European Union: Brussels Commercial Court: Parallel Imported Pharmaceuticals Must Comply With Latest Packaging

On 27 April 2017, the President of the Dutch-language Commercial Court of Brussels (Nederlandstalige Rechtbank van Koophandel/Tribunal de commerce néerlandophone)decided a case concerning the repackaging of parallel imported pharmaceuticals, in which it applied the so-called "BMS"-criteria which the Court of Justice of the European Union ("ECJ") developed in Bristol-Myers-Squibb (Case C-427/93).

The ECJ held in Bristol-Myers-Squibb that parallel imported products can be repackaged: (i) if repackaging is objectively necessary to market the product in the country of importation; (ii) if the repackaging does not affect the original condition of the product inside the packaging; (iii) if the new packaging clearly states who repackaged the product and indicates the name of the manufacturer; (iv) if the presentation of the repackaged product is not liable to damage the reputation of the trade mark or of its owner; and (v) if the importer gives notice to the trade mark owner before the repackaged product is put on sale, and, on demand, supplies him with a specimen of the repackaged product. If these five conditions are satisfied, the trade mark owner cannot legitimately object to the further marketing of a repackaged pharmaceutical.

The dispute before the Commercial Court of Brussels related to the parallel import and repackaging by Pi Pharma NV ("Pi Pharma") of pharmaceuticals of Merck Sharp & Dohme Corp. and MSD Belgium BVBA (together, "MSD"). MSD is the marketing authorisation holder of a pharmaceutical with the active ingredient montelukast which it markets under the trade mark "Singulair" in various presentations, including formats of 28 and 98 tablets. After the Federal Agency for Medicines and Health Products (Federaal Agentschap voor Geneesmiddelen en Gezondheidsproducten/Agence Fédérale des Médicaments et des Produits de Santé, the "FAMHP") had objected to the use by MSD of two shades of the colour blue for its logo as this could hamper the legibility of the labelling, MSD changed the logo to a single dark blue colour. On 16 January 2015, Pi Pharma notified MSD that it had received a licence from the FAMHP to distribute parallel imported "Singulair" products on the Belgian market. Pi Pharma imported the products from Poland where MSD also markets Singulair in packaging formats of 28 tablets. Subsequently, Pi Pharma repackaged the product into a new packaging of 98 tablets.

MSD claimed that Pi Pharma infringed its trade marks and copyright since Pi Pharma: (i) had failed to indicate on the packaging the identity of the company responsible for the repackaging of the product; (ii) had damaged MSD's reputation by using two shades of blue for the logo; and (iii) had failed to demonstrate that repackaging of the product was objectively necessary in order to gain effective access to the Belgian market.

First, with regard to the third BMS-requirement, i.e., that the new packaging must clearly state who repackaged the product, the Commercial Court held that consumers or end users would be likely to believe that the trade mark owner was responsible for the repackaging or re-labelling of Singulair. Because the products sold by Pi Pharma did not fulfil the third BMS-requirement, the Court decided that Pi Pharma thus infringed MSD's trade marks.

Second, on the fourth BMS-requirement, i.e., that the presentation of the repackaged product must not be liable to damage the reputation of the trade mark or its owner, the Commercial Court held that the use by Pi Pharma of two shades of blue is in contradiction with FAMHP's viewpoint regarding the use by MSD of two colours for the "Singulair" logo. Furthermore, the Court referred to the obligation contained in Article 7, para. 2 of the Royal Decree of 19 April 2001 (the "Parallel Importation Decree") which requires parallel importers to take all necessary steps to remain informed of the latest changes with regard to the license for parallel imports. Accordingly, the Commercial Court concluded that the presentation of the repackaged product was "inadequate" and that there was a risk that the reputation of the trade mark and/or its owner would be damaged.

Third, regarding the first BMS-requirement, i.e., that repackaging must be objectively necessary to market the product in the country of importation, the Commercial Court again referred to the ECJ's reasoning in Bristol-Myers-Squibb. The ECJ had held that repackaging must be allowed where it is necessary to market effectively the parallel imported pharmaceutical in the country of import. Indeed, allowing trade mark owners to object to such practices would lead to an artificial partitioning of the markets. Conversely, the ECJ had added that repackaging was not objectively necessary if less drastic means of repackaging were available. This was confirmed by the ECJ in the Orifarm case (C-297/15) and by the Belgian Supreme Court in the Cozaar-cases (See, VBB on Belgian Business Law, Volume 2016, No. 12, p. 12-13). According to the Commercial Court, Pi Pharma failed to show that repackaging was objectively necessary to market Singulair in Belgium since Pi Pharma could have over stickered the product. Therefore, the Court reached the conclusion that the first BMS-requirement was not fulfilled either.

Based on the above reasons, the Court held that Pi Pharma infringed MSD's trade marks and copyright and issued an injunction against Pi Pharma to stop selling infringing Singulair products on the Belgian market.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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