Tuesday, April 5, 2016

Philippines Pharma trademark litigation

Image result for natrapharmA Philippines pharma dispute illustrates a common emerging markets problem of trademark linkages.  It also shows the complexities of litigating in the Philippines.

Natrapharm, Inc. makes a heart and stroke medicine called ZYNAPSE. They sued Zuneca Pharmaceutical for trademark infringement over a product called ZYNAPS. Zuneca defended that they could sell the product pursuant to a marketing approval granted in 2003 prior to the grant of Nutrapharm's ZYNAPSE trademark. 

The case started first over whether a temporary restraining order (TRO) could be granted against Zuneca. The Regional Trial Court (RTC) initially rejected Natrapharm’s application which was confined by the the Court of Appeals (CA) on the basis that Natrapharm didn't have a clear prior IP right. At a full hearing the CA then reversed its position grating Natrapharm's case with a final injunction.  Zuneca then appealed through first a motion for reconsideration (MR), then after they lost through a Supreme Court Petition for Review. Meanwhile the RTC made its decision on the merits of the case in favour of Natrapharm. Thus the SC ended up in the difficult position of trying to decide the ultimate appeal on the TRO point, after the main trial was over. Of course infringement was then moot so the SC held for Natrapharm. Zuneca's proper remedy was to appeal the main case.

Two points can be seen from this. First the question of what rights are conferred by a marketing approval and how to handle trademark conflicts. It is extremely common to find this in Asian markets. Companies don't seem to realize that they need BOTH marketing approvals and trademarks, that they are not alternatives. Courts then get confused over which prevails.

Secondly the Philippines courts entertain endless appeals which mainly serve to drag cases out, usually without penalty. In the Philippines the mantra of 'justice delayed is justice denied' is widely ignored.  This case began many years ago, and the parties and court seemed happy to fight out a preliminary issue endlessly. If a TRO cannot be decided quickly it should not be granted at all, and the appellate courts ought to follow that, and penalize parties and litigants to prevent them clogging up the court system pointlessly. 

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