Frits Loendersloot, trading as F. Loendersloot Internationale Expeditie v George Ballantine & Son Ltd and Others.
Date: 1997-11-11
18 On this point, it suffices to note that it is for the national court to determine whether, from the point of view of the national rules applicable to orders such as those sought in the main proceedings, the dispute before it is to be resolved on the basis of Article 36 of the Treaty or of Directive 89/104, Article 7 of which regulates the question of exhaustion of trade mark rights in relation to goods which have been put on the market in the Community. However, Article 7 of that 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 aim to achieve the same result, must be interpreted in the same way (Joined Cases C-427/93, C-429/93 and C-436/93 Bristol-Myers Squibb and Others v Paranova [1996] ECR I-3457, paragraph 40; Joined Cases C-71/94, C-72/94 and C-73/94 Eurim-Pharm v Beiersdorf and Others [1996] ECR I-3603, paragraph 27, and Case C-232/94 MPA Pharma v Rhône-Poulenc Pharma [1996] ECR I-3671, paragraph 13).
The questions
22 With respect to trade mark rights, the Court has held that they 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 made possible only by 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, in particular, Case C-10/89 CNL-SUCAL v HAG GF (hereinafter `HAG II') [1990] ECR I-3711, paragraph 13, and Bristol-Myers Squibb, cited above, paragraph 43). Consequently, 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 mark for the purpose of putting a product on the market for the first time and thus to protect him against competitors wishing to take unfair advantage of the status and reputation of the trade mark by selling products illegally bearing it (see, in particular, Case 102/77 Hoffmann-La Roche v Centrafarm [1978] ECR 1139, paragraph 7; HAG II, paragraph 14; and Bristol-Myers Squibb, paragraph 44).
23 It follows in particular that 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 has been put on the market in another Member State by him or with his consent (see, in particular, Bristol-Myers Squibb, paragraph 45). Trade mark rights are not intended to allow their owners to partition national markets and thus assist the maintenance of price differences which may exist between Member States (see Bristol-Myers Squibb, paragraph 46).
24 With respect more particularly to the question whether a trade mark owner's exclusive right includes the power to oppose the use of the trade mark by a third party 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 authorization of the trade mark owner, in such a way as to affect the original condition of the product (see, in particular, Hoffmann-La Roche, paragraph 7, and Bristol-Myers Squibb, paragraph 47).
25 The Court has thus held that 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, as 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, Case 1/81 Pfizer v Eurim-Pharm [1981] ECR 2913, paragraph 9, and Bristol-Myers Squibb, paragraph 48).
26 Applying those principles in the context of disputes concerning the repackaging of pharmaceutical products for purposes of parallel trade, the Court has held that Article 36 of the Treaty must be interpreted as meaning that a trade mark owner may in principle legitimately oppose the further marketing of a pharmaceutical product where the importer has repackaged it and reaffixed the trade mark (see, in particular, Hoffmann-La Roche, paragraph 8, and, with respect to Article 7(2) of Directive 89/104, Bristol-Myers Squibb, paragraph 50).
28 It should be noted, however, that according to the case-law of the Court (see, in particular, Hoffmann-La Roche, paragraph 10, Case 3/78 Centrafarm v American Home Products [1978] ECR 1823, paragraphs 21 and 22, and Bristol-Myers Squibb, paragraphs 49 and 50) Article 36 does not permit the owner of the trade mark to oppose the reaffixing of the mark where such use of his trade mark rights contributes to the artificial partitioning of the markets between Member States and where the reaffixing takes place in such a way that the legitimate interests of the trade mark owner are observed. Protection of those legitimate interests means in particular that the original condition of the product inside the packaging must not be affected, and that the reaffixing is not done in such a way that it may damage the reputation of the trade mark and its owner.
30 According to the Court's case-law a person who repackages pharmaceutical products is also required to inform the trade mark owner of the repackaging, to supply him, on demand, with a specimen of the repackaged product, and to state on the repackaged product the person responsible for the repackaging (see, in particular, Bristol-Myers Squibb).
33 As to protection of the reputation of the trade mark, a third party who relabels the product must ensure that the reputation of the trade mark - and hence of its owner - does not suffer from an inappropriate presentation of the relabelled product (see, in particular, Bristol-Myers Squibb, paragraphs 75 and 76). To assess whether that is the case in the main proceedings, the national court must take into account in particular the interest of Ballantine and others in protecting the luxury image of their products and the considerable reputation they enjoy.
35 On this point, the Court held in Bristol-Myers Squibb, paragraph 52, that use of trade mark rights by their owner in order to oppose the 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.
36 The Court went on to hold, in paragraphs 56 and 57 of that judgment, that the possibility for the owner of trade mark rights to oppose the marketing of repackaged products under his 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. It need not be established, on the other hand, that the trade mark owner has deliberately sought to partition the markets between Member States.
43 Where it is established that the identification numbers have been applied for purposes which are legitimate from the point of view of Community law, but are also used by the trade mark owner to enable him to detect weaknesses in his sales organization and thus combat parallel trade in his products, it is under the Treaty provisions on competition that those engaged in parallel trade should seek protection against action of the latter type.
Removal of the word `pure' and the importer's name on the labels
48 On this point, the Court has considered that the imposition of such conditions on the person carrying out repackaging is justified by the fact that the essential requirements of the free movement of goods mean that that person is recognized as having certain rights which, in normal circumstances, are reserved for the trade mark owner himself (see Bristol-Myers Squibb, paragraph 68). In formulating those conditions, account was taken of the legitimate interests of the trade mark owner with regard to the particular nature of pharmaceutical products.