In The Wellcome Foundation Ltd v Paranova Pharmazeutika Handels GmbH, 22 December 2008 (C-276/05) the European Court of Justice (ECJ) has confirmed that where the re-packaging of trade marked goods has been established to be necessary there is only one criteria to be fulfilled in respect of the nature of the re-packaging. This is that the repackaging must not be liable to damage the reputation of the mark or its proprietor. There is no minimum intervention requirement. The ECJ also held that in some circumstances parallel importers may be required to disclose the origin of the re-packaged product.
The Wellcome Foundation Ltd (Wellcome) is the proprietor of two Austrian word marks ZOVIRAX and a figurative word mark ZOVIRAX, used in Austria by GlaxoSmithKline (Glaxo) with Wellcome's consent.
Paranova Pharmazeutika Handels GmbH (Paranova) sold re-packaged products under the ZOVIRAX mark in Austria in packs of 60 x 400 mg tablets (ZOVIRAX 400/60). Paranova had imported the product from Greece where it was supplied in packs of 70 tablets - 10 more than the maximum 60 permissible in Austria. Printed prominently on the front of the packaging was 'Repackaged and imported by Paranova', while references to the manufacturer were on the sides of the box in less prominent print. The re-packaging bore a blue band, which is regularly used on pharmaceutical products marketed by Paranova.
Paranova had notified Wellcome's associated Austrian company of its intention to market ZOVIRAX 400/60 in Austria. It had supplied prints of the outer packaging, the blister packs and the accompanying instructions. Paranova was asked to disclose such activities to Glaxo in future, to provide a complete sample of every type of re-packaging and to disclose the Member State of export and the reasons for the re-packaging.
Paranova explained the reasons for the re-packaging to Glaxo but did not disclose the State of export. Glaxo again asked Paranova to disclose the origins of the product and also raised complaints about Paranova's name featuring more prominently than Wellcome's name on the re-packaging and the presence of Paranova's distinctive blue band. Glaxo requested that a sample of all re-packaging be sent to it; Paranova refused, explaining that it was not technically possible, particularly if Glaxo would not bear the costs involved.
Wellcome then obtained an interim order from the Vienna Commercial Court. The order prohibited Paranova from offering and/or marketing re-packaged ZOVIRAZ products under the ZOVIRAX mark if:
a. the reference to Paranova on the re-packaging was larger than the reference to Wellcome, or
b. if Paranova did not inform Wellcome prior to marketing the re-packaged ZOVIRAX, specifying the State of export and the reasons necessitating the re-packaging.
The court rejected Wellcome's request for an order prohibiting use of the Paranova blue band.
Both parties appealed to the Supreme Court and proceedings were stayed while a preliminary reference was made to the European Court of Justice of the following questions:
1 (a) Are Article 7 of ... Directive 89/104 ... and the case law of the court... which has been pronounced on it to be interpreted as meaning that proof that reliance on the trade mark would contribute to an artificial partitioning of the market must be furnished not only as regards the re-packaging itself, but also as regards the presentation of the new packaging?
1 (b) Is the presentation of the new packaging to be measured against the principle of minimum intervention or (only) against whether it is such as to damage the reputation of the trade mark and its proprietor?
2 Are Article 7 of the Directive [89/104] and the case law of the court... which has been pronounced on it to be interpreted as meaning that the parallel importer fulfils his duty of notification only if he informs the proprietor of the trade mark also of the State of export and the precise reasoning for the re-packaging?
The ECJ concluded that Boehringer Ingelheim and Others applied. It confirmed, that the condition that the repackaging of the product must be "necessary" for its further marketing is to be directed only to the fact of re-packaging the product, and not to the presentation of the new packaging.
"Article 7(2)... is to be interpreted as meaning that, where it is established that re-packaging of the pharmaceutical product is necessary for further marketing in the Member State of importation, the presentation of the packaging should be assessed only against the condition that it should not be such as to be liable to damage the reputation of the trade mark or that of its proprietor."
Regarding Welcome's claims that disclosure of the State of export and the precise reasoning for the re-packaging was necessary, the court held that
"Article 7(2)... is to be interpreted as meaning that it is for the parallel importer to furnish to the proprietor of the trade mark the information which is necessary and sufficient to enable the latter to determine whether the re-packaging of the product under that trade mark is necessary in order to market it in the Member State of importation."
Significantly, in respect of what information is to be regarded as sufficient for these purposes, the court stated that: "It cannot, prima facie, be excluded that it may, in exceptional cases, involve disclosing the Member State of export, where the absence of that information would prevent the proprietor of the trade mark from evaluating the need to re-package."
Parallel importers will not be pleased by this. It opens the door for a manufacturer to endeavour to 'tighten-up' its distribution network by requiring parallel importers to disclose the State of origin of repackaged products on the basis that lack of that information prevents evaluation of whether the re-packaging is necessary.
However the ECJ does not appear too sympathetic to parallel importers' concerns in this respect, noting that "it should be borne in mind that, in a situation where it is established that the details furnished are used by the proprietor of the trade mark to enable him to detect weaknesses in his sales organisation and thus combat parallel trade in his products, it is under the provisions of the EC Treaty on competition that those engaged in parallel trade should seek protection against action of the latter type".