Mock-ups no proper notification of repackaged pharmaceutical parallel imports

In PI Pharma v Novartis (Docket 2011/AR/3035, November 20 2012), the Brussels Court of Appeal has expressed its views on the notification obligation of parallel importers of repackaged pharmaceuticals. It ruled that the Belgian parallel importer PI Pharma had not properly notified Novartis, the holder of the VENORUTON trademark, when it provided a blister and a two-dimensional mock-up of the outer packaging, rather than an actual sample, of the repackaged pharmaceutical as it would be presented on sale. In so ruling, the court followed the logic of its earlier case law. That affirmation was more than welcome, as the first instance jurisdiction in Brussels had issued contradicting decisions on the matter.

The basic criteria for parallel imports of repackaged pharmaceuticals, laid down more than a decade ago by the European Court of Justice in Bristol-Myers Squibb (Joined Cases C-427/93, C-429/93 and C-436/93, July 11 1996) and referred to as the 'BMS criteria', remain relevant today. In that judgment, the court held that a trademark holder can oppose such imports unless:

• the repackaging is objectively necessary to avoid artificial partitioning of the markets between EU member states;
• the repackaging cannot adversely affect the original condition of the product;
• the repackaging clearly identifies the repackager and the manufacturer;
• the repackaging is not liable to cause prejudice to the reputation of the trademark - implying, for example, that the packaging cannot be defective, of poor quality or untidy; and
• the importer gives notice to the trademark owner before putting the repackaged product on sale and supplies it, on request, with a specimen of the repackaged product.

The fifth of these criteria was the subject of the case before the Brussels Court of Appeal. In particular, PI Pharma had notified Novartis of its intent to import repackaged Venoruton, a product indicated for oedema and symptoms associated with venous insufficiency, from Portugal.

Novartis sought an injunction against the parallel imports in an expedited action brought before the president of the Brussels Commercial Court. It argued, among other things, that it had not been properly notified because:

• the notice was addressed to the wrong entity of the group;
• the notice was untimely in that it was not done "just before" the product was imported; and
• PI Pharma failed to provide an actual specimen of the repackaged product as it would be presented on sale.

The first argument related to the addressee of the notification. Novartis objected to the fact that PI Pharma had notified the Novartis entity holding the marketing authorisation for Venoruton in Belgium, instead of the trademark holder (Article 11 of the Royal Decree of April 19 2001 regulating the parallel trade of pharmaceuticals requires that the parallel importer notify the holder of the marketing authorisation for the reference product as part of the administrative procedure to obtain an authorisation for parallel imports). The appeal court concurred with Novartis and the first instance court that, in principle, the trademark holder must be notified. However, in this particular case the court did not allow the objection because it was raised for the first time in the framework of proceedings, rather than in correspondence between the parties before the dispute. In that correspondence, the holder of the marketing authorisation and its counsel voiced objections to the packaging, which the court found that the parallel importer should have assumed were made on behalf of the trademark holder.

Secondly, Novartis took issue with the timing. It argued that the fifth BMS criterion can be met only if notification is made "just before" the product is put on sale. That argument was successful before the first instance court. The appeal court found the contrary to be true, stating that both parties benefit from an early notification in order to iron out any objections to the packaging before the product is put on sale.

On the other hand, the appeal court accepted Novartis' third argument that PI Pharma was required to provide an actual sample of the repackaged product as it would be sold, instead of a mere two-dimensional mock-up of the outer packaging and a blister. PI Pharma argued that the use of mock-ups was common practice in Europe and before the European Medicines Agency. The appeal court held that a mock-up of the outer packaging, while useful to solicit the trademark holder's initial comments, does not allow a full and adequate assessment of the second and the fourth BMS criteria. According to the court, only an actual sample of the product as it would be put on sale suffices to ascertain whether the condition of the original product or the reputation of the trademark would be adversely affected.

The appeal court's decision is in line with its earlier case law. In a similar matter, it had decided that PI Pharma, then Aktuapharma, had not properly notified MSD of its repackaged Zocor imports (Brussels Court of Appeal, September 19 2006, Aktuapharma v MSD, IRDI 2006, p 406). PI Pharma had provided MSD with an actual sample of the outer 84-tablet packaging that it intended to use in Belgium, but it had failed to clarify that it would use the 28-tablet packaging that it was importing from France as the inner packaging. The court ruled that MSD's trademarks had been infringed, holding that it had the right to "complete information on the way the product would be repackaged". In light of that reasoning, the court's disapproval of a two-dimensional mock-up notice comes as no surprise.

The consistency of the Brussels Court of Appeal stands in contrast to the conflicting views at first instance. In the October 12 2011 Venoruton decision (Novartis v PI Pharma, ICIP 2011, p 310; on the same day, this decision was confirmed in a nearly identical decision issued by the same judge in a conflict between the same parties, but concerning the product Neoral (ICIP 2011, p 291)), the acting president of the Brussels Commercial Court took a strict stance and held that only notification "just before" marketing sufficed and that a mock-up did not meet the fifth BMS criterion. However, on November 30 2011 another magistrate in the same commercial court ruled against Eurogenerics's claim for injunctive relief against parallel imports of its omeprazole product by PI Pharma (Eurogenerics v PI Pharma, ICIP 2011, p 333, with case comment by P de Jong, "The parallel importer's duty of prior notice: the Brussels court is one but not the same" ("De notificatieplicht van de parallel invoerder: de ene Brusselse stakingsrechter is de andere niet"), ICIP 2011, p 358). In that case, the court held that there was no requirement to notify "just before" importing and that a mock-up of the outer packaging was sufficient to ascertain that no harm was done to the trademark's reputation or to the condition of the product.

The Venoruton decision hopefully puts an end to this controversy at the Brussels Commercial Court, which has exclusive jurisdiction to hear Community trademark cases in Belgium. The Brussels Court of Appeal has now issued a clear and unambiguous warning to parallel importers that two-dimensional mock-ups of the outer packaging are no replacement for the real thing.

Kristof Neefs and Philippe de Jong, ALTIUS, Brussels