Ferring markets a medicine under the brand “Klyx” in Denmark, Finland, Sweden and Norway. In all those countries, Klyx is sold in the same way: in containers of 120 and 240ml sold individually or in boxes of 10 units.
Orifarm bought 10-unit boxes of Klyx in Norway, repackaged them individually, reaffixing the KLYX mark to them, and sold them in Denmark.
As an EEA member, Norway is subject to Directive 2008/95. Article 7 of that Directive provides:
- The trade mark shall not entitle the proprietor to prohibit its use in relation to goods which have been put on the market in the Community under that trade mark by the proprietor or with his consent.
- Paragraph 1 shall not apply where there exist legitimate reasons for the proprietor to oppose further commercialisation of the goods, especially where the condition of the goods is changed or impaired after they have been put on the market.
Ferring opposed the repackaging claiming:
- It was not necessary to market the product.
- This was instead an attempt by the importer to secure a commercial advantage.
Orifarm contended on the other hand that the repackaging was necessary to gain access to the segment of the Danish market for Klyx repackaged in packets of one.
The Danish court questioned whether the repackaging was necessary given the availability of the packs in sizes of 1 or 10 in all the states concerned. It referred the matter to the Court of Justice, asking whether Article 7(2) means that a trade mark proprietor may lawfully object to repackaging when the product is already sold in all the relevant sizes in all the markets concerned.
- The purpose of a trade mark is to guarantee the origin of the product bearing the market, and thus the repackaging of a product carried out by a third party without the authorisation of the proprietor is likely to create real risks for that guarantee of origin.
- A trade mark owner’s opposition to repackaging cannot be accepted if it constitutes a disguised restriction to trade between Member States.
- There will be such a disguised restriction when the exercise by a trade mark proprietor of his right to oppose repackaging helps the artificial partitioning of the markets.
Therefore, the change caused by any third party’s repackaging of a trade mark-bearing medicine, creating by its very nature the risk of interference with the original condition of that product, may be prohibited by the owner of that trade mark unless the repackaging is necessary in order to enable to marketing of the products imported and at the same the legitimate interests of the proprietor are safeguarded.
The circumstances prevailing at the time of marketing in the importing state must be taken into account objectively. This can include, for example, insurance rules on the size of the packaging or well-established medical prescription practices
Finally, it is up to the parallel importer to justify why the trade mark owner should be prevented from lawfully opposing the further marketing of the medicines.
Thus, a trade mark proprietor can oppose the marketing of a medicine by a parallel importer where the latter has repackaged the product in a new, outer packaging and reaffixed the trade mark where (1) the medicine can be marketed in the importing country in the same packaging as that in which it was originally bought in the exporting country and (2) the importer has not demonstrated that the product can only be marketed in a limited part of the importing state’s market. Those matters are to be determined by the national court.
This judgement strengthens the position of pharmaceutical trade mark owners as in EEA parallel import disputes the parallel importers will have to establish their actions are necessary.