Passing off - Glaxo Wellcome UK Ltd. v Sandoz Ltd.

Jane Lambert

High Court of Justice, Business and Property Courts of England and Wales, Intellectual Property List, Chancery Division (Lord Justice Arnold)  Glaxo Wellcome UK Ltd and Another  v Sandoz Ltd and Others [2019] EWHC 2545 (Ch) (4 Oct 2019)

This was an action for passing off. The claimants alleged that the defendants were passing off their dry powder inhalers ("DPI") as and for the claimants' by presenting and packaging them in purple. The action came on for trial before Lord Justice Arnold in July 2019. His lordship dismissed the claim in his judgment of 4 Oct 2019.

The Claimants
The claimants, Glaxo Welcome UK Ltd. and Glaxo Group Ltd. have marketed a combination of salmeterol and fluticasone for the treatment of asthma and chronic obstructive pulmonary disease ("COPD") under the trade mark Seretide in a proprietary DPI branded Accuhaler since 1999 and in a metered dose inhaler ("MDI") branded Evohaler since 2000. Both the Seretide Accuhaler and the Seretide Evohaler are coloured two shades of purple. In the case of the Evohaler, the shades vary with the dose of fluticasone. Both are sold in packaging featuring a shade of purple. Again, the shade varies with the dose of fluticasone.

The Defendants
Sandoz Ltd, the first defendant, Sandoz International GmbH, the second defendant and Sandoz AG, the fifth defendant have launched a branded generic competitor to the Seretide Accuhaler under the trade marks AirFluSal Forspiro. The Forspiro is a proprietary DPI designed by the Vectura Group Plc, the sixth defendant and Vectura Delivery Devices Lts, the seventh defendants. The AirFluSal Forspiro DPI is largely coloured a shade of purple and is sold in packaging featuring a shade of purple.


The Claim
The claimants claim that the defendants have passed off the AirFluSal Forspiro as being 
  • connected in the course of trade with Glaxo and/or 
  • equivalent to the Seretide Accuhaler through the get-up and packaging of the AirFluSal Forspiro. 
Although the claimants pleaded case also relies upon certain other aspects of the get-up and packaging, by the end of the trial the only feature they really relied upon was the use of purple. 

Other Issues
There was no dispute that the sixth and seventh defendants would have been jointly liable for any passing off. It was also contended that the third defendant, Aeropharm GmbH and the fourth, Hexal AG, which are members of the Sandoz group of companies, were also jointly liable.

Procedural History
The action was launched in 2015 but did not come on for trial before Lord Justice Arnold until July 2019.  According to the judge, "both sides have approached the matter as if it were a State Trial: there was a great deal of interlocutory skirmishing which continued right up to trial, a large volume of both documentary and witness evidence was produced and I received extensive written and oral submissions."  The learned Lord Justice delivered judgment on 4 Oct 2019 after a 9-day trial.

The Law
Lord Justice Arnold took as his starting point Lord Oliver's well-known speech on the elements of an action for passing off in  Reckitt & Colman (Products) Ltd v Borden Inc [1990] 1 WLR 491 at 499 (see paragraph [156[ of his judgment). He continued that the date as at which the three elements identified above must be assessed is the date when the defendant commences the acts complained of relying on the decision of the Privy Council in Cadbury-Schweppes v Pub Squash Co [1981] RPC 429, [1981] 1 All ER 213, [1981] 1 WLR 193, [1981] WLR 193, [1980] UKPC 30.  He referred to Mr Justice Jacob's judgment in Hodgkinson & Corby Ltd v Wards Mobility Services Ltd [1994] 1 WLR 1564 at 1569-1570:

"I turn to consider the law and begin by identifying what is not the law. There is no tort of copying. There is no tort of taking a man's market or customers. Neither the market nor the customers are the plaintiff's to own. There is no tort of making use of another's goodwill as such. There is no tort of competition. …
At the heart of passing off lies deception or its likelihood, deception of the ultimate consumer in particular. Over the years passing off has developed from the classic case of the defendant selling his goods as and for those of the plaintiff to cover other kinds of deception, e.g. that the defendant's goods are the same as those of the plaintiff when they are not, e.g. Combe International Ltd v. Scholl (UK) Ltd [1980] R.P.C. 1; or that the defendant's goods are the same as goods sold by a class of persons of which the plaintiff is a member when they are not, e.g. Erven Warnink Besloten Vennootschap v. J. Townend & Sons (Hull) Ltd [1979] A.C. 29 (the Advocaat case). Never has the tort shown even a slight tendency to stray beyond cases of deception. Were it to do so it would enter the field of honest competition, declared unlawful for some reason other than deceptiveness. Why there should be any such reason I cannot imagine. It would serve only to stifle competition.
The foundation of the plaintiff's case here must therefore lie in deception…"

At paragraph [159] the judge considered the need for misrepresentation referring to Phones4u Ltd and another v Phone4u.Co.UK and others  [2006] EWCA Civ 244 (19 May 2006)  [2006] EWCA Civ 244, [2007] RPC 5:

"[16.]  The next point of passing off law to consider is misrepresentation. Sometimes a distinction is drawn between 'mere confusion' which is not enough, and 'deception', which is. I described the difference as 'elusive' in Reed Executive Plc v Reed Business Information Ltd [2004] RPC 40 I said this, [111]:

'Once the position strays into misleading a substantial number of people (going from 'I wonder if there is a connection' to 'I assume there is a connection') there will be passing off, whether the use is as a business name or a trade mark on goods.'

[17] This of course is a question of degree—there will be some mere wonderers and some assumers—there will normally (see below) be passing off if there is a substantial number of the latter even if there is also a substantial number of the former.
[18] The current (2005) edition of Kerly contains a discussion of the distinction at paras 15–043 to 15–045. It is suggested that:

'The real distinction between mere confusion and deception lies in their causative effects. Mere confusion has no causative effect (other than to confuse lawyers and their clients) whereas, if in answer to the question: "what moves the public to buy?", the insignia complained of is identified, then it is a case of deception.'

[19] Although correct as far as it goes, I do not endorse that as a complete statement of the position. Clearly if the public are induced to buy by mistaking the insignia of B for that which they know to be that of A, there is deception. But there are other cases too—for instance those in the Buttercup case. A more complete test would be whether what is said to be deception rather than mere confusion is really likely to be damaging to the claimant's goodwill or divert trade from him. I emphasise the word 'really'."

Lord Justice Arnold added that a substantial number of members of the public must be misled as Mr Justice Jacon noted in Neutrogena Corp v Golden Ltd [1996] RPC 473 at 493-494:

"The judge must consider the evidence adduced and use his own common sense and his own opinion as to the likelihood of deception. It is an overall 'jury' assessment involving a combination of all these factors, see 'GE' Trade Mark [1973] R.P.C. 297 at page 321. Ultimately the question is one for the court, not for the witnesses. It follows that if the judge's own opinion is that the case is marginal, one where he cannot be sure whether there is a likelihood of sufficient deception, the case will fail in the absence of enough evidence of the likelihood of deception. But if that opinion of the judge is supplemented by such evidence then it will succeed. And even if one's own opinion is that deception is unlikely though possible, convincing evidence of deception will carry the day. The Jif lemon case (Reckitt & Colman Products Ltd. v. Borden Inc. [1990] RPC 341) is a recent example where overwhelming evidence of deception had that effect. It was certainly my experience in practice that my own view as to the likelihood of deception was not always reliable. As I grew more experienced I said more and more 'it depends on the evidence.'"

He observed at [162] that it is not fatal to a claim for passing off that there is no evidence of actual confusion, but where the rival goods have been sold side by side for a long period the absence of such evidence is very material unless satisfactorily explained: see Kerly's Law of Trade Marks and Trade Names (16th ed) at 23-020.

While acknowledging that it is possible for a claimant to acquire goodwill in a shape or colour, the judge warned that it was not easy for the reason Mr Justice Jacob gave in Hodgkinson:

"The plaintiff's problem of proof when there is no manifest badge of trade origin such as a trade mark becomes hard. This is so in the case of a descriptive or semi-descriptive word such as 'camel hair'. It is perhaps even more so where one is concerned simply with the appearance of the article with no self-evident trade origin frill or embellishment. For people are likely to buy the article because of what it is, not in reliance on any belief of any particular trade origin. This is so whether they buy it for its eye-appeal (e.g. glass dogs) or for what it does (e.g. the copy Rubik cube…

The plaintiff's problem of proof lies in relation to the first two items of the trinity, which are related. It is not good enough for him to show that his article is widely recognised – has a 'reputation' in that general sense. …

I believe that [Learned Hand J in Crescent Tool Co v Kilborn & Bishop Co (1917) 247 F 290 at 300-301] exactly encapsulates what must be shown when the plaintiff is complaining, in a passing off action, about a copy of his product as such. Is the public 'moved to buy by source?'

It is, I think, because the difficulties of proof are so great that successful cases of passing off based on the shape of goods are so rare."

Similar observations had been made by Mr Justie Floyd in Numatic International Ltd v Qualtex Ltd [2010] EWHC 1237 (Ch), [2010] RPC 25 and Mr Justice Walton in Rizla Ltd v Bryant & May Ltd [1986] RPC 389.

Claim of a Connection in the Course of Trade with Glaxo
Lord Justice Arnold said at [192]: 

"In order to succeed in either of their claims, Glaxo must demonstrate that, at the relevant date, the feature of get-up they rely upon, namely the colour purple, was distinctive of Seretide in the mind of the relevant public, either HCPs or patients. For the purposes of the first claim, they must show that the colour was distinctive of the trade origin of Seretide. For the purposes of the second claim, they must show that the colour was distinctive of the relevant characteristics of the Seretide Accuhaler."

The claimants produced marketing materials, patient leaflets and market survey evidence in support of their contention that the colour purple was distinctive of Seretide in the minds of health care professionals and patients. The judge analysed those materials and found no evidence that the colour purple was distinctive in the minds of healthcare professionals.  As for patients, he said at [265]:

"I am not persuaded that there is any likelihood of patients being confused into thinking that AirFluSal Forspiro comes from the same origin as Seretide. But if I was in any doubt, the state of the evidence would resolve it. Given the lengthy period during which AirFluSal Forspiro has been on the market, the substantial sales of AirFluSal Forspiro and the likelihood that, if there had been any confusion, Glaxo would have found evidence of it, I conclude that the reason why there is no evidence of confusion is, as Mr Crompton recognised, that there is no confusion."

Claim to Equivalence
The evidence of misrepresentation as to equivalence among health care professionals or patients was no more compelling.  His lordship observed at [288]:

"As counsel for the Defendants submitted, it is inherently improbable that patients would make any assumptions as to the characteristics of AirFluSal Forspiro inhalers based on their colour. There is no reason why patients should make any assumption as to the delivery mechanism, and as discussed above they would find out that it was different as soon as they tried to use it even if they had somehow not been made aware of that before. Nor is there any reason for patients to be concerned as to whether or not there is more than one strength of AirFluSal Forspiro. Few patients would be aware of the need for downwards titration, and those that were aware would rely upon their prescribers and dispensers to ensure that they received the appropriate treatment. Equally, few patients would be aware of the existence and significance of differing marketing authorisations, and those that were aware would rely upon their prescribers and dispensers. It is therefore unsurprising that there is no evidence that any patients have been, or are likely to have been, confused as to the characteristics of the AirFluSal Forspiro, let alone that this is due to its colour."

Finally, the claimants complained that the defendants were reckless as to whether members of the relevant public would be deceived into believing that the AirFluSal Forspiro was connected in the course of trade with Glaxo and/or equivalent to Glaxo's product.   The Lord Justice rejected that contention:

"There is nothing in the Defendants' state of mind at the time of developing and launching the AirFluSal Forspiro that lends any support to the claim of passing off. To the contrary, given that it is Glaxo's own case that Sandoz were knowledgeable about the relevant market, the evidence supports the case advanced by the Defendants at trial that the use of the colour purple on the AirFluSal Forspiro would be perceived by HCPs and patients as indicating the combination of active ingredients it contained. It can now be seen that there never was any proper basis for the charge of recklessness. It follows that, as the Defendants submit, the entire investigation into the Defendants' state of mind has been a complete waste of time and money."

Joint Liability
As noted above, it was common ground that the Vectura companies would have been jointly liable for passing off but there was no evidence of a common design involving Aeropharm or Hexal.

Further Information
Anyone wishing to discuss this case can call me on 020 7404 5252 during office hours or send me a message through my contact page.


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