The ECJ has given judgment in Wellcome v Paranova (C-276/05), the latest decision in the litigation saga regarding the repackaging of pharmaceutical product imports, holding:

  • Once a parallel importer has demonstrated that it is necessary to repackage the product, there is no additional requirement of "minimum intervention" with the trade mark owner's rights. The presentation of the repackaging is assessed only against whether it is liable to damage the reputation of the trade mark or its proprietor.
  • In terms of notification, the parallel importer must provide the trade mark owner with the information that is necessary and sufficient for the trade mark owner to determine if repackaging is necessary. Only in exceptional cases will this require disclosure of the Member State of export.

Business Impact

  • After the initial optimism following Boehringer II, trade mark owners will be disappointed with the latest decisions in the repackaging saga which give parallel importers significant freedom with respect to the manner of repackaging parallel imported pharmaceutical products, as well as to choose the combination of information to furnish to trade mark owners to demonstrate that repackaging is necessary.
  • This latest decision provides little further guidance as to the information that should be provided to trade mark owners to demonstrate necessity. It may be that the focus in relation to the circumstances in which trade mark owners may prevent a parallel importer from marketing repackaged products will now shift to the notification requirement.  

Background

This ECJ reference is one of several concerning the repackaging of pharmaceutical products. The cases center around Article 7 of the Trade Marks Directive 89/104, and the five conditions set out in the ECJ's judgment in Bristol-Myers Squibb v Paranova [1996] (the "BMS conditions").

Article 7(1) provides that a trade mark owner's rights are exhausted once goods have been put on the market under that mark by the proprietor or with his consent in a member state. This is subject to Article 7(2), which provides that this will not apply where there are "legitimate reasons" for the owner to oppose further commercialisation of the goods.

Satisfaction of the BMS conditions means that there will not be "legitimate reasons" for the trade mark owner to oppose the commercialisation of the imported goods. Consequently, the exact scope of the BMS conditions has been the subject of much interest and litigation.

The case concerns the parallel importation of ZOVIRAX pharmaceutical products into Austria by Paranova, a well known wholesaler of pharmaceutical products. Wellcome owns trade marks in Austria for ZOVIRAX in relation to pharmaceutical products. Paranova markets pharmaceutical products bearing the trade mark ZOVIRAX in Austria. Paranova's parent company purchases the products in Greece, where they are sold by or with the consent of Wellcome in packs of 70 tablets. In Austria, they must be in packs of 60 tablets.

Paranova therefore repackages the product before marketing it in Austria. The new packaging contains:

  1. the words "repackaged and imported by Paranova" in bold type and block capitals on the front of the packaging;
  2. reference to the manufacturer on the sides and the back of the packaging in normal (ie. smaller) type; and
  3. a blue band, such as Paranova regularly uses for the pharmaceutical products that it markets.  

Paranova informed Wellcome that it intended to market ZOVIRAX in Austria and sent colour prints of the outer packaging, blister packs and instructions for use. Wellcome asked that Paranova provide a complete sample of the packaging and disclose the state of export and the exact reasons for the repackaging. Paranova told Wellcome the reasons for the repackaging (different pack size), but not the state of export. It refused to provide a sample unless Wellcome paid.

Wellcome brought proceedings to prevent Paranova marketing ZOVIRAX in packaging with the above features and without having informed Wellcome of the state of export and the precise reasons for repackaging.

The ECJ proceedings were stayed pending the reference in Case C-348/04 Boehringer Ingelheim and Others (Boehringer II), judgment on which was delivered in April 2007 (see our newsflash of 11 May 2007).

The questions maintained following Boehringer II were:

  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 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 reasons for the repackaging?  

Minimum intervention: do parallel importers need to ensure re-packaging has the minimum possible effect on trade mark rights?

The ECJ held that:

"It would be inconsistent to accept that there is no need to ascertain whether the presentation of the new packaging of the product in question, chosen by the parallel importer, is necessary for the further marketing of the products and, at the same time, to demand that the importer satisfy the criterion of the minimum possible adverse effect on trade mark rights."

The principle of minimum intervention was stated by the Austrian referring court to be that set out in Frits Loendersloot v George Ballantine & Sons and others, Case C-349-95; that "the person carrying out the relabelling must use means which make parallel trade feasible, while causing as little prejudice as possible to the specific subject-matter of the trade mark right".

While one might ask whether the sparse reasoning above is adequate to address the Loendersloot quote, the ECJ's conclusion is not a surprise following Boehringer II. It seems now clear that "as little prejudice as possible to the specific subject-matter of the trade mark right" does not take trade mark owners any further than the fourth BMS condition. There is no requirement of minimum intervention. 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 its proprietor.

Consequently, the courts will not engage in a consideration of whether co-branding could have been carried out in a manner which would have been more beneficial to the trade mark owner; the question is whether actual damage has been caused by the repackaging.

The extent of the duty of notification: do parallel importers need to provide "precise reasons" for repackaging and the state of export?

The ECJ held that:

"[I]t is for the parallel importer to furnish the proprietor of the trade mark with the information which is necessary and sufficient to enable the latter to determine whether the repackaging of the product under that trade mark is necessary in order to market it in the Member State of importation…[this] 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 repackage."

The importer must provide enough information to demonstrate necessity. It can do this by whatever combination of information will suffice. It is only in exceptional circumstances that this will require disclosure of the state of export.