Boehringer ruling shows fact examination is for national courts

The European Court of Justice (ECJ) has issued its preliminary ruling on the repackaging of parallel imported pharmaceutical products requested by the Court of Appeal of England and Wales in a case involving Boehringer Ingelheim KG and Swingward Ltd (see Repackaging case referred to ECJ for a second time).

The ECJ had already issued a first preliminary ruling in the same case which refined guidelines issued in Joined Cases C-427/93, C-429/93 and C-436/93, known jointly as the Bristol Myers Case) in which the court explained when and how goods introduced on the market by a parallel importer can be repackaged and/or reconditioned.

In the first Boehringer Case, the ECJ held that:

"Article 7(2) of [the First Trademarks Directive]… must be interpreted as meaning that a trademark proprietor may rely on its trademark rights in order to prevent a parallel importer from repackaging pharmaceutical products unless the exercise of those rights contributes to artificial partitioning of the markets between member states.

Replacement packaging of pharmaceutical products is objectively necessary within the meaning of the court's case law if, without such repackaging, effective access to the market concerned, or to a substantial part of that market, must be considered to be hindered as the result of strong resistance from a significant proportion of consumers to relabelled pharmaceutical products.

A parallel importer must, in any event, in order to be entitled to repackage trademarked pharmaceutical products, fulfil the requirement of prior notice. If the parallel importer does not satisfy that requirement, the trademark proprietor may oppose the marketing of the repackaged pharmaceutical product. It is incumbent on the parallel importer [itself] to give notice to the trademark proprietor of the intended repackaging. In the event of dispute, it is for the national court to assess, in the light of all the relevant circumstances, whether the proprietor had a reasonable time to react to the intended repackaging."

However, the Court of Appeal of England and Wales found the answers insufficient and so put three new questions, subdivided into 14 sub-questions, to the ECJ on the issue of reboxing and repackaging.

Considering first the meaning of Article 7(2) when repackaging consists of the attachment of a label to the original packaging of products, the ECJ held that the answer is simply to apply the five requirements already set out by the Bristol Myers Case. As a consequence, the ECJ held that:

"Article 7(2) … must be construed as meaning that the proprietor may legitimately oppose further commercialization of a pharmaceutical product imported from another member state in its original internal and external packaging with an additional external label applied by the importer, unless

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

Turning then to the issue of whether the style and manner of the repackaging has to be taken into account when examining if the repackaging was necessary to introduce the goods on the market by a parallel importer, the court once again referred to its reasoning in the Bristol Myers Case and held that:

"the condition that the repackaging of the pharmaceutical product, either by reboxing the product and re-applying the trademark or by applying a label to the packaging containing the product, be necessary for its further commercialization in the importing member state, as one of the conditions which, if fulfilled, prevent the proprietor under Article 7(2) … from opposing such commercialization, is directed solely at the fact of repackaging and not at the manner and style of the repackaging."

Next, the ECJ clarified the fourth of the five circumstances considered in the Bristol Myers decision in which the parallel importation of repackaged goods could be stopped when the reputation of the goods could be damaged. Here, the ECJ held that the condition that the presentation of the pharmaceutical product must not be such as to be liable to damage the reputation of the trademark and of its proprietor - as a necessary condition for preventing the proprietor, pursuant to Article 7(2), from legitimately opposing further commercialization of a pharmaceutical product, where the parallel importer has either reboxed the product and re-applied the trademark or applied a label to the packaging containing the product - is not limited only to cases where the repackaging is defective, of poor quality or untidy.

However, the court held that it is for the national courts to decide, as a question of fact, whether a parallel importer is liable of damaging a trademark's reputation if it:

• does not affix the trademark to the new exterior carton;
  
  
• applies either its own logo or a house style or get-up, or a get-up used for a number of different products;
  
  
• positions the additional label so as wholly or partially to obscure the proprietor's trademark; or
  
  
• fails to state on the additional label that the trademark in question belongs to the proprietor or prints the name of the parallel importer in capital letters.

The ECJ then held that it is the parallel importer which has to prove the existence of conditions showing that:

• "reliance on trademark rights by the proprietor in order to oppose the marketing of repackaged products under that trademark would contribute to the artificial partitioning of the markets between member states;
  
  
• the repackaging cannot affect the original condition of the product inside the packaging;
  
  
• the new packaging clearly states 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 trademark and of its proprietor; thus, the repackaging must not be defective, of poor quality or untidy; and
  
  
• the importer must give notice to the trademark proprietor before the repackaged product is put on sale and, on demand, supply [it] with a specimen of the repackaged product."

The extent of evidence required from the parallel importer is a little broader than the five original criteria set out in the Bristol Myers Case, to reflect the ECJ's answers to the questions put to it in the present case.

Further, the ECJ held that it could not be left to national law to decide who has the burden of proof since this could lead to different results in different countries.

Finally, the ECJ considered the absence of giving prior notice of importing to the trademark owner and its consequences. The court noted that if one of the Bristol Myers conditions is not fulfilled, it is possible for the trademark owner to oppose to the marketing of the products even if prior notice has been given to it since the goods would be considered as equivalent to spurious goods being marketed on the same market.

As a consequence, and taking into consideration the fact that damages have not been harmonized by the First Trademarks Directive, the ECJ held that the proprietor's rights are damaged if it has not been given notice and that a court can on the basis of the facts of the case decide a proportionate sanction including awarding damages.

The answers given by the ECJ demonstrate that it no longer wants to be put in a position where it has to make a decision in a specific case. Instead, the court wants to go back to giving an interpretation of EU law and let the national courts decide on the basis of the facts submitted. But even though the decision shows that the extent of protection granted has shifted slightly in favour of the trademark owner, one wonders whether the ECJ will be asked again to refine its case law on reboxing and repackaging.

Richard Milchior, Granrut Avocats, Paris