BOEHRINGER CASE BOUNCED BACK TO LUXEMBOURG AGAIN

Further to yesterday’s blog, here’s the IPKat’s account of Boehringer Ingelheim and others v Dowelhurst and Swingward.

The claimants were well known pharma manufacturers. The defendants, parallel importers, bought the claimants’ original pharma products in another EU Member State and repackaged them, taking their contents out of the boxes designed for their first market and putting them in new boxes designed for the UK market along with fresh information leaflets in English complying with UK regulatory requirements. Some of the defendants’ boxes bore the claimants’ trade marks as well as the importer’s distinctive get-up (i.e. co-branding). Other boxes used only the drug’s generic name, not its trade mark (i.e. de-branding). In some cases the product’s weren’t even reboxed: they were merely over-stickered with fresh labels. In all these instances the packaging indicated that the goods came from the EU and were repackaged by the defendants. The claimants sued for trade mark infringement.

It was accepted that reapplying a trade mark to goods infringed the claimants’ rights unless it fell within the free circulation rules. The claimants said they were justified in enforcing their rights under Art.30 EC Treaty (which lets IP laws act as an exception to the free movement of goods) and that they had legitimate reason to oppose the defendants’ exhaustion defence under Art.7(2) of Council Directive 89/104 (the trade marks directive).

Following a reference by the trial judge (Mr Justice Laddie) the ECJ (Case C-143/00) held that repackaging was objectively necessary if it was required for effective access to the market concerned. After the ECJ ruling, Laddie J held that all the claimants’ actions about reboxing succeeded but those about relabelling failed. According to the judge, the test of necessity required the repackaging to involve the least possible impairment to the specific subject-matter of the trade mark right. Both de-branding and co-branding involved trade mark infringement, but relabelling did not. The defendants appealed on the reboxing issue. In their view it was wrong to hold that the test of necessity applied not only to repackaging as such but also to all the details of the manner of repackaging: that would impose on parallel importers the impossible burden of showing, in relation to their repackaging, that they had done no more than necessary. Meanwhile, the claimants cross-appealed on restickering.

The Court of Appeal, in a judgment delivered by Lord Justice Jacob, agreed that Laddie J was entitled to hold on the evidence that reboxing was, as a matter of fact, necessary to overcome strong resistance in the market to relabelled boxes. He was also right to dismiss the passing off claim based on de-branding: there was no misrepresentation and no evidence of deception. Laddie J was however wrong to hold that the ECJ had created an irrebuttable presumption that repackaging was prejudicial to the specific subject-matter of the trade mark right: the better view was that any act which would infringe, particularly reaffixing, was not permitted by Art.28 EC Treaty or Art.7(1) of Directive 89/104 if it would damage the reputation of the mark, whether by affecting or potentially affecting the goods themselves, by poor packaging or otherwise. On that basis co-branding might cause damage to the reputation of the mark, even though it had not done so on the facts of this case. De-branding had not caused any damage to the reputations of the claimants or their trade marks. On that basis, if the matter was acte clair, the defendants’ appeals would be allowed in relation to the reboxed products and the claimants’ cross-appeals in relation to restickered boxes would be dismissed. However, since there was a substantial disparity of views across the EU as to how the law applied, a reference to the ECJ was required to determine whether the necessity test applied only to the act of repackaging or whether it extended to the presentation of the repackaged product.

The IPKat marvels at the courage of the Court of Appeal in referring this costly and heavily litigated case back to the ECJ a second time. It takes guts to do so, particularly where the turn-round time for an ECJ reference is only a little less than two years. The IPKat is also grateful to the Court of Appeal for fixing at 15 days the period of notice that parallel traders have to give original drugs manufacturers that they intend to import repackaged or restickered products: this is the period suggested by the ECJ, who conceded that the determination of the notice period was a matter for national courts rather than for itself.

Early repackaging precedents here and here
Exhaustion strategies here and here