Parallel importer may use design similar to producer’s mark
The Norwegian Supreme Court has ruled that parallel importer Paranova’s use of its own design on repackaged boxes of Merck’s products does not infringe Merck’s trademark. Instead of considering whether the repackaging and design were necessary to enter the Norwegian market, the Supreme Court considered the interests of both parties and held that Paranova’s design was not liable to damage Merck’s reputation or that of its trademark.
Paranova first imported Merck’s products from European Free Trade Association (EFTA) countries into Norway in 1995, using on the repackaged boxes its own logo, word mark and parallel stripes design. Following a ruling by a Norwegian county court, Paranova ceased to use its logo and trademark but carried on using its design on the packaging in a colour very close to that of Merck's registered Community colour mark. Merck filed a new suit to enjoin Paranova from using the design. In 2002 the Court of Appeal ruled that Paranova’s use of vertical coloured stripes on the repackaged boxes infringed Merck’s colour mark. The court found that the use of the design was not necessary to enter the Norwegian market.
Paranova appealed to the Supreme Court, which referred a question concerning the necessity criterion to the EFTA Court. In an advisory opinion, the EFTA Court stated that the necessity criterion was not mechanically applicable when considering the presentation and design of repackaged boxes. The interests of the trademark owner and the parallel importer must be carefully balanced. In the case at hand, the Supreme Court should consider whether the use of the parallel importer’s own design was liable to damage the reputation of the trademark or of the trademark owner pursuant to Article 7(2) of the Community Trademark Directive - Articles 11 and 13 of the European Economic Area Agreement (see Grounds for opposing new package designs on parallel imports clarified).
The Supreme Court reversed the Court of Appeal decision. It rejected Merck’s contentions that the use of coloured stripes similar to Merck’s colour mark:
- gives the impression that there is a commercial link (such as a co-branding agreement) between Merck and Paranova;
- creates a more general risk that Merck’s products would be confused with the products of other manufacturers;
- creates a risk of dilution of Merck’s trademark; and
- misuses Merck’s goodwill.
Instead, the court found that the Paranova design (i) was unlikely to damage the reputation of Merck’s trademark or Merck itself, and (ii) was a consequence of the right to parallel import pharmaceutical products. Thus, Merck had no legitimate reason to oppose Paranova’s use of the design under either the Norwegian Trademark Act or the Marketing Practices Act.
Felix Reimers and Torger Kielland, Advokatfirmaet Grette DA, Oslo
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