In the case of Junek Europ-Vertrieb GmbH v Lohmann & Rauscher International GmbH & Co KG (Case C-642/16) the CJEU has recently held that applying a small additional label to the original packaging of a pharmaceutical product, so as to further commercialise that product through parallel importation, did not contravene the provisions of the 2009 EU Trade Mark Regulations ("the Regulations").
What are parallel imports?
Once a trade mark proprietor places goods on the market which bear their trade mark, the proprietor's rights are considered exhausted by this first sale. Third parties are permitted to buy up legitimate goods and to subsequently sell those goods, provided the advertisement or offer for sale is lawful. The aim of this is to promote a healthy internal market through increased trade.
However, often the trade mark proprietor will formulate or package their product for distribution in a particular country. They may also operate a different pricing strategy based on the territory in which they wish to sell the product. Parallel imports occur where those goods are bought up, most often in a territory where they are cheaper, and imported into another territory where they are sold for a profit. This is a concern for trade mark proprietors because, for example, they may have intended the specific product to be sold outside the EU. By importing the product into the EU, the importer will often need to change the packaging, for example, because of additional safety standards, regulations or language barriers.
The law
Article 13 of the Regulations (now Article 15 of Regulation (EU) 2017/1001) allows a trade mark proprietor to prohibit further commercialisation of goods already put on the market in the EEA, provided there are legitimate reasons for doing so, particularly where the condition of the goods is changed or impaired.
In the case of Bristol-Myers Squibb v Paranova A/S (C-427/93) the CJEU held that trade mark proprietors could prevent the sale of repackaged parallel imported pharmaceutical products unless certain conditions are met by the importer. Importers are required to provide the trade mark proprietor with notice of the parallel importation and a sample of the modified packaging if requested (amongst other things). These conditions now supplement the Regulations.
Background
Lohman are the proprietors of the EU trade mark DEBRISOFT for sanitary preparations for medical purposes, plasters, materials for dressings and medical dressings. Junek sold, through parallel importation, sanitary preparations and medical dressings in Germany which were originally manufactured and exported to Austria.
In so doing, Junek placed a small label on the packaging which contained: (1) the name of the company responsible for the importation (2) its address and telephone number and (3) a barcode and central pharmaceutical number. The label was applied neatly to an unprinted part of the packaging and did not conceal Lohman's trade mark. However, Junek had not provided Lohman with prior notice of the importation or a sample of the modified packaging.
Lohman initially succeeded in trade mark infringement proceedings brought in Germany. On appeal, the German Federal asked the CJEU whether Article 13 of the Regulations meant that the proprietor of a registered trade mark can oppose further commercialisation of a medical device imported from another member state, in its original internal and external packaging, when an additional label is added by the importer.
CJEU's judgment
The CJEU reasoned that, effectively, the German Federal Court was asking whether the Bristol-Myers Squibb conditions apply, without restriction, to the parallel importation of medical devices. It is clear the purpose of a trade mark is to guarantee origin of the product bearing the mark and that repackaging a product is a risk to this purpose. However, the proprietor's rights cannot restrict free movement of goods unless necessary to protect their legitimate interests e.g. the repackaging adversely affects the original condition or harms the trade mark proprietor's reputation.
The CJEU held that the Bristol-Myers Squibb criteria only applied when the importer had repackaged the product. Whilst this includes relabelling products, in Bristol-Myers Squibb the importer had opened the original packaging to insert information leaflets. In this case, the importer had merely affixed an additional label to an unprinted part of the packaging. The label was small and only included necessary information. The original packaging was preserved and was not modified. As such, Junek's actions did not constitute "repackaging" and did not affect the function of the trade mark.
Therefore, there was no legitimate reason for Lohman opposing the further commercialisation of the medical device.
Comment
This case is interesting because it appears to set a de minimis threshold to the concept of "repackaging" which, in turn, will determine whether the Bristol-Myers Squibb criteria apply to a case of parallel importation. A small label, applied to an otherwise blank area of the original packaging of a medical device and restricted to information which is necessary to make it clear in what circumstances the medical device is being redistributed, will fall below the threshold.
The decision also seems sensible. The issue with parallel imports is that they jeopardise the function of the trade mark and risk adversely affecting the product or the reputation of the trade mark proprietor. The application of a small label, in circumstances such as this where it is positioned discretely, is rarely going to jeopardise the functions of the trade mark. What's more, if the packaging of the medical device has not actually been opened, the integrity of the product and the original user manual and instructions are preserved.