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Neptune Pharma and Europharma have been cleared by Olso District Court to continue to supply the sea lice treatment Azasure Vet in Norway, following a dispute with the Fish Vet Group (FVG) and Benchmark Animal Health.

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The Court found that Neptune had “not exploited FVG’s trade secrets, either as individual items or by a protected ‘amount of knowledge’.”

The claimants had sought for Neptune to be prohibited from marketing and selling their Azamethiphos-based product, ‘Azasure Vet’, in Norway for a limited period and also sought damages of 150 million NOK (£12.5m) from Neptune, and its founder Adrian Endacott.

FVG alleged that Neptune used confidential information about the production and manufacture of ‘Salmosan Vet’ to produce ‘Azasure Vet’ (previously ‘Trident Vet’). FVG alleged that Adrian Endacott and Victor Endacott had obtained confidential information through consultancy work undertaken for FVG by Neptune’s founder Adrian Endacott, prior to its establishment.

The Court disagreed with the claims from FVG and Benchmark, stating: “Whether Norwegian or English law is used, the court concluded that there is no exploitation of business secrets.”

The judgment also stated that: “The development and production of [Azasure Vet] does not represent a violation of the Marketing Control Act No 28 based on the doctrine of the amount of knowledge. An important starting point for this assessment is that patent protection is now gone, so that there is freedom to develop generic products, and that the formula of the drug is commonly known.”

The Court therefore could not find grounds for compensation or a temporary ban on Neptune’s continued sale of ‘Azasure Vet’. Neptune will continue to supply the Norwegian salmon farming industry via its distributor, Europharma.

The Court ruled against Benchmark’s claim that Norway-based distributors Europharma had also breached laws by selling Neptune Pharma’s product. Benchmark and FVG were ordered to pay for the legal costs of Europharma, determined at 1,162,420 NOK (£97,227). The other parties involved in the case were ruled to cover their own legal costs.

The ruling stated: “Given the fact that the claim against Europharma in the subpoena was as high as 40 million, the claim was subsequently increased during the preparatory proceedings, and that requirement and the claim appeared late during the main hearing and was limited to 900,000 kroner, the court is in no doubt that Europharma must be deemed to have won the case essentially in relation to Benchmark. Europharma will therefore initially be awarded compensation for their legal costs from FVG and Benchmark.”

As part of the judgment, Neptune and Europharma are obliged to pay 775,000 NOK (£64,822) and 125,000 NOK (£10,455) respectively in compensation to Benchmark, plus default interest from 24 October 2014, for a historic trademark infringement under the Trademarks Act No. 58 over the use of the name ‘Trident Vet’, because Benchmark hold the trademark for ‘Trident’. Despite gaining a trademark, Benchmark never marketed their product under the ‘Trident’ name. Neptune took immediate action when it became aware of the trademark in 2014, changing the name of its product from ‘Trident Vet’ to ‘Azasure Vet’.

However the judge held that: "Although it is not of importance to the outcome, the Court considers that it deems most likely that it was Neptune who first came to use the trademark of Trident, and that employees in FVG were most likely aware of Neptune’s intended use of this trademark during a visit to Neptune’s manufacturer in China in summer 2013."

FVG, which supplies its own Azamethiphos-based product in Norway, is a sister company of Benchmark. As part of the same judgment, delivered on 03 March 2016, Benchmark was acquitted of counter claims from Neptune under Marketing Act No. 25.

Adrian Endacott, Chief Executive Officer at Neptune Pharma Ltd, said: “Through their accusations Benchmark Holdings forced Neptune Pharma to open its books exposing to them commercially sensitive information. It showed Neptune Pharma has no case to answer on the main issue of exploiting FVG’s trade secrets.

“We are pleased that the court has ruled in our favour and we can put this episode behind us and continue to grow this area of our business, both in Norway and internationally.

“More than £200 million has been wiped from Benchmark Holdings’ value in the past year. It is a shame for their investors that it has been vexatiously pursuing a company a fraction of its size with accusations which have withered under the cold light of a court room rather than concentrating on growth.

“The only thing which stood up in court was a temporary breach of a trademark in using a name which was registered after Neptune’s drug application was made and which Benchmark never used.”

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