TRADE MARK — Proprietor’s rights — Exhaustion — Parallel importation — Council Directive 89/104/EEC (as amended by Agreement on European Area) (“the Directive”), art 7(2)
Boehringer Ingelheim KG and others v Swingward Ltd and others (No 2) (Case C-348/04)
ECJ: President of Chamber Timmermans, Judges Klučka, Makarczyk, Arestis and Bay Larsen: 26 April 2007
{The condition, which, if fulfilled, prevented the proprietor of a trade mark from opposing further commercialisation of a product bearing the mark by a parallel importer who reboxed or overstickered the product, that such repackaging had to be necessary for the further commercialisation in the importing state, applied solely to the fact of repackaging, and not to its manner and style.
The Second of Chamber of the Court of Justice of the European Communities so held, inter alia, on a reference for a preliminary ruling by the Court of Appeal.
Art 7 of the Directive provides: “(1) The trade mark shall not entitle the proprietor to prohibit its use in relation to goods which have been put on the market in a contracting party under that trade mark by the proprietor or with his consent. (2) Paragraph (1) shall not apply where there exist legitimate reasons for the proprietor to oppose further commercialisation of the goods, especially where the condition of the goods is changed or impaired after they have been put on the market.”
The defendants, parallel importers, bought in various member states of the EC medicinal products marketed under a number of trade marks by the claimants, and imported them into the United Kingdom and sought to market them there after altering the packaging. The alterations varied and comprised attaching a label with the parallel importer’s name and import licence number to the original package; repacking the product in a new box on which the original trade mark was reproduced; and repacking in a box which bore, not the original trade mark, but the product’s generic name. In trade mark infringement proceedings brought by the claimants, the High Court referred a number of questions for preliminary ruling to the European Court of Justice, to which that court replied in Boehringer Ingelheim KG v Swingward Ltd (Case C-143/00) [2003] Ch 27. On the resumption of the proceedings, the High Court ruled against the defendants, who appealed to the Court of Appeal, which made the present reference to the European Court for a preliminary ruling on further questions.
THE COURT, for reasons stated by it, ruled:
(1) Art 7(2) of the First Directive meant that the trade mark owner could legitimately oppose further commercialisation of a pharmaceutical product imported from another member state in its original internal and external packaging with an additional external label applied by the importer, unless (i) it was established that reliance on trade mark rights by the proprietor in order to oppose the marketing of the overstickered product under that trade mark would contribute to the artificial partitioning of the markets between member states; (ii) it was shown that the new label could not affect the original condition of the product inside the packaging; (iii) the packaging clearly stated who had overstickered the product and the name of the manufacturer; (iv) the presentation of the overstickered product was not such as to be liable to damage the reputation of the trade mark and of its proprietor (thus, the label could not be defective, of poor quality, or untidy); and (v) the importer gave notice to the trade mark proprietor before the overstickered product was put on sale, and, on demand, supplied him with a specimen of that product.
(2) The condition that the repackaging of the pharmaceutical product, either by reboxing the product and re-applying the trade mark or by applying a label to the packaging containing the product, had to be necessary for its further commercialisation in the importing member state, as one of the conditions which, if fulfilled, prevented the proprietor from opposing such commercialisation under art 7(2), was directed solely at the fact of repackaging and not at the manner and style of the repackaging.
(3) The condition that the presentation of the pharmaceutical product could not be such as to be liable to damage the reputation of the trade mark and of its proprietor, as a necessary condition for preventing the proprietor from legitimately opposing further commercialisation of a pharmaceutical product where the parallel importer had either reboxed the product and re-applied the trade mark or applied a label to the packaging containing the product, was not limited to cases where the repackaging was defective, of poor quality, or untidy.
(4) The question whether the fact that a parallel importer (i) failed to affix the trade mark to the new exterior carton (“de-branding”), or (ii) applied either his own logo or house-style or get-up or a get-up used for a number of different products (“co-branding”), or (iii) positioned the additional label so as wholly or partially to obscure the proprietor's trade mark, or (iv) failed to state on the additional label that the trade mark in question belonged to the proprietor, or (v) printed the name of the parallel importer in capital letters, was liable to damage the trade mark’s reputation, was a question of fact for the national court to decide in the light of the circumstances of each case.
(5) In situations such as those in issue, it was for the parallel importer to prove the existence of the conditions (which, if fulfilled, would prevent the proprietor from lawfully opposing the further commercialisation of a repackaged pharmaceutical product) that: (i) reliance on trade mark rights by the proprietor 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; (ii) the repackaging could not affect the original condition of the product inside the packaging; (iii) the new packaging clearly stated who had repackaged the product and the name of the manufacturer; (iv) the presentation of the repackaged product was not such as to be liable to damage the reputation of the trade mark and of its proprietor (and thus was not defective, of poor quality, or untidy); and (v) the importer had given notice to the trade mark proprietor before the repackaged product was put on sale and, on demand, supplied him with a specimen of the repackaged product. As to condition (ii), it was sufficient, however, that the parallel importer furnished evidence that led to the reasonable presumption that that condition had been fulfilled. That applied a fortiori also to condition (iv). Where the importer furnished such initial evidence in the latter case, it was then for the proprietor of the trade mark, who was best placed to assess whether the repackaging was liable to damage his reputation and that of the trade mark, to prove that they had been damaged.
(6) Where a parallel importer failed to give prior notice to the trade mark proprietor concerning a repackaged pharmaceutical product, he infringed the proprietor’s rights on the occasion of any subsequent importation of the product, so long as he did not give the proprietor such notice. The sanction for that infringement had to be not only proportionate, but also sufficiently effective and a sufficient deterrent to ensure that the Directive was fully effective. A national measure under which, in the case of such an infringement, the trade mark proprietor was entitled to claim financial remedies on the same basis as if the goods had been spurious, was not in itself contrary to the principle of proportionality. It was for the national court, however, to determine the amount of the financial remedies according to the circumstances of each case, in the light in particular of the extent of damage to the trade mark proprietor caused by the parallel importer’s infringement and in accordance with the principle of proportionality. |
