UK: Boehringer Ingelheim/Glaxo v Swingward & Dowelhurst

Last Updated: 21 June 2002

High Court & European Court of Justice Judgment European Court of Justice: 23 April 2002

The European Court of Justice has now given its Judgment in this case referred by Mr Justice Laddie of the High Court in the UK. The case concerned the repackaging of pharmaceutical parallel imports obtained from within the EU and in particular the circumstances in which the parallel importer is entitled to rebox rather than relabel pharmaceutical imports.

The ECJ clearly rejected Mr Justice Laddie’s primary proposition that a trade mark owner could only object to the repackaging of its products if it could prove that there was substantial harm to specific subject matter of the trade mark. Mr Justice Laddie had stated that it was only after such substantial harm had been proved that the Court needed to consider the guidelines set out in Bristol Myers Squib -v- Paranova.

It was stated by the ECJ that in any case of repackaging (both relabelling and reboxing) there was a real risk of damage to the specific subject matter of the trade mark which meant that the trade mark owner was allowed to object to such repackaging, provided that such objection did not lead to the artificial partitioning of the market place within the EU. There was no requirement to prove substantial harm to the specific subject matter of the trade mark, the risk is assumed. In its previous case of Bristol Myers Squib -v- Paranova, the ECJ clearly stated that there would only be artificial partitioning of the market if the trade mark owner continued to object even when the following conditions had been met: that the repackaging was necessary for effective access to the market place; the names of the manufacturer and repackager had been placed on the repackaging; and, advance notice had been given to the trade mark owner of the proposed repackaging before the newly repackaged products were put on the market place. These conditions are usually called the "Paranova Guidelines".

The Court then went on to consider the Paranova Guidelines. With the advance notification requirements, the ECJ again rejected Mr Justice Laddie’s propositions. It held that it was not enough that the trade mark owner be notified by any third party sources, the notification must come from the parallel importer itself. The notification must be given in advance of the proposed marketing and a sample of the proposed form of repackaging must be provided by the parallel importer if requested by the trade mark owner. A notification must be given in sufficient time for the trade mark owner to react to the intended form of repackaging. It is a matter for the National Courts to assess whether or not a reasonable time to react has been given, but the ECJ stated that a period of 15 working days is likely to constitute a reasonable time. If notification is not given by the parallel importer before marketing the product, then the parallel importer is infringing the trade mark owner’s trade marks. This would entitle the trade mark owner to an injunction and damages or an account of profits.

The ECJ Judgment emphasises the importance of advanced notification in repackaging cases. If such notification has not been given, then the trade mark owner’s rights have been infringed. Historically, parallel importers in the UK have not, until very recently, given such advance notice. This means that there have been a number of parallel imports placed on the market place in the UK in relation to the products of a number of pharmaceutical companies, which have been infringing various trade marks. In the light of the ECJ Judgment, it would be prudent for all pharmaceutical companies to undertake a review of the parallel importation of their products in order to ascertain whether or not any advance notice had been given in relation to these products, and if not, to seek legal advice as to whether or not trade infringement proceedings could be appropriate.

Similarly, if the repackaging (and in particular reboxing) used by the parallel importer does not state the name of the manufacturer and the name of the repackager, then again on the basis of the ECJ Judgment, these packages are also infringing the trade mark owner’s trade marks, even if sufficient advance notice has been given, and trade mark infringement proceedings could be commenced without the need to prove any substantial harm to the specific subject matter of the trade mark. Again, it would be prudent for pharmaceutical companies to review the packaging used by parallel importers in years gone by to see whether or not this requirement has been complied with.

With regard to the question of necessity of repackaging, the ECJ reiterated that a trade mark owner may oppose repackaging if it is based solely on the parallel importer’s attempts to secure a commercial advantage. It went on to state that the trade mark owner may oppose reboxing of its products if the parallel importer is able to reuse the original packaging by affixing labels to that packaging. However, the trade mark owner’s ability to oppose use of reboxing is conditional upon whether the relabelled pharmaceutical products can have effective access to the market in the importing state. If there is strong resistance from a significant proportion of consumers to relabelled pharmaceutical products in the importing market (or a substantial part of it) such that there is hindrance to effective market access then the trade mark owner cannot oppose the reboxing of its products. It is a question for the national court to determine whether or not this is the case in their respective countries.

This case will now return to the High Court in the UK for Mr Justice Laddie to determine whether or not any of the packaging in question in this case infringes the trade mark owner’s rights in the light of the ECJ decision.

Although the ECJ decision has clarified the importance of notice in relation to parallel imports, it has created uncertainty with regard to the question of necessity for reboxing and if there is a need to rebox, does this entitle the parallel importer to design the new box in any way it likes or are there limitations? What is "strong resistance" from a "significant proportion" of consumers? If the resistance relates to the fact that the product has come from a foreign country rather than simply to foreign writing on a product, can a parallel importer simply rebox in order to deceive the consumer into believing that the product originated from the UK or was originally intended for the UK? If reboxing is necessary, can the parallel importer rebox in a way which uses its own house-style and trade mark or must it use the least intrusive form of box? It is ironic that the more xenophobic a country is the more a parallel importer can interfere with the trade mark owner’s rights. It is surprising that the ECJ appears to "reward" such xenophobia. Unfortunately, the approach of the ECJ in relation to necessity as set out in the most recent judgment gives rise to more questions than answers and will probably result in more litigation being referred to the ECJ. This is regrettable. We all need more certainty.

The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.

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