“Farmak” VS “Darnitsa”: the battle for “Corvalol”
How the long-term dispute began, the Supreme Court put an end to the conflict and how its decision could affect other similar cases EP.
The dispute over Corvalol between the pharmaceutical companies Farmak and Darnitsa has been going on for almost 20 years.
At one time, courts of different instances took up the consideration of the case, but the final point in this story could not be put in any way.
Recently, the Supreme Court satisfied the complaint of the Darnitsa company and canceled the recognition of the Farmak company’s well-known trademark Corvalol Corvalolum. The latter is not satisfied with such a decision, so the company plans to continue fighting for its rights in the European Court of Human Rights.
What is “well-known”, how did the long-term dispute begin, what claims do companies make to each other and what can such a precedent lead to?
The history of “Corvalol” from “Farmak”
The sedative Corvalol has been known for a long time and is widely used in Ukraine. So much so that often its name is identified with any sedative drug.
By itself, “Corvalol” is a generic (a copy that, in terms of therapeutic efficacy and safety, corresponds to the original – EP) for the drug “Valocordin”. The latter has been produced in Germany since the 1950s and is present on the Ukrainian market only as a drug from German manufacturers.
The Ukrainian generic of a German drug called Corvalol (the first batch was called Kardivalol) was developed and put on the market, then still in the Soviet Union, by employees of the Kyiv Chemical and Pharmaceutical Plant named after. M. V. Lomonosov in the distant 1960.
After the collapse of the Soviet Union and the beginning of the process of privatization of state-owned enterprises, Farmak became the assignee of the aforementioned Kyiv plant. With the acquisition of Independence, this company has already continued to produce all the drugs previously produced at the plant. Including Corvalola.
In 1993, Farmak filed an application for trademark registration (TM) Corvalol Corvalolum, and in 1996 its registered. Since that time, the company has twice extended the validity of the trademark certificate, the next term of which expires on May 31, 2023.
The use of the name “Corvalol Corvalolum” by Farmak is confirmed by the packages produced by them from 1991 to 2002 inclusive.
At the end of 2004, the Court of Appeal of the Ministry of Economy even gave Corvalol Corvalolum the status of a “well-known trademark”. That is, recognizable among consumers for a long time. The owner of such a TM gets extended opportunities to prohibit the registration of such trademarks by other companies.
Even before that, the production of a drug similar to Corvalol was launched by the pharmaceutical company Darnitsa. In 2005 she received certificate on registration of TM “Korvalol-Darnitsa”, an application for which was submitted back in August 2003.
In Ukraine, it is forbidden to register trademarks with identical names, but Darnitsa managed to do this thanks to the addition of its company name to the name.
The dispute over Corvalol
Litigation on Corvalol began in 2004. And for almost two decades, pharmaceutical giants have been producing the same sedative drug in the cheap segment (the cost of a Corvalol bottle, depending on the volume, is 20-30 UAH) with almost identical names.
In 2017, Farmak re-applied to the Appellate Chamber of the Ministry of Economy with a request to grant the “Corvalol Corvalolum” mark the status of a “well-known trademark”. And such a decision was made.
“The active use of the mark “Corvalol Corvalolum” in Ukraine and abroad began in 1996. In the period from 2000 to 2002, 71.683 million bottles were sold in Ukraine, and in total for the period from 2000 to 2017 – 239.189 million bottles» noted in circulation Farmak.
In 2017, the retail sales of Corvalol produced by Darnitsa amounted to UAH 43 million, and Farmak — UAH 44 million. According to Forbes-Ukraine, the volume of the pharmacy market for sales of drugs called Corvalol over the past year exceeded $12 million.
Despite the low cost of the drug, the sales volumes are amazing. For this money of consumers, the real struggle began.
Having received the decision of the Appeals Chamber of the Ministry of Economy in May 2017, Farmak went on the attack. In August of the same year, the company applied to the Kyiv Economic Court with a claim to invalidate the registration of the mark for goods and services “Korvalol-Darnitsa”.
“There is no monopoly on this drug, never was and cannot be. Farmak stands for civilized competition and defends its rights to the well-known Corvalolum Corvalolum brand. We defend our right to the designation.
That is, we are not talking about any monopoly on the drug itself. It can be produced by any manufacturer that proves its quality and effectiveness and passes all the necessary licensing procedures, but under a different name, under its own brand.”, Dmitry Taranchuk, Director of Legal Support of the company, will explain these actions in 2019.
Darnitsa did not want to sit on the defensive, and responded with a lawsuit in which they asked the Kyiv Economic Court to invalidate the decision of the Appeals Chamber of the Ministry of Economy of 2017 to give the Corvalol Corvalolum sign the status of a “well-known trademark”.
“The first series of Corvalol was released in the USSR in 1959. In fact, this is a copy of the German drug “Valocordin” without the fourth ingredient – hop vegetable oil. This drug was produced by 70 Soviet factories in the 60-70s. Therefore, no company can claim monopoly ownership of TM “Corvalol”, says Vasily Gubarets, director of corporate communications at Darnitsa.
Both cases reached the highest authorities. And in both cases they sided with Darnitsa.
Initially, in 2019, the Supreme Court recognized the company’s right to own the Korvalol-Darnitsa trademark, in 2022 the same court stood on the side “Darnitsa” in an attempt by “Farmak” to cancel the registration of TM “Korvalol-Darnitsa”. As an argument, the latter used precisely the fact that the mark “Corvalol Corvalolum” had the status of “well known”.
The point in the confrontation between Darnitsa and Farmak for Corvalol on the Ukrainian market on January 18, 2023 was put by the same Supreme Court, upheld the complaint the first company and canceled the recognition in 2004 TM “Corvalol Corvalolum” is well known.
However, this is not the end.
What could be the consequences for Farmak and Darnitsa
At Farmak reacted strongly to the decision of the Supreme Court and stated that they “will continue to protect their intellectual property rights with all national and international remedies.” So far, this means a lawsuit to the European Court of Human Rights.
Dmitry Taranchuk believes that the Corvalol story is the first precedent for invalidating the decision of the Appeals Chamber of the Ministry of Economy in court and sees this as an interference with the discretionary powers of the ministry.
“Using the Corvalol precedent, any unscrupulous business has reason to question and challenge any decision of the Appeals Chamber on the good record of any brand.
And we can talk not only about well-known old Ukrainian brands, but also about new brands, including foreign ones. The system of state protection of intellectual property rights may be completely discredited“, Taranchuk is convinced.
As you know, there are other similar litigations, for example, for the name “Kyiv Cake”, which was initiated by Roshen. Or the same “Danica”, for example, disputes the production of the drug “Citramon-Health” of the pharmaceutical company “Health”.
Farmak believes that such a case entails more serious consequences. “The decision of the highest court may cast a shadow on the long process of approaching the standards of European regulation. Protection of intellectual property rights in EU member states and partner countries is one of the priority areas”– says the director of legal support of Farmak.
According to Darnitsa’s lawyer, Tatyana Kudrytska, “the decision of the Supreme Court forms an important precedent for Ukrainian judicial practice, because so far no decision of the Court of Appeal on recognizing trademarks as well-known has been canceled in court.”
It is difficult to judge whether Farmak has a chance to finally defend its right to Corvalol. Ivan Nikitchenko, CEO of the law firm Crane IP, believes that there has never been a practice of canceling the decision to recognize the mark as “well-known” by the court in Ukraine. There are also no mechanisms left to continue litigation.
“If the international court starts considering the case, more than one year will pass by the time of the decision. Perhaps a precedent was created in world practice, and it is impossible to predict the result of a possible consideration at the international level,” Nikitchenko summed up.
Anastasia Dyachkina, translation Skeleton.Info
DOSSIER: Zhebrovsky-Zhebrivsky. Medicine, drugs, politics
