New decision of the Swedish Patent and Market Court of Appeal addresses interface between new safety regulation for packaging of pharmaceuticals and parallel imports

As of 9 February 2019, most prescription medicines and some over-the-counter medicines for human use supplied in the European Union are required to have a unique identifier (a two-dimension barcode) and an anti-tampering device on their outer packaging. The anti-tampering device is a safety feature that shows whether the packaging has been opened or altered since it left the manufacturer, thereby ensuring that the content of the packaging is authentic.

These mandatory safety features are a key measure of the Falsified Medicines Directive which is part of the EU’s strategy to strengthen the security of the supply chain of medicines. The safety features are implemented through a delegated regulation that came into application on 9 February 2019 (this new system applies in all EU/EEA Member States, except for Greece and Italy, who have until 2025 to adjust their respective national systems). The unique identifier and the anti-tampering device on the packaging of the medicines will guarantee medicine authenticity for the benefit of patients, and will strengthen the security of the medicine supply chain, from manufacturers to distributors to pharmacies and hospitals. The unique identifier will be uploaded for each individual medicine to a central EU repository, where depending on the source, wholesalers will have to scan medicines at different points in the supply chain to verify their authenticity (pharmacies and hospitals will thus be able to check the information in this repository before providing them to patients).

Although the above stated security measures and the concerns for patient safety versus raising numbers of falsified medicines are important and introduced for obvious reasons, they also raise interesting questions concerning their interface with rules concerning parallel import of pharmaceuticals, the rights of the trademark holder and the way in which these are to be preserved in the new system. The case in the Swedish Patent and Market Court of Appeal concerned a request for preliminary injunction of the parallel importation of Novarti’s pharmaceuticals VOTIRENT, TYVERB, MEKINIST, TAFINLAR, GILENYA, AFINITOR, REVOLADE and TASIGNA.

Parallel imports? New challenges

Parallel importation of pharmaceuticals presents challenges that are not relevant for other products. While parallel importation is allowed in the EU (regional exhaustion), pharmaceuticals are products that may not be parallel imported without complying with certain mandatory requirements. First of all there has to be a Patient Information Leaflet (PIL) in the official language of the country where the pharmaceutical is to be sold, and/or the pharmaceutical in question may have to be repackaged since it may not be sold in the specific country in the same quantities as in the country of origin. Thus parallel importers have had to repackage pharmaceuticals and the question as to whether this constitutes trademark infringement has been an issue. In general in order for the parallel importer to be able to proceed to a repackaging (using the protected trademark) that does not constitute trademark infringement, the sale of these pharmaceutical must otherwise be impossible.

In its decision of the Patent and Market Court of Appeal (case nr PMÖ 8760-19, find here), the Court concluded that the new safety requirements (unique identifier and the anti-tampering device) means that it was impossible for the parallel importer Abacus to proceed to an importation of the pharmaceutical in Sweden without repackaging the product. Such a repackaging was thus, at this stage in the process and for the purposes of the preliminary infringement, is not to constitute repackaging.

The Court of Appeal, overruled the decision of the Patent and Market Court (Court of first instance) in the same case and reversed the preliminary injunction prohibiting importation of Novarti’s listed pharmaceuticals (with a penalty of 1.000.000). This decision may not be appealed

It will be interesting of course to see how the Court reasons in the infringement case.

It seems that one of the side-effects of the new safety regulations against falsified medicines will be the limited possibilities of rightholders to object repackaging for purposes of parallel importation.