SSRN-Id2212473 - Copyright and Trademark Issues in the Pharmaceutical Industry

Electronic copy available at: http://ssrn.com/abstract=221247334 PENNSYLVANIA BAR ASSOCIATION QUARTERLY | January 2013

Copyright And Trademark IssuesIn The Pharmaceutical Industry—Generic Compliance Or BrandDrug Imitating—”Copycat

Or Compliance”†

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . 34COPYRIGHT ISSUES . . . . . . . . . . . . . . . . . 35

Generic Labeling . . . . . . . . . . . . . . . . . . 36Counterfeit Drugs . . . . . . . . . . . . . . . . . 38

TRADEMARK ISSUES . . . . . . . . . . . . . . . . 38Generic Use of Pill Shape and Color . . 39Trademark Genericide . . . . . . . . . . . . . . 44

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . 46

TABLE OF CONTENTS

ABSTRACTImitation is the sincerest form of flattery; that is , unless the imitation is of a

product produced by a multi billion-dollar industry. Then, imitation has the poten-tial to involve intellectual property litigation. For the pharmaceutical industry,the majority of intellectual property litigation stems from the interplay betweengeneric or imitator drug and brand name or pioneer drug manufacturers.1

INTRODUCTIONInitially, a brand name drug is covered under a patent, and thus may be the only

one of its type on the market. When a patent expires and generic drugs enter the

† Special thanks to patent and trademark attorney Manny Pokotilow, partner at Caesar, Rivise,Bernstein, Cohen & Pokotilow, Ltd.,Philadelphia, PA for his excellent recommendations and review. Mr.Pokotilow has extensive trial experience in patent and trademark issues involving [email protected] http://www.crbcp.com.* Roseann B. Termini, Esq., has extensive experience in food and drug law and a particular interest in

this topic. She teaches several food and drug law courses at Widener University School of Law. Sheserved as corporate counsel for a pharmaceutical company and as a trial and appellate senior deputyattorney general for the Pennsylvania Office of Attorney General. Ms. Termini recently publishednew editions of Food and Drug Law: Federal Regulation of Drugs, Biologics, Medical Devices, Foods, DietarySupplements, Cosmetics, Veterinary and Tobacco Products, a separate CD and Instructor’s Manual (2012).www.fortipublications.com, [email protected].** Amy Miele sparked her avid interest in intellectual property while interning in Viacom’s Music and

Media Licensing department. She earned her Bachelors degree from Rutgers University and J.D. fromWidener University School of Law. [email protected]. See William R. Warner & Co. v. Eli Lilly & Co., 265 U.S. 526 (1924); Shire US Inc. v. Barr Labs. Inc., 329

F.3d 348 (3d Cir. 2003); SmithKline Beecham Consumer Healthcare, L.P. v.Watson Pharm., Inc., 211 F.3d 21 (2dCir. 2000), cert. denied, 531 U.S. 872 (2000); Ives Labs., Inc. v. Darby Drug Co., Inc., 601 F.2d 631 (2d Cir. 1979);Norwich Pharmacal Co. v. Sterling Drug, Inc., 271 F.2d 569 (2d Cir. 1959), cert. denied, 362 U.S. 919 (1960);Upjohn Co. v. Schwartz, 246 F.2d 254 (2d Cir. 1957); Smith, Kline & French Labs. v. Clark & Clark, 157 F.2d 725(3d Cir. 1946); Smith, Kline & French Labs. v. Heart Pharm. Corp., 90 F.Supp. 976 (S.D.N.Y. 1950).

By ROSEANN B. TERMINI,* Montgomery CountyMember of the Pennsylvania BarAND AMY MIELE**

Electronic copy available at: http://ssrn.com/abstract=2212473

Copyright And Trademark Issues In The Pharmaceutical Industry 35

marketplace at a lower price the brand name manufacturer loses profits.2 Oftenbrand name manufacturers have no recourse due to federal drug law regulations.3In an effort to have the brand name drug be the only one of its type on the marketfor longer, and thus profit more, brand name manufacturers pursue injunctionsagainst generic manufacturers. A legal basis for these injunctions is copyright andtrademark claims.4Copyright and trademark law protect creativity whereas patent and trade secret

law protect inventions. Specifically, copyright law protects an author’s creative ex-pression of their idea.5 Patent law and trade secret law protect the idea itself (tradesecrets protect commercial information).6 Trademarklaw protects symbols firms use to indicate their prod-ucts or services.7 This article creates a dichotomy be-tween the scientific and the creative and addressesonly copyright and trademark issues within the phar-maceutical industry.A discussion of how similar a generic drug’s label

can be to the brand name drug without infringing thebrand name’s copyrighted label is first. Second, a newdevelopment in counterfeit drugs crossing the borderis addressed. Next, the main issue of whether a genericdrug can be manufactured in the same shape and col-ors as the brand name drug without infringing on thebrand name’s trademark is explored. That involves a discussion of functional fea-tures, what is considered trade dress, and whether substitution of generic drugs forbrand name amounts to passing or palming off. The final discussion involves thegenericide of trademarks; that is, who has and has not fallen victim.

COPYRIGHT ISSUESCopyright law protects an author’s creative expression(s) of one’s ideas, yet not

the ideas themselves.8 If an individual author holds a copyright it lasts for the life ofthe author, plus seventy years.9 If a corporation holds a copyright it lasts for 120years from creation or ninety-five years from publication, whichever expires first.10To obtain a copyright, you need not register for one, but registration does confer cer-tain benefits.11 Copyrights are created as soon as an original expression is fixed in atangible medium.12 The natural rights theory of copyright law says that when youput time into creating something, you should own the rights to it.13 Another policyjustification behind copyright law is that the public must retain the ability to bene-fit from existing copyrighted works, and use those works to create new ones.14

A high creativitythreshold exists forbrand name drugcompanies toachieve and main-tain copyright andtrademark protec-tion in their label-ing, pill shape, colorand trade names.

2. See Watson, 211 F.3d at 26.3. Id.4. See Shire, 329 F.3d 348; Watson, 211 F.3d 21; Ives, 601 F.2d 631.5. See Watson, 211 F.3d at 29.6. See, e.g., Craig Allen Nard & David W. Barnes & Michael J. Madison, The Law of Intellectual

Property 10, 15 (Vicki Been et al. eds., 2nd ed. 2008).7. Id. at 2.8. Id. at 7.9. 17 U.S.C. §302(a) (2012).10. Id. at §302(c)11. Nard et. al, supra note 6, at 7.12. 17 U.S.C. §102(a)13. Watson, 211 F.3d at 29.14. Id.

36 PENNSYLVANIA BAR ASSOCIATION QUARTERLY | January 2013

Although the bulk of this paper contemplates trademark issues in the pharma-ceutical field, a brief foray into copyright issues is warranted. Copyrights are aboutartistic creative expression so copyright law does not overlap much with the pharma-ceutical field. One important area the fields do overlap in is drug labeling. Sufficeit to state that copyright protection can only be achieved for labels if somethingis added to the labels which is creative and which is beyond FDA requirements.Although copyright does protect labeling to the extent it contains more than justdata that may be sufficient for a brand owner that is creative in making its labels.After labeling is discussed one of the most recent developments in the pharma-

ceutical industry is mentioned as are the copyright issues it presents.

Generic LabelingA generic label verbatim copying a brand label is not copyright infringement be-

cause it is necessary under FDA mandates and hence approval of generic drugs anddoes not impede on copyright law’s underlying principals.15 Before generic drugscome to market manufacturers must submit an Abbreviated New Drug Application(ANDA).16 ANDA submissions are quite comprehensive yet do not entail the rigorsof the brand name application.17 The focus of the application is bioequivalence—ensuring the generic is identical to the brand in dose, safety, strength, method ofadministration, quality, and performance.18 In addition to these requirements theFederal Food, Drug and Cosmetic Act and accompanying regulations also mandatethat generic drugs comply with labeling guidelines.19Succinctly stated, labeling is defined as “a display of written, printed, or graphic

matter upon the immediate container of any article” or “accompanying such article”.20The FDA broadly interpreted this to include brochures, booklets, sound recordings,and similar pieces of printed, audio, or visual matter descriptive of a drug.21The labeling at issue in SmithKline Beecham Consumer Healthcare, L.P. v. Watson

Pharm, Inc., was a guide and tape accompanying plaintiff SmithKline’s over-the-counter (OTC) Nicorette-brand gum.22The tape included music and, along with theguide and gum, was a method that aided the consumer in quitting smoking.23 Brandmanufacturers are required to include samples of their labeling in their new drugapplications (NDA).24 Pursuant to this requirement SmithKline submitted its tapeand guide to the FDA, spent two and a half years, and made approximately seventymodifications to meet FDA-approved labeling requirements.25Watson, the generic company defendant, sought to obtain FDA approval for a

generic gum.26The Hatch-Waxman Amendments required the labeling for genericsbe the same as the labeling approved for the brand.27 Thus, Watson’s initial guideand tape were almost identical to SmithKline’s, until SmithKline instituted this ac-

15. Id.16. 21 U.S.C. §355(j)(1).17. See, e.g., 21 U.S.C. §355(j).18. Id. at (j)(2)(A)(iv).19. Id. at (j)(2)(A)(v).20. 21 U.S.C. §321(k) & (m).21. See, e.g., 21 C.F.R. §202.1.22. Watson, 211 F.3d.23. Id.24. 21 U.S.C. §355(b)(1)(F).25. Watson, 211 F.3d at 23.26. Id.27. 21 U.S.C. §355(j)(2)(A)(v).


tion.28 Initially, Watson was enjoined from selling its product relying on a letter fromthe FDA to Watson stating that the labeling does not have to be identical and de-fendants can design their own.29 Subsequently, Watson revised its guide and tape todeviate from plaintiff’s but still be comparable.30 The FDA rejected it and requiredverbatim compliance with the brand labeling materials.31The court held verbatim compliance would not be copyright infringement. First,

they analyzed the purpose of the Hatch-Waxman Amendments, which was to facil-itate, rather than impede, the approval of OTC drugs.32 It took the brand name overtwo years to get their labeling up to specifications. Although the defendant has anexample, and is not starting from scratch, a lengthy period of modifications wouldsurely ensue. Since the generic drug cannot be approved until its labeling is, pa-tients would be without it longer and price competition in the market would bedelayed.33 Next, the court looked to conflict of laws canons that a later date of enact-ment and specificity over broadness should be given priority. Since the CopyrightAct was enacted previous to and was broader than the Hatch-Waxman Amend-ments, the court gave the latter deference.34The court aimed to adhere to adopt the interpretation that preserves the princi-

pal of each law.35 Delaying a generic’s entry into the market contravenes the goal ofthe Hatch-Waxman Amendments.36 The purpose of copyright laws is to encouragecreative expression by bestowing ownership rights to that expression.37 This pur-pose is unharmed by allowing brand labeling to be copied verbatim by generics be-cause the creative expression (labeling) is not just encouraged but required. Brandnames require labels and those labels must meet FDA approval.38The period of exclusivity also bestows exclusive ownership rights for that dura-

tion. Generics do not have that period of exclusivity on the market. That period iswhat makes it acceptable for brand names to expend resources for labeling. It is animportant period because it develops the good will of the company, allows con-sumers to associate the brand with the drug, as it’s the only one of its kind on themarket, and provides a period of exclusive profit.This scenario creates a difficulty for brand name manufacturers to protect them-

selves from copyright infringement. In the alternative it could be opined that thiscase makes it very easy as it essentially eliminates copyright infringement as a causeof action for generic label copying. Aside from putting flashy, superfluous markingson their labeling materials that extend beyond the scope of FDA requirements with-out interfering with them, brand manufacturers cannot do much to avoid genericcopying. Watson illustrates the complexity between copyright law and compliance with

federal drug law regulation. Copyright issues may arise; however Watson illustratesthat federal drug law compliance will trump copyright law. If a generic drug’s marketentry is unduly delayed, the consumer benefit of lower costs and choice are stymied.

28. Watson, 211 F.3d at 23-24.29. Id at 24.30. Id.31. Id.32. Id. at 25.33. Id. at 26.34. Id. at 28, Copyright Act of 1976, 17 U.S.C. §101-805 (2012).35. Watson, 211 F.3d at 27-28.36. Id. at 28, Drug Price Competition and Patent Restoration Act (Hatch Waxman Amendments) §505(j),

21 U.S.C. §355(j).37. Watson, 211 F.3d at 29.38. Id.


Counterfeit DrugsCounterfeit drugs entering the United States have widespread effects for copy-

right infringement and public health. United States v. Articles of Drugs, distinguishedbetween a counterfeit drug and an imitation drug under the Federal Food, Drug,and Cosmetic Act (FDCA). The court noted the FDCA was designed to protectpublic health and consumers and its terms are interpreted broadly to achieve thosepurposes.39 An imitation drug is one that passes off one substance in imitationof another. A counterfeit drug is a drug that simulates another’s label, containerand/or identifying marks.40However, United States Customs Officials cannot always differentiate between le-

gitimate and counterfeit goods.41 To solve that difficulty, goods bearing the labels ofothers are presented to the rights holders for inspection, to determine if infringe-ment is occurring.42 It could be argued that rights holders are entitled to this prac-tice, to be given the opportunity to ensure only legitimate goods of the quality theyhave established are put to market. Alternatively, it could be argued that rightsholders will always claim infringement, even if none exists, in an effort to monopo-lize the industry.Around 2007-2008 United States Customs took the latter approach and enforced

an initiative that had been in effect, but not adhered to, Customs Directive 2310-0081.43 This required the removal of all identifying information and marks fromsamples before providing those samples to the copyright holders for verification.44However, this led to substantial delays in determining whether shipments werecounterfeit or legitimate. It also delayed legitimate goods from getting to market, asthey too had to be veraciously inspected.45In 2012, H.R. 4216 was introduced which would overrule Customs Directive 2310-

008.46 This proposed legislation would require supplying copyright holders withunredacted samples to determine infringement.47 Yet, passage does not appearimminent.48Of course these policies have ramifications for a wide variety of goods, yet the

consequences of counterfeit drugs are far more severe than that of a pair of sneak-ers or a video game. These counterfeit drugs may have the same labels and mark-ings as brand name or American generics, but they have not been FDA approved.This means that they have not undergone rigorous requirements.

TRADEMARK ISSUESAs aforementioned, trademark law protects the symbol(s) a firm uses to indicate

their products and/or services.49 A trademark, unlike a patent, or a copyright, does

39. United States of America v. Articles of Drugs, 601 F.Supp. 392, 398 (D. Neb. 1984).40. Id. at 397.41. Mark Elliot, Saving Trade Secrets (Mar. 28, 2012, 8:58 AM) http://www.politico.com/news/stories/

0312/74585.html (last visited July 9, 2012, 4:05 PM).42. Id.43. Id.44. Id.45. Id.46. Foreign Counterfeit Prevention Act H.R. 4216 112th Congress (ref’d to Committee Mar. 20, 2012).47. Id.48. US Gov. Database of Federal Legislation, H.R. 4216—112th Congress: Foreign Counterfeit Preven-

tion Act, http://www.govtrack.us/congress/bills/112/hr4216 (last visited July 9, 2012 4:11 PM).49. Nard, et. al., supra note 6 at 2.


not expire (with exceptions).50 Trademarks are a product of state and federal law.51However, federal law governs almost all pharmaceutical trademarks, because whena mark is used in interstate commerce, federal law governs it. Trademarks do notnecessarily need to be registered, although registration does confer certain benefitsthat extend beyond the scope of this article. A trademark can be obtained throughcommon law use.52The primary policies behind trademark law are twofold. The first is to prevent

consumer confusion and reduce consumer search costs.53 In the pharmaceuticalfield, more so with Over- the-Counter or OTC (OTC) purchases, this is especiallyimportant. Consumers come to know a brand by their trademark. If the brand is onea consumer identifies with, the mark begins to stand for quality. This is referred toas the good will of the mark owner- making a reliable, quality product. Due to thefact that mark owners know consumers will eventually associate their mark withquality, trademarks also promote a consistent level of quality among trademarkowners.54The next policy behind trademark law is encouraging competitors to develop

their own trademarks and not “free load”.55 Trademark law prevents free loadingand protects the good will of mark owners by creating causes of action for infringe-ment, dilution, and the like. These two policies are exemplified in the first issue dis-cussed below, whether generic drugs should be able to bear the same colors andshapes as the brand name drug. The next issue, genericide, addresses what hap-pens, not when others try to use an established mark, but when a mark owner doesnot protect their own mark.

Generic Use of Pill Shape and ColorA brand name drug company manufactures its drug in a certain shape or color for

a variety of reasons. It may be cost effective, easier to swallow, an advertising gim-mick, or any number of other reasons, or maybe no reason at all.56 Generic drugs aresometimes manufactured in the same shape and color as the brand name drugs.57Themain issue that arises is whether generic drug companies can manufacture theirgeneric drugs in the same shape and color as the brand name drug while avoidingtrademark liability.If the color and/or shape of the drug is functional, or in the alternative is non-

functional and has not acquired secondary meaning, then the color and/or shape ofthe drug is not protected as a trademark and generic manufacturers may manufac-ture the generic drug in the same color and/or shape unless they know or have rea-son to know that manufacturing facilitates passing off by a pharmacist.58This section addresses each part of this rule and consequences stemming from it:

when the shape and color of a drug is considered functional, when secondary mean-

50. Id.51. Id. at 3.52. Id.53. Id. at 19.54. Id.55. Id.56. See Smith, Kline & French Labs. v. Heart Pharm. Corp., 90 F.Supp. 976 (S.D.N.Y. 1950); Smith, Kline &

French Labs. v. Clark & Clark, 157 F.2d 725 (3d Cir. 1946).57. Id.58. See William R. Warner & Co. v. Eli Lilly & Co., 265 U.S. 526 (1924); Shire US Inc. v. Barr Labs. Inc., 329

F.3d 348 (3d Cir. 2003); Ives Labs., Inc. v.Darby Drug Co., Inc., 601 F.2d 631 (2d Cir. 1979); Smith, Kline & FrenchLabs. v. Heart Pharm. Corp., 90 F.Supp. 976 (S.D.N.Y. 1950); Smith, Kline & French Labs. v. Clark & Clark, 157F.2d 725 (3d Cir. 1946).


ing is acquired; when trade dress protection is achieved. Lastly, if a generic drug canuse the same shape and color as the brand name, the question is posed as to whetherthe generic can be substituted for the brand name without raising palming off issues.

Shape & Color as a Functional FeatureThe shape and color of a drug is a functional feature if it is the cheapest means of

production or if it benefits patients in a way other than identifying the source.59Functional features of a mark are not entitled to trademark protection with excep-tions.60 In general, a feature of a mark is functional if it serves a purpose other thanidentifying the source of the product the mark is affixed to.61 Functional features areutilitarian in nature and are necessary for competitors to use to achieve commercialsuccess.62If the shape and color are deemed functional, they are not protected trademarks,

and generic manufacturers can use them. One of the earliest cases involving genericdrug substitution was Smith, Kline & French Labs. v. Clark & Clark. There, defendantClark & Clark manufactured a generic drug almost identical to the brand namedrug.63 The court held the shape, color, and score of the drug were functional be-cause it was the natural shape and color (white) and coating required additionalcost.64 In an earlier case, William R. Warner & Co. v. Eli Lilly & Co., chocolate as an ad-ditive to quinine was held to be functional in part because it gave the substance adistinctive color.65In a later decision, Ives v.Darby the plaintiff, Ives, was a brand name manufacturer

of a powder it sold in capsules.66 Two doses were sold in two colors: pale blue and,red and blue.67 Defendant generic manufacturer Darby purchased empty capsulesof the same colors and put the same corresponding dosage in them.68 The districtcourt held the capsule colors functional for three reasons. First, elderly patients,whom the drug mostly benefited, associated the appearance of a drug with its ther-apeutic effect. Second, patients taking multiple medications often co-mingled themin one container, and then relied solely on appearance to follow the instructions ofthe prescribing physician. Third, the color of a drug proved useful in aiding emer-gency room identification of the type of drug a patient overdosed on.69In Shire US Inc. v. Barr Labs. Inc., Shire manufactured various doses of the drug

Adderall® in different colors.70 The generic manufacturer, Barr, made the samedoses in the same colors.71 The court held that using different colors to signify dif-ferent doses was highly beneficial to the type of people who ingested the drug, peo-ple diagnosed with ADHD.72 The court held the colors functional because they

59. See Shire US Inc. v. Barr Labs. Inc., 329 F.3d 348 (3d Cir. 2003); Ives Labs., Inc. v. Darby Drug Co., Inc.,601 F.2d 631 (2d Cir. 1979); Smith, Kline & French Labs. v. Clark & Clark, 157 F.2d 725 (3d Cir. 1946).60. Ives, 601 F.2d at 643.61. Id.62. Id.63. Clark, 157 F.2d at 727.64. Id. at 730.65. Warner, 265 U.S. at 529.66. Ives Labs., Inc. v. Darby Drug Co., Inc., 601 F.2d 631, 634 (2d Cir. 1979), remanded 488 F.Supp. 394

(E.D.N.Y. 1980), rev’d on other grounds 638 F.2d 538 (2d Cir. 1981), rev’d 456 U.S. 844 (1982).67. Id.68. Id. at 635.69. Ives Labs., Inc. v. Darby Drugs Co., Inc., 488 F.Supp. 394 (E.D.N.Y. 1980), rev’d 638 F.2d 538 (2d Cir. 1981),

rev’d 456 U.S. 844 (1982).70. Shire US Inc. v. Barr Labs. Inc., 329 F.3d 348,351 (3d Cir. 2003).71. Id.72. Id. at 354.


aided patients and school nurses, who distribute the medication to several childrenthroughout the day, in correctly identifying dosage strength.73 Additionally, attimes, ADHD patients require frequent adjusting concerning the correct dosageamount.74 The court considered the testimony of a pharmacy, which opined thathaving the generic in the same color as the brand name increases patient accep-tance of, and comfort with, generic pharmaceuticals.75On the other end of the spectrum is Smith, Kline &French Labs. v. Heart Pharm.

Corp., where the brand or innovator manufacturer expenditures amounted to ap-proximately $900,000 promoting and stocking its revamped pills.76The new pills hada distinctive heart shape, a score in the middle, and originated in two distinctive col-ors based on the dose-pinkish brown and orange.77 In this case, the court held thescore was functional as a bevel that aided in breaking the pill for a lower dose; how-ever, the shape and color of the pill were not functional.78 Unlike the above cases,the generic manufacturer was enjoined from using them. The reasoning behind thecourt’s holding was that the distinctive shape and color served no other purposeexcept to identify the brand manufacturer as the source of the product.79These types of cases typically arise when the brand name manufacturer institutes

a legal proceeding to enjoin the generic manufacturer’s use of the same shape andcolors. The aforementioned cases depict that shape and color of a drug will be heldfunctional, and open for generic use, when they do more than identify the source ofthe product. The history of the law in this area has been consistent. However, Darbyand Shire suggest a presumption of functionality is developing. The reasoning inthose cases is very general—color is functional in identifying overdose, differentiat-ing doses, and patient/pharmacy recognition of the generic product.80 These jus-tifications could be imposed on almost any set of facts. Additionally, Shire pointsout that the Supreme Court supports the conclusion of functionality reached intheir opinion and in Ives.81 The Supreme Court’s most recent trade dress decisions,albeit not regarding pharmaceuticals, caution against over-extension of trade dressprotection.82

Shape & Color as Trade Dress

Shape and color are protected as trade dress, and unavailable for generic use ifthey are non-functional and have acquired secondary meaning.83 Trade dress en-compasses product packaging and product design and serves to identify a product’ssource.84 The shape and colors of a pill are considered product design.85 The factthat the pill is ingested does not impact.86

73. Id.74. Id. at 355.75. Id.76. Smith, Kline &French Labs. v. Heart Pharm. Corp., 90 F.Supp. 976, 977 (S.D.N.Y. 1950).77. Id.78. Id.79. Id. See also Ciba-Geigy Corp v. Bolar Pharm. Co., 547 F.Supp. 1095 (D. N.J. 1982) where shape and size

of drug was held non-functional because no medical or business considerations compelled the choice;and Shire, 329 F.3d at 358 where competitors may be free to copy the color of a pill where the color iden-tifies the kind of medicine the pill is, i.e. a blood thinner.80. Shire, 329 F.3d at 354; Ives, 488 F.Supp. at 396.81. Id. at 358.82. Id.83. Ives, 601 F.2d at 642-643; Norwich, 271 F.2d at 571; Heart, 90 F.Supp. at 977.84. Shire, 329 F.3d at 353.85. Lanham Trade-Mark Act §43(a), 15 USCA§1125(a).86. Id.


Product packaging is inherently distinctive; however, product design is not.87 “Inher-ently distinctive” applies if it was selected by the manufacturer to distinguish itsproduct from another manufacturer.88 There is no automatic presumption of dis-tinctiveness for product design because it can be functional.89 However, if it is notfunctional, product design can acquire distinctiveness through secondary mean-ing.90 Secondary meaning establishes that there is sufficient consumer recognitionof the mark or dress as a source indicator that the source meaning dominates thedesign or descriptive meaning.91 This is a complex aspect to prove in trademarklaw.92 Proof of secondary meaning occurs through consumer testimony, surveys,sales figures, as well as circumstantial evidence.93In the Heart decision where colors and heart shape of pills were found non-func-

tional, the court found secondary meaning.94 “Druggists, physicians, students ofpharmacy, wholesale distributors, and even laymen, recognize plaintiff’s tablets bytheir combination of shape and colors.95”The case hinged on recognition.96Yet, in Norwich Pharmacal Co., where defendant used the same pink color for its

generic liquid medicine that plaintiff used for its brand name, the court did notgrant an injunction.97 Although the color was non-functional it had not acquiredsecondary meaning as a source indicator and consequently was not entitled to tradedress protection.98Ives detailed that, “imitation of physical details and designs of a competitor’s

product may be actionable, if the particular features imitated are “non-functional” andhave acquired secondary meaning.99 The court examined one of the forms of circum-stantial evidence used to show secondary meaning, copying-in-fact. The argumentis that defendant’s copying, in itself, constitutes evidence of secondary meaning be-cause they were trying to trade on the good will the brand built.100 Good will wouldnot exist if consumers did not associate the pill design with the brand manufacturer.One argument a defendant may postulate in these types of cases is that granting

protection to shapes and colors creates monopolies.101 It is argued that a genericcompany would not have color availability.102 This argument was found by multiplecourts to be unpersuasive because, along with primary colors, endless color combi-nations are available.103 Consumers do not receive prescription pills in wholesalepackaging; therefore, containers, shape, color, and stamps or markings on pills arethe only means of product identification by manufacturers to consumers.104

87. See Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (1992); Wal-Mart Stores, Inc. v. Samara Brothers,Inc., 529 U.S. 205 (2000).88. Wal-Mart, 529 U.S. at 209.89. Id.90. Id.91. Id. See also Shire, 329 F.3d at 353 where trade dress protection only extends to incidental, arbitrary,

or ornamental product features which identify product’s source.92. Nard et. al., supra note 6, at 35.93. Id.94. Heart, 90 F.Supp. at 977.95. Id.96. Id. at 976.97. Norwich Pharmacal Co. v. Sterling Drug, Inc., 271 F.2d 569 (2d Cir. 1959), cert. denied, 362 U.S. 919

(1960).98. Id. at 571.99. Ives, 601 F.2d at 642-643.100. Id. at 643.101. Morrissey v. Proctor & Gamble Co., 379 F.2d 675 (1st Cir. 1967).102. Id.103. Id.; Ives, 601 F.2d at 643.104. Ives, 601 F.2d at 643.


The shape and color of a pill are considered product design and product designis a type of trade dress protected by trademark law. Product design is not inherentlydistinctive, as product packaging is, yet can acquire distinctiveness through sec-ondary meaning. Some courts have in essence rewarded brand name manufactur-ers who create good will with consumers by granting protection to non-functionalpill designs that acquired secondary meaning.

Generic Substitution of Pioneer or Brand Name ProductRegardless of whether a brand drug’s shape and colors are functional, or have ac-

quired secondary meaning, liability might arise for use of the identical shape andcolor(s) if use results in “passing off”.105 Passing off is an unfair competition claimencompassing a variety of commercial conduct that is likely to cause confusionabout source.106 The cases discussed below involve generic substituting in place ofbrand products when brand pharmaceuticals were ordered or selling generic drugsyet representing it as brand. This is also termed palming off.107 When a physicianwrites a prescription either: 1) do not substitute or 2) substitution allowed is checked.This determines how the pharmacist fills the prescription.108The decision of William R. Warner & Co. v. Eli Lilly & Co., provides an example of

directly passing off where generics were sold yet misrepresented as brand.109 Sales-men for Quin Coco, the generic of Coco Quinine, informed pharmacists the genericcould be substituted for the brand without danger of detection.110They also pointedout that doing so would enhance profits because the generic was sold to pharma-cists at a lower price; however in representing it to customers as the brand, phar-macists could sell it at a higher price.111 Pharmacists did engage in this practice.112The court held this was direct inducement.113 Ultimately, generic packaging re-quired labeling which clearly distinguished generic from brand and affirmativelystated that generics could not be sold as brand or used to fill orders that requiredbrand only.114 The court reasoned that, although it was lawful for defendant to imi-tate the brand goods, they must sell them as their own.115 Generic manufacturerscannot palm their goods off to the public as the goods of their brand competitor be-cause the brand manufacturer is entitled to the good will they created and the pub-lic is entitled to distinguish between goods.116The Heart decision was a case of indirectly passing off.117 Defendants Heart Phar-

maceutical and others used pamphlets to advertise the similarity of the generic tothe brand and ensured “color guaranteed.118” Pharmacists, on several occasions,filled prescriptions that required brand with generic.119 The court found that Heartdid “pass off” the product as a brand and opined, “The wrong is in designedly en-

105. See William R. Warner & Co. v. Eli Lilly & Co., 265 U.S. 526 (1924); Ives Labs., Inc. v. Darby Drug Co.,Inc., 601 F.2d 631 (2d Cir. 1979); Upjohn Co. v. Schwartz, 246 F.2d 254 (2d Cir. 1957); Smith, Kline & FrenchLabs. v. Heart Pharm. Corp., 90 F.Supp. 976 (S.D.N.Y. 1950).106. Nard et. al., supra note 6, at 193.107. Id. at 194.108. William R. Warner & Co. v. Eli Lilly & Co., 265 U.S. 526, 530 (1924).109. Id.110. Id.111. Id.112. Id.113. Id. at 531.114. Id. at 532-533.115. Id. at 531.116. Id.117. Smith, Kline &French Labs. v. Heart Pharm. Corp., 90 F.Supp. 976 (S.D.N.Y. 1950).118. Id. at 977.119. Id. at 978.


abling the dealers to palm off the preparation as that of plaintiff.”120 The court rea-soned that the possibility of substitution was presented to the pharmacists by thepamphlets.121 Similar to the court in Warner the court here also admonished defen-dants for trying to “avail themselves of the favorable reputation” that plaintiffs“painstakingly established”.122Subsequently, Upjohn Co. v. Schwartz, 246 F.2d 254 (2d Cir. 1957), presented nearly

an identical factual situation. Defendant Schwartz distributed cards to pharmacistslisting plaintiff Upjohn Company’s brand drugs and alongside the comparablegeneric Schwartz made.123 There was no proof the pharmacists actually substitutedthe drugs, and Upjohn Company had not established secondary meaning, nonethe-less the court held, as in Heart, this was indirectly “passing off”.124 The court en-joined Schwartz from indirectly representing that their product may be substitutedfor Upjohn Company’s when the brand is prescribed. They also required a notice beattached to the pill bottles clarifying the contents are not to be sold or dispensed asUpjohn Company’s brand product.125In Ives v. Darby, where capsule colors were deemed functional, defendant Darby

promoted their generic as comparable to the brand, specifically referring to the color.126There were numerous instances of improper substitution by pharmacists.127 Thecourt held the colors made substitution easy and, since Darby could have used al-ternate colors and did not, the court admonished them for deliberately imitating thebrand name.128Nearly all “passing off” cases cited Hostetter Co. v. Brueggeman-Reinert Distilling Co.,

where the court stated, “One who induces another to commit a fraud and furnishesthe means of consummating it is equally guilty and liable for the injury.”129 After theearly cases the Lanham Act amended its section on contributory infringement to in-clude this occurrence, stating in relevant part “manufacturer [is] liable if he sug-gested, even if only by implication, that a retailer fill a bottle with the generic cap-sules and apply brand mark to the label, or continued to sell capsules containing thegeneric drug which facilitated this to a druggist whom he knew or had reasons toknow was engaging in the practices just described.”130A common thread in these cases is to consider the good will and reputation of the

brand manufacturer. The court protects those assets, especially when there is evi-dence that the generic manufacturer deliberately imitated or induced substitution.The passing off unfair competition cause of action prevents that ramification frombecoming reality by not allowing substitution unless the generic label has an affir-mative disclaimer and the prescribing physician explicitly sanctions.

Trademark GenericideTrademarks have the potential to last eternally if used continuously, in commerce,

and in a source-identifying manner in connection with the same product(s).131

120. Id.121. Id.122. Id.123. Upjohn, 246 F.2d at 256.124. Id. at 258.125. Id. at 259.126. Ives Labs., Inc. v. Darby Drug Co., Inc., 601 F.2d 631, 636 (2d Cir. 1979), remanded 488 F.Supp. 394

(E.D.N.Y. 1980), rev’d on other grounds 638 F.2d 538 (2d Cir. 1981), rev’d 456 U.S. 844 (1982).127. Id.128. Id.129. Hostetter Co. v. Brueggeman-Reinert Distilling Co., 46 Fed. 188, 189 (C.C.E.D. Mo 1891).130. 15 U.S.C.A. §1114.131. Nard et. al., supra note 6, at 19.


Genericide is the death knell of a trademark. It occurs when there is such generalextensive use of the trademark by the consuming public that the trademark nolonger serves to identify the source of the product; rather it identifies the product it-self.132 The mark becomes a generic word for the product. Genericide is not a victimless occurrence. The company that falls victim to it de-

veloped such good will, and marketed so well, that their name became synonymouswith the product. However, in essence the exclusive right to use the trademark is lost.In the landmark decision of Bayer Co., Inc., v. United Drug Co., the Bayer company

forfeited the right to the exclusive use of the trademark ‘Aspirin’ to genericide.133Bayer instituted legal proceedings against United Drug Company to enjoin themfrom using their trade name Aspirin.134 United had begun using the trade nameafter Bayer’s patent for acetyl salicylic acid, the drug associated with Aspirin, ex-pired.135 The court, in an opinion written by Learned Hand, held that Aspirin hadbecome synonymous with the drug itself and thus belonged to the public domainfor all to use.136 The test for genericide is what the primary significance of the wordis to the purchasing public.137 The court acknowledged that chemists, physicians,and retail druggists associated Aspirin with the source of the drug, Bayer.138 Thegeneral consuming public, however, did not. They used the word interchangeablywith the name of the chemical compound in requesting it from their physicians.Additionally, the court pointed out that when Bayer began bottling tablets after itmade the switch from powder, the bottles were labeled ‘Aspirin’ and had no indica-tion of the manufacturer from which they came.139 The bottles were modified toinclude “Bayer” several years later, however, the court determined the term had al-ready passed into the public domain.140 This was the second time genericide struckBayer. A lesser-known instance that occurred around the same time was whenBayer lost its trademark for heroin141. Heroin was originally marketed as an OTCcough suppressant.Genericide remains a risk for brands today. However, with the vast expansion of

technology since the times of Bayer genericide, it is less of a concern. Companies areaware when their trademarks are crossing from ubiquitous to generic, as Bayer was;however, now there are advertising campaigns to prevent it. Brands resemblingTylenol and Band-Aid still maintain their trademarks despite widespread associa-tion of the term with the product. For example, Band-Aid changed its theme songfrom, “I’m stuck on Band-Aid” to “I’m stuck on Band-Aid brand.142” The court inBayer placed emphasis on consumers using Aspirin as the word for the drug be-cause they were not educated enough to pronounce or remember the compoundname.143 Perhaps this reasoning would fail today due to consumer sophistication.

132. See Kellogg Co. v.Nat’l Biscuit Co., 305 U.S. 111 (1938) where brand name “Shredded Wheat” becamegeneric name for a type of cereal.133. Bayer Co., Inc., v. United Drug Co., 272 F. 505 (S.D.N.Y. 1921).134. Id. at 511.135. Id.136. Id. at 512.137. Id. at 510.138. Id.139. Id. at 510-511.140. Id. at 512.141. Michelle Maltais, Apple’s iPad could become the next ‘heroin’ (Apr. 9, 2012), http://articles.

latimes.com/2012/apr/09/business/la-fi-tn-ipad-name-becoming-generic-20120409 (last visited July 9, 20124:20 PM).142. The Associated Press, Brand Names: Will ‘iPad’ become generic word for tablet? (Apr. 8, 2012),

http://usatoday30.usatoday.com/money/companies/story/2012-04-07/apple-ipad-generic-name/54110024/1 (last visited Oct. 1, 2012 2:00PM).143. Bayer, 272 F. at 511


CONCLUSIONIntellectual property permeates pharmaceuticals, protecting the inside, in be-

tween, and outside. Patents protect chemical compounds, trademarks protect cap-sules, and copyrights protect labeling. Intellectual property encourages creativity,even in a science-dominated industry such as pharmaceuticals. However, the man-dates of the United States Federal Food, Drug and Cosmetic Act in terms of pro-tecting public health and consumer safety would usually usurp the goals of intel-lectual property to protect company good will and rights.This point was exemplified in Watsonwhere generic labeling was required to copy

brand labeling verbatim in order for FDA approval for eventual marketplace entry.Functionality is presumed, at the expense of brand good will, to make generics uni-form with brand, ensuring consumer comfort with the use of generic pharmaceuticals.Of course, the two fields of drug law regulation and intellectual property protec-

tion are not constantly at odds, and an interpretation that furthers the goals of eachcan be achieved. If trade dress is non-functional and consumers identify it with thebrand, protection is granted, and safety and reliability will ensue. Deliberate imita-tion or inducement, without the express authorization by a prescribing physicianand an affirmative disclaimer asserting generic status, is not permitted. Ubiquitoustrademarks vanish to expand the public domain and avoid consumer confusion.Although the two fields clash, and the Federal Food and Drug mandates may win

the day, copyright and trademark law remains integral in the pharmaceutical in-dustry. Trademark issues remain critical regulating functions, securing the identityof brand names consumers have come to trust, and protecting the products theycreate.

SSRN-Id2212473 - Copyright and Trademark Issues in the Pharmaceutical Industry

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