Case Law – Admissible Distribution of Pharmaceuticals in Modified Packaging

Germany, May 29, 2018

The restrictive requirements for an admissible reimportation of repackaged pharmaceuticals do not necessarily apply if only an additional label is attached to the original packaging. With these findings, the Court of Justice of the European Union (CJEU) corrects a misinterpretation of its previous case law by the German Federal Supreme Court (BGH) (CJEU, judgment of May 17, 2018, C-642/16, Junek/Lohmann & Rauscher).

According to the case law of the CJEU, the proprietor of a mark may legitimately oppose the further commercialisation of a pharmaceutical product imported from another EU member state in a new packaging, or in its original internal and external packaging with an additional external label applied by the importer, unless:

  • it is established that the use of the trade mark rights by the proprietor thereof to oppose the marketing of the relabelled products under that trade mark would contribute to the artificial partitioning of the markets between EU member states;
  • it is shown that the repackaging cannot affect the original condition of the product inside the packaging;
  • the new packaging states clearly who repackaged the product and the name of the manufacturer;
  • the presentation of the repackaged product is not such as to be liable to damage the reputation of the trade mark and of its owner; thus, the packaging must not be defective, of poor quality, or untidy; and
  • the importer gives notice to the trade mark proprietor before the repackaged product is put on sale, and, on demand, supplies him with a specimen of the repackaged product.

In a case pending before the BGH, the defendant reimported to Germany medical patches distributed by the plaintiff in Austria. The defendant neither opened nor repackaged the original products, but attached a small additional label featuring information on the company responsible for the importation, its address and telephone number, a barcode and a central pharmaceutical number. The defendant had neither given prior notice to the plaintiff of the reimportation of the products nor supplied it with the modified packaging of the patches. In its decision of October 6, 2016 (I ZR 165/15 – Debrisoft), the German Federal Supreme Court thus asked the CJEU for a preliminary ruling on the question whether or not the above-outlined five requirements for admissible reimportation of repackaged products apply to medical devices like the medical patches at issue. In its decision, the court made it clear that, in case the CJEU should confirm applicability, the principle of exhaustion would not justify the defendant’s activities and the infringement action would be well-founded.

In its following ruling, the CJEU did actually not answer the question referred by the German court. Rather, it availed itself of the opportunity to correct a misunderstanding of the BGH regarding the strictness of the CJEU’s previous findings in cases relating to repackaged pharmaceuticals. Although the court confirmed that the application of an additional label can trigger the applicability of the five cumulative requirements for admissible repackaging of pharmaceuticals, it made also clear that this need not necessarily be the case. In the case at hand, the court found that the defendant in the German proceedings did not have to adhere to these strict requirements, as his activities did not constitute a repackaging within the meaning of the court’s previous case law. The court particularly pointed out that the packaging of the medical devices concerned had not been modified and the original presentation of the packaging had not been affected other than by the attachment of a small label, which did not conceal the plaintiff’s mark and which designated the defendant as responsible for placing it on the market by setting out his details, a barcode and a central pharmacological number.

Given the unusually concrete findings of the CJEU, it is clear that the BGH will finally dismiss the action.

Practical Impact:

The CJEU did not limit its findings to medical devices. Rather, it specifically explained that its previous judgments related to repackaged pharmaceuticals do not necessarily exclude the effects of exhaustion in a case like the present one. Consequently, from now on it will be much more difficult to argue trademark infringement when repackaged pharmaceuticals are reimported in their unopened original packaging to which only an additional – moderate – label has been attached.