In the latest in a series of applications by pharmaceuticals against parallel importers the summary judgment obtained by Roche against Kent Pharmaceuticals at first instance has been upheld by the Court of Appeal. This finding was made by the Court of Appeal shortly before Christmas, despite Kent’s innovative argument that the CE mark placed on the packaging indicated consent by Roche to their sale in the EU.
18,000 test strips (marked Roche and ACCU-CHECK) which were used for testing glucose levels in the blood, were sold by the Roche company group to an organisation known as PROPA in the Dominican Republic. This transaction was on beneficial terms as PROPAS had agreed that the test strips would be used exclusively for clinical trials amongst vulnerable communities in the Dominican Republic and would not be re-sold. In breach of the agreement, most of the strips made there way to France and were subsequently imported into the UK by Kent. The packaging also bore a CE mark. It was accepted that CE marking “shows that the product in question has been formally approved for sale in the EU under the relevant regulatory and approval regimes”. If a pharmaceutical is to be lawfully sold in the EU it must comply with the relevant regulatory regime and must bear a CE mark.
Article 7.1 of the Trade Marks Directive (89/104/EEC) implemented in the UK by the Trade Marks Directive 1994 states “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”
To defeat an application for summary judgment in the UK, the defendant has to show it has a defence that has a realistic prospect of success. Kent’s defence was that the test strips had been put on the market in the Community under the trade marks with Roche’s consent which was “manifested by the affixing of the CE mark by Roche, or its associated company in the United States, on the packaging of the test strips”
The appeal court referred to the ECJ’s guidance in Zino Davidoff v A & G Imports Limited and noted that, although it was conceivable consent may be inferred from circumstances rather than express, a defendant must unequivocally demonstrate that the proprietor had renounced its rights.
Neuberger LJ noted that it may be “possible” to establish, by evidence, that the use of such a mark has a different/wider meaning from that which would be derived “from the reason (whether in law or otherwise)” for which it was affixed. This could result from a general understanding in the relevant market. For example, when interpreting a commercial contract, “an English court is prepared to recognise that a particular expression which may have a different or more limited meaning to an ordinary speaker of English, can nonetheless come to have a different or wider meaning in a particular trade”. It could well be that this English contract law approach may not be permissible when considering Article 7. However, for the purpose of considering whether Kent had a realistic prospect of defending this infringement action, it was fair that one should proceed on the basis that this approach was permissible.
However, “consent is a two way process; it has to be given by the person consenting and received by the person to whom consent is given” and Kent failed to establish that the CE mark was generally understood amongst trade mark owners to indicate consent to marketing in the EU (rather than being so understood merely by parallel importers). Kent then argued that, even if its evidence to date was thus insufficient, the action should proceed to full trial, as the evidence, so far, showed there was reason to believe it might or would be able to obtain such evidence. This argument was given short shrift by the appeal court on the basis that to allow such an argument to succeed would “undermine much of the purpose of CPR 24” under which summary judgment may be obtained
The clear guidance given by the ECJ in the Zino Davidoff case has encouraged the English court to take a robust approach to summary judgment applications in parallel importing cases, shoring up the English boundaries of “Fortress Europe”. The English system of summary judgment where there is no real defence, enables a claimant to obtain a final determination (subject to appeal) quickly, and at a fraction of the cost of a full trial, as all the evidence is in writing and there is no cross examination. It can therefore be a powerful weapon against illegitimate parallel imports.