i p m u s t be a r t i s t i c . I n t h e r e c e n t c a s e o f G e o r g e H e n s h e r L t d v 42 R e s t a w i l e U p h o l s t e r y t h e H o u s e o f L o r d s h e l d t h a t t h e w o r d " a r t i s t i c " s h o u l d be g i v e n i t s " o r d i n a r y a n d n a t u r a l m e a n i n g " . T h e a r t i c l e i n q u e s t i o n - a p r o t o t y p e c h a i r -was h e l d n o t t o be a work o f a r t i s t i c c r a f t s m a n s h i p b e c a u s e a n y p o i n t s o f o r i g i n a l i t y i n d e s i g n w e r e a i m e d a t a p p e a l i n g t o t h e e y e a s c o m m e r c i a l s e l l i n g p o i n t s . I n t h e l i g h t o f t h i s d e c i s i o n i t i s i n c o n c e i v a b l e t h a t a c a p s u l e o r p i l l w i l l e v e r be a f f o r d e d p r o t e c t i o n u n d e r S . 3 ( l ) ( c ) o f t h e 1956 A c t . 5 . L i t e r a r y C o p y r i g h t T h e p h a r m a c e u t i c a l i n d u s t r y d o e s n o t s p r i n g i n s t a n t l y t o m i n d a s an e x a m p l e o f a n a r e a w h e r e c o p y r i g h t i s r e q u i r e d t o p r o t e c t o r i g i n a l l i t e r a r y e n d e a v o u r . H o w e v e r , g i v e n t h e f a c t t h a t c o p y r i g h t law h a s c o n f e r r e d p r o t e c t i o n u p o n m a t h e m a t i c a l t a b l e s a n d s t r e e t d i r e c t o r i e s a s l i t e r a r y w o r k s i t i s r e a s o n a b l e t o a s k w h e t h e r s u c h p r o t e c t i o n m i g h t a l s o be c o n f e r r e d u p o n d o s a g e i n f o r m a t i o n s h e e t s a n d o t h e r i n s t r u c t i o n a l l e a f l e t s . - 1 5 3 -S e c t i o n 2 o f t h e 1956 A c t c o n f e r s c o p y r i g h t p r o t e c t i o n u p o n e v e r y l i t e r a r y w o r k , d e f i n e d i n S e c t i o n 48 a s i n c l u d i n g " a n y w r i t t e n t a b l e o r c o m p i l a t i o n " . W r i t i n g i s d e f i n e d t o i n c l u d e a n y f o r m o f n o t a t i o n , w h e t h e r b y h a n d o r p r i n t i n g , t y p e w r i t i n g o r a n y s i m i l a r p r o c e s s . T h u s c o p y r i g h t h a s b e e n u s e d t o p r o t e c t v i r t u a l l y a l l p r i n t e d m a t t e r i r r e s p e c t i v e o f q u a l i t y o r s t y l e . A n y r e q u i r e m e n t o f s k i l l j u d g m e n t o r l a b o u r i s m i n i m a l . I n U n i v e r s i t y o f L o n d o n P r e s s L t d v U n i v e r s i t y 43 T u t o r i a l P r e s s L t d P e t e r s o n J . s a i d : " I t may be d i f f i c u l t t o d e f i n e l i t e r a r y work a s u s e d i n t h i s a c t b u t i t seems p l a i n t h a t i t i s n o t c o n f i n e d t o l i t e r a r y w o r k i n t h e s e n s e i n w h i c h t h a t p h r a s e i s a p p l i e d f o r i n s t a n c e t o M e r e d i t h s n o v e l s o r t h e w r i t i n g s o f R o b e r t L o u i s S t e v e n s o n . I n s p e a k i n g o f s u c h w r i t i n g s a s l i t e r a r y w o r k s o n e t h i n k s o f t h e q u a l i t y , t h e s t y l e and t h e l i t e r a r y f i n i s h w h i c h t h e y e x h i b i t . U n d e r t h e A c t o f 1842 w h i c h p r o t e c t e d b o o k s many t h i n g s w h i c h h a d no p r e t e n s i o n t o l i t e r a r y s t y l e a c q u i r e d c o p y r i g h t . F o r e x a m p l e , a l i s t o f f o x h o u n d s and h u n t i n g d o g s a n d t r a d e c a t a l o g u e s a n d I s e e no g r o u n d f o r c o m i n g t o t h e c o n c l u s i o n t h a t t h e p r e s e n t a c t was i n t e n d e d t o c u r t a i l t h e r i g h t s o f a u t h o r s . I n my v i e w t h e w o r d s " l i t e r a r y w o r k " c o v e r work w h i c h i s e x p r e s s e d i n p r i n t o r w r i t i n g i r r e s p e c t i v e o f t h e q u e s t i o n o f w h e t h e r t h e q u a l i t y o r s t y l e i s h i g h . " - 1 5 4 -I s i t p o s s i b l e f o r p h a r m a c e u t i c a l f i r m s t o b e n e f i t f r o m t h i s b r o a d i n t e r p r e t a t i o n ? T h e r e i s l i t t l e a u t h o r i t y t o i n d i c a t e w h e t h e r p h a r m a c e u t i c a l f i r m s may p r o t e c t a n y o f t h e i n s t r u c t i o n a l s h e e t s o r o t h e r l i t e r a t u r e a c c o m p a n y i n g t h e i r p r o d u c t s a l t h o u g h t h e r e i s some a u t h o r i t y t o i n d i c a t e t h a t a d v e r t i s i n g m a t e r i a l may be p r o t e c t e d i f s u f f i c i e n t l y 44 d e t a i l e d a n d o r i g i n a l . I n S i n a n i d e v L a M a i s o n Kosmeo S c r u t t o n L . J . a d m i t t e d t h a t t h e r e may be c o p y r i g h t i n a n a d v e r t i s e m e n t a l t h o u g h t h e s i m p l e s l o g a n " B e a u t y i s a s o c i a l n e c e s s i t y " was t o o i n s u b s t a n t i a l t o a t t r a c t 45 c o p y r i g h t . S i m i l a r l y i n K i r k v F l e m m i n g a n a d v e r t i s e m e n t c o n s i s t i n g o f f o u r common p l a c e s e n t e n c e s was d e n i e d c o p y r i g h t . T h u s s i m p l e a d v e r t i s i n g c l a i m s s u c h a s " r e l i e v e s c o l d s y m p t o m s " w o u l d e n j o y no c o p y r i g h t b u t a more d e t a i l e d a d v e r t i s e m e n t o r h i g h l y m e m o r a b l e s l o g a n may be c o p y r i g h t a b l e . I n t h e New Z e a l a n d c a s e o f C o t t o n v 46 F r o s t a n a d v e r t i s e m e n t f o r t h e m a n u f a c t u r e o r s a l e o f d e n t a l p l a t e s was h e l d t o be a n " o r i g i n a l l i t e r a r y w o r k " u n d e r t h e New Z e a l a n d C o p y r i g h t A c t 1913 ( b a s e d u p o n t h e E n g l i s h A c t o f 1911) . A l t h o u g h t h e c l a i m s a m o u n t e d t o no more t h a n t h a t c e r t a i n s t a n d a r d s t o w h i c h e v e r y m a n u f a c t u r e r o f d e n t a l p l a t e s may work h a d b e e n r e a c h e d -15b-t h e y w e r e p r e s e n t e d i n a n o v e l way a n d w e r e t h e r e s u l t o f a c o m b i n a t i o n o f s k i l l , l a b o u r a n d e x p e n d i t u r e c o n t r i b u t e d b y t h e a u t h o r a n d c o p y r i g h t o w n e r . On t h e q u e s t i o n o f d o s a g e i n s t r u c t i o n s h e e t s a n d o t h e r i n s t r u c t i o n a l m a t e r i a l , t h e c a s e o f A . J . C a l e y & S o n s 47 v G . G a r n e t t & S o n s L t d i n d i c a t e s t h e p r o b a b l e a t t i t u d e o f t h e c o u r t s . T h e c a s e i n v o l v e d r u l e s f o r p l a y i n g a s i m p l e game. A l t h o u g h t h e r u l e s i n q u e s t i o n w e r e h e l d t o be c o p y r i g h t a b l e t h e i d e a o f t h e game was n o t s o t h e r e w o u l d be n o t h i n g t o s t o p a n y o n e f r o m d e s c r i b i n g i n h i s own w o r d s t h e o b j e c t o f t h e game a n d t h e r u l e s t o be o b s e r v e d i n p l a y i n g i t . I t w o u l d seem t h e r e f o r e t h a t , e v e n i f t h e p h a r m a c e u t i c a l f i r m c a n s u c c e s s f u l l y c l a i m c o p y r i g h t i n t h e i r i n s t r u c t i o n s h e e t s , s u c h c o p y r i g h t w i l l n o t h e l p t h e m t o p r o l o n g t h e i r m o n o p o l y . A n y o t h e r m a n u f a c t u r e r who h a s o v e r c o m e p a t e n t p r o b l e m s a n d t h e o t h e r h u r d l e s d i s c u s s e d a b o v e i n o r d e r t o m a r k e t a s i m i l a r p r o d u c t m u s t be f r e e t o i n s t r u c t t h e p u b l i c o n how t o a d m i n i s t e r t h e d r u g . I f t h e d r u g i t s e l f i s s i m i l a r t o t h e o r i g i n a l p r o d u c t t h e i n s t r u c t i o n s f o r u s e m u s t , o f n e c e s s i t y , be c o u c h e d i n s i m i l a r t e r m s . M e r e s i m i l a r i t y w i t h o u t p r o o f o f c o p y i n g -156-w i l l n o t a m o u n t t o a n i n f r i n g e m e n t o f c o p y r i g h t a n d t h e s i m i l a r i t y i s e x c u s e a b l e a s t h e r e a r e o n l y a l i m i t e d n u m b e r o f w a y s i n w h i c h t o e x p l a i n a c c u r a t e l y h o w a c e r t a i n d r u g i s t o b e a d m i n i s t e r e d . I n t h e w r i t e r ' s o p i n i o n , t h e r e f o r e , l i t e r a r y c o p y r i g h t i s n o t a h i g h l y p o t e n t w e a p o n f o r t h e p h a r m a c e u t i c a l m a n u f a c t u r e r . O f f a r m o r e p o t e n t i a l v a l u e a r e t h e p r o v i s i o n s d e a l i n g w i t h a r t i s t i c c o p y r i g h t i n d r a w i n g s . 6 . I n d u s t r i a l D e s i g n s a n d T r a d e M a r k s S m i t h K l i n e & F r e n c h w e r e u n s u c c e s s f u l i n t h e i r a t t e m p t t o r e g i s t e r t h e i r t w o t o n e c o l o u r b a n d e d c a p s u l e a s a n i n d u s t r i a l d e s i g n b u t i t w i l l b e r e c a l l e d t h a t t h e y s u c c e e d e d i n r e g i s t e r i n g t h e a p p e a r a n c e o f t e n t w o t o n e c o l o u r e d c a p s u l e s a s t r a d e m a r k s . 4 8 T h e i r c l a i m t o i n d u s t r i a l d e s i g n p r o t e c t i o n f a i l e d f o r l a c k o f n o v e l t y . T h i s w i l l n o t h u r t t h e p h a r m a c e u t i c a l c o m p a n y . N o t o n l y c a n t h e y n o w e n j o y c o p y r i g h t p r o t e c t i o n f o r t h e f u l l " l i f e p l u s f i f t y y e a r s " t e r m , t h e y c a n s t i l l o b t a i n t r a d e m a r k p r o t e c t i o n w h i c h m a y b e r e n e w e d i n d e f i n i t e l y . T h i s t r a d e m a r k p r o t e c t i o n , u n l i k e c o p y r i g h t -157-w i l l p r o t e c t the manufacturers a g a i n s t independent i n v e n t i o n w i t h i n the same f i e l d as w e l l as d i r e c t copying. One view of the r e l a t i o n s h i p between a r e g i s t r a b l e d e s i g n and a r e g i s t r a b l e t r a de mark i s contained i n the f o l l o w i n g e x t r a c t from the judgment of Sargant L . J . i n 4 9 C h a r l e s G o o d a l l & Son L t d v John Waddington L t d . "A d e s i g n forms p a r t of the goods themselves. A trade mark i s something which i s e x t r a , which i s added to the goods f o r the purpose of denoting the o r i g i n of the goods, and, speaking g e n e r a l l y o f tr a d e mark and design, the same t h i n g i s not a tr a d e mark and a d e s i g n . " Lord D i p l o c k c r i t i c i s e d t h i s passage i n the Smith 50 K l i n e & French trade mark a c t i o n s a y i n g : " i f i t i s to be understood t h a t what i s capable of being r e g i s t e r e d as a design i s i p s o f a c t o i n c a p a b l e o f being r e g i s t e r e d as a trade mark i t does not c o r r e c t l y s t a t e the law." Many of the c r i t e r i a f o r r e g i s t r a t i o n as an i n d u s t r i a l d e s i g n are s i m i l a r t o the requirements f o r t r a d e mark r e g i s t r a t i o n . - 1 5 8 -To r e c a p b r i e f l y , a r e g i s t e r e d d e s i g n i s d e f i n e d a s ; " f e a t u r e s o f s h a p e c o n f i g u r a t i o n p a t t e r n o r o r n a m e n t a p p l i e d t o a n a r t i c l e b y a n i n d u s t r i a l p r o c e s s o r means b e i n g f e a t u r e s w h i c h , i n t h e f i n i s h e d a r t i c l e , a p p e a l t o a n d a r e j u d g e d s o l e l y b y t h e e y e , b u t d o e s n o t i n c l u d e a p r i n c i p l e o r m e t h o d o f c o n s t r u c t i o n o r f e a t u r e s o f s h a p e o r c o n f i g u r a t i o n w h i c h a r e d i c t a t e d b y t h e f u n c t i o n w h i c h t h e a r t i c l e t o be made i n t h a t s h a p e o r c o n f i r g u r a t i o n h a s t o p e r f o r m . ' ' A t r a d e mark i s a n o r n a m e n t a l f e a t u r e a p p l i e d t o a n a r t i c l e a n d m u s t be s o m e t h i n g d i s t i n c t f r o m t h e a r t i c l e 52 i t s e l f . I t a p p e a l s t o a n d i s j u d g e d s o l e l y b y t h e e y e . I t s p u r p o s e i s t o v i s u a l l y d i s t i n g u i s h t h e a p p l i c a n t s p r o d u c t f r o m t h o s e o f r i v a l p r o d u c e r s a n d i t may n o t be a s o l e l y f u n c t i o n a l e l e m e n t o f t h e a r t i c l e . F r o m a c o m p a r i s o n o f t h e a b o v e r e q u i r e m e n t s i t i s c l e a r t h a t a c e r t a i n f e a t u r e may q u a l i f y a s b o t h a r e g i s t e r e d d e s i g n a n d a t r a d e m a r k . A n o v e l d e s i g n a p p l i e d t o a n a r t i c l e i s l i k e l y t o be d i s t i n c t i v e o f i t s maker a n d t h e r e f o r e , i n t h e l i g h t o f t h e S m i t h K l i n e & F r e n c h j u d g e m e n t , may be r e g i s t e r e d a s a t r a d e m a r k . - 1 5 9 -I t d o e s n o t f o l l o w h o w e v e r t h a t e v e r y r e g i s t e r e d t r a d e mark w i l l a l s o be r e g i s t r a b l e a s a d e s i g n . I n t h e p h a r m a c e u t i c a l f i e l d a t l e s t , t h e r e q u i r e m e n t o f n o v e l t y i n t h e R e g i s t e r e d D e s i g n s A c t i s a more s t r i n g e n t r e q u i r e m e n t t h a n t h a t o f d i s t i n c t i v e n e s s i n t h e t r a d e mark c o n t e x t . I t s h o u l d be r e m e m b e r e d , h o w e v e r , t h a t e v e n a d e s i g n w h i c h i s n e i t h e r a r e g i s t e r e d t r a d e mark n o r e l i g i b l e f o r r e g i s t r a t i o n u n d e r t h e D e s i g n s A c t i s n o t o p e n t o t h e w o r l d . I t may be p r o t e c t e d u n d e r t h e t h e l a w o f p a s s i n g o f f d i s c u s s e d i n C h a p t e r I V . -16U-NOTES TO CHAPTER V For detailed background information to the law of copyright and the law of i n d u s t r i a l designs see Coppinger & Skone James on Copyright, London, Sweet Maxwell (11th ed) 1971. 2Copyright Act 1709 (8 Anne c.19). 3 For a f u l l e r explanation of these terms see Wallace, William, Protection for Designs i n the UK (1975) 5 1 PCL 421. 4 King Features Syndicate v 0 & M Kleeman Ltd [1940] Ch. 806 [1941] A.C. 417 (H. of L.). 5Copyright Act 1911 (UK) n S . 2 2 ( l ) . This Act s h a l l not apply to designs capable of being registered under the Patents and Designs Act 1907, except designs which, though capable of being so registered, are not used or intended to be used as models or patterns to be multiplied by any i n d u s t r i a l process." 6 supra n.3. 7 It i s also the present p o s i t i o n i n Canada since the Canadian Copyright Act s t i l l contains a provision modelled on the old section 22. The a r t i s t ' s intention at the time of creation i s s t i l l of paramount importance. 8 Report of the Committee on the Law of Copyright, 1952, London, HMSO Cmd 86 62 (the Gregory Report). 9Report of the Designs Committee 1962, London HMSO 1808 (Johnstone Report) Appendix C. 10 Aspro Nicholas Ltd's Designs Application [1974] R.P.C. 645 (Regis. Designs App. T r i b . ) . 1 : L i b i d at p.652. 1 2Smith Kline & French Ltd's Design Application [1974] R.P.C. 253 (Regis. Designs App. T r i b . ) . - 1 6 1 -13 T h e I s h i h a r a T e s t c o n s i s t s o f t h e u s e o f a s e r i e s o f c a r d s o n w h i c h a p a t t e r n o f c o l o u r e d d o t s i s p r i n t e d t o f o r m a p i c t u r e o f o n e c o l o u r o u t l i n e d a g a i n s t a b a c k g r o u n d o f a d i f f e r e n t c o l o u r . A n o r m a l o b s e r v e r w i l l e a s i l y p i c k o u t t h e p i c t u r e w h i l s t a c o l o u r b l i n d o b s e r v e r may f a i l t o s e e t h e p i c t u r e a t a l l o r w i l l s e e a d i f f e r e n t p i c t u r e f r o m t h a t s e e n b y t h e n o r m a l o b s e r v e r . 1 4 ( 1 9 3 5 ) 52 R . P . C . 117 ( C h . D) a t p . 1 2 4 - 5 . 1 6 [ 1 9 7 9 ] R . P . C . 197 ( R e g i s D e s i g n s A p p . T r i b . ) . 1 7 i b i d a t p . 2 1 2 . 18 Summary o f D e s i g n s R e g i s t r y O f f i c e P r a c t i c e [1974] R . P . C . 262 p a r a 3 . 19 s u p r a n . 1 0 . 2 ° C o p y r i g h t A c t 1 9 5 6 , s . 3 ( l ) ( a ) . 2 1 C o p y r i g h t A c t 1 9 5 6 , s . 4 8 ( l ) . 2 2 C o p y r i g h t A c t 1 9 5 6 , s . 4 ( l ) . 2 3 S h o r t v J . W . H e n d e r s o n L t d (1946) 39 B . W . C . S . 62 (H o f L) L o r d T h a n k e r t o n r e a f f i r m e d t h e f o u r c r i t e r i a g i v e n b y t h e L o r d J u s t i c e - C l e r k i n t h e C o u r t o f S e s s i o n i n P a r k e v W i l s o n s & C l y d e C o a l C o L t d [1928] S e s s . C a s . 121 a t p . 1 3 3 : (1) t h e m a s t e r ' s p o w e r o f s e l e c t i o n o f h i s s e r v a n t (2) p a y m e n t o f wages o r o t h e r r e m u n e r a t i o n (3) m a s t e r ' s r i g h t t o c o n t r o l t h e m e t h o d o f d o i n g t h e w o r k (4) m a s t e r ' s r i g h t o f s u s p e n s i o n o r d i s m i s s a l . 2 4 S i m m o n s v H e a t h L a u n d r y C o [1910] 1 K . B . 543 ( C . A . ) p e r F l e t c h e r M o u l t o n L . J . a t p . 5 5 0 . 2 5 S t e v e n s o n J o r d a n & H a r r i s o n L t d v M a c D o n a l d & E v a n s [1952] 1 T . L . R . 101 ( C . A . ) . An a c c o u n t a n t who a l s o p r e p a r e d a n d w r o t e l e c t u r e s f o r d e l i v e r y t o U n i v e r s i t i e s a n d p r o f e s s i o n a l s o c i e t i e s was h e l d n o t t o h a v e p r e p a r e d l e c t u r e s i n t h e c o u r s e o f h i s e m p l o y m e n t a n d c o p y r i g h t i n t h e l e c t u r e s r e m a i n e d w i t h t h e a c c o u n t a n t . -162-Le Rose Ltd and Another v Hawick Jersey International  Limited [1974] R.P.C. 42 (Ch. D.). 2 7[1972] 1 Ch. 242. 2 8 C o p y r i g h t Act 1956, s.48(l). 2 9[1974] R.P.C. 57 at p.68. 3 0(1890) 25 Q.B.D 99. 3 1 i b i d at p.104. 3 2[1979] R.P.C. 551 (H. of L.). 3 3 i b i d at p.629. 34 „_ supra n.27. 35 per Lord Hailsham i n L.B. (Plastics) Limited v Swish  Products Limited supra n.31 at p.628. 3 6 D o r l i n g v Honnor Marine Ltd [1965] Ch. 1 at p.21. 3 7 A design i s applied i n d u s t r i a l l y i f i t i s applied to more than 50 a r t i c l e s which do not constitute a single set of a r t i c l e s within the Registered Designs Act 194 9, s.44(l) or to non hand-made goods manufactured i n lengths or pieces. Copyright Act 1956, s.l0(5). Copyright (Industrial Design) Rules 1957, r . l . 3 8 supra n.36. 3 8 a i b i d at p.16. 39 supra n.9. 4 0[1973] R.P.C. 75. 41 Gratwick, Stephen, UK Designs Copyright - A G i l b e r t i a n Situation [1980] EIPR 243; Drysdale, John, The Application of UK Copyright Law to Manufactured A r t i c l e s [1980] EIPR 75; Cornish W.R., Cumulative Protection for Industrial Designs [1973] UBC Law Rev. 219. 4 2[1976] A.C. 64 (H. of L.) . -163-43 J[1916] 2 Ch. 601 a t p.608. 44 (1928) 139 L.T. 365 (C.A.). 45 [1928-1935] Mac. G. Cop. Cas. 44. 4 6 [ 1 9 3 6 ] N.Z.L.R. 627 (Sup. C t ) . 4 7[1936-45] Mac. G. Cop. Cas. 99 (1937) (Ch. D). 48 Smith K l i n e & French L a b o r a t o r i e s L t d v S t e r l i n g  Winthrop Group L t d [1975] 1 W.L.R. 914 (H. of L.) supra Chapter IV. *(1924) 41 R.P.C. 658 (C.A.) at p.688. SO supra n.48 a t p.921. 51 R e g i s t e r e d Designs Act 1949, s . l ( 3 ) . 5 2 R e James's Trade Mark (1886) 33 Ch. D. 392 a t p.395. - 1 6 4 -C H A P T E R V I T E R R I T O R I A L I T Y AND THE PROBLEM OF P A R A L L E L IMPORTATION One o f t h e p u r p o s e s o f t h e i n t e l l e c t u a l p r o p e r t y l a w s d i s c u s s e d a b o v e i s t o g i v e t h e p h a r m a c e u t i c a l f i r m s p r o t e c t i o n a g a i n s t r i v a l e n t e r p r i s e s w h i c h w o u l d o t h e r w i s e be p r o v i d i n g s i m i l a r d r u g s i n d i r e c t c o m p e t i t i o n . T h e c o m p a n i e s , b y t a k i n g maximum a d v a n t a g e o f t h e s e r i g h t s , a r e a b l e t o s e c u r e c o n s i d e r a b l e p r o t e c t i o n i n t h e t e r r i t o r y w i t h i n w h i c h t h e r i g h t i s c o n f e r r e d . H o w e v e r , t h e s e e x c l u s i v e r i g h t s do n o t g e n e r a l l y e n t i t l e t h e o w n e r t o c o n t r o l t h e r e s a l e o f a n a r t i c l e m a r k e t e d b y h i m s e l f o r w i t h h i s c o n s e n t . Where a p r o d u c t f a l l i n g w i t h i n t h e s c o p e o f t h e r i g h t h a s b e e n p u t l a w f u l l y o n t h e m a r k e t m o s t n a t i o n a l l e g i s l a t u r e s ( w i t h t h e e x c e p t i o n o f B r i t a i n ' 1 ' ) a l l o w i t t o c i r c u l a t e f r e e l y w i t h i n t h e n a t i o n a l t e r r i t o r y . T h u s , t h e f i r s t a u t h o r i s e d s a l e " e x h a u s t s " t h e p r o t e c t i o n g r a n t e d b y l a w . P r o t e c t i o n w i l l n o t r e a c h b e y o n d t h e s c o p e o f t h e n a t i o n a l b o u n d a r i e s o f t h e s t a t e w i t h i n w h i c h t h e r i g h t h a s - 1 6 b -b e e n r e g i s t e r e d ( w i t h t h e p o s s i b l e e x c e p t i o n o f p r o t e c t i o n 2 u n d e r t h e l a w s o f p a s s i n g o f f ) . T h i s i s t h e p r i n c i p l e o f t e r r i t o r i a l i t y . P h a r m a c e u t i c a l f i r m s h o w e v e r a r e g e n e r a l l y m u l t i n a t i o n a l c o r p o r a t i o n s o p e r a t i n g o n an i n t e r n a t i o n a l s c a l e . I f t h e f i r m w i s h e s t o m a r k e t a p a t e n t e d o r t r a d e m a r k e d d r u g i n d i f f e r e n t c o u n t r i e s i t must s e c u r e t h e r e q u i r e d p r o t e c t i o n i n e a c h c o u n t r y a c c o r d i n g t o t h e i r r e s p e c t i v e l a w s . T h i s t a s k i s f a c i l i t a t e d b y a number o f i n t e r n a t i o n a l c o n v e n t i o n s t h e m a i n o n e b e i n g t h e P a r i s C o n v e n t i o n f o r t h e P r o t e c t i o n o f I n d u s t r i a l P r o p e r t y . B y v i r t u e o f t h i s c o n v e n t i o n a p e r s o n who h a s f i l e d a n a p p l i c a t i o n f o r a p a t e n t , o r f o r r e g i s t r a t i o n o f a t r a d e mark i n o n e o f t h e c o u n t r i e s o f t h e u n i o n s h a l l e n j o y , f o r t h e p u r p o s e o f f i l i n g i n o t h e r c o u n t r i e s , a r i g h t o f p r i o r i t y . As a r e s u l t t h e r e w i l l be a s t r o n g c o n n e c t i o n b e t w e e n a p p l i c a t i o n s made i n s e v e r a l c o u n t r i e s i n r e s p e c t o f t h e same i n v e n t i o n . T h e c o n v e n t i o n p r o v i d e s , h o w e v e r , t h a t t h e " p a r a l l e l " r i g h t s so o b t a i n e d s h a l l be i n d e p e n d e n t o f e a c h o t h e r . I n v a l i d a t i o n o f a n e x c l u s i v e r i g h t i n one c o u n t r y w i l l n o t a f f e c t t h e v a l i d i t y o f p a r a l l e l r i g h t s i n o t h e r c o u n t r i e s . S u c h p a r a l l e l r i g h t s may b e l o n g t o d i f f e r e n t e n t e r p r i s e s b u t , f r e q u e n t l y , t h e y a r e owned b y - 1 6 6 -t h e same c o m p a n i e s o r a s s o c i a t e d c o m p a n i e s w i t h i n t h e same m u l t i n a t i o n a l g r o u p . T h e m u l t i n a t i o n a l p h a r m a c e u t i c a l c o r p o r a t i o n s h a v e a t t e m p t e d t o u s e t h e i n t e l l e c t u a l p r o p e r t y l a w s t o p r e v e n t d r u g s p r o d u c e d b y r e l a t e d c o m p a n i e s f r o m m o v i n g f r o m o n e t e r r i t o r y t o a n o t h e r . T h e r e a s o n f o r t h i s i s t h e e x i s t e n c e i n c e r t a i n c o u n t r i e s o f c o m p u l s o r y l i c e n s i n g s c h e m e s o r v o l u n t a r y p r i c e r e s t r i c t i o n s c h e m e s w h i c h l e a d t o a c o n s i d e r a b l e v a r i a t i o n i n d r u g p r i c e s . T h e p h a r m a c e u t i c a l c o m p a n i e s w i s h t o p r e v e n t a t h i r d p a r t y b u y i n g t h e i r g o o d s i n a c o u n t r y w h e r e d r u g p r i c e s a r e c h e a p ( e . g . B r i t a i n ) a n d t r a n s p o r t i n g t h e m t o a c o u n t r y w h e r e p r i c e s a r e h i g h e r f o r r e s a l e a t a p r o f i t - u s u a l l y i n c o m p e t i t i o n w i t h t h e o r i g i n a l r i g h t h o l d e r o r a r e l a t e d e n t e r p r i s e . T h i s p r a c t i c e i s known a s p a r a l l e l i m p o r t a t i o n . The a b i l i t y o f p h a r m a c e u t i c a l f i r m s t o p r e v e n t p a r a l l e l i m p o r t a t i o n i s h i n d e r e d b y t h e t h e o r y o f e x h a u s t i o n o f r i g h t s ( d i s c u s s e d a b o v e ) w h i c h i s a n a t t e m p t t o r e c o n c i l e t h e i n t e r e s t s o f t h e o w n e r w i t h t h e demands o f f r e e t r a d e . M o s t s t a t e s h a v e a c c e p t e d t h e p r i n c i p l e o f n a t i o n a l e x h a u s t i o n a n d t h e E u r o p e a n C o u r t o f J u s t i c e h a s i n t e r p r e t e d t h e T r e a t y o f Rome a s g i v i n g r i s e t o a - 1 6 7 -p r i n c i p l e o f c o m m u n i t y - w i d e e x h a u s t i o n . I n i n t e r n a t i o n a l t r a d e h o w e v e r t h e p o s i t i o n i s s t i l l u n c e r t a i n . Some l e g i s l a t u r e s h a v e a p p l i e d t h e p r i n c i p l e o f i n t e r n a t i o n a l e x h a u s t i o n a n d h a v e r e f u s e d p a t e n t e e s t h e r i g h t t o b a r i m p o r t s f r o m a b r o a d when t h e y h a v e b e e n m a n u f a c t u r e d a n d / o r f i r s t s o l d b y t h e p a t e n t e e o r h i s l i c e n s e e u n d e r t h e p r o t e c t i o n o f a p a r a l l e l p a t e n t . T h e p r i n c i p l e o f i n t e r n a t i o n a l e x h a u s t i o n h o w e v e r h a s n o t b e e n a c c e p t e d i n a l l i n d u s t r i a l i s e d n a t i o n s a n d i n many c a s e s i n t e l l e c t u a l p r o p e r t y r i g h t s h a v e b e e n i n s t r u m e n t a l i n p r o t e c t i n g t h e p h a r m a c e u t i c a l c o m p a n y f r o m t h e p a r e 1 l e i i m p o r t e r . I n t h e w r i t e r ' s o p i n i o n , t h e r e i s no r e a s o n why t h e p h a r m a c e u t i c a l f i r m s h o u l d be a l l o w e d t o e x c l u d e g o o d s f r o m a n a t i o n a l m a r k e t w h i c h w e r e m a n u f a c t u r e d a b r o a d b y t h e p a t e n t e e o r w i t h h i s c o n s e n t . P r e s u m a b l y t h e p a t e n t e e , b y m a r k e t i n g a b r o a d o r g r a n t i n g l i c e n c e s a b r o a d , h a s a l r e a d y b e e n r e w a r d e d f o r h i s p a t e n t b y t h e p r i c e o r r o y a l t y p a i d . T h e r e i s no r e a s o n why t h e i n t e l l e c t u a l p r o p e r t y l a w s s h o u l d a s s i s t t h e p a t e n t e e i n h i s e f f o r t s t o p r a c t i c e i n t e r n a t i o n a l p r i c e d i s c r i m i n a t i o n . N e v e r t h e l e s s , n a t i o n a l c o u r t s h a v e i n s e v e r a l i n s t a n c e s a l l o w e d a n a t i o n a l p a t e n t o w n e r t o u s e h i s r i g h t t o e r e c t a b a r r i e r t o e n t r y o f p a t e n t e d g o o d s 3 e m a n a t i n g f r o m t h e same u n d e r t a k i n g . - 1 6 8 -W i t h i n E u r o p e d i s c u s s i o n s a r e i n p r o g r e s s f o r t h e h a r m o n i s a t i o n o f i n t e l l e c t u a l p r o p e r t y l a w s i n a l l member s t a t e s . M e a n w h i l e t h e E u r o p e a n C o u r t o f J u s t i c e d e r i v e s j u s t i f i c a t i o n f o r t h e p r i n c i p l e o f c o m m u n i t y w i d e e x h a u s t i o n f r o m t h e T r e a t y o f Rome p r o v i s i o n s d e a l i n g w i t h . . 4 c o m p e t i t i o n a n d t h e f r e e movement o f g o o d s . T h e c r e a t i o n o f t h e E u r o p e a n E c o n o m i c C o m m u n i t y h a s h a d a m a j o r i m p a c t o n t h e i n t e r n a t i o n a l o p e r a t i o n o f i n t e l l e c t u a l p r o p e r t y r i g h t s . I t i s t h e r e f o r e n e c e s s a r y t o c o n s i d e r t h e p r i n c i p l e o f e x h a u s t i o n i n two s e c t i o n s - t h e f i r s t w i l l d e a l w i t h p r o t e c t i o n a g a i n s t i m p o r t s f r o m n o n - m e m b e r s t a t e s and t h e s e c o n d w i t h t h e f r e e movement o f g o o d s w i t h i n t h e E E C . 1 . I n t e r n a t i o n a l E x h a u s t i o n o f P a t e n t R i g h t s The p h a r m a c e u t i c a l c o m p a n y w i l l w a n t t o p r e v e n t p a r a l l e l i m p o r t s i n o r d e r t o m a x i m i s e r e t u r n s o n t h e i r i n v e n t i o n s t h r o u g h t h e m a i n t e n a n c e o f t e r r i t o r i a l p r i c e d i s c r i m i n a t i o n . I t i s a r g u a b l e t h a t an a d d i t i o n a l i n c e n t i v e t o i n v e n t i s c r e a t e d b y t h e h i g h e r r e w a r d s e a r n e d b y t h e p a t e n t e e s u n d e r a s y s t e m o f p r i c e d i s c r i m i n a t i o n . To d e p r i v e p h a r m a c e u t i c a l f i r m s o f t h i s a d d i t i o n a l i n c e n t i v e may r e s u l t i n a r e d u c t i o n i n t h e amount a f i r m i s w i l l i n g t o e x p e n d o n r e s e a r c h a n d d e v e l o p m e n t . I n t h e w r i t e r ' s o p i n i o n t h e p r o f i t s a c c r u i n g t o p h a r m a c e u t i c a l 5 f i r m s a r e s u f f i c i e n t l y h i g h t h a t a d e n i a l o f t h e o p p o r t u n i t y t o p r a c t i c e t e r r i t o r i a l p r i c e d i s c r i m i n a t i o n w i l l n o t l e a d t o a s i g n i f i c a n t d e c r e a s e i n r e s e a r c h p r o g r a m m e s . A d m i t t e d l y , p a t e n t e e s w i l l no l o n g e r be a b l e t o m a x i m i s e p r o f i t s o n t h e b a s i s o f demand i n e a c h n a t i o n a l m a r k e t b u t t h e y w i l l s t i l l be i n a p o s i t i o n t o s e t p r i c e s a n d m a x i m i s e p r o f i t s o n t h e b a s i s o f t h e e l a s t i c i t y o f t h e a g g r e g a t e n a t i o n a l d e m a n d s . I f p a r a l l e l i m p o r t a t i o n b e t w e e n t e r r i t o r i e s b e c o m e s f e a s i b l e t h e p a t e n t e e w i l l be u n a b l e t o q u o t e d i f f e r e n t p r i c e s f o r d r u g s i n d i f f e r e n t c o u n t r i e s ( a s s u m i n g t h a t n a t i o n a l b a r r i e r s t o t h e movement o f g o o d s a r e m i n i m a l ) a n d t h e r e s u l t w i l l be a u n i v e r s a l r e d u c t i o n i n d r u g p r i c e s . I n B r i t a i n , t h e p r i n c i p l e o f e x h a u s t i o n h a s f o u n d f a v o u r i n n e i t h e r t h e d o m e s t i c n o r t h e i n t e r n a t i o n a l c o n t e x t . A s l o n g ago a s 1871 i t was h e l d t h a t w h e r e a B r i t i s h f i r m i t s e l f m a r k e t s p a t e n t e d g o o d s a b r o a d i t w i l l be a b l e t o p r e v e n t i m p o r t a t i o n o f t h e g o o d s i n t o B r i t a i n -b u t o n l y i f t h e p a t e n t e e a t t a c h e d a c l e a r a n d e x p r e s s e m b a r g o o n t h e o r i g i n a l s a l e . -17U-T h e c a s e o f B e t t s v W i l m o t t 6 i n v o l v e d a p a t e n t f o r m a k i n g m e t a l l i c c a p s u l e s o f t i n a n d l e a d c o m p r e s s e d t o g e t h e r f o r c o v e r i n g t h e c o r k s a n d n e c k s o f b o t t l e s . T h e o w n e r o f t h e E n g l i s h p a t e n t was n o t p e r m i t t e d i n t h i s i n s t a n c e t o r e s t r a i n t h e s a l e i n E n g l a n d o f t h e same p r o d u c t e m a n a t i n g f r o m h i s F r e n c h f a c t o r y . H o w e v e r , i f he h a d some c l e a r i n d i c a t i o n o n f i r s t s a l e i n F r a n c e t o t h e e f f e c t t h a t no l i c e n c e t o i m p o r t i n t o E n g l a n d was c o n f e r r e d t h e r e s t r i c t i o n w o u l d h a v e b e e n e n f o r c e a b l e i n E n g l i s h C o u r t s . I f t h e s a l e a b r o a d i s b y a l i c e n s e e u n d e r t h e 7 f o r e i g n p a t e n t t h e c o u r t w i l l be l e s s w i l l i n g t o f i n d a n i m p l i e d l i c e n c e t o i m p o r t i n v i o l a t i o n o f t h e l i c e n s o r ' s n a t i o n a l p a t e n t r i g h t . T h e n a t i o n a l p a t e n t e e c a n p r e v e n t p a r r e l l e i i m p o r t a t i o n u n l e s s t h e p a t e n t l i c e n c e e x p r e s s l y s t a t e s o t h e r w i s e . I n S t e r l i n g D r u g C o I n c L t d v C M . B e c k Q L t d a n d A n o t h e r t h e p h a r m a c e u t i c a l f i r m was a b l e t o e n f o r c e a c o n d i t i o n a g a i n s t e x p o r t o n t h e s a l e o f p a t e n t e d g o o d s . T h e o n l y i s s u e was w h e t h e r t h e d e f e n d a n t s w e r e aware o f t h e r e s t r i c t i o n . The c o u r t d i d n o t q u e s t i o n i t s v a l i d i t y . T h e c a s e was d e c i d e d o n 2 4 t h J u n e 1972 a n d was n o t c o m p l i c a t e d b y E . E . C . c o n s i d e r a t i o n s . I f a s i m i l a r c a s e was h e a r d t o d a y t h e c o n d i t i o n w o u l d be u n e n f o r c e a b l e - 1 7 1 -t o t h e e x t e n t t h a t i t a p p l i e d t o e x p o r t s t o E . E . C . c o u n t r i e s . So f a r a s t r a d e w i t h n o n E . E . C . c o u n t r i e s i s c o n c e r n e d , t h e c a s e i s s t i l l g o o d a u t h o r i t y f o r t h e p r i n c i p l e t h a t r e s t r i c t i o n s : p r e v e n t i n g e x p o r t s t o t h o s e c o u n t r i e s a r e v a l i d . S i m i l a r l y , r e s t r i c t i o n s o n s a l e i n a n o n E . E . C . c o u n t r y p r o h i b i t i n g i m p o r t o f g o o d s i n t o t h e U . K . w i l l be v a l i d . T h e r i g h t o f a p a t e n t e e t o i m p o s e p o s t s a l e r e s t r a i n t s u p o n u s e o f h i s p a t e n t e d p r o d u c t e x t e n d s b e y o u n d t h e i n i t i a l s a l e o r l i c e n c e a n d a f f e c t s a l l s u b s e q u e n t d e a l i n g s w i t h t h e p a t e n t e d p r o d u c t . I n B e e c h a m G r o u p L t d v  I n t e r n a t i o n a l P r o d u c t s L t d a n d A n o t h e r , h e a r d i n t h e H i g h g C o u r t o f K e n y a , B e e c h a m s h a d i n v e n t e d a n o v e l p e n i c i l l i n w h i c h t h e y m a r k e t e d t h r o u g h t t h e w o r l d . T h e y g r a n t e d t o B r i s t o l M e y e r s Co a l i c e n c e t o m a n u f a c t u r e a n d s e l l t h e d r u g i n many c o u n t r i e s i n w h i c h t h e y owned p a t e n t r i g h t s , e x c l u d i n g K e n y a . B e e c h a m s t h e r e f o r e s o l d t h e p e n i c i l l i n t o I n t e r n a t i o n a l P r o d u c t s L t d i n t h e U . S . (where t h e y w e r e l i c e n s e d t o s e l l ) a n d I n t e r n a t i o n a l P r o d u c t s L t d p r o c e e d e d t o s e l l t h e d r u g i n K e n y a . I n t h e e n s u i n g i n f r i n g e m e n t a c t i o n t h e d e f e n c e was r a i s e d t h a t B r i s t o l w e r e l i c e n s e d t o s e l l t h e g o o d s i n t h e U . S . and g o o d s o n w h i c h a r o y a l t y h a d o n c e b e e n p a i d w e r e t h e r e a f t e r f r e e i n t h e h a n d s o f t h e - 1 7 2 -p u r c h a s e r t o be s o l d a n y w h e r e i n t h e w o r l d . I t was h e l d h o w e v e r t h a t a s a B r i s t o l M e y e r ' s l i c e n c e c o n f e r r e d no r i g h t t o s e l l t h e p r o d u c t i n i n f r i n g e m e n t o f t h e K e n y a p a t e n t , t h e s a l e i n t h e U . S . t o I n t e r n a t i o n a l w o u l d c o n f e r no g r e a t e r r i g h t u p o n t h e p u r c h a s e r s who w e r e a c c o r d i n g l y e n j o i n e d f r o m f u r t h e r s e l l i n g i n K e n y a . I f t h e t r a n s a c t i o n b e t w e e n B e e c h a m s a n d B r i s t o l M e y e r s h a d b e e n a s a l e , r a t h e r t h a n a l i c e n c e , t h e s a l e w o u l d h a v e c o n f e r r e d a n i m p l i e d l i c e n c e t o r e s e l l a n y w h e r e i n t h e w o r l d i n t h e a b s e n c e o f a n e x p r e s s r e s t r i c t i o n . 1 ^ A s i t was a l i c e n c e a r r a n g e m e n t t h e e x t e n t t o w h i c h t h e a r t i c l e was r e l e a s e d f r o m t h e p a t e n t e e s r i g h t s d e p e n d e d o n t h e e x t e n t o f t h e a u t h o r i t y c o n f e r r e d u p o n t h e l i c e n s e e b y t h e a g r e e m e n t . 1 1 T h u s , i g n o r i n g t e m p o r a r i l y t h e i m p a c t o f t h e E . E . C . , t h e e x t e n t t o w h i c h a B r i t i s h p h a r m a c e u t i c a l f i r m c a n p r e v e n t p a r a l l e l i m p o r t a t i o n i s a s f o l l o w s : W h e r e t h e B r i t i s h c o m p a n y o r i t s s u b s i d i a r y m a r k e t s a d r u g a b r o a d u n d e r a f o r e i g n p a t e n t i t c a n p r e v e n t t h e i m p o r t a t i o n o f t h e d r u g i n t o B r i t a i n o n l y i f i t a t t a c h e s a c l e a r a n d e x p r e s s e m b a r g o o n t h e s a l e . I f , h o w e v e r , t h e f i r m g r a n t s a l i c e n c e u n d e r t h e f o r e i g n p a t e n t a n d t h e l i c e n s e e s e l l s - 1 7 3 -g o o d s a b r o a d , t h e u l t i m a t e p u r c h a s e r may n o t i m p o r t t h e p a t e n t e d d r u g i n t o B r i t a i n u n l e s s t h e l i c e n c e e x p r e s s l y c o n f e r s t h e r i g h t t o d o s o . T h e p r i n c i p l e o f e x h a u s t i o n a p p e a r s t o h a v e no p l a c e i n B r i t i s h p a t e n t law o u t s i d e t h e c o n t e x t o f t h e E . E . C . I t i s t i m e t h a t t h e law was amended t o c o n f o r m w i t h t h e p o s i t i o n t a k e n b y o t h e r i n d u s t r i a l i s e d n a t i o n s . T h e C o m m u n i t y P a t e n t C o n v e n t i o n , when i t i s i n f o r c e , w i l l e s t a b l i s h t h e p r i n c i p l e o f e x h a u s t i o n w i t h i n t h e E . E . C . a n d , u n t i l t h e n , t h e E u r o p e a n C o u r t o f J u s t i c e i s a p p l y i n g t h e p r i n c i p l e u n d e r e x i s t i n g p r o v i s i o n s o f t h e T r e a t y o f Rome. F u r t h e r m o r e , t h e t h e o r y o f e x h a u s t i o n h a s l o n g p r e v a i l e d i n U . S . d o m e s t i c l a w : " T h e f i r s t v e n d i n g o f a n a r t i c l e m a n u f a c t u r e d u n d e r t h e p a t e n t p u t s t h e a r t i c l e b e y o n d t h e r i g h t o f m o n o p o l y w h i c h t h e p a t e n t c o n f e r s . " ^ E x h a u s t i o n o f p a t e n t r i g h t s l i b e r a t e s t r a d e ( d o m e s t i c o r i n t e r n a t i o n a l ) i n p a t e n t e d p r o d u c t s f r o m a r t i f i c i a l b a r r i e r s . The p r o d u c t s c a n t h e n e n t e r n a t i o n a l m a r k e t s f r e e l y a n d c o m p e t i t i o n i s e n h a n c e d b o t h q u a l i t i t i v e l y and q u a n t i t i v e l y w i t h o b v i o u s r e s u l t i n g b e n e f i t s t o t h e c o n s u m e r . - 1 7 4 -2. T r a d e M a r k s i n I n t e r n a t i o n a l Law T r a d e mark l a w c o n f e r s u p o n t h e p r o p r i e t o r a n e x c l u s i v e r i g h t t o u s e a t r a d e mark t o d i s t i n g u i s h h i s g o o d s f r o m c o m p e t i n g p r o d u c t s . T h i s e x c l u s i v i t y w a r r a n t s t o t h e o w n e r t h a t no o t h e r p e r s o n may b r i n g i n t o c i r c u l a t i o n g o o d s o f a s i m i l a r n a t u r e b e a r i n g t h a t t r a d e m a r k . H o w e v e r , t h e o b j e c t o f t h e t r a d e mark i s n o t t o s h i e l d t h e o w n e r f r o m t h e i m p a c t o f c o m p e t i t i o n ( a l t h o u g h t h i s may be a n i n d i c e n t a l r e s u l t ) b u t t o p r o v i d e a c o n n e c t i o n b e t w e e n t h e a r t i c l e m a n u f a c t u r e d a n d t h e t r a d e mark o w n e r s u f f i c i e n t t o e n a b l e t h e p u b l i c t o i d e n t i f y t h e o r i g i n o f t h e p r o d u c t . T h e o w n e r o f a t r a d e mark s h o u l d n o t be a b l e t o u s e t h e mark t o r e p e l t h e i m p o r t a t i o n o f g o o d s w h i c h he h i m s e l f h a s m a r k e t e d e l s e w h e r e f o r t h e s i m p l e r e a s o n t h a t a mark d o e s n o t c e a s e t o a c c u r a t e l y i d e n t i f y t h e m a n u f a c t u r e r j u s t b e c a u s e t h e g o o d s c r o s s a n a t i o n a l f r o n t i e r . T r a d e mark l a w , l i k e p a t e n t l a w , i s g o v e r n e d b y t h e t e r r i t o r i a l i t y p r i n c i p l e , t h a t i s , t h e p r o t e c t i o n c o n f e r r e d b y t h e t r a d e mark l a w c a n n o t e x t e n d b e y o n d t h e t e r r i t o r i a l b o u n d a r i e s i n s i d e w h i c h t h i s law i s e n f o r c e a b l e . T h e so c a l l e d " u n i v e r s i t y p r i n c i p l e " w h e r e b y - 1 7 5 -t r a d e m a r k s w e r e c o n s i d e r e d t o be a n o u t g r o w t h o f a r i g h t o f p e r s o n a l i t y , l i k e a f a m i l y name, and t h e r e f o r e e n t i t l e d t o u n i v e r s a l p r o t e c t i o n b e y o n d t h e f r o n t i e r s o f t h e c o u n t r y 13 o f o r i g i n was a b a n d o n e d l o n g a g o . T h e t e r r i t o r i a l i t y p r i n c i p l e i m p l i e s t h a t o w n e r s o f i d e n t i c a l t r a d e m a r k s , e a c h h a v i n g an e x c l u s i v e r i g h t i n t h e home c o u n t r y , c a n e x i s t s i d e b y s i d e i n two c o u n t r i e s e a c h w i t h i t s own t r a d e mark l a w . T h i s t e r r i t o r i a l s o v e r e i g n t y o f e a c h s t a t e i n m a t t e r s o f t r a d e mark l a w i s r e c o g n i s e d i n t h e C o n v e n t i o n o f t h e U n i o n o f P a r i s a n d t h e T r a d e M a r k C o n v e n t i o n o f M a d r i d . T h e t e r r i t o r i a l i t y p r i n c i p l e a l s o i m p l i e s t h a t d o m e s t i c t r a d e mark r i g h t s c a n n o t be i n f r i n g e d b y a c t s a b r o a d a n d c o n v e r s e l y a c t s a t 14 home may n o t v i o l a t e f o r e i g n t r a d e mark r i g h t s . I t i s a r e s u l t o f t h e t e r r i t o r i a l i t y p r i n c i p l e t h a t when t h e g o o d s o f a t r a d e mark o w n e r a r e i m p o r t e d i n t o a n o t h e r c o u n t r y w h e r e a n i d e n t i c a l t r a d e mark i s h e l d b y a n o t h e r u n c o n n e c t e d e n t e r p r i s e , t h e l a t t e r ' s c l a i m f o r t r a d e mark 15 i n f r i n g e m e n t i s g e n e r a l l y u p h e l d . H o w e v e r , t h e p r i n c i p l e h a s b e e n a b a n d o n e d i n f a v o u r o f t h e e x h a u s t i o n p r i n c i p l e when a s p e c i a l r e l a t i o n s h i p e x i s t s b e t w e e n t h e two e n t e r p r i s e s . I n s u c h a c a s e t h e p u b l i c a r e n o t m i s l e d a b o u t t h e o r i g i n o f t h e g o o d s a n d t h e r e i s no r e a s o n t o p r e v e n t i m p o r t a t i o n . - 1 7 6 -O p p o n e n t s o f t h i s t r e n d m a i n t a i n t h a t t h e r e s p o n s i b i l i t y o f t h e p h a r m a c e u t i c a l f i r m s d o e s n o t e n d o n c e t h e t r a d e m a r k e d g o o d s h a v e b e e n p u t i n t o c i r c u l a t i o n . T h e o r i g i n a l m a n u f a c t u r e r s h o u l d r e t a i n c o n t r o l t h r o u g h o u t t h e s a l e s c h a n n e l s u n t i l t h e g o o d s r e a c h t h e i r u l t i m a t e c o n s u m e r s . I t i s p o s s i b l e t h a t d r u g s m a n u f a c t u r e d b y t h e same c o n c e r n f o r d i s t r i b u t i o n i n d i f f e r e n t m a r k e t s may be made t o a s l i g h t l y d i f f e r e n t f o r m u l a . I n t h e s e n s i t i v e a r e a o f p u b l i c h e a l t h t h i s c o u l d h a v e p o t e n t i a l l y s e r i o u s c o n s e q u e n c e s . P r o p o n e n t s o f t h e r i g h t o f c o n t r o l s t r e s s t h e " g u a r a n t e e f u n c t i o n " o f a t r a d e m a r k . The v a l i d i t y o f t h e g u a r a n t e e f u n c t i o n h a s b e e n t h e s u b j e c t o f c o n s i d e r a b l e c o n t r o v e r s y . 1 6 I t i s t h e w r i t e r ' s o p i n i o n t h a t , a l t h o u g h t h e p h a r m a c e u t i c a l c o m p a n y may h a v e a j u s t i f i e d i n t e r e s t i n b a n n i n g i m p o r t s o f t h e i r own b r a n d e d g o o d s w h i c h may be m a n u f a c t u r e d f o r a d i f f e r e n t m a r k e t t o a s l i g h t l y d i f f e r e n t f o r m u l a , t h e s o l u t i o n l i e s w i t h t h e p h a r m a c e u t i c a l c o m p a n i e s t h e m s e l v e s . T h e y c a n u s e d i f f e r e n t m a r k s t o d i s t i n g u i s h p r o d u c t s i n t e n d e d f o r d i f f e r e n t m a r k e t s i f t h e r e i s a r e a l d i f f e r e n c e i n q u a l i t y . I t i s n o t p a r t o f t h e t r a d e mark f u n c t i o n t o i n d i c a t e q u a l i t y . O n c e a t r a d e - 1 7 / -mark o w n e r h a s o b t a i n e d a n e x c l u s i v e r i g h t f o r a c e r t a i n c a t e g o r y o f g o o d s he i s a t l i b e r t y t o c h a n g e t h e q u a l i t y o f h i s p r o d u c t a t a n y t i m e w i t h o u t t h e r i s k o f l o s i n g h i s t r a d e m a r k . He may o r may n o t c h o o s e t o i n f o r m t h e p u b l i c o f t h e c h a n g e a n d t h e r e r e s t s u p o n h i m no l e g a l o b l i g a t i o n t o do s o . A c o n s i s t e n t s t a n d a r d q u a l i t y i s n o t a n e s s e n t i a l f e a t u r e o f t h e i d e n t i f i c a t i o n f u n c t i o n o f a t r a d e m a r k , t h e r e f o r e t h e t r a d e mark o w n e r c a n h a v e no l e g a l c l a i m t o a g u a r a n t e e f u n c t i o n i n t h e s e n s e o f a n u n c h a n g e d q u a l i t y . T h e r i g h t o f a UK t r a d e mark h o l d e r t o p r e v e n t t h e p a r a l l e l i m p o r t a t i o n o f t r a d e m a r k e d p r o d u c t s m a r k e t e d a b r o a d b y a r e l a t e d c o m p a n y was c o n s i d e r e d b y t h e c o u r t s 17 q u i t e r e c e n t l y i n t h e R e v l o n c a s e . T h e R e v l o n g r o u p o p e r a t e d i n E u r o p e t h r o u g h two s u b s i d i a r i e s o n e o f w h i c h was t h e o w n e r a n d t h e o t h e r t h e r e g i s t e r e d u s e r o f t h e B r i t i s h mark " R e v l o n F l e x " . T h e p a r e n t c o m p a n y d i s t r i b u t e d i n t h e US a r a n g e o f g o o d s b e a r i n g t h e R e v l o n F l e x mark w h i c h w e r e n o t a v a i l a b l e i n t h e U K . T h e two s u b s i d i a r i e s w e r e u n a b l e t o p r e v e n t a p a r a l l e l i m p o r t e r i m p o r t i n g t h e US r a n g e i n t o E n g l a n d f o r r e s a l e . T h e v i t a l s e c t i o n o f t h e UK T r a d e M a r k A c t t o be i n t e r p r e t e d b y t h e c o u r t s was s e c t i o n 4, S u b s e c t i o n 1 w h i c h g i v e s t o t h e p r o p r i e t o r o f t h e t r a d e - 1 7 8 -mark "the exclusive r i g h t to use the trade mark i n r e l a t i o n to those goods". Subsection 3 provides however that the right s h a l l not be deemed to be infringed " i f the proprietor or registered user has applied the mark and has not subsequently removed or obliterated i t or has at any time expressly or impliedly consented to use of the trade mark." The mark i n t h i s case had been applied by the parent company but the court was of the opinion that the subsidiaries must be taken to have consented to the use -The company structure of the Revlon Group was such that Revlon Inc. (the parent company) could at any moment impose i t s w i l l on any company i n the group. Thus every company must be taken to have consented to the acts of others within the group or, as Templeman L.J. put i t ; "In more homely language s.4(3)(a) cannot be evaded by substituting the monkey for the organ g r i n d e r . " 1 8 This case represents a considerable step forward for the English Courts. Previously, the pos i t i o n i n England appeared to be that although the proprietor of a trade mark could not object to the importation of branded 19 goods marketed by him abroad he could object i f those 20 goods had been marketed by an associate company. - 1 7 9 -T h e R e v l o n c a s e a p p e a r s t o s u b j e c t E n g l i s h t r a d e mark law t o t h e p r i n c i p l e o f i n t e r n a t i o n a l e x h a u s t i o n . H o w e v e r , i t l e a v e s c e r t a i n q u e s t i o n s u n a n s w e r e d . I n p a r t i c u l a r ; how c l o s e s h o u l d t h e a s s o c i a t i o n b e t w e e n t h e c o m p a n i e s be i n o r d e r f o r t h e p a r a l l e l i m p o r t e r t o r e l y o n t h e g r o u p n a t u r e o f t h e m a r k ? . The c o u r t s t r e s s e d t h e f a c t t h a t t h e p u b l i c a s s o c i a t e d t h e mark w i t h t h e g r o u p and w e r e u n a w a r e o f , a n d u n c a r i n g a b o u t , w h i c h member o f t h e g r o u p a c t u a l l y p r o d u c e d t h e g o o d s . I f t h e p h a r m a c e u t i c a l m a n u f a c t u r i n g g r o u p c a n s u c c e s s f u l l y i n s t i l i n t h e p u b l i c m i n d a w a r e n e s s o f t h e i n d e p e n d e n t n a t u r e o f e a c h c o m p a n y w i t h i n t h e g r o u p i t may be a b l e t o e v a d e t h e c o n s e q u e n c e s o f t h e R e v l o n d e c i s i o n . I n t h i s m a n n e r t h e S w i s s S u p r e m e C o u r t h e l d t h a t S u n l i g h t A . G . , t h e S w i s s s u b s i d i a r y o f U n i l v e r w h i c h owned r e g i s t r a t i o n o f t h e t r a d e mark " L u x " i n S w i t z e r l a n d , c o u l d e n j o i n i m p o r t a t i o n a n d s a l e o f A m e r i c a n made L u x s o a p i n S w i t z e r l a n d d e s p i t e t h e c l o s e r e l a t i o n s h i p 21 b e t w e e n S u n l i g h t A . G . and t h e A m e r i c a n L e v e r B r o s C o . T h e c o u r t s t r e s s e d t h a t S u n l i g h t A . G . h a d , s i n c e 1 9 3 9 , b e e n e n t i t l e d t o r e g i s t e r t h e t r a d e mark i n t h e name o f t h e c o m p a n i e s r e l a t e d t o i t . T h e f i n d i n g b y t h e c o u r t t h a t t h e S w i s s c o m p a n y h a d b u i l t up i n d e p e n d e n t g o o d w i l l i n S w i t z e r l a n d o v e r a p e r i o d o f 30 y e a r s was h e l d t o be - 1 8 0 -d e c i s i v e . T h e I t a l i a n c o u r t s a p p l i e d a s i m i l a r p r i n c i p l e 22 i n t h e P a l m o l i v e c a s e s . A n o t h e r q u e s t i o n u n a n s w e r e d b y t h e R e v l o n c a s e i n v o l v e s t h e s i t u a t i o n w h e r e t h e p r o d u c i n g c o m p a n y a p p o i n t s a n i n d e p e n d e n t e x c l u s i v e d i s t r i b u t o r t o m a r k e t i t s g o o d s i n one c o u n t r y a n d t h e t r a d e mark i s r e g i s t e r e d i n t h e name o f t h e d i s t r i b u t o r . I n f a c t s u c h a s i t u a t i o n i s u n l i k e l y t o o c c u r o f t e n . The a s s i g n m e n t o f a t r a d e mark t o a n i n d e p e n d e n t t h i r d p a r t y f o r d i s t r i b u t i o n p u r p o s e s c o n s t i t u t e s a somewhat h a z a r d o u s v e n t u r e f o r t h e o w n e r . T h e r e i s a l w a y s a r i s k t h a t t h e i n d e p e n d e n t d e a l e r w i l l u s e t h e mark a g a i n s t t h e i n t e r e s t s o f t h e o r i g i n a l o w n e r . He may a f f i x t h e mark t o d r u g s e m a n a t i n g f r o m a d i f f e r e n t m a n u f a c t u r e r and t h e r e b y d i s c r e d i t t h e s t a n d i n g o f t h e t r a d e mark o w n e r . A l s o , p r a c t i c a l d i f f i c u l t i e s a r e i n e v i t a b l e when t h e r e l a t i o n s h i p i s s e v e r e d a n d t h e mark m u s t be r e a s s i g n e d . H o w e v e r , i f s u c h a s i t u a t i o n was t o a r i s e t h e i n d e p e n d e n t d i s t r i b u t o r w o u l d p r e s u m a b l y be e n t i t l e d t o p r e v e n t p a r a l l e l i m p o r t a t i o n o f h i s m a n u f a c t u r e r ' s g o o d s o n l y i f he h a s c o n s i s t e n t l y b u i l t t h e mark up a s a s s o c i a t e d e n t i r e l y w i t h h i m . I f he a c t s i n s u c h a way a s t o c o n v e y t h e i m p r e s s i o n t h a t h i s i s o n l y a b r a n c h o f f i c e o f t h e m a n u f a c t u r e r a n d a l l a d v e r t i s i n g and - 1 8 1 -s e r v i c i n g i s c a r r i e d o u t b y t h e m a n u f a c t u r e r he s h o u l d n o t be a l o w e d t o a s s e r t a n y i n d e p e n d e n t r i g h t s a g a i n s t i m p o r t a t i o n o f t h e m a n u f a c t u r e r ' s p r o d u c t . O c c a s i o n a l l y i t may h a p p e n t h a t t h e same t r a d e mark i s u s e d a n d r e g i s t e r e d i n d i f f e r e n t p a r t s o f t h e w o r l d b y e n t i r e l y s e p a r a t e c o n c e r n s . I f t h e r e i s no p r e s e n t l e g a l o r e c o n o m i c l i n k b e t w e e n t h e two c o n c e r n s e a c h s h o u l d be a l l o w e d t o p r e v e n t p a r a l l e l i m p o r t a t i o n o f t h e o t h e r ' s p r o d u c t . T h u s , t h e w o r l d f a m o u s t r a d e mark " H i s M a s t e r s V o i c e " was r e g i s t e r e d i n S w i t z e r l a n d b y t h e B r i t i s h c o n c e r n EMI a n d i n t h e US b y RCA V i c t o r - a c o n c e r n w h i c h h a d no c o n n e c t i o n w i t h E M I . S a l e s o f t h e US made r e c o r d s b e a r i n g t h e t r a d e mark HMV w e r e h e l d t o be a v i o l a t i o n o f t h e t r a d e mark r i g h t s o f t h e S w i s s t r a d e mark o w n e r r e g a r d l e s s o f t h e f a c t t h a t t h e r e c o r d s o f f e r e d f o r s a l e b y t h e d e f e n d a n t 23 w e r e g e n u i n e V i c t o r r e c o r d s . S u c h a s i t u a t i o n h a s n o t so f a r a r i s e n i n a p h a r m a c e u t i c a l c o n t e x t . D e s p i t e i t s d e f e c t s , t h e R e v l o n d e c i s i o n i s t o be w e l c o m e d f o r i t s a c c e p t a n c e o f t h e p r i n c i p l e o f i n t e r n a t i o n a l e x h a u s t i o n . I t i s a f u r t h e r s t e p t o w a r d s f r e e d o m o f c o m p e t i t i o n w h i c h i s d e s i r a b l e i n t h e p h a r m a c e u t i c a l f i e l d . - 1 8 2 -3. Passing Off i n International Law Trade mark law confers, through r e g i s t r a t i o n , the exclusive r i g h t to use a trade mark for the purpose of distinguishing the proprietor's goods within the t e r r i t o r y covered by the r e g i s t r a t i o n . Although the trade mark owner may not have the ri g h t to prevent the importation of goods emanating from a related company he w i l l always have a rig h t of action against the producer or importer of spurious or counter goods bearing his trade mark. Protection may be obtained i n any number of countries through r e g i s t r a t i o n but most countries w i l l require as a condition of r e g i s t r a t i o n that the trade mark owner use the mark within the j u r i s d i c t i o n . Modern methods of communication and the ease of tr a v e l have led to a situa t i o n where a company's reputation may spread beyond the national f r o n t i e r s of the country of r e g i s t r a t i o n into an area where the company i s not trading and has no registered mark. Thus, a pharmaceutical company may market a drug abroad using marketing and advertising techniques which are so successful that the mark or get up becomes well known i n England even though the drug i s not marketed here. Can the - 1 8 3 -company p r e v e n t a t h i r d p a r t y t a k i n g a d v a n t a g e o f t h a t r e p u t a t i o n t o m a n u f a c t u r e a d r u g i n E n g l a n d b e a r i n g t h e same m a r k , name o r g e t u p ? I n A l a i n B e r n a d i n e t C o m p a g n i e v P a v i l i o n P r o p s 24 L t d i t was h e l d t h a t , f o r p r o t e c t i o n t o be g r a n t e d i n E n g l a n d , t h e r e m u s t be a r e p u t a t i o n b a s e d u p o n u s e r i n E n g l a n d . T h e p r o p r i e t o r o f t h e i n t e r n a t i o n a l l y known C r a z y H o r s e S a l o o n i n P a r i s was u n a b l e t o e n j o i n a n i m i t a t o r f r o m c a s h i n g i n o n t h e r e p u t a t i o n o f t h e name a n d g e t u p . H o w e v e r t h e p r i c i p l e was n o t f o l l o w e d i n t h e s i m i l a r c a s e o f 25 M a x i m s L t d a n d A n o t h e r v D y e . T h e E n g l i s h c o m p a n y w h i c h owned t h e w o r l d f a m o u s M a x i m s r e s t a u r a n t i n P a r i s h a d n o t , and n e v e r h a d h a d , a n y b u s i n e s s i n E n g l a n d y e t i t h a d s u f f i c i e n t r e p u t a t i o n i n E n g l a n d b y v i r t u e o f t h e r e s t a u r a n t i n P a r i s t o j u s t i f y t h e g r a n t o f r e l i e f f o r p a s s i n g o f f a g a i n s t a d e f e n d a n t s e t t i n g u p i n E n g l a n d u n d e r a s i m i l a r name. G r a h a m J . r e l i e d , i n h i s d e c i s i o n , o n a 2 6 s t a t e m e n t f r o m t h e B a s k i n s R o b i n s c a s e "Some b u s i n e s s e s a r e h o w e v e r , t o a g r e a t e r o r l e s s e r e x t e n t t r u l y i n t e r n a t i o n a l i n c h a r a c t e r a n d t h e r e p u t a t i o n a n d g o o d w i l l a t t a c h i n g t o t h e m c a n n o t i n f a c t h e l p b e i n g i n t e r n a t i o n a l a l S O - " 2 6 a - 1 8 4 -M a x i m ' s c a s e i s o f d o u b t f u l a u t h o r i t y i n v i e w o f t h e r e c e n t c a s e o f A t h l e t e s F o o t M a r k e t i n g A s s o c i a t e s I n c . v C o b r a  S p o r t s L t d a n d A n o t h e r . W a l t o n J . d i s c u s s e d t h e r e l a t i o n s h i p b e t w e e n t h e M a x i m ' s c a s e a n d t h e C r a z y H o r s e c a s e : " W h a t c o n n e c t i o n w i t h t h i s c o u n t r y i s r e q u i r e d b e f o r e a p l a i n t i f f c a n s u c c e s s f u l l y m a i n t a i n a n a c t i o n f o r p a s s i n g o f f ? T h e r e a p p e a r , o n t h e c a s e s t o be two s c h o o l s o f t h o u g h t a b o u t t h i s . T h e r e i s w h a t was d e s c r i b e d i n a r g u m e n t a s a " h a r d l i n e " s h o o l o f t h o u g h t , w h i c h m a i n t a i n s t h a t i t i s e s s e n t i a l f o r t h e p l a i n t i f f t o h a v e c a r r i e d o n a t r a d e i n t h i s c o u n t r y ( b e s t , p e r h a p s , e x e m p l i f i e d b y t h e C r a z y H o r s e c a s e ) a n d a much l e s s d e m a n d i n g a p p r o a c h w h i c h s u g g e s t s t h a t s o m e t h i n g l e s s t h a n t h a t w i l l d o ( w e l l e x e m p l i f i e d b y [ t h e M a x i m s c a s e ] ) " 2 6 c A f t e r r e v i e w i n g a l l t h e a u t h o r i t i e s W a l t o n J . c o n c e d e d t h a t i t d i d n o t m a t t e r w h e t h e r t h e p l a i n t i f f s w e r e a c t u a l l y c a r r y i n g o n b u s i n e s s i n t h e c o u n t r y p r o v i d e d t h e y h a d c u s t o m e r s t h e r e b u t w h e r e t h e y c o u l d d i s c l o s e n o t o n e s o l i t a r y t r a n s a c t i o n b y way o f t r a d e w i t h a n y b o d y i n t h e c o u n t r y t h e y c o u l d h a v e no p r o t e c t a b l e g o o d w i l l i n t h e c o u n t r y n o t w i t h s t a n d i n g t h e i r g e n e r a l r e p u t a t i o n . I t seems t h e r e f o r e t h a t t h e p h a r m a c e u t i c a l f i r m may n o t r e l y u p o n i t s i n t e r n a t i o n a l r e p u t a t i o n t o b r i n g a - 1 8 5 -p a s s i n g o f f a c t i o n i n a c o u n t r y w h e r e i t h a s no c u s t o m e r s and h a s no i n t e n t i o n o f s e l l i n g i t s p r o d u c t m e r e l y t o p r e v e n t t h e d e f e n d a n t c o m p a n y t a k i n g a d v a n t a g e o f i t s r e p u t a t i o n . To t h a t l i m i t e d e x t e n t i t seems t h a t a " f r e e r i d e " i s p e r m i s s a b l e . 4. I m p a c t o f t h e E E C T h e T r e a t y o f Rome h a s h a d a c o n s i d e r a b l e i m p a c t o n t h e o p e r a t i o n o f t h e i n t e l l e c t u a l p r o p e r t y r i g h t s o f member s t a t e s . T h e a i m o f t h e T r e a t y i s t o e s t a b l i s h a s i n g l e e c o n o m i c t e r r i t o r y b y p r o v i d i n g f o r t h e f r e e movement o f g o o d s a n d f r e e i n t e r a c t i o n o f c o m p e t i t i v e f o r c e s . The p r i n c i p l e o f t e r r i t o r i a l i t y c e a s e s t o a p p l y o n a n a t i o n a l b a s i s a n d w i l l a p p l y i n s t e a d t o t h e e n t i r e E E C . S t e p s a r e b e i n g t a k e n t o h a r m o n i s e t h e i n t e l l e c t u a l p r o p e r t y l a w s o f member s t a t e s i n o r d e r t o p r o v i d e a s i n g l e , u n i f i e d s y s t e m . T h e E u r o p e a n P a t e n t C o n v e n t i o n a l r e a d y i n e x i s t e n c e e s t a b l i s h e s w i t h i n E u r o p e a s a w h o l e ( n o t j u s t E E C c o u n t r i e s ) a s u p r a n a t i o n a l s y s t e m b y p r o v i d i n g f o r a E u r o p e a n P a t e n t O f f i c e t o g r a n t E u r o p a t e n t s i n a s many c o u n t r i e s a s t h e a p p l i c a n t d e s i r e s . T h e E u r o p a t e n t c o n s i s t s o f a " b u n d l e o f n a t i o n a l p a t e n t s " a n d e a c h s t a t e -186-p a r t y t o t h e C o n v e n t i o n i s o b l i g e d t o t r e a t t h e E u r o p a t e n t as h a v i n g t h e same e f f e c t , a n d b e i n g s u b j e c t t o t h e same c o n d i t i o n s , a s a n a t i o n a l p a t e n t . W i t h i n t h e E E C a l o n e n e g o t i a t i o n s a r e i n p r o g r e s s f o r t h e e s t a b l i s h m e n t o f a C o m m u n i t y P a t e n t C o n v e n t i o n . T h e g e n e r a l p r i n c i p l e i s t h a t w h e r e a n a p p l i c a t i o n f o r a E u r o p a t e n t d e s i g n a t e s a n y E E C c o u n t r y a c o m m u n i t y p a t e n t w i l l be g r a n t e d i n s t e a d o f a n a t i o n a l p a t e n t f o r t h a t c o u n t r y i n t h e b u n d l e . T h e c o m m u n i t y p a t e n t w i l l be u n i t a r y i n t h a t i t may be g r a n t e d , t r a n s f e r r e d , r e v o k e d o r a l l o w e d t o l a p s e o n l y i n r e s p e c t o f t h e e n t i r e E E C . S i m i l a r n e g o t i a t i o n s a r e i n p r o g r e s s f o r t h e 27 e s t a b l i s h m e n t o f a E u r o p e a n T r a d e m a r k . A g a i n , t h e c o m m u n i t y mark i s c o n c e i v e d a s a u n i t y e f f e c t i v e t h r o u g h o u t t h e E E C o r n o t a t a l l . One c o n t e n t i o u s a s p e c t o f t h e p r e s e n t p r o p o s a l s f o r t h e E E C mark c o n c e r n s t h e e x h a u s t i o n o f r i g h t s i n l e g i t i m a t e g o o d s . I n t e r n a t i o n a l c o m p a n i e s h o p i n g t o u s e t r a d e m a r k s t o d i v i d e m a r k e t s a r e h o s t i l e t o E E C C o u r t o f J u s t i c e d e c i s i o n s o n t r a d e m a r k s i n t h e 2 8 n a t i o n a l m a r k e t ( d i s c u s s e d b e l o w ) a n d t o n a t i o n a l 29 d e c i s i o n s s u c h a s t h e R e v l o n c a s e ( d i s c u s s e d a b o v e ) w h i c h a d o p t t h e p r i n c i p l e o f i n t e r n a t i o n a l e x h a u s t i o n . - 1 8 7 -There has been strong opposition to proposals within the EEC which would enshrine the p r i n c i p l e s on which these decisions were based i n l e g i s l a t i o n . At present neither the CPC nor the CTM i s operative. The absence of any p o l i t i c a l union i n the EEC has made movement towards a un i f i e d , harmonised law a complex business. However, i n view of the manner i n which i n t e l l e c t u a l property rights have been used to prevent the movement of goods from one part of the EEC to another, the European Court of Justice has r e l i e d upon provisions of the Treaty of Rome i t s e l f to l i m i t the scope of those r i g h t s . 5. Exhaustion of Patent Rights i n the EEC The proposed draft of the Community Patent Convention makes s p e c i f i c provision for the exhaustion of patent r i g h t s . 3 0 "The r i g h t conferred by a community patent s h a l l not extend to acts concerning a product covered by that patent which are done within the t e r r i t o r i e s of the contracting states af t e r that product has been put on the market i n one of these states by the proprietor of the patent or with his express consent unless there are grounds which, under community law, would j u s t i f y the extension to such acts of the r i g h t conferred by the patent." - 1 8 8 -31 A s i m i l a r a r t i c l e a p p l i e s t h e p r i n c i p l e b e h i n d t h e a r t i c l e 32 p r o h i b i t i o n t o c a s e s w h e r e t h e r i g h t o f p r o t e c t i o n a r i s e s n o t f r o m a c o m m u n i t y p a t e n t b u t f r o m one o r s e v e r a l n a t i o n a l p a t e n t s t h a t b e l o n g t o one o w n e r o r t o p e r s o n s who a r e t i e d t o h i m e c o n o m i c a l l y . A s t u d y o f r e c e n t c a s e law s u g g e s t s t h a t t h e s e p r o p o s e d a r t i c l e s h a v e become m e r e l y a r e s t a t e m e n t o f t h e e x h a u s t i o n d o c t r i n e e v o l v e d b y t h e c o u r t u n d e r t h e T r e a t y o f Rome. T h e C o n v e n t i o n w i l l be u s e f u l , h o w e v e r , n o t o n l y i n s e c u r i n g t h e f r e e movement o f g o o d s b u t a l s o i n e s t a b l i s h i n g u n i f o r m c o n d i t i o n s t h r o u g h o u t t h e E E C f o r t h e e x p l o i t a t i o n o f i n v e n t i o n s . T h e p r o v i s o c o n t a i n e d a t t h e e n d o f A r t i c l e 3 2 may be e m p l o y e d t o r e l i e v e f i r m s f r o m c o m p l i a n c e w i t h t h e A r t i c l e w h e r e t h e p r o d u c t h a s b e e n m a r k e t e d b y a t h i r d p a r t y i n a c o u n t r y w h e r e no p a t e n t i s a v a i l a b l e . The c a s e 32 o f P a r k e D a v i s & C o v P r o b e l a n d O t h e r s d o e s n o t i n v o l v e a B r i t i s h p h a r m a c e u t i c a l f i r m a n d was d e c i d e d b e f o r e B r i t a i n e n t e r e d t h e E E C . N e v e r t h e l e s s , i t d i d i n v o l v e t h e i n t e r p r e a t i o n o f n a t i o n a l i n d u s t r i a l p r o p e r t y r i g h t s i n t h e l i g h t o f t h e T r e a t y o f Rome. P a r k e D a v i s , an A m e r i c a n p h a r m a c e u t i c a l f i r m , owned c e r t a i n D u t c h p a t e n t s - 1 8 9 -o n w h i c h i t a t t e m p t e d t o r e l y i n o r d e r t o p r e v e n t t h e i m p o r t a t i o n i n t o H o l l a n d o f d r u g s m a n u f a c t u r e d a n d s o l d f r e e l y i n I t a l y w h e r e , i t w i l l be r e c a l l e d , no p a t e n t s w e r e a v a i l a b l e f o r p h a r m a c e u t i c a l s . T h e c o u r t h e l d , i n t h e w r i t e r ' s o p i n i o n w r o n g l y , t h a t t o a l l o w t h e p l a i n t i f f s t o r e s t r a i n i m p o r t a t i o n f r o m I t a l y w o u l d n o t c o n t r a v e n e t h e T r e a t y o f Rome. When a d r u g h a s b e e n m a r k e t e d a n y w h e r e b y t h e p a t e n t e e o r a s u b s i d i a r y o r l i c e n s e e t h e r e i s n o r e a s o n why t h e p a t e n t e e s h o u l d be a b l e t o s u b s e q u e n t l y r e s t r i c t t h e f r e e movement o f t h o s e g o o d s . T h e p a t e n t e e h a d p o w e r t o c o n t r o l w h e r e t h e g o o d s w e r e m a r k e t e d a n d c h o s e t o s e l l t h e m i n a c o u n t r y w h e r e no p a t e n t r i g h t s w e r e a v a i l a b l e . T h e p o s i t i o n s h o u l d be t h e same w h e t h e r no p a t e n t s a r e a v a i l a b l e a t a l l o r p a t e n t s a r e a v a i l a b l e b u t t h e m a n u f a c t u r e r h a s n e g l e c t e d o r f a i l e d t o o b t a i n o n e . I t i s a r g u a b l e t h a t t h i s a p p r o a c h u n f a i r l y p e n a l i s e s a p a t e n t e e who d o e s n o t t a k e o u t a p a t e n t i n e v e r y E E C c o u n t r y w h e r e t h e p r o d u c t i s p a t e n t a b l e . I t may be t h a t d e s p i t e h i s i n t e r e s t a n d w i l l i n g n e s s t o h a v e h i s i n v e n t i o n p a t e n t e d i n e v e r y member s t a t e p r o t e c t i o n i s r e f u s e d i n some s t a t e s . I t s h o u l d be r e m e m b e r e d h o w e v e r t h a t t h i s s i t u a t i o n w i l l , h o p e f u l l y , n o t l a s t l o n g . O n c e t h e C . P . C . i s i n f o r c e an i n v e n t o r o r h i s a s s i g n e e s h o u l d - 1 9 0 -be a b l e t o o b t a i n p a t e n t p r o t e c t i o n i n a l l o f t h e member s t a t e s w h e r e he w a n t s t o e x p l o i t h i s i n v e n t i o n s i n c e p a t e n t a b i l i t y r u l e s w i l l be t h e same t h r o u g h o u t E u r o p e . T h e r e i s a s t r o n g e r a r g u m e n t f o r a l l o w i n g a p a t e n t e e t o p r e v e n t p a r a l l e l i m p o r t a t i o n o f t h e p a t e n t e d p r o d u c t f r o m a s t a t e w i t h o u t p a t e n t p r o t e c t i o n when t h e p r o d u c t i s m a r k e t e d b y a t h i r d p a r t y . I n s u c h a c a s e t h e p a t e n t e e h a s d e r i v e d no b e n e f i t f r o m t h e m a r k e t i n g a n d h a d no c h o i c e i n t h e m a t t e r . T h i s i s p e r h a p s t h e o n l y s i t u a t i o n w h e r e a n e x c e p t i o n t o t h e p r i n c i p l e o f f r e e movement o f g o o d s may be j u s t i f i e d . T h e E u r o p e a n C o u r t e x p r e s s e d a p p r o v a l f o r t h i s a p p r o a c h i n t h e C e n t r a f a r m c a s e d i s c u s s e d b e l o w . T h e g r e a t v a r i a t i o n i n d r u g p r i c e s w i t h i n E u r o p e h a s l e d one f i r m i n p a r t i c u l a r t o e n g a g e i n p a r a l l e l i m p o r t a t i o n o n a l a r g e s c a l e w h i c h h a s r e s u l t e d i n e x t e n s i v e l i t i g a t i o n . The f i r m i s t h e D u t c h p h a r m a c e u t i c a l c o m p a n y , C e n t r a f a r m . T h e f i r s t a c t i o n i n v o l v i n g t h e 33 c o m p a n y was d e c i d e d o n O c t o b e r 3 1 s t 1 9 7 4 . T h e Hoge R a a d h e l d t h a t u n d e r D u t c h law t h e p a t e n t e e h a d t h e u n t r a m m e l l e d r i g h t t o p r e v e n t i m p o r t a t i o n f r o m a b r o a d e v e n i f t h e d r u g i n q u e s t i o n h a d b e e n m a n u f a c t u r e d w i t h c o n s e n t - 1 9 1 -o f t h e p a t e n t e e u n d e r a p a r a l l e l p a t e n t . H o w e v e r , u p o n r e f e r r a l t o t h e E u r o p e a n C o u r t o f J u s t i c e , t h e C o u r t l a i d down t h e p r i n c i p l e t h a t , w h i l e t h e T r e a t y o f Rome d o e s n o t a f f e c t t h e e x i s t e n c e o f r i g h t s r e c o g n i s e d b y t h e l e g i s l a t u r e o f a member s t a t e i n i n d u s t r i a l p r o p e r t y , t h e e x e r c i s e o f t h o s e r i g h t s may be a f f e c t e d b y p r o h i b i t i o n s i n t h e T r e a t y . T h u s , e n f o r c e m e n t o f t h e p a t e n t e e ' s r i g h t w a s , i n t h i s i n s t a n c e , i n c o m p a t i b l e w i t h t h e T r e a t y o f Rome. 6. E x h a u s t i o n o f T r a d e M a r k s i n t h e E . E . C . T h e t r a d e mark c o u n t e r p a r t o f t h e C e n t r a f a r m v 34 S t e r l i n g D r u g c a s e was C e n t r a f a r m v W i n t h r o p . T h e h o l d e r o f a mark i n o n e member s t a t e was deemed t o be u n a b l e t o p r e v e n t t h e i m p o r t a t i o n o f g o o d s f r o m a n o t h e r member s t a t e i f m a r k e t e d t h e r e b y h i m o r w i t h h i s c o n s e n t . I n t h a t c a s e t h e t r a d e mark N e g r a m was owned b y d i f f e r e n t m a r k e t i n g s u b s i d i a r i e s o f t h e same c o n c e r n i n t h e c o u n t r i e s o f e x p o r t a n d i m p o r t a n d c o n s e n t was i m p l i e d t h r o u g h t h e l e g a l a n d e c o n o m i c l i n k s b e t w e e n t h e two c o m p a n i e s . The c o u r t h a s n o t p l a c e d u n d u e e m p h a s i s o n t h e 35 r e q u i r e m e n t o f c o n s e n t . I n V a n Z u y l e n B r o s v H a g , t h e mark " H a g " was owned b y two u n r e l a t e d e n t e r p r i s e s i n G e r m a n y a n d B e l g i u m b o t h o f w h i c h h a d e x c l u s i v e t r a d e mark - 1 9 2 -r i g h t s i n t h e i r r e s p e c t i v e c o u n t r i e s . T h e c o m p a n i e s h a d a t o n e t i m e b e e n r e l a t e d a n d a l t h o u g h , a s a r e s u l t o f g o v e r n m e n t s e q u e s t r a t i o n o f G e r m a n a s s e t s a f t e r t h e w a r , t h e r e was no l o n g e r a n y c o n n e c t i o n b e t w e e n t h e f i r m s t h e c o u r t s t i l l m a i n t a i n e d t h a t i t w o u l d c o n t r a v e n e t h e f r e e m o v e r m e n t o f g o o d s d o c t r i n e t o a l l o w t h e o w n e r o f t h e B e l g i a n mark t o p r o h i b i t i m p o r t a t i o n o f t h e G e r m a n c o m p a n y ' s g o o d s . W h i l e t h e w r i t e r a p p l a u d s m e a s u r e s d e s i g n e d t o e n c o u r a g e t h e f r e e movement o f g o o d s i t i s p o s s i b l e t h a t t h i s c a s e e x t e n d s t h e p r i n c i p l e t o o f a r . T h e c o u r t h a s r e p e a t e d o n n u m e r o u s o c c a s i o n s t h a t t h e s p e c i f i c p u r p o s e o f a t r a d e mark i s a s a g u a r a n t e e o f o r i g i n f o r t h e b e n e f i t o f t h e c o n s u m e r . T h i s c a s e s a c r i f i c e s t h e c o n s u m e r ' s b e n e f i t u n d e r t r a d e mark l a w t o t h e p r i n c i p l e o f f r e e movement o f g o o d s . The c o u r t c o n s i d e r e d t h a t t h e two c o m p a n i e s c o u l d r e l y o n o t h e r means t o d i f f e r e n t i a t e t h e i r p r o d u c t s b u t t h i s p r e s u p p o s e s t h a t t h e c o n s u m e r n o t i c e s t h e o t h e r d i s t i n c t i o n s a n d d o e s n o t p u r c h a s e b y mark a l o n e . T h e c o n s e q u e n c e s o f e x t e n d i n g t h e H a g p r i n c i p l e t o t h e p h a r m a c e u t i c a l f i e l d a r e p o t e n t i a l l y s e r i o u s . Two t o t a l l y s e p a r a t e e n t e r p r i s e s m a n u f a c t u r i n g d i f f e r e n t d r u g s u n d e r t h e same t r a d e mark c o u l d c o n s t i t u t e a d a n g e r t o p u b l i c h e a l t h . - I m -p o r t u n a t e l y t h e H a g s i t u a t i o n i s u n l i k e l y t o o c c u r f r e q u e n t l y and t h e c o u r t h a s n o t a p p l i e d t h e same p r i n c i p l e i n a s i t u a t i o n w h e r e t h e m a r k s w e r e a t a l l t i m e s owned and 3 6 d e v e l o p e d b y e n t i r e l y s e p a r a t e e n t e r p r i s e s . T h e C e n t r a f a r m c o m p a n y , p r e s u m a b l y e n c o u r a g e d b y i t s s u c c e s s i n t h e S t e r l i n g W i n t h r o p a c t i o n , c o n t i n u e d t h e i r p r a c t i c e o f p a r a l l e l i m p o r t a t i o n a n d became e m b r o i l e d i n two f u r t h e r l e g a l b a t t l e s w i t h m a j o r d r u g 3 7 m a n u f a c t u r e r s . H o w e v e r , t h e y w e r e l e s s s u c c e s s f u l a s t h e c o u r t i m p o s e d c e r t a i n l i m i t a t i o n s o n t h e d o c t r i n e o f e x h a u s t i o n e s p o u s e d i n C e n t r a f a r m v S t e r l i n g W i n t h r o p . T h e p r i n c i p l e was h e l d n o t t o a p p l y w h e r e t h e m a r k e d p r o d u c t i s m a r k e t e d i n o t h e r member s t a t e s a f t e r i t h a s b e e n r e p a c k a g e d i n new p a c k a g i n g t o w h i c h t h e t r a d e mark h a s b e e n a f f i x e d b y a t h i r d p a r t y . T h e d r u g i n v o l v e d i n t h e H o f f m a n - L a R o c h e c a s e was t h e t r a n q u i l i z e r V a l i u m . T h e B r i t i s h s u b s i d i a r y o f H o f f m a n - L a R o c h e s u p p l i e d t h e d r u g t o E n g l i s h c h e m i s t s i n l a r g e p a c k s w h i c h t h e d i s p e n s e r t h e n d i s t r i b u t e d a c c o r d i n g t o q u a n t i t i e s p r e s c r i b e d b y t h e p h y s i c i a n . I n G e r m a n y , o n t h e o t h e r h a n d , d r u g s w e r e s o l d t o p a t i e n t s i n s m a l l s e a l e d p a c k a g e s c o n t a i n i n g a r e g u l a t i o n n u m b e r o f t a b l e t s - a p r a c t i c e w h i c h made t h e l a r g e s i z e d B r i t i s h p a c k s v i r t u a l l y u n s a l e a b l e i n G e r m a n y . - 1 9 4 -E v e n i n t h i s c a s e , h o w e v e r , t h e e x e m p t i o n t o t h e e x h a u s t i o n p r i n c i p l e was n a r r o w l y d e f i n e d . The c o u r t m u s t e x a m i n e w h e t h e r t h e u s e o f d i f f e r e n t p a c k a g e s i z e s was a r e s u l t o f m a r k e t i n g c o n d i t i o n s i n t h e two c o u n t r i e s o r was a d e v i c e i n t e n d e d t o a c t a s a d i s g u i s e d r e s t r i c t i o n o n t r a d e b e t w e e n member s t a t e s . T h e c o u r t l a i d down f o u r c r i t e r i a u p o n t h e b a s i s o f w h i c h s u c h i n t e n t w o u l d be p r e s u m e d . T h a t i s w h e r e : -" - i t i s e s t a b l i s h e d t h a t t h e u s e o f t h e t r a d e mark r i g h t b y t h e p r o p r i e t o r , h a v i n g r e g a r d t o t h e m a r k e t i n g s y s t e m w h i c h he h a s a d o p t e d , w i l l c o n t r i b u t e t o t h e a r t i f i c i a l p a r t i t i o n i n g o f t h e m a r k e t s b e t w e e n member s t a t e s - i t i s shown t h a t r e p a c k a g i n g c a n n o t a d v e r s e l y a f f e c t t h e o r i g i n a l c o n d i t i o n o f t h e p r o d u c t - t h e p r o p r i e t o r o f t h e mark r e c e i v e s p r i o r n o t i c e o f t h e m a r k e t i n g a n d r e p a c k a g i n g o f t h e p r o d u c t a n d - i t i s s t a t e d o n t h e new p a c k a g i n g b y whom t h e p r o d u c t h a s b e e n r e p a c k a g e d . " T h e l a s t t h r e e e l e m e n t s w i l l be r e l a t i v e l y e a s y f o r t h e p a r a l l e l i m p o r t e r t o c o m p l y w i t h . I t w i l l be h a r d e r t o e s t a b l i s h w h e t h e r t h e u s e o f t h e t r a d e mark w i l l c o n t r i b u t e t o t h e a r t i f i c i a l p a r t i t i o n i n g o f t h e m a r k e t s . T h i s a p p e a r s t o be a n o b j e c t i v e t e s t f o r t h e c o u r t t o d e c i d e . - 1 9 5 -T h e n e x t C e n t r a f a r m b a t t l e was a g a i n s t A m e r i c a n 3 8 Home P r o d u c t s C o r p o r a t i o n (AHPC) . The c o m p a n y m a r k e t e d w h a t was e s s e n t i a l l y t h e same d r u g a s " S e r e n i d D " i n B r i t a i n and a s " S e r e s t a " i n t h e N e t h e r l a n d s . C e n t r a f a r m r e p a c k a g e d t h e B r i t i s h d r u g a n d s o l d i t a s S e r e s t a i n t h e N e t h e r l a n d s . T h i s was h e l d t o i n f r i n g e t h e D u t c h p a t e n t n o t w i t h s t a n d i n g t h a t t h e t r a d e mark was a f f i x e d t o " g e n u i n e " g o o d s . A g a i n h o w e v e r , t h e e x c e p t i o n t o t h e e x h a u s t i o n p r i n c i p l e was q u a l i f i e d b y t h e c o u r t : " N e v e r t h e l e s s , s u c h p r e v e n t i o n may c o n s t i t u t e a d i s g u i s e d r e s t r i c t i o n o n t r a d e b e t w e e n member s t a t e s i f i t i s e s t a b l i s h e d t h a t t h e p r o p r i e t o r o f d i f f e r e n t m a r k s h a s f o l l o w e d t h e p r a c t i c e o f u s i n g s u c h m a r k s f o r t h e p u r p o s e o f a r t i f i c i a l l y p a r t i t i o n i n g t h e m a r k e t . " I n t h i s c a s e no o b j e c t i v e c r i t e r i a w e r e l a i d d o w n . T h e c o u r t made t h e i s s u e t u r n o n t h e i n t e n t i o n o f t h e mark o w n e r . T h e s e l a s t two C e n t r a f a r m d e c i s i o n s r e p r e s e n t a d i s a p p o i n t i n g r e v e r s a l o f t h e t r e n d t o w a r d s c o m m u n i t y w i d e e x h a u s t i o n o f r i g h t s . T h e r e c a n be no h a r m t o t h e c o n s u m e r i n p e r m i t t i n g s u c h r e p a c k a g i n g a n d r e l a b e l l i n g p r o v i d e d i t - 1 9 6 -i s p e r f o r m e d u n d e r c o n t r o l l e d c o n d i t i o n s b y q u a l i f i e d p e r s o n n e l a n d t h e r e i s no a l t e r a t i o n o f t h e o r i g i n a l p r o d u c t . The c o u r t s h o u l d n o t c o n c e r n i t s e l f w i t h t h e s u b j e c t i v e i n t e n t o f t h e d r u g m a n u f a c t u r e r . I f h i s m a r k e t i n g t e c h n i q u e s h a v e t h e e f f e c t , a l b e i t c o i n c i d e n t a l , o f p a r t i t i o n i n g t h e m a r k e t t h e p r o d u c e r s h o u l d n o t be p e r m i t t e d t o u s e h i s t r a d e mark t o p r e v e n t p a r a l l e l i m p o r t a t i o n . 7 . P a s s i n g O f f A c t i o n s i n t h e E . E . C . D u r i n g t h e c o u r s e o f n e g o t i a t i o n s o n t h e E T M , a c o n f l i c t h a s a r i s e n b e t w e e n t h o s e who f e e l t h a t i n d u s t r y and commerce s h o u l d be f r e e o f a l l r e s t r i c t i o n s e x c e p t t h o s e a r i s i n g o u t o f r e g i s t r a t i o n , a n d t h o s e who w i s h t o p r o t e c t t h e e x p e c t a t i o n s o f b u s i n e s s e s t h a t t h e y w i l l h a v e r i g h t s i n p a s s i n g o f f a c c r u i n g f r o m t h e i r g r o w i n g r e p u t a t i o n e v e n i f t h e y do n o t r e g i s t e r t h e m . T h e p r e s e n t d r a f t d e f i n e s a mark i n v e r y w i d e t e r m s t o c o v e r n o t o n l y t r a d i t i o n a l e l e m e n t s s u c h a s n a m e s , p r i n t s a n d s e a l s , b u t a l s o " s h a p e s , a r t i c l e s o f p a c k i n g a n d a l l o t h e r s i g n s w h i c h d i s t i n g u i s h t h e g o o d s o r s e r v i c e s o f a n u n d e r t a k i n g . " - 1 9 7 -T h i s d e f i n i t i o n seems v i r t u a l l y a s w i d e a s t h a t a d o p t e d i n 3 9 t h e S m i t h K l i n e & F r e n c h c a s e d i s c u s s e d a b o v e . T h e c o l o u r e d c a p s u l e s w h i c h , i n t h e w r i t e r ' s o p i n i o n , w e r e w r o n g l y h e l d t o be r e g i s t r a b l e a s t r a d e m a r k s w i l l a p p a r e n t l y be e l i g i b l e f o r r e g i s t r a t i o n a s c o m m u n i t y t r a d e mark s . E v e n s o , i t i s n o t now p r o p o s e d t h a t r e g i s t r a t i o n w i l l be t h e o n l y way o f p r o t e c t i n g s u c h s u b j e c t m a t t e r . R i g h t s i n n a t i o n a l l a w a g a i n s t p a s s i n g o f f o r u n f a i r c o m p e t i t i o n may a l s o be u s e d . A r t i c l e 16 o f t h e 1978 D r a f t R e g u l a t i o n w h i c h r e s t r i c t e d t h e p r o p r i e t o r o f a CTM f r o m p r o c e e d i n g o t h e r w i s e t h a n f o r i n f r i n g m e n t u n d e r A r t i c l e 10 h a s b e e n d e l e t e d so t h a t t h e r e i s now n o p r e j u d i c e a g a i n s t b r i n g i n g c o n c u r r e n t a c t i o n s f o r t r a d e mark i n f r i n g e m e n t a n d p a s s i n g o f f w h e r e t h e c i r c u m s t a n c e s w a r r a n t i t . F i r m s w i t h a t r a d e mark a l r e a d y r e g i s t e r e d i n a member s t a t e may o p p o s e a p p l i c a t i o n s o r s e e k c a n c e l l a t i o n o f m a r k s o n t h e r e g i s t e r p r o v i d e d t h e y a l s o s a t i s f y t h e c r i t e r i a f o r u s e . T h u s , t h e p o s i t i o n o f b u s i n e s s e s i n c o u n t r i e s w i t h a " r e g i s t r a t i o n o n l y " b a c k g r o u n d i s c l e a r . What i s l e s s c l e a r i s t h e e x t e n t t o w h i c h p r i o r r i g h t s - 1 9 8 -a c q u i r e d b y u s e w i l l a l s o f o r m t h e b a s i s o f a n o b j e c t i o n . T h i s i s p a r t i c u l a r l y r e l e v a n t f o r B r i t i s h p h a r m a c e u t i c a l f i r m s w h i c h may r e l y o n u n r e g i s t e r e d m a r k s t o b r i n g a p a s s i n g o f f a c t i o n . T h e c u r r e n t p r o p o s a l i s t o a l l o w t h o s e w i t h a mark " w e l l known i n a n o t h e r member s t a t e " t o o p p o s e a n a p p l i c a t i o n o r s e c u r e c a n c e l l a t i o n b u t t h e p r i o r r i g h t m u s t be o f more t h a n l o c a l o r r e g i o n a l i m p o r t a n c e . T h i s r e q u i r e m e n t c o u l d b e a r h a r d o n s m a l l b u s i n e s s e s whose s u c c e s s e n t i t l e s t h e m g r a d u a l l y t o e x p a n d b u t o n e f e e l s i t w i l l n o t b e a r h a r d o n t h e m u l t i n a t i o n a l p h a r m a c e u t i c a l c o r p o r a t i o n s . C o p y r i g h t i n t h e E . E . C . I t w i l l be r e c a l l e d t h a t t h e p h a r m a c e u t i c a l c o m p a n i e s h a v e n o t so f a r r e l i e d h e a v i l y o n c o p y r i g h t t o p r o t e c t t h e i r p r o d u c t s so c a s e law i n t h e a r e a i s p r a c t i c a l l y n o n - e x i s t e n t . On t h e q u e s t i o n o f c o p y r i g h t e n f o r c e m e n t i n t h e E . E . C . g e n e r a l l y t h e l e a d i n g c a s e i s 40 D e u t s c h e Grammaphon v M e t r o w h e r e t h e c o u r t r e s t r i c t e d t h e u s e o f c o p y r i g h t t o p r e v e n t p a r a l l e l i m p o r t s o f r e c o r d s i n t o G e r m a n y . I t seems f r o m t h i s c a s e t h a t t h e c o u r t t r e a t s c o p y r i g h t l a w s i n t h e same way a s t h o s e r e l a t i n g t o - 1 9 9 -p a t e n t s a n d t r a d e m a r k s when j u d g i n g t h e i r r e l a t i o n s h i p w i t h t h e r u l e s o f t h e T r e a t y o f Rome a n d , i n p a r t i c u l a r , r u l e s p r o v i d i n g f o r t h e f r e e movement o f g o o d s . So f a r a s g o o d s m a r k e t e d i n t h e E . E . C . w i t h t h e c o n s e n t o f t h e c o p y r i g h t p r o p r i e t o r a r e c o n c e r n e d t h e d o c t r i n e o f t h e f r e e f l o w o f i d e a s s h o u l d p r e v a i l o v e r n a t i o n a l l y g r a n t e d i n t e l l e c t u a l p r o p e r t y r i g h t s . 9 . I n d u s t r i a l D e s i g n s A b r i e f w o r d r e m a i n s t o be s a i d a b o u t i n d u s t r i a l d e s i g n s . T h e P a r i s t e x t o f t h e B e r n e C o p y r i g h t C o n v e n t i o n r e f e r s s p e c i f i c a l l y t o i n d u s t r i a l d e s i g n s , t h e p r i n c i p l e b e i n g t h a t w o r k s p r o t e c t e d i n one c o u n t r y s o l e l y a s d e s i g n s o r m o d e l s s h a l l be e n t i t l e d i n a n y o t h e r c o u n t r y t o o n l y s u c h s p e c i a l p r o t e c t i o n a s i s g r a n t e d i n t h a t c o u n t r y t o d e s i g n s a n d m o d e l s . T h u s , i f r e g i s t r a t i o n i s a p r e r e q u i s i t e t o p r o t e c t i o n i n t h e home c o u n t r y t h e a p p l i c a n t m u s t a l s o r e g i s t e r a b r o a d . I f d e s i g n s a r e p r o t e c t e d s i m p l y t h r o u g h c o p y r i g h t p r o t e c t i o n s i m i l a r p r o t e c t i o n may be o b t a i n e d a b r o a d . W i t h i n t h e E . E . C , a E u r o p e a n D e s i g n C o n v e n t i o n h a s b e e n p r o p o s e d b u t no w o r k h a s y e t b e e n d o n e o n t h i s . The C o m m i s s i o n i s u n d e r p r e s s u r e t o a c t b e c a u s e , a t - 2 0 0 -p r e s e n t , t h e d e g r e e o f p r o t e c t i o n a f f o r d e d i n t h e d i f f e r e n t member s t a t e s v a r i e s and t h i s i s a p o t e n t i a l h i n d r a n c e t o i n t r a c o m m u n i t y t r a d e . T h e C o m m i s s i o n i s s t u d y i n g t h e B e n e l u x C o n v e n t i o n a s a p o s s i b l e m o d e l . The B e n e l u x L a w , o p e r a t i v e f r o m 1 9 7 5 , p r o v i d e s f o r t h e new a p p e a r a n c e o f a p r o d u c t h a v i n g a u t i l i t y f u n c t i o n t o be p r o t e c t e d a s a d e s i g n t h r o u g h o u t t h e B e n e l u x c o u n t r i e s . 1 0 . F u t u r e D e v e l o p m e n t s T h e E u r o p e a n C o u r t o f J u s t i c e i s w o r k i n g t o w a r d s a u n i f o r m i n t e r p r e t a t i o n o f n a t i o n a l i n d u s t r i a l p r o p e r t y l a w s b u t t h e r e r e m a i n s an u r g e n t n e e d f o r a s i n g l e E u r o p e a n I n t e l l e c t u a l P r o p e r t y Law u n d e r w h i c h a n y m a r k e t i n g b y t h e h o l d e r o f a p r o d u c t p r o t e c t e d b y a n i n t e l l e c t u a l p r o p e r t y r i g h t w i l l e x h a u s t t h a t r i g h t . T h e r e i s no n e e d t o r e s t r i c t t h i s p r i n c i p l e t o m a r k e t i n g i n t h e E . E . C . M a r k e t i n g a n y w h e r e i n t h e w o r l d s h o u l d e x h a u s t t h e r i g h t p r o v i d e d i t i s d o n e b y t h e r i g h t h o l d e r o r w i t h h i s c o n s e n t . W h e n e v e r t h e c o u r t f i n d s t h a t a p r o t e c t e d p r o d u c t i s s u b j e c t t o a s u b s t a n t i a l p r i c e d i f f e r e n t i a l b e t w e e n two t e r r i t o r i e s , o r a p a t e n t e d p r o d u c t i s b e i n g s o l d f o r a p r i c e w h i c h i s a b n o r m a l l y h i g h i n t h e l i g h t o f c o m p a r a b l e - 2 0 1 -p r o d u c t s t h e r e i s r e a s o n t o s u s p e c t t h a t i n t e l l e c t u a l p r o p e r t y r i g h t s a r e b e i n g a b u s e d . I t i s o f c o u r s e a r g u a b l e t h a t a p r i c e s u b s t a n t i a l l y i n e x c e s s o f t h a t n e c e s s a r y t o r e m u n e r a t e c o n v e n t i o n a l f a c t o r s o f p r o d u c t i o n i s a l o g i c a l c o n s e q u e n c e o f a l e g a l m o n o p o l y . T h i s d e p e n d s o n t h e p h i l o s o p h y a d o p t e d b y t h e c o u n t r y c o n f e r r i n g t h e r i g h t -w h e t h e r t o c o n f e r o n t h e r i g h t h o l d e r t h e a b i l i t y t o m a x i m i s e h i s r e t u r n s o r t o l i m i t h i m t o a " r e a s o n a b l e r e w a r d " . T h e B r i i s h v i e w h a s t e n d e d t o w a r d t h e c o n c e p t o f " r e a s o n a b l e r e w a r d " p a r t i c u l a r l y i n t h e p h a r m a c e u t i c a l f i e l d a n d , i n t h e w r i t e r ' s o p i n i o n , t h i s i s t h e v i e w w h i c h s h o u l d p r e v a i l t h r o u g h o u t t h e E . E . C . - 2 0 2 -NOTES TO CHAPTER V I I n B r i t a i n , t h e r u l e o f d o m e s t i c l aw h a s a l w a y s b e e n t h a t t h e p u r c h a s e r o f p a t e n t e d g o o d s n e e d s t h e p a t e n t e e s l i c e n c e b e f o r e u s i n g o r v e n d i n g t h e m a r k e t e d p r o d u c t , a l t h o u g h t h e e f f e c t s o f t h i s a p p r o a c h a r e m i t i g a t e d t o t h e e x t e n t t h a t , w h e r e g o o d s a r e s o l d w i t h o u t a d e q u a t e l y n o t i f i e d r e s t r i c t i o n s t h e v e n d o r c o n f e r s o n t h e p u r c h a s e r a n i m p l i e d l i c e n c e f o r a l l f u t u r e d e a l i n g s a n d u s e s 2 S e e g e n e r a l l y C h a p t e r I V 3 F o r d e t a i l e d d i s c u s s i o n o f p a r a l l e l r i g h t s , s e e A l e x a n d e r , " T h e E s t a b l i s h m e n t o f t h e Common M a r k e t a n d t h e P r o b l e m o f P a r a l l e l P a t e n t s " (1969) 14 A n t i - T r u s t B u l l e t i n 1 8 1 - 2 2 0 , 1 8 5 - 1 9 3 4 T r e a t y o f Rome, A r t s 8 5 , 86 - C o m p e t i t i o n ; A r t s 30 - 36 - f r e e movement o f g o o d s 5 S e e g e n e r a l l y C h a p t e r s I a n d I I 6 (1871) L . R . 6 C h . A p p . 239 7 G l a c e s v T i l g h m a n (1883) 25 C h . D . 1 ( C . A . ) 8 [ 1 9 7 3 ] R . P . C . 915 ( C h . D . ) 9 [1968] R . P . C . 129 ( H i g h C t o f K e n y a ) 1 0 B e t t s v W i l m o t t s u p r a n . 6 11 G l a c e s v T i l g h m a n s u p r a n . 7 1 2 U . S . v U n i v e r s a l L e n s C o . (1942) 316 U . S . 241 ( S u p . C t ) 13 K o h l e r , J o s e p h ; W a r e n z e i c h e n r e c h t 2nd E d . 1910 14 S e e T h e M a j a C a s e i n t h e G e r m a n S u p r e m e C o u r t J a n u a r y 24 1964 (1964) G . R . U . R . I n t . 202 15 T h e P e r s i l C a s e s : ( C . A . ) D e c . 20 1963 a n d J a n u a r y 17 1964 (1964-5 ) 2 CML R e v . 349 [1964] G . R . U . R . I n t . 636 [1964] WuW 535 -20 J -16 W e r h e i m e r / T h e P r i n c i p l e o f T e r r i t o r i a l i t y i n T r a d e M a r k Law o f t h e Common M a r k e t C o u n t r i e s (1967) 16 I C L Q 6 3 0 ; B i e r [1964] G . R . U . R . I n t . 2 0 5 ; L u t z [1965] G . R . U . R . I n s t . 6 0 1 ; H e r f e r m e l [1964] G . R . U . R . I n t . 3 7 6 ; R o t t g e r [1964] G . R . U . R . I n t . 128 17 R e v l o n I n c a n d O t h e r s v C r i p p s L e e a n d O t h e r s [1980] F . R . S . 85 S e e a l s o K i t c h i n , D a v i d , The R e v l o n C a s e . T r a d e M a r k s a n d P a r a l l e l I m p o r t s (UK) [1980] E I P R 86 1 8 i b i d a t p . 1 1 6 19 Champagne H e i d s i e c k e t c i e M o n o p o l e S o c i e t i e Anonyme v  B u x t o n (1930) 47 R . P . C . 28 ( C h . D . ) 2 0 D u n l o p R u b b e r C o L t d v A . A . B o o t h a n d C o L t d (1926) 43 R . P . C . 139 ( C h . D . ) 21 T h e L u x C a s e ; F e d e r a l T r i b u n a l , F e b r u a r y 1 2 , 1952 A r r e t s d u T r i b u n a l F e d e r a l V o l . 78 , 1 1 , p . 1 6 4 , L u x [1953] G . R . U . R . I n t 42 22 C a s s a z ; O c t o b e r 2 0 , 195 6, N o . 3 7 8 1 ; F i r o I t a l i a n o , 1957 I C o l . 1 0 2 1 ; P a l m o l i v e [1957] R e v . D i r I n d I I 358 23 E l e c t r i c a l a n d M u s i c a l I n d s L t d v D e l a c h a u x , M a r c h 1 3 , 1959 (1959) 85 ( i v ) B . G . E . 53 2 4 [ 1 9 6 7 ] R . P . C . 581 ( C h . D . ) 2 5 [ 1 9 7 7 ] 1 W . L . R . 1155 ( C h . D . ) 2 6 [ 1 9 7 6 ] 2 F . S . R . 545 a t p . 5 4 8 ( C h . D . ) 2 6 a S e e a l s o C & A M o d e s v C & A ( W a t e r f o r d ) L t d [1976] I . R . 198 (Sup C t o f I r e l a n d ) w h e r e i t was i n s i s t e d t h a t " g o o d w i l l d o e s n o t n e c e s s a r i l y s t o p a t a f r o n t i e r . " 2 6 b [ 1 9 8 0 ] R . P . C . 343 ( C h . D . ) 2 6 c i b i d a t p . 3 4 9 27 D r a f t R e g u l a t i o n o n C o m m u n i t y T r a d e M a r k s D o c u m e n t I I I / D / 7 5 3 / 7 8 ; D r a f t D i r e c t i v e t o a p p r o x i m a t e t h e T r a d e M a r k Laws o f Member S t a t e s D o c u m e n t I I I / D / 1 2 9 3 / 7 9 ; L a t e s t D r a f t R e g u l a t i o n C . O . M . (80) 635 - 2 U 4 -for a f u l l discussion on the CTM Regulation and Directives see Armitage, Edward, The CTM: Comments on the l a t e s t drafts of the proposed EEC Regulation and Directive [1981] 3 EIPR 72 2 8 i n f r a p.143 29 supra p.131 3 0C.P.C. Art. 32 3 1C.P.C. Art. 81 3 2Case 24/67 [1968] 7 C.M.L.R. 47 33 Centrafarm B.V. and Adriaan de Peijper v S t e r l i n g Drug  Inc case 15/74 [1974] E.C.R. 1147 (preliminary r u l i n g requested by the Hoge Raad) 34 Centrafarm B.V. and Adriaan de Peijper v Winthrop B.V. case 16/74 [1974] E.C.R. 1183 (preliminary r u l i n g requested by the Hoge Raad) 3 5Van Zuylen Freres v Hag A.G. case 192/73 [1974] E.C.R. 731 (preliminary r u l i n g requested by the Tribunal d 1Arrondiseement of Luxemborg) 3 6 Terrapin (Overseas) Ltd v Terranova Industrie C.A. Kapferer & Co. (preliminary r u l i n g requested by the Bundesgerichtshof) case 119/75 [1976] E.C.R. 1039 37 Hoffman-La Roche & Co A.G. v Centrafarm Vertriebsgesellschaft Pharmazeutischer Erzeugnisse Mbh (preliminary r u l i n g requested by the Landgericht Freiburg) Case 102/77 [1978] E.C.R. 1139 Centrafarm  B.V. v American Home Products Corporation (preliminary r u l i n g requested by the Arondissementsrecht Bank Rotterdam) Case 3/78 [1978] E.C.R. 1823 see also Rottger, Martin, AHPC and Centrafarm, the Courts Decision i n the Light of i t s E a r l i e r Rulings [1980] E.I.P.R. 322 Case 78/70 [1971] E.C.R. 1147 3 8 i b i d 3 9Chapter IV n.19 4 0Case 78/70 [1971] E.C.R. 487(499) CONCLUSION I t w i l l be a p p a r e n t b y t h i s s t a g e t h a t t h e t e n o r o f t h i s p a p e r i s s t r o n g l y a n t i p r o t e c t i o n i s t . T h e w r i t e r h a s a d v o c a t e d t h e a b o l i t i o n o f p a t e n t p r o t e c t i o n f o r p h a r m a c e u t i c a l p r o d u c t s o r , f a i l i n g t h a t , a l i m i t a t i o n o f p r o t e c t i o n t o p r o c e s s e s o n l y . R e c e n t t r e n d s h o w e v e r , i n E n g l a n d a n d E u r o p e , a r e f i r m l y i n f a v o u r o f s t r o n g e r p a t e n t p r o t e c t i o n f o r p h a r m a c e u t i c a l s a n d t h e l i k e l i h o o d o f a r e v e r s a l o f t h i s t r e n d i s s m a l l . F a i l i n g t h a t , h o w e v e r , s t e p s s h o u l d be t a k e n t o p r e v e n t t h e e x t e n s i o n o f t h e t w e n t y y e a r m o n o p o l y t h r o u g h p r o m o t i o n o f a n e x c l u s i v e g e t u p . T h e scheme o f u n i v e r s a l c a p s u l e c o l o r a t i o n a d v o c a t e d i n C h a p t e r I V w o u l d a l l o w l a r g e f i r m s s u c h a s H o f f m a n - L a R o c h e a n d S m i t h K l i n e & F r e n c h t o s u p e r i m p o s e t h e i r name o r mark u p o n t h e c o l o u r e d c a p s u l e t h e r e b y c o n t i n u i n g e n j o y m e n t o f t h e i r h i g h r e p u t a t i o n a n d a n y r e s u l t i n g b e n e f i t s d e p e n d e n t u p o n d o c t o r s ' p r e s c r i b i n g h a b i t s . A t t h e same t i m e , t h e scheme w o u l d e l i m i n a t e t h e s u s p i c i o n t h a t s u c h f i r m s a r e u s i n g t h e l a w s o f t r a d e mark a n d p a s s i n g o f f a s s h i e l d s b e h i n d w h i c h t o r e a p p r o f i t s f r e e f r o m t h e r i g o u r s o f a l l b u t o l i g o p o l i s t i c c o m p e t i t i o n . -206-I n a t e r r i t o r i a l c o n t e x t , E n g l i s h c o u r t s s h o u l d be p e r s u a d e d t o a c c e p t t h e p r i n c i p l e o f i n t e r n a t i o n a l e x h a u s t i o n . T h e s a l e o f a p r o t e c t e d p r o d u c t a n y w h e r e i n t h e w o r l d ( n o t j u s t w i t h i n t h e E . E . C . ) s h o u l d e x h a u s t a l l e x c l u s i v e r i g h t s a t t a c h e d t o t h e p r o d u c t p r o v i d e d t h e s a l e t a k e s p l a c e b y , o r w i t h t h e c o n s e n t o f , t h e r i g h t o w n e r . I t i s t h e w r i t e r ' s b e l i e f t h a t i n c e n t i v e s i n t h e p h a r m a c e u t i c a l i n d u s t r y a r e s u f f i c i e n t l y h i g h t h a t i m p l e m e n t a t i o n o f t h e a b o v e m e a s u r e s w o u l d n o t l e a d t o a s i g n i f i c a n t r e d u c t i o n i n t h e amount o f r e s e a r c h a n d d e v e l o p m e n t p r e s e n t l y u n d e r t a k e n . F u r t h e r m o r e , t h e r e i s a s t r o n g p o s s i b i l i t y t h a t t h e m e a s u r e s w i l l l e a d t o a u n i v e r s a l r e d u c t i o n i n t h e p r i c e s o f p h a r m a c e u t i c a l p r o d u c t s w i t h r e s u l t i n g b e n e f i t s f o r c o n s u m e r s a n d s o c i e t y . - 2 0 7 -B I B L I O G R A P H Y B o o k s B l a n c o - W h i t e , T . A . : B l a n c o - W h i t e , T . A . a n d J a c o b , R o b i n : B l a n c o - W h i t e , T . A . J e f f s , J . , J a c o b , R . , & C o r n i s h W . 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A . : M a r k e t Law R e v i e w 3 7 , 5 9 . waelbroeck: Wallace, William: Warner, J i l l i a n A: Werheimer: Trade Mark Protection i n the EEC (1964) 54 Trade Mark Reporter 333. Protection for Designs i n the UK (1975) 5 IPCL 421. Consumer Protection & Prescription Drugs: The Generic Substitution Laws (1978-9) 67 Kentucky Law Journal 384. The P r i n c i p l e of T e r r i t o r i a l i t y i n Trade Mark Law of Common Market Countries (1967) 16 International Comparative Law Quarterly 6.30. G o v e r n m e n t P u b l i c a t i o n s  U n i t e d K i n g d o m R e p o r t o f t h e C o m m i t t e e t o E x a m i n e T h e P a t e n t S y s t e m & P a t e n t L a w . 1 9 7 0 , L o n d o n , HMSO Cmnd 4407 (The B a n k s R e p o r t ) . 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S e n a t e made by i t s S u b - C o m m i t t e e o n A n t i T r u s t & M o n o p o l y P u r s u a n t t o S e n a t e R e s o l u t i o n 5 2 , 8 7 t h C o n g r e s s f i r s t s e s s i o n , R e p o r t N o : 448 (1961) ( K e f a u v e r R e p o r t ) . -ZLO-C a n a d a R e s t r i c t i v e T r a d e P r a c t i c e s C o m m i s s i o n R e p o r t c o n c e r n i n g t h e M a n u f a c t u r e , D i s t r i b u t i o n & S a l e o f D r u g s . D e p a r t m e n t o f J u s t i c e , O t t a w a (1963) (RTPC R e p o r t ) . 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