Pharmacia & Upjohn SA v Paranova A/S.
Date: 1999-10-12
13 According to consistent case-law, as reflected in Article 7(1) of the Directive, the proprietor of a trade mark protected by the legislation of a Member State cannot rely on that legislation to prevent the import or marketing of a product which has been put on the market in another Member State by him or with his consent (see, in particular, Case 16/74 Centrafarm v Winthrop [1974] ECR 1183, paragraphs 7 to 11; Case C-10/89 CNL-SUCAL v HAG GF [1990] ECR I-3711, paragraph 12; and Joined Cases C-427/93, C-429/93 and C-436/93 Bristol-Myers Squibb and Others v Paranova [1996] ECR I-3457, paragraph 31).
14 In its case-law on those situations in which parallel importers purchase products placed on the market in a Member State by the trade-mark proprietor, repackage them and reaffix the original trade mark in order to market them in the Member State of import, the Court has held that Article 36 of the Treaty allows derogations from the fundamental principle of the free movement of goods in the common market only to the extent to which such derogations are justified in order to safeguard the rights which constitute the specific subject-matter of that property (see Case 102/77 Hoffmann-La Roche v Centrafarm [1978] ECR 1139, paragraph 6, and Bristol-Myers Squibb, paragraph 42).
15 With regard to the right in a trade mark, its specific purpose is in particular to guarantee the proprietor the exclusive right to use that trade mark for the purpose of putting a product on the market for the first time and therefore to protect him against competitors wishing to take advantage of the status and reputation of the trade mark by selling products which bear it unlawfully (see Hoffmann-La Roche, paragraph 7, and Bristol-Myers Squibb, paragraph 44).
16 With respect to the question whether this exclusive right includes the power to oppose the reaffixing of the original trade mark after the product has been repackaged, the Court has held that account must be taken of the essential function of the trade mark, which is to guarantee to the consumer or end user the identity of the trade-marked product's origin by enabling him to distinguish it without any risk of confusion from products of different origin.  That guarantee of origin means that the consumer or end user can be certain that a trade-marked product offered to him has not been subject at a previous stage of marketing to interference by a third party, without the authorisation of the trade mark proprietor, in such a way as to affect the original condition of the product (see Hoffmann-La Roche, paragraph 7, and Bristol-Myers Squibb, paragraph 47).
17 Having regard to those considerations, the Court interpreted Article 36 of the Treaty as meaning that a trade mark proprietor may rely on his rights as proprietor to prevent an importer from marketing a product put on the market in another Member State by the proprietor or with his consent, where that importer has repackaged the product in new packaging to which the trade mark has been reaffixed (see Hoffmann-La Roche, paragraph 8, and Bristol-Myers Squibb, paragraph 49).  However, the Court has also held that the exercise by the proprietor of his trade-mark right may constitute a disguised restriction under Article 36 of the Treaty if it is established that reliance on the trade-mark right by the proprietor, having regard to the marketing system which he has adopted, would contribute to the artificial partitioning of the markets between Member States, and that, in the event of repackaging, the protection of certain legitimate interests of the trade-mark proprietor is assured, in particular that the repackaging cannot adversely affect the original condition of the product and that the presentation of the repackaged product is not such as to be liable to damage the reputation of the trade mark (see Hoffmann-La Roche, paragraph 10, Bristol-Myers Squibb, paragraph 49, and Case C-349/95 Loendersloot v Ballantine [1997] ECR I-6227, paragraph 29).
18 With regard to the condition that there be artificial partitioning of the markets, the Court pointed out in paragraph 57 of Bristol-Myers Squibb that the requirement of artificial partitioning of the markets does not imply that the importer must demonstrate that, by putting an identical product on the market in varying forms of packaging in different Member States, the trade mark proprietor deliberately sought to partition the markets between Member States.
19 The Court also held, in paragraph 52 of Bristol-Myers Squibb, that reliance on trade-mark rights by their proprietor in order to oppose marketing under that trade mark of products repackaged by a third party would contribute to the partitioning of markets between Member States, in particular where the proprietor has placed an identical pharmaceutical product on the market in several Member States in various forms of packaging and the product may not, in the condition in which it has been marketed by the trade mark proprietor in one Member State, be imported and placed on the market in another Member State by a parallel importer.  In this context, the Court pointed out, in paragraph 56 of Bristol-Myers Squibb, that the power of the proprietor of trade-mark rights should be limited only in so far as the repackaging undertaken by the importer is necessary in order to market the product in the Member State of import.
21 In paragraphs 14, 17 and 18 of that judgment, the Court held, first, that the essential function of the trade mark, namely the guarantee of origin of the trade-marked product, would be jeopardised if it were permissible for a third party to affix the mark to the product, even the original product, and, second, that the right granted to the proprietor of the trade mark to prohibit any unauthorised affixing of that mark to his product accordingly comes within the specific subject-matter of the trade mark.  The proprietor was accordingly justified, pursuant to the first sentence of Article 36 of the Treaty, in preventing the parallel importer from so acting.
22 The Court also held, however, in paragraphs 22 and 23 of American Home Products, that prohibition by the proprietor of unauthorised use of the mark by a third party would constitute a disguised restriction on trade between Member States within the meaning of the second sentence of Article 36 of the Treaty if it were established that the practice of using different trade marks for the same product had been adopted by the proprietor of those trade marks for the purpose of artificially partitioning the markets.
The questions submitted for a preliminary ruling
30 Moreover, according to the Court's case-law, Article 7 of the Directive, like Article 36 of the Treaty, is intended to reconcile the fundamental interest in protecting trade mark rights with the fundamental interest in the free movement of goods within the common market: it follows that those two provisions, which pursue the same result, must be interpreted in the same way (see Bristol-Myers Squibb, paragraph 40).
37 The view expressed by Paranova, by the Netherlands and United Kingdom Governments, and by the Commission, in this respect is correct: there is no objective difference between reaffixing a trade mark after repackaging and replacing the original trade mark by another which is capable of justifying the condition of artificial partitioning being applied differently in each of those cases.
38 In the first place, the practice of using different packaging and that of using different trade marks for the same product, in contributing similarly to the partitioning of the single market, adversely affect intracommunity trade in the same way; secondly, the reaffixing of the original trade mark on the repackaged product and its replacement by another trade mark both represent a use by the parallel importer of a trade mark which does not belong to him.
39 Consequently, where the trade-mark rights in the importing Member State allow the proprietor of the trade mark to prevent it being reaffixed after repackaging of the product or being replaced, and where the repackaging with reaffixing or the replacement of the trade mark is necessary to enable the products to be marketed by the parallel importer in the importing Member State, there are obstacles to intracommunity trade giving rise to artificial partitioning of the markets between Member States within the meaning of the case-law cited, whether or not the proprietor intended such partitioning.
43 It follows that it is for the national courts to examine whether the circumstances prevailing at the time of marketing made it objectively necessary to replace the original trade mark by that of the importing Member State in order that the product in question could be placed on the market in that State by the parallel importer.  This condition of necessity is satisfied if, in a specific case, the prohibition imposed on the importer against replacing the trade mark hinders effective access to the markets of the importing Member State.  That would be the case if the rules or practices in the importing Member State prevent the product in question from being marketed in that State under its trade mark in the exporting Member State.  This is so where a rule for the protection of consumers prohibits the use, in the importing Member State, of the trade mark used in the exporting Member State on the ground that it is liable to mislead consumers.
44 In contrast, the condition of necessity will not be satisfied if replacement of the trade mark is explicable solely by the parallel importer's attempt to secure a commercial advantage.