By order issued on October 17, 2016, the Court of Milan ruled on exhaustion of trademark rights and on the activities preliminary to the commercialisation that may amount to trademark infringement. The decision centred upon the purchase of imported products from the owner in the State of importation and assigning the court having venue where notification of intent took place.
Background: Products lawfully purchased in the country of origin but …
The Italian pharmaceutical company Giuliani is the owner of the Italian trademark Trosyd. Giuliani acquired the trademark Trosyd from Pfizer when the latter was required to divest certain products in Italy as part of a multinational acquisition.
Medifarm, an Italian distributor of medicinal products, decided to purchase Trosyd products in Portugal from Pfizer (the trademark owner for this market), with a view to parallel importing them into Italy. Medifarm notified Giuliani of this intention and provided a sample of Trosyd as repackaged for the Italian market. Giuliani opposed the parallel importation of Trosyd in Italy and argued that it would amount to infringement, as the product was put on the market in Portugal by a different and unrelated trademark owner and therefore the trademark was not exhausted in Italy. Medifarm responded that it did not accept such argument and intended to start commercialisation of the imported product by 27 June 2016.
Giuliani brought proceedings against Medifarm, seeking the grant of a preliminary injunction. The Judge of first instance dismissed the petition for improper venue. On appeal, however, the Court of Milan set aside the first instance order and granted the requested interim measure.
Referring to the EU Court of Justice’s case law, the Court of Milan noted that the same trademark can be assigned for a single country without being assigned at the same time for other countries. In this circumstance, exhaustion takes place:
- When the trademark owner in the State of importation and the trademark owner in the country of origin are the same entity.
- When the trademark owner in the State of importation and the trademark owner in the country of origin are different entities that are economically linked, for example where products are distributed by the same company,
- Upon license by the trademark owner, the parent company, or by a subsidiary thereof, or by an exclusive retailer.
With this in mind, the key points from this Court decision are that: the trademark Trosyd, used for the commercialisation of the products in two different Member States (Italy and Portugal) was indeed the same; the products bearing the trademark were identical as well; the medicinal product imported into Italy was lawfully purchased in Portugal from the right owner; and most significantly the trademark owner of the country of importation did not appear to be the same or be anyway linked with the right owner of the country of origin.
Hence, as the commercialisation of the products in Portugal under the trademark Trosyd did not take place with the consent of Giuliani, no exhaustion occurred that could be applied to Giuliani and the importation of the products by Medifarm was held to amount to an infringement.
The question of venue.
The court having venue was determined by Giuliani according to the procedural rule of the place where the harmful event has or may have occurred.
Medifarm objected that the Court of Milan would not have had venue, since the products were not on the market and no infringement occurred in Italy, much less in Milan. The Court of Milan rejected such argument, observing that:
“purchasing the product, repackaging, subsequent importation in Italy, request of the marketing authorisation [for the parallel importation], presentation of the product in Milan, imminent sale on the Italian market are activities univocally and objectively directed to the imminent commercialisation of the medicinal product Trosyd in Italy and in particular in Milan“.
The Court also noted that it was Medifarm itself that stated, in a communication to Giuliani, the date on which the commercialisation would have been started. Indeed, the following excerpt indicates that notification and the provision of the sample to the trademark owner, as required pursuant to EU case law, seems to have played a key role in the decision of the Court:
“the sending of a letter in Milan, attaching a product ready for the imminent commercialisation on the Italian market, grounds the jurisdiction of the Court of Milan, as the place of the threatened infringement, where the preparatory activities, univocally addressed to the commercialisation of the product in Italy and, in particular, in Milan, took place“.
As the place of notification is usually that of the trademark owner’s registered office, it is worth noting that the decision of the Court of Milan may provide a useful precedent for trademark owners, if infringement further to parallel imports occur, to have the case heard by their home court.