Bristol-Myers Squibb v Paranova A/S (C-427/93) and C. H. Boehringer Sohn, Boehringer Ingelheim KG and Boehringer Ingelheim A/S v Paranova A/S (C-429/93) and Bayer Aktiengesellschaft and Bayer Danmark A/S v Paranova A/S (C-436/93).
Date: 1996-07-11
25 Where Community directives provide for the harmonization of measures necessary to ensure the protection of the interests referred to in Article 36 of the Treaty, any national measure relating thereto must be assessed in relation to the provisions of that directive and not Articles 30 to 36 of the Treaty (see Case 5/77 Tedeschi v Denkavit [1977] ECR 1555, paragraph 35; Case 227/82 Van Bennekom [1983] ECR 3883, paragraph 35; Case C-37/92 Vanacker and Lesage [1993] ECR I-4947, paragraph 9; and Case C-323/93 Centre d' Insémination de la Crespelle v Coopérative de la Mayenne [1994] ECR I-5077, paragraph 31).
26 Article 7 of the directive is worded in general terms and comprehensively regulates the question of the exhaustion of trade mark rights for products traded in the Community. Therefore, national rules on the subject must be assessed in the light of that article.
27 Like any secondary legislation, however, the directive must be interpreted in the light of the Treaty rules on the free movement of goods and in particular Article 36 (see Case C-47/90 Delhaize v Promalvin [1992] ECR I-3669, paragraph 26; and Case C-315/92 Verband Sozialer Wettbewerb v Clinique Laboratoires and Estée Lauder [1994] ECR I-317, paragraph 12).
31 That provision is framed in terms corresponding to those used by the Court in judgments which, in interpreting Articles 30 and 36 of the Treaty, have recognized in Community law the principle of the exhaustion of the rights conferred by a trade mark. It reiterates the case-law of the Court to the effect that the owner of a trade mark protected by the legislation of a Member State cannot rely on that legislation to prevent the importation or marketing of a product which was 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 ("HAG II"); and Case C-9/93 IHT Internationale Heiztechnik v Ideal Standard [1994] ECR I-2789, paragraphs 33 and 34).
34 The Court' s case-law on Article 36 of the Treaty shows that the owner' s exclusive right to affix a trade mark to a product must in certain circumstances be regarded as exhausted in order to allow an importer to market under that trade mark products which were put on the market in another Member State by the owner or with his consent (see Case 102/77 Hoffmann-La Roche v Centrafarm [1978] ECR 1139; Case 3/78 Centrafarm v American Home Products Corporation [1978] ECR 1823; and the judgments given today in Joined Cases C-71/94, C-72/94 and C-73/94 Eurim-Pharm v Beiersdorf and in Case C-232/94 MPA Pharma v Rhône-Poulenc Pharma).
39 Article 7(2) of the directive provides that the owner of a trade mark may oppose the further commercialization of products where there is a legitimate reason for doing so, especially where the condition of the products has been changed or impaired since they were put on the market. The use of the word "especially" shows that the case envisaged is given only as an example.
40 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, so that those two provisions, which pursue the same result, must be interpreted in the same way.
41 The Court' s case-law under Article 36 must therefore be taken as the basis for determining whether, under Article 7(2) of the directive, a trade mark owner may oppose the marketing of repackaged products to which the trade mark has been reaffixed.
42 The Court' s case-law shows that Article 36 allows derogations from the fundamental principle of the free movement of goods within the common market only in so far as such derogations are justified in order to safeguard the rights which constitute the specific subject-matter of the industrial and commercial property in question.
43 Trade mark rights, the Court has held, constitute an essential element in the system of undistorted competition which the Treaty is intended to establish. In such a system, undertakings must be able to attract and retain customers by the quality of their products or services, which is possible only thanks to the existence of distinctive signs allowing them to be identified. For the trade mark to be able to fulfil that function, it must constitute a guarantee that all products which bear it have been manufactured under the control of a single undertaking to which responsibility for their quality may be attributed (see HAG II, paragraph 13, and IHT Internationale Heiztechnik, paragraphs 37 and 45).
44 Thus, as the Court has recognized on many occasions, the specific subject-matter of a trade mark is in particular to guarantee to the owner that he has 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 bearing it illegally (see Hoffmann-La Roche v Centrafarm, paragraph 7; Case 1/81 Pfizer v Eurim-Pharm [1981] ECR 2913, paragraph 7; HAG II, paragraph 14; and IHT Internationale Heiztechnik, paragraph 33).
45 It follows that, as mentioned above, the owner of a trade mark protected by the legislation of a Member State cannot rely on that legislation in order to oppose the importation or marketing of a product which was put on the market in another Member State by him or with his consent (see, in particular, Winthrop, paragraphs 7 to 11; HAG II, paragraph 12; and IHT Internationale Heiztechnik, paragraphs 33 and 34).
46 Trade mark rights are not intended to allow their owners to partition national markets and thus promote the retention of price differences which may exist between Member States. Whilst, in the pharmaceutical market especially, such price differences may result from factors over which trade mark owners have no control, such as divergent rules between the Member States on the fixing of maximum prices, the profit margins of pharmaceutical wholesalers and pharmacies, or the maximum amount of medical expenses which may be reimbursed under sickness insurance schemes, distortions caused by divergent pricing rules in one Member State must be remedied by measures of the Community authorities and not by another Member State introducing measures which are incompatible with the rules on the free movement of goods (see, in particular, Winthrop, paragraphs 16 and 17).
47 In answering the question whether a trade mark owner' s exclusive rights include the power to oppose the use of the trade mark by a third party after the product has been repackaged, 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 person, without the authorization of the trade mark owner, in such a way as to affect the original condition of the product (Hoffmann-La Roche, paragraph 7; Pfizer, paragraph 8).
48 Therefore, the right conferred upon the trade mark owner to oppose any use of the trade mark which is liable to impair the guarantee of origin so understood forms part of the specific subject-matter of the trade mark right, the protection of which may justify derogation from the fundamental principle of the free movement of goods (Hoffmann-La Roche, paragraph 7; Pfizer, paragraph 9).
49 In Hoffmann-La Roche, the Court held, applying those principles, that Article 36 of the Treaty must be interpreted as meaning that a trade mark owner may rely on his rights as owner to prevent an importer from marketing a product put on the market in another Member State by the owner or with his consent, where that importer has repackaged the product in new packaging to which the trade mark has been reaffixed, unless:
° it is established that the use of the trade-mark right by the owner, having regard to the marketing system which he has adopted, will contribute to the artificial partitioning of the markets between Member States;
° it is shown that the repackaging cannot adversely affect the original condition of the product;
° the owner of the mark receives prior notice before the repackaged product is put on sale; and
° it is stated on the new packaging by whom the product has been repackaged.
50 In accordance with that case-law, Article 7(2) of the directive must therefore be interpreted as meaning that a trade mark owner may legitimately oppose the further marketing of a pharmaceutical product where the importer has repackaged it and reaffixed the trade mark, unless the four conditions set out in the Hoffmann-La Roche judgment, cited above, have been met.
52 Reliance on trade mark rights by their owner 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 owner 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 owner in one Member State, be imported and put on the market in another Member State by a parallel importer.
53 The trade mark owner cannot therefore oppose the repackaging of the product in new external packaging when the size of packet used by the owner in the Member State where the importer purchased the product cannot be marketed in the Member State of importation by reason, in particular, of a rule authorizing packaging only of a certain size or a national practice to the same effect, sickness insurance rules making the reimbursement of medical expenses depend on the size of the packaging, or well-established medical prescription practices based, inter alia, on standard sizes recommended by professional groups and sickness insurance institutions.
54 Where, in accordance with the rules and practices in force in the Member State of importation, the trade mark owner uses many different sizes of packaging in that State, the finding that one of those sizes is also marketed in the Member State of exportation is not enough to justify the conclusion that repackaging is unnecessary. Partitioning of the markets would exist if the importer were able to sell the product in only part of his market.
55 The owner may, on the other hand, oppose the repackaging of the product in new external packaging where the importer is able to achieve packaging which may be marketed in the Member State of importation by, for example, affixing to the original external or inner packaging new labels in the language of the Member State of importation, or by adding new user instructions or information in the language of the Member State of importation, or by replacing an additional article not capable of gaining approval in the Member State of importation with a similar article that has obtained such approval.
56 The power of the owner of trade mark rights protected in a Member State to oppose the marketing of repackaged products under the trade mark 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 importation.
57 Finally, contrary to the argument of the plaintiffs in the main actions, the Court' s use of the words "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 owner deliberately sought to partition the markets between Member States. By stating that the partitioning in question must be artificial, the Court' s intention was to stress that the owner of a trade mark may always rely on his rights as owner to oppose the marketing of repackaged products when such action is justified by the need to safeguard the essential function of the trade mark, in which case the resultant partitioning could not be regarded as artificial.
Whether the original condition of the product is adversely affected
59 The trade mark owner may therefore oppose any repackaging involving a risk of the product inside the package being exposed to tampering or to influences affecting its original condition. To determine whether that applies, account must be taken, as the Court held in paragraph 10 of the Hoffmann-La Roche judgment, of the nature of the product and the method of repackaging.
67 If the repackaging is carried out in conditions which cannot affect the original condition of the product inside the packaging, the essential function of the trade mark as a guarantee of origin is safeguarded. Thus, the consumer or end user is not misled as to the origin of the products, and does in fact receive products manufactured under the sole supervision of the trade mark owner.
68 Whilst, in these circumstances, the conclusion that the trade mark owner may not rely on his rights as owner in order to oppose the marketing under his trade mark of products repackaged by an importer is essential in order to ensure the free movement of goods, it does nevertheless confer on the importer certain rights which, in normal circumstances, are reserved for the trade mark owner himself.
69 In the interests of the owner as proprietor of the trade mark, and to protect him against any misuse, those rights must therefore, as the Court held in Hoffmann-La Roche, be recognized only in so far as the importer complies with a number of other requirements.
70 Since it is in the trade mark owner' s interest that the consumer or end user should not be led to believe that the owner is responsible for the repackaging, an indication must be given on the packaging of who repackaged the product.
71 As the Court has already stated, that indication must be clearly shown on the external packaging of the repackaged product (Hoffmann-La Roche, paragraph 12, and Pfizer, paragraph 11). That implies, as the Advocate General pointed out in paragraph 128 of his Opinion, that the national court must assess whether it is printed in such a way as to be understood by a person with normal eyesight, exercising a normal degree of attentiveness.
75 Even if the person who carried out the repackaging is indicated on the packaging of the product, there remains the possibility that the reputation of the trade mark, and thus of its owner, may nevertheless suffer from an inappropriate presentation of the repackaged product. In such a case, the trade mark owner has a legitimate interest, related to the specific subject-matter of the trade mark right, in being able to oppose the marketing of the product. In assessing whether the presentation of the repackaged product is liable to damage the reputation of the trade mark, account must be taken of the nature of the product and the market for which it is intended.
76 In the case of pharmaceutical products, that is certainly a sensitive area in which the public is particularly demanding as to the quality and integrity of the product, and the presentation of the product may indeed be capable of inspiring public confidence in that regard. It follows that defective, poor quality or untidy packaging could damage the trade mark' s reputation.
78 Finally, as the Court pointed out in Hoffmann-La Roche, the trade mark owner must be given advance notice of the repackaged product being put on sale. The owner may also require the importer to supply him with a specimen of the repackaged product before it goes on sale, to enable him to check that the repackaging is not carried out in such a way as directly or indirectly to affect the original condition of the product and that the presentation after repackaging is not likely to damage the reputation of the trade mark. Similarly, such a requirement affords the trade mark owner a better possibility of protecting himself against counterfeiting.
79 Accordingly, the answer to the second question in Cases C-427/93 and C-429/93, the third and fourth questions in Case C-427/93, and the second, third, fourth and fifth questions in Case C-436/93, should be that Article 7(2) of the directive is to be interpreted as meaning that the trade mark owner may legitimately oppose the further marketing of a pharmaceutical product where the importer has repackaged the product and reaffixed the trade mark unless:
° it is established that reliance on trade mark rights by the owner 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; such is the case, in particular, where the owner has put an identical pharmaceutical product on the market in several Member States in various forms of packaging, and the repackaging carried out by the importer is necessary in order to market the product in the Member State of importation, and also carried out in such conditions that the original condition of the product cannot be affected by it; that condition does not, however, imply that it must be established that the trade mark owner deliberately sought to partition the markets between Member States;
° it is shown that the repackaging cannot affect the original condition of the product inside the packaging; such is the case, in particular, where the importer has merely carried out operations involving no risk of the product being affected, such as, for example, the removal of blister packs, flasks, phials, ampoules or inhalers from their original external packaging and their replacement in new external packaging, the fixing of self-stick labels on the inner packaging of the product, the addition to the packaging of new user instructions or information, or the insertion of an extra article; it is for the national court to verify that the original condition of the product inside the packaging is not indirectly affected, for example, by the fact that the external or inner packaging of the repackaged product or new user instructions or information omits certain important information or gives inaccurate information, or the fact that an extra article inserted in the packaging by the importer and designed for the ingestion and dosage of the product does not comply with the method of use and the doses envisaged by the manufacturer;
° the new packaging clearly states who repackaged the product and the name of the manufacturer in print such that a person with normal eyesight, exercising a normal degree of attentiveness, would be in a position to understand; similarly, the origin of an extra article from a source other than the trade mark owner must be indicated in such a way as to dispel any impression that the trade mark owner is responsible for it; however, it is not necessary to indicate that the repackaging was carried out without the authorization of the trade mark owner;
° the presentation of the repackaged product is not such as to be liable to damage the reputation of the trade mark and of its owner; thus, the packaging must not be defective, of poor quality, or untidy; and
° the importer gives notice to the trade mark owner before the repackaged product is put on sale, and, on demand, supplies him with a specimen of the repackaged product.