Boehringer Ingelheim KG, Boehringer Ingelheim Pharma KG, Glaxo Group Ltd, The Wellcome Foundation Ltd, SmithKline Beecham plc, Beecham Group plc, SmithKline & French Laboratories Ltd and Eli Lilly and Co. v Swingward Ltd and Dowelhurst Ltd.
Date: 2002-04-23
6 Each of the pharmaceutical products concerned by the main proceedings has been marketed under a trade mark by one of the claimants within the Community, where it was purchased by one of the defendants and imported into the United Kingdom. For the latter purpose, the defendants have to some extent altered the packaging of the products and the instruction leaflets going with them.
12 First of all, it is clear from the Court's case-law, in particular from Case 102/77 Hoffmann-La Roche [1978] ECR 1139, paragraphs 6 and 7, that:
- Article 30 EC allows derogations from the fundamental principle of the free movement of goods between Member States only to the extent to which such derogations are justified in order to safeguard the rights which constitute the specific subject-matter of the industrial property concerned;
- in that context, 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.
13 The right attributed to a trade mark proprietor of preventing any use of the trade mark which is likely to impair the guarantee of origin so understood is therefore part of the specific subject-matter of the trade mark rights. It is therefore justifiable under the first sentence of Article 30 EC to recognise that the proprietor of a trade mark is entitled to prevent an importer of a trade-marked product, following repackaging of that product, from affixing the trade mark to the new packaging without the authorisation of the proprietor (Hoffmann-La Roche, paragraphs 7 and 8).
14 It is clear from paragraph 14 of Hoffmann-La Roche that the proprietor of a trade mark right which is protected in two Member States at the same time is justified, for the purposes of the first sentence of Article 30 EC, in preventing a product to which the trade mark has lawfully been applied in one of those States from being put on the market in the other Member State after it has been repacked in new packaging to which the trade mark has been affixed by a third party. That paragraph also states, however, that such prevention of marketing will constitute a disguised restriction on trade between Member States, within the meaning of the second sentence of Article 30 EC, where:
- it is established that the use of the trade mark right by the proprietor, 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 proprietor of the mark receives prior notice of the marketing of the repackaged product; and
- it is stated on the new packaging by whom the product has been repackaged.
17 Finally, it should be remembered that, before Directive 89/104 was adopted, the Court's case-law on those issues had been developed on the basis of the provisions of the EEC Treaty relating to intra-Community trade. Following adoption of that directive, Article 7 of which comprehensively regulates the question of the exhaustion of trade mark rights for products traded in the Community, the Court held that national rules on the subject had to be assessed in the light of that article (see Bristol-Myers Squibb and Others, paragraph 26).
18 However, Article 7 of the Directive, like Article 30 EC, is intended specifically to reconcile the fundamental interest in protecting trade mark rights with the fundamental interest in free movement of goods between Member States, so that those two provisions, which pursue the same result, must be interpreted in the same way. The Court's case-law under Article 36 of the EEC Treaty (subsequently Article 36 of the EC Treaty and now, after amendment, Article 30 EC) must therefore be taken as the basis for determining whether, under Article 7(2) of the Directive, a trade mark proprietor may oppose the marketing of repackaged products to which the trade mark has been reaffixed (see Bristol-Myers Squibb and Others, paragraphs 40 and 41).
The specific subject-matter of the trade mark
29 It is not in dispute that the specific subject-matter of a mark is to guarantee the origin of the product bearing that mark and that repackaging of that product by a third party without the authorisation of the proprietor is likely to create real risks for that guarantee of origin.
30 Thus, in paragraphs 7 and 8 of Hoffmann-La Roche, the Court considered that the proprietor's right to oppose the repackaging of pharmaceutical products bearing its mark is, having regard to that risk to the guarantee of origin, related to the specific subject-matter of the mark. According to that case-law, it is the repackaging of the trade-marked pharmaceutical products in itself which is prejudicial to the specific subject-matter of the mark, and it is not necessary in that context to assess the actual effects of the repackaging by the parallel importer.
31 However, it is clear from paragraph 9 of Hoffmann-La Roche that the derogation from free movement of goods which is the consequence of the trade mark proprietor's opposition to repackaging cannot be accepted if the proprietor's exercise of that right constitutes a disguised restriction on trade between Member States within the meaning of the second sentence of Article 30 EC.
32 A disguised restriction within the meaning of that provision will exist where the exercise by a trade mark proprietor of its right to oppose repackaging contributes to artificial partitioning of the markets between Member States and where, in addition, the repackaging is done in such a way that the legitimate interests of the proprietor are respected. This means, in particular, that the repackaging must not adversely affect the original condition of the product and must not be such as to harm the reputation of the mark.
33 As was recalled in paragraph 15 above, the Court has found that a trade mark proprietor's opposition to repackaging of pharmaceutical products must be regarded as contributing to artificial partitioning of the markets between Member States where the repackaging is necessary in order to enable the product imported in parallel to be marketed in the importing State.
34 Thus it is clear from settled case-law that the change brought about by any repackaging of a trade-marked pharmaceutical product - creating by its very nature the risk of interference with the original condition of the product - may be prohibited by the trade mark proprietor unless the repackaging is necessary in order to enable the marketing of the products imported in parallel and the legitimate interests of the proprietor are also safeguarded (see, to that effect, Bristol-Myers Squibb and Others, paragraph 57).
46 The Court has found in that respect that it is necessary to take account of the circumstances prevailing at the time of marketing in the importing Member State which make repackaging objectively necessary in order that the pharmaceutical product can be placed on the market in that State by the parallel importer. The trade mark proprietor's opposition to the repackaging is not justified if it hinders effective access of the imported product to the market of that State (see, to that effect, Upjohn, paragraph 43).
47 Such an impediment exists, for example, where pharmaceutical products purchased by the parallel importer cannot be placed on the market in the Member State of importation in their original packaging by reason of national rules or practices relating to packaging, or where sickness insurance rules make reimbursement of medical expenses depend on a certain packaging or where well-established medical prescription practices are based, inter alia, on standard sizes recommended by professional groups and sickness insurance institutions. In that regard, it is sufficient for there to be an impediment in respect of one type of packaging used by the trade mark proprietor in the Member State of importation (see Bristol-Myers Squibb and Others, paragraphs 53 and 54).
48 In contrast, the trade mark proprietor may oppose the repackaging if it is based solely on the parallel importer's attempt to secure a commercial advantage (see, to that effect, Upjohn, paragraph 44).
49 In that context, it has also been held that the trade mark proprietor may oppose replacement packaging where the parallel importer is able to reuse the original packaging for the purpose of marketing in the Member State of importation by affixing labels to that packaging (see Bristol-Myers Squibb and Others, paragraph 55).
55 By its fifth to seventh questions, the national court seeks to obtain clarification of the requirement that the parallel importer must give advance notice to the trade mark proprietor that the repackaged product is to be put on sale. It seeks in particular to ascertain whether, as long as the intended repackaging does not in the particular case prejudice the specific subject-matter of the mark, notice is nevertheless necessary; whether the importer himself must give notice or it is sufficient that the proprietor receive such notice from another source; the length of notice to be given; and the consequence of failure to give notice.
Observations submitted to the Court
61 According to the Court's case-law, a parallel importer which repackages a trade-marked pharmaceutical product must give prior notice to the trade mark proprietor that the repackaged product is being put on sale (see Hoffmann-La Roche, paragraph 12). At the request of the trade mark proprietor, the importer must also supply it with a sample of the repackaged product before it goes on sale. That requirement enables the proprietor 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 such as to damage the reputation of the trade mark. It also affords the trade mark proprietor a better possibility of protecting himself against counterfeiting (see Bristol-Myers Squibb and Others, paragraph 78).
62 The purpose of the requirements set out in the preceding paragraph is to safeguard the legitimate interests of trade mark proprietors. As the claimants point out, satisfying those requirements scarcely poses any real practical problems for parallel importers provided that the proprietors react within a reasonable time to the notice. Adequate functioning of the notice system presupposes that the interested parties make sincere efforts to respect each other's legitimate interests.
63 As regards the requests for clarification from the national court as to those requirements, first, it follows from the reply to the first, second, fourth and eighth questions that a parallel importer must, in any event, in order to be entitled to repackage trade-marked pharmaceutical products, fulfil the requirement of prior notice. If the parallel importer does not satisfy that requirement, the trade mark proprietor may oppose the marketing of the repackaged pharmaceutical product.
64 Second, it is incumbent on the parallel importer itself to give notice to the trade mark proprietor of the intended repackaging. It is not sufficient that the proprietor be notified by other sources, such as the authority which issues a parallel import licence to the importer.