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A Difficult Product Launch

A recent decision of the English High Court of Justice illustrates the broader scope of protection typically given to a trademark that has become known in the marketplace. Combe International LLC v. Dr August Wolfe GNBH & Co.KG Arzneimittel [2021] EWHC 3347 (Eng.Ch D).


The Facts

The Plaintiff

The plaintiff has marketed and sold non-prescription female intimate healthcare products in various parts of the world since the early 1970s under the VAGISIL mark. VAGISIL was first introduced into the UK market in 1984. The first product introduced into the market was VAGISIL Medicated Crème, which provides relief from itching, burning and irritation.


There have been significant sales of the plaintiff’s products, and advertising expenditures and VAGISIL was a well-known brand in the UK at the relevant date and perceived as a strong brand in its sector.


The plaintiff owns three UK-registered trademarks for the word mark VAGISIL. The oldest registration was obtained in 1975 for use in association with “medicated, deodorizing and sanitary preparations and substances all for vaginal use.”

The Defendant

The defendant is a German pharmaceutical company. It developed VAGISAN Moist Cream, whose purpose is to relieve “the symptoms of vaginal dryness….

VAGISAN was originally launched in Germany, but the defendant was keen to expand into other markets. In February 2012, the defendant applied for an international trademark designating the EU and US for the word mark VAGISAN in classes 3 and 5.


The defendant obtained an International registration for the EU. The plaintiff opposed the US designation and brought a cancellation action against the EU designation. The cancellation proceeding succeeded on the basis the mark was invalid because of the likelihood of confusion between VAGISAN and VAGISIL, and the defendant’s VAGISAN EU registration was cancelled. An appeal to the Fourth Board of Appeal was dismissed, but the defendant appealed to the General Court of the CJEU. This appeal was outstanding at the time of the trial in the infringement action.

While the cancellation proceedings were ongoing, the defendant actively promoted its products and introduced additional related products in association with its VAGISAN mark. A major television advertising campaign was launched, which ran for five weeks in December 2016, costing in the region of £600,000. This gave sales of the defendant’s VAGISAN products a material boost. Interestingly, sales of the plaintiff’s VAGISIL branded products also increased.


The defendant recruited the British comedian Jenny Éclair as a brand ambassador. A new campaign was launched in September 2018, which included two television advertisements featuring Ms. Éclair talking bluntly about vaginal dryness and displaying the Moist Cream packaging.


In January 2019, the defendant introduced a second product into its UK range, namely VAGISAN Intimate Wash Lotion. In February 2020, the defendant introduced two more VAGISAN branded products in the UK: (1) VAGISAN Moist Cream Cremolum - a pessary version of the Moist Cream product, for vaginal insertion; and (2) VAGISAN protective Ointment - for external application.

The defendant’s goods sold in association with its VAGISAN mark in England are shown below.

Product Name

Packaging

Date of Introduction to the Market

Vagisan Moist Cream


c. February 2013

Vagisan Intimate Wash Lotion



c. January 2019

Vagisan Moist Cream Cremolum



c. February 2020

Vagisan Protective Ointment



c. February 2020


In September 2020, the defendant decided to rebrand its UK VAGISAN products as “DR WOLFF’s VAGISAN.” The rebranding was in progress during the trial.


The Action

The plaintiff alleged infringement and brought an action in the English High Court. The defendant denied any infringement and advanced a counterclaim for a declaration that their re-branded sign, “DR WOLFF’s VAGISAN,” did not infringe. The action proceeded to trial.


The Likelihood of Confusion

The test for confusion in the UK is broadly similar to the test in Canada, but there are differences. There was significant evidence and argument relating to the characteristics of the average purchaser. The Judge concluded that the average purchaser would be a woman with these characteristics:


i) Likely to feel a sense of embarrassment and unlikely to linger in the aisle or in the store longer than necessary. For the same reason, she is unlikely to wish to consult a pharmacist.

ii) Unlikely to have consulted a GP beforehand.

iii) Likely to have conducted some internet research, but given the nature of the products and their price, this is unlikely to have been extensive.

iv) Overall, her level of attentiveness is likely to be towards the lower end of the attentiveness spectrum.


The next major point of contention related to the “distinctiveness” of the plaintiff’s marks. The Judge accepted the proposition that VAGI or VAGIS are suggestive of the idea of the vagina, but it did not follow that the VAGISIL marks had only a low level of distinctiveness in the UK in February 2013 (the date of the first alleged infringement). By that stage, whatever their inherent level of distinctiveness, they had acquired enhanced distinctiveness given their use and their position in the market.


In the UK, where actual confusion has occurred, it will be highly probative of whether there is a likelihood of confusion. The plaintiff relied on there being a halo effect, and each time VAGISAN products were promoted sales of their products rapidly increased.


There was a significant amount of evidence on this issue which was of a technical nature. The Judge said that what was striking was the volume of evidence all pointing strongly in the same direction and fitting into an obvious and coherent pattern. The initial impression derived from the VAGISIL sales spike in December 2016 was confirmed by the later events and the efforts undertaken by the defendant to identify the reasons for what they saw as disappointing sales figures, notwithstanding the heavy advertising expenditures. By late 2019, not just one but several advisers and consultants to the defendant had reached the same conclusion, namely that an important contributing factor was confusion with VAGISIL.


The Counterclaim

Examples of the defendant’s rebranding efforts are set out below:


To succeed with its counterclaim, the defendant had to show there was no risk of confusion associated with the new mark. The judge said whether there is a risk of confusion must involve comparing the competing signs and the carrying out of a global assessment taking account of all relevant factors. If the word VAGISAN in the composite phrase DR WOLFF’s VAGISAN is properly regarded as having an independent distinctive role, then that is a relevant factor in assessing the overall risk of confusion. He concluded that it did, and there was still a risk of confusion.


Comment

The decision reviews some considerations relating to the launch of a new product on a worldwide basis. It was not disputed that confusion was unlikely in Germany, which was the home market of the defendant, but the situation was quite different in England.


The defendant adopted an aggressive position concerning the choice of its mark, but it succeeded in initially obtaining an EU registration which encouraged their efforts. They unsuccessfully argued acquiescence by the plaintiff.


If the plaintiff monitored the trademark filings and had instituted timely oppositions, perhaps both parties would have been farther ahead by avoiding the cost and disruption relating to the legal proceedings and the defendant’s marketplace efforts.


If you have questions, please contact me at mckeown@gsnh.com.

John McKeown

Goldman Sloan Nash & Haber LLP

480 University Avenue, Suite 1600

Toronto, Ontario M5G 1V2

Direct Line: (416) 597-3371

Fax: (416) 597-3370


These comments are of a general nature and not intended to provide legal advice as individual situations will differ and should be discussed with a lawyer.


A version of this article originally appeared in the Lawyer’s Daily published by LexisNexis Canada Inc.

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