Two bumper ECJ rulings

The two big trade mark decisions of the European Court of Justice today have been a little overshadowed by the festivities for World Intellectual Property Day, but the IPKat took just enough time off from his ecstatic celebrations to check the Curia website and see what the ECJ had in store for him.

Right: objection to the repackaging of pharma products has led to some grey goods traders taking extreme measures to avoid trade mark infringment litigation

Case C-348/04, Boehringer Ingelheim KG and Boehringer Ingelheim Pharma GmbH & Co. KG v Swingward Ltd (that's the short version of the case name, which covers a whole side of A4): this was a re-referred case from the UK on a variety of questions relating to trade mark infringement where a trader buys an original pharma manufacturer's trade mark-protected goods and repackages them, relabels or overstickers them or otherwise makes the appearance of the packaging look quite different. When has he only done what's necessary for the purpose of selling them lawfully in another country, and when has he so changed the original product as to deprive himself of the right to rely on "exhaustion of rights" doctrine? The referred questions this time round were complex but specific (to avoid the risk of referring this dispute to the ECJ for a third time):

"Reboxed products

(1) Where a parallel importer markets in one Member State a pharmaceutical product imported from another Member State in its original internal packaging but with a new exterior carton printed in the language of the Member State of importation (a “reboxed” product):

(a) does the importer bear the burden of proving that the new packaging complies with each of the conditions set out in Joined Cases C-427/93, C-429/93 and C-436/93 Bristol-Myers Squibb [and Others] [1996] ECR I-3457 or does the trade mark proprietor bear the burden of proving that those conditions have not been complied with or does the burden of proof vary from condition to condition, and if so how?

(b) does the first condition set out in Bristol-Myers Squibb as interpreted in Case C-379/97 Upjohn … [1999] ECR I-6927 and Boehringer Ingelheim and Others, namely that it must be shown that it is necessary to repackage the product in order that effective market access is not hindered, apply merely to the fact of reboxing (as held by the Court of Justice of the European Free Trade Association in Case E-3/02 Paranova v Merck) or does it also apply to the precise manner and style of the reboxing carried out by the parallel importer, and if so how?

(c) is the fourth condition set out in Bristol-Myers Squibb and Others, namely that the presentation of the repackaged product is not such as to be liable to damage the reputation of the trade mark or its owner, only infringed if the packaging is defective, of poor quality or untidy or does it extend to anything which damages the reputation of the trade mark?

(d) if the answer to Question l(c) is that the fourth condition is infringed by anything which damages the reputation of the trade mark and if either (i) the trade mark is not affixed to the new exterior carton (“de-branding”) or (ii) the parallel importer applies either his own logo or a house-style or get-up or a get-up used for a number of different products to the new exterior carton (“co-branding”) must such forms of box design be regarded as damaging to the reputation of the trade mark or is that a question of fact for the national court?

(e) If the answer to Question l(d) is that it is a question of fact, on whom does the burden of proof lie?

Overstickered products

(2) Where a parallel importer markets in one Member State a pharmaceutical product imported from another Member State in its original internal and external packaging to which the parallel importer has applied an additional external label printed in the language of the Member State of importation (an “overstickered” product):

(a) do the five conditions set out in Bristol-Myers Squibb and Others apply at all?

(b) If the answer to Question 2(a) is yes, does the importer bear the burden of proving that the overstickered packaging complies with each of the conditions set out in Bristol-Myers Squibb and Others or does the trade mark proprietor bear the burden of proving that those conditions have not been complied with or does the burden of proof vary from condition to condition?

(c) if the answer to Question 2(a) is yes, does the first condition set out in Bristol-Myers Squibb and Others as interpreted in Upjohn … and Boehringer Ingelheim and Others, namely that it must be shown that it is necessary to repackage the product in order that effective market access is not hindered, apply merely to the fact of overstickering or does it also apply to the precise manner and style of overstickering adopted by the parallel importer?

(d) if the answer to Question 2(a) is yes, is the fourth condition set out in Bristol-Myers Squibb and Others, namely that the presentation of the repackaged product is not such as to be liable to damage the reputation of the trade mark or its owner, only infringed if the packaging is defective, of poor quality or untidy or does it extend to anything which damages the reputation of the trade mark?

(e) if the answer to Question 2(a) is yes and the answer to Question 2(d) is that the fourth condition is infringed by anything which damages the reputation of the trade mark, is it damaging to the reputation of a trade mark for this purpose if either (i) the additional label is positioned so as wholly or partially to obscure one of the proprietor’s trade marks or (ii) the additional label fails to state that the trade mark in question is a trade mark owned by the proprietor or (iii) the name of the parallel importer is printed in capital letters?

Notice

(3) Where a parallel importer has failed to give notice in respect of a repackaged product as required by the fifth condition of Bristol-Myers Squibb and Others, and accordingly has infringed the proprietor’s trade mark(s) for that reason only:

(a) is every subsequent act of importation of that product an infringement or does the importer only infringe until such time as the proprietor has become aware of the product and the applicable notice period has expired?

(b) is the proprietor entitled to claim financial remedies (i.e. damages for infringement or the handing over of all profits made by infringement) by reason of the importer’s acts of infringement on the same basis as if the goods had been spurious?

(c) is the granting of financial remedies to the proprietor in respect of such acts of infringement by the importer subject to the principle of proportionality?

(d) if not, upon what basis should such compensation be assessed given that the products in question were placed on the market within the [European Economic Area] by the proprietor or with his consent?’".
If you thought that this was a helluva lot of question, just wait till you read the answer. Ruled the Court, in what it must pray will be the final time these issues trouble them:

"1. Article 7(2) of ... Council Directive 89/104... is to be interpreted as meaning that the trade mark owner may legitimately oppose further commercialisation 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 trade mark rights by the proprietor in order to oppose the marketing of the overstickered product under that trade mark 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 trade mark and of its proprietor; thus, the label must not be defective, of poor quality, or untidy; and

– the importer gives notice to the trade mark proprietor before the overstickered product is put on sale, and, on demand, supplies him with a specimen of that product.

2. The condition that the repackaging of the pharmaceutical product, either by reboxing the product and re-applying the trade mark or by applying a label to the packaging containing the product, be necessary for its further commercialisation in the importing Member State, as one of the conditions which, if fulfilled, prevent the proprietor under Article 7(2) of Directive 89/104, as amended by the Agreement on the European Economic Area, from opposing such commercialisation, is directed solely at the fact of repackaging and not at the manner and style of the repackaging.

3. The condition that the presentation of the pharmaceutical product must not be such as to be liable to damage the reputation of the trade mark and of its proprietor – as a necessary condition for preventing the proprietor, pursuant to Article 7(2) of Directive 89/104, as amended by the Agreement on the European Economic Area, from legitimately opposing further commercialisation of a pharmaceutical product where the parallel importer has either reboxed the product and re-applied the trade mark or applied a label to the packaging containing the product – is not limited to cases where the repackaging is defective, of poor quality, or untidy.

4. The question whether the fact that a parallel importer:

– fails to affix the trade mark to the new exterior carton (‘de-branding’), or

– applies either his own logo or house-style or get-up or a get-up used for a number of different products (‘co-branding’), or

– positions the additional label so as wholly or partially to obscure the proprietor’s trade mark, or

– fails to state on the additional label that the trade mark in question belongs to the proprietor, or

– prints the name of the parallel importer in capital letters,

is liable to damage the trade mark’s reputation is a question of fact for the national court to decide in the light of the circumstances of each case.

5. In situations such as those in the main proceedings, it is for the parallel importers to prove the existence of the conditions that

– reliance on trade mark rights by the proprietor in order to oppose the marketing of repackaged products under that trade mark 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 trade mark and of its proprietor; thus, the repackaging must not be defective, of poor quality, or untidy; and

– the importer must give notice to the trade mark proprietor before the repackaged product is put on sale and, on demand, supply him with a specimen of the repackaged product,

and which, if fulfilled, would prevent the proprietor from lawfully opposing the further commercialisation of a repackaged pharmaceutical product.

As regards the condition that it must be shown that the repackaging cannot affect the original condition of the product inside the packaging, it is sufficient, however, that the parallel importer furnishes evidence that leads to the reasonable presumption that that condition has been fulfilled. This applies a fortiori also to the condition that the presentation of the repackaged product must not be such as to be liable to damage the reputation of the trade mark and of its proprietor. Where the importer furnishes such initial evidence that the latter condition has been fulfilled, it will then be for the proprietor of the trade mark, who is best placed to assess whether the repackaging is liable to damage his reputation and that of the trade mark, to prove that they have been damaged.

6. Where a parallel importer has failed to give prior notice to the trade mark proprietor concerning a repackaged pharmaceutical product, he infringes that proprietor’s rights on the occasion of any subsequent importation of that product, so long as he has not given the proprietor such notice. The sanction for that infringement must be not only proportionate, but also sufficiently effective and a sufficient deterrent to ensure that Directive 89/104, as amended by the Agreement on the European Economic Area, is fully effective. A national measure under which, in the case of such an infringement, the trade mark proprietor is entitled to claim financial remedies on the same basis as if the goods had been spurious, is not in itself contrary to the principle of proportionality. It is for the national court, however, to determine the amount of the financial remedies according to the circumstances of each case, in the light in particular of the extent of damage to the trade mark proprietor caused by the parallel importer’s infringement and in accordance with the principle of proportionality".
It is impossible even for the IPKat to come up with a slick conclusion in so short a time, particularly while under the influence of catnip, but he hopes to return to this ruling in due course. Adds Merpel, this ruling looks a little more pharma-friendly in that it seems to put the burden on the parallel importer to prove the legitimacy of his actions rather than on the trade mark owner to prove their unlawful nature.


The second case before the ECJ today, C-412/05 P, is Alcon Inc v OHIM, Biofarma SA, which arises from a Community trade mark application. In short, in 1998 Alcon applied to register the word TRAVATAN as a CTM for ophthalmic pharmaceutical preparations. Biofarma opposed, alleging a likelihood of confusion and citing its earlier Italian word mark TRIVASTAN for “pharmaceutical, veterinary and hygiene products; dietary products for infants or patients; plasters; materials for dressings; tooth fillings and dental impressions; disinfectants; herbicides and pesticides”. After Biofarma was put to proof of use of its earlier mark, proof was furnished for a “peripheral vasodilator intended to treat peripheral and cerebral vascular disturbance and vascular disorders of the eye and ear”.

The Opposition Division agreed that there was a likelihood of confusion and refused the application, in a decision upheld both by the Board of Appeal and the Court of First Instance. Alcon appealed on various grounds, particularly challenging the notion that in respect of pharma products such as those in question, which were available in part on prescription, the relevant consumer should be taken to be the public at large rather than healthcare professionals.Advocate General Juliane Kokott advised the ECJ to dismiss Alcon's appeal, which is what it has done. The ruling contains some interesting observations on the identification of the "relevant public" and the comparison of similarity of goods, but the IPKat's first reading has spotted nothing earth-shattering.
Two bumper ECJ rulings Two bumper ECJ rulings Reviewed by Jeremy on Thursday, April 26, 2007 Rating: 5

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