On 17 November 2022, the CJEU handed down its rulings in relation to three claims brought by pharmaceutical companies Novartis Pharma GmbH, Bayer Intellectual Property GmbH and Merck Sharp & Dohme BV, against parallel importers of their pharmaceutical products.
Each of the cases arose because the pharmaceutical companies sought to rely on their trade mark rights to prevent repackaging of their products in circumstances where the parallel importers had been required to open or otherwise amend the original packaging to comply with national requirements. In all three cases, the importers had considered it necessary to completely replace the packaging so that they could comply with EU legislation relating to falsified medicines. EU legislation requires medicines supplied in Member States to have anti-tampering devices (typically a safety seal at each end of the medicine) and also a unique identifier, which is usually printed on the outer packaging (containing unique product information). The parallel importers had repackaged the products prior to placing them in the Member State markets (Novartis' and Bayer's products were put on the German market, and Merck's product was put on the market in Denmark). The importers had deemed it necessary to replace the original packaging in its entirety, because the alternative to repackaging was replacing the anti-tampering devices and adding a new unique identifier. Replacing the anti-tampering devices would leave visible traces which they considered could be concerning to consumers.
The rulings provide clarity on when a trade mark owner can oppose the repackaging of their pharmaceuticals when they are imported in such circumstances. Essentially, the CJEU determined that it is not acceptable for importers to take a blanket approach to repackaging medicines in such situations. The CJEU held that, whilst the importers could not assume such resistance on behalf of consumers and decide to repackage every time, if the importers could show that consumers in a particular Member State would have a strong resistance on a factual basis, they could in such circumstances repackage.
The decisions required an assessment by the CJEU of the relevant legislation: the EU Trade Mark Regulation 2017/1001, the Falsified Medicines Directive 2011/62 and the "safety features" Delegated Regulation 2016/161 (which applies to certain categories of medicines).
Under the Trade Mark Regulation, an owner of an EU trade mark cannot prevent the parallel importation of goods which have been put on the market in the European Economic Area by it, or with its consent. That is unless there exist legitimate reasons for the trade mark owner to oppose the further commercialisation of those goods. The Falsified Medicines Directive governs the distribution of medicinal products to ensure that appropriate safeguards for public health are in place. Medicinal products sold in the EU are required to have an anti-tampering device (i.e., a seal to show that that product has not been opened, meaning the medicine has not been interfered with). They also need a unique identifier (e.g., a printed barcode) which provides key product information including the brand name of the medicine and the generic name. Furthermore, the form, strength, pack size, batch number and expiry date are typically printed on the packaging by the manufacturer.
The BMS conditions
The CJEU's 1996 judgment Bristol-Myers Squibb v Paranova is the key case dealing with repackaged parallel imports. It set out five cumulative conditions (the "BMS conditions"), which, if satisfied by a parallel importer, enable them to import and market a trade mark owner's repackaged pharmaceuticals in a Member State. If just one of the conditions is not satisfied, then the trade mark owner can legitimately oppose the further marketing of the repackaged pharmaceutical product. The BMS conditions are:
The repackaging is necessary to market the imported goods – for example, this would apply if a relabelled product would cause strong resistance by significant numbers of the public and would contribute to the artificial partitioning of member states' markets;
- The repackaging does not alter the pharmaceutical product within it;
- The new packaging states clearly who has carried out the repackaging;
- The repackaged product is not liable to damage the reputation of the trade mark or its owner; and
- The importer gives notice to the trade mark owner prior to selling the repackaged product.
Parallel imported medicines often need to be opened by importers so that they can comply with the local regulations of the particular import market by, for example, including a notice. However, this raises issues of how to comply with the Falsified Medicines Directive. Opening imports is likely to damage the anti-tampering seal and/or the unique identifier on the original packaging. The parallel importers in these three cases argued that it was therefore necessary to repackage the pharmaceutical products as the replacement of the anti-tampering device would leave visible traces which could deter consumers. Novartis, Bayer and Merck's position was that the requirements would be satisfied if the importers relabelled the original packaging, by sticking a new unique identifier barcode to it and by covering the opened anti-tampering devices with new ones.
The CJEU determined that the presence of traces that the original anti-tampering devices had been opened if they were replaced with new safety seals, did not mean that importers could take a blanket approach to repackaging medicines in such circumstances.
The CJEU determined that the EU legislator's intention was not to prevent the reuse of the original packaging, as long as the original safety features are replaced by equivalent ones. The presence of possible traces of the original packaging having been opened by a parallel trader was not, on its own, sufficient to determine that a replacement anti-tampering device would not be adequate. The CJEU ruled that the replacement anti-tampering devices need to be equally as effective as the originals at demonstrating that the product had not been unlawfully opened (i.e., between the time the medicine was opened by the importer and supplied to the public). Furthermore, wholesalers and suppliers of medicines to the public should not have any doubt that the traces of opening are attributable to the importer.
The CJEU provided that re-labelled packaging should clearly identify the parallel importer (i.e., the company responsible for opening and reapplying the anti-tampering devices). It explained that the original barcode can be replaced by attaching an adhesive barcode to the original packaging, as long as it cannot be removed without being damaged and remains perfectly readable throughout the supply chain.
The CJEU however identified potential exceptions to the rule that pharmaceuticals should be relabelled rather than repackaged in such circumstances.
- where there was strong resistance from a significant proportion of consumers in the importing Member State to relabelled pharmaceuticals to the extent it hinders effective market access; or
- where a significant proportion of consumers were opposed to pharmaceutical products where the packaging had visible traces of being opened as a result of replacing the anti-tampering devices.
However, the CJEU clarified that a parallel importer cannot rely on a general presumption of consumer resistance. It would require an assessment of the particular import market and whether the traces are clearly visible or whether they are only identifiable after thorough checks by wholesalers and pharmacists.
In the Merck ruling, the CJEU also determined that a pharmaceutical company can oppose the marketing of a repackaged pharmaceutical product where:
- their trade mark (that is specific to the medicinal product) has been reaffixed to new outer packaging by the importer, but the importer has not also reproduced on the new packaging the other trade marks and/or the other distinctive signs which appeared on the original packaging; and
- the new outer packaging is liable to damage the reputation of the trade mark or the packaging does not enable consumers to ascertain the origin of the mark.
These judgments provide clarity for pharmaceutical companies and the extent to which they can enforce their trade mark rights for their pharmaceutical products when these products are imported into different Member States. The CJEU's decision sets out the basis upon which parallel importers should reapply safety seals and unique identifier information to the original packaging, as opposed to repackaging. However, there may be circumstances where they are able to demonstrate that this would cause strong resistance from a significant number of the public in the Member State in question, leaving open the possibility of further issues arising for determination in future cases.