The German Federal Court of Justice has given a key decision in its judgment of 14 January 2010 (Case I ZR 138/07) relating to the differentiation of foodstuffs and medicinal products in borderline cases. The question was whether cinnamon capsules constituted a foodstuff having a nutritive effect or a medicinal product by function having a pharmacological effect. The judgment follows the “Garlic Capsules” decision of the European Court of Justice (Case C-319/05). The German Federal Court of Justice has reiterated its reasons in a parallel court proceeding concerning another cinnamon containing product (Case I ZR 67/07) as well.

“Diabetruw” contains a top quality, standardised cinnamon extract as a dietetic foodstuff indicated for the reduction of the blood glucose level and is produced and distributed by TRUW Arzneimittel GmbH. The recommended daily intake of three capsules resulted in a daily dose of 3.0 g of cinnamon. “Diabetruw” is the leading product containing cinnamon in the German foodstuff market and is used by many diabetics for the reduction of blood glucose levels. The German Association of Social Competition (“Verband Sozialer Wettbewerb e.V.”) had attacked the product arguing that its status should be as a pharmaceutical and not as a foodstuff. The case is special due to the fact that clinical studies had undisputedly proven the positive effect of “Diabetruw” in reducing blood glucose levels in diabetics.

The District Court in Bielefeld had decided in the first instance that “Diabetruw” showed nutritive and not pharmacological effects and therefore had to be considered as a foodstuff. The District Court had based its decision on the evaluation of several university expert opinions and the evidence before it. The Court of Appeals in Hamm quashed the decision of the District Court in Bielefeld however and argued that “Diabetruw” should be considered a pharmaceutical.

The German Federal Court of Justice held in its judgment that the “Diabetruw” is compliant with EU law and marketable as a foodstuff. The German Federal Court of Justice relied upon the precedent set in the “Garlic Capsules” judgment of the European Court of Justice (Case C-319/05) and refined the guidance on borderline products. The European Court of Justice had reasoned that a product whose effect on physiological functions was no more than the effect that a foodstuff consumed in a reasonable quantity may have on those functions, does not have a significant effect on metabolism and cannot therefore be classified as a product capable of restoring, correcting or modifying physiological functions within the meaning Article 1(2) of Directive 2001/83/EC. In the “Garlic Capsules” case the physiological effects of the product could also be obtained by ingesting 7.4 g daily of garlic as a foodstuff.

The German Federal Court of Justice held that a product whose effects are achieved by a substance that can be ingested in a corresponding amount in an appropriate manner as part of a normal diet, may not be considered as a medicinal product even if the recommended frequency of intake (here daily) did not necessarily correspond to the usual dietary intake, given that the consumption of the product did not pose any health risks for the consumers. The Court opined that “Diabetruw”, based on the scientific evidence shown to the Court, had a nutritive and not a pharmacological effect. The evaluation of harmlessness is a notable additional criteria for the differentiation of foodstuffs from medicinal products.

The judgment of the German Federal Court of Justice not only has an impact on other cases concerning products containing cinnamon, but it will have a tremendous influence on most of the running and future cases relating to foodstuffs showing physiological effects. The criteria for the differentiation of borderline products will be made easier to test. It is also a further distancing from the previous basic principle that products having a proven physiological effect had to be considered to be medicinal products if there was any doubt. In the past, products having a physiological effect were mostly considered as medicinal products particularly by authoritative bodies. Manufacturers of food supplements and dietetic foodstuffs are now significantly strengthened by the “Garlic Capsules” and the cinnamon capsules decisions.

This development in case law should strengthen the food product market not only in Germany but also in other Member States. Depending on the specific national legal situation, this judgment of the German Court of Justice could influence the outcome of borderline cases in other jurisdictions and obviously might help to swing balance of favour further towards foodstuffs. This judgment not only sustains the decision of the European Court of Justice, but also refines the reasoning regarding borderline products.