Repackaging case referred to ECJ for a second time

United Kingdom

The Court of Appeal of England and Wales has referred 14 questions to the European Court of Justice (ECJ) in the case of Glaxo Group Limited v Dowelhurst Limited (also known as Boehringer Ingelheim AG v Swingward Limited), a long-running parallel import repackaging case. This is the second time a court has referred questions to the ECJ in this case, thus demonstrating the confusion and uncertainty that remain as to when a trademark owner may rely on its rights to prevent parallel importers from repackaging its goods.

The claimants are well-known pharmaceutical manufacturers (Boehringer Ingelheim KG, Glaxo Group Limited, Eli Lilly and Company and Smithkline Beecham plc, now part of Glaxo). The defendants, Dowelhurst Limited and Swingward Limited, are parallel importers of branded pharmaceutical products within the European Economic Area, who either (i) repackage the products and re-affix the trademarks to the outer packaging using their own branding (ie, co-branding), or (ii) remove the trademark and use the generic name of the drug on the box (ie, de-branding). The claimants argued that both practices amounted to trademark infringement.

The High Court first heard the case in January 2000 and made a reference to the ECJ. Following the ECJ ruling, Justice Laddie handed down a second judgment on February 6 2003 in which he restricted repackaging on the basis that it implied a legal presumption that the mark owner has suffered harm as a result (see Repackaging of parallel-imported drugs restricted). The defendants appealed.

In March 2004 the Court of Appeal indicated that it wanted to overturn some of the High Court’s findings, but felt bound to make another reference to the ECJ to clarify certain points (see Further guidance from ECJ required in drugs repackaging case). The questions for referral have now been formulated by Lord Justice Jacob, after suggestions from both sides. The questions are broadly as follows:

  • Do the five conditions set out in Bristol-Myers Squibb v Paranova apply at all to overstickered products? The conditions are that:

    o the repackaging is necessary to market the product;

    o the repackaging has no effect on the original condition of the product and includes the proper instructions;

    o the repackaging features a clear identification of manufacturer and importer;

    o the presentation of the repackaging is not damaging; and

    o the party repackaging the product has given notice to the mark owner.

  • Does the importer bear the burden of proof that its new packaging or overstickering complies with the Paranova conditions or does the trademark owner have to prove that the conditions have not been complied with? Also, does the burden switch between importer and mark owner from condition to condition? If so, how?

  • Does the first Paranova condition (ie, the necessity criterion) apply merely to the fact of reboxing or overstickering, or does it also apply to the precise manner and style of the reboxing or overstickering carried out by the parallel importer? If so, how?

  • Is the fourth Paranova condition (ie, liability to damage the reputation of the trademark or its owner) only infringed if the reboxing is defective, of poor quality or untidy, or does it extend to anything that damages the reputation of the trademark?

  • If the damage criterion extends to anything that damages the reputation of the trademark, are de-branding and co-branding damaging or is that a question of fact for the national court? If it is a question of fact, does the burden of proof lie with the manufacturer or the importer?

  • Will the reputation of a trademark be damaged where:

    o an additional label is positioned so as wholly or partially to obscure the manufacturer’s trademark;

    o the additional label fails to state that the mark in question is owned by the product’s manufacturer; or

  • o the name of the parallel importer is printed in capital letters?

  • Where a parallel importer has failed to give notice in respect of a repackaged product and has infringed the trademark for that reason only, to what extent are subsequent acts of importation infringements? To what financial remedies, if any, should the mark owner be entitled?

The questions referred are comprehensive and, unlike the first reference, are phrased within the framework of existing ECJ jurisprudence. Hopefully they will elicit clarification of whether co-branding and de-branding are acceptable practices. However, the ECJ may rule that it has already given sufficient guidance in this case.

Joel Smith and Lucy Harrold, Herbert Smith, London

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