Parallel imports of repackaged medicinal products – when can brand owners oppose?

Published Date
Nov 29, 2022
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Three cases handed down on 17 November 2022 by the EU’s highest court shed important light on the ability of brand owners to oppose the repackaging of medicinal products, particularly where anti-tampering devices are replaced and leave visible traces. The decisions reflect the delicate balance between consumer welfare, trade mark rights and the free movement of goods.

Pharmaceutical companies have welcomed the rulings as long overdue confirmation that the safety features required by the Falsified Medicines Directive (2011/62/EU) do not give parallel importers carte blanche to repackage genuine products. 

The practice of parallel trading (where goods are moved from one Member State to another outside the trade mark owner’s formal distribution channels) is considered integral to the principle of the EU single market. Under EU law, proprietors cannot oppose the marketing of their products by parallel importers without legitimate reason (Articles 9(2) and 15(2) of the EU Trade Mark Regulation ((EU) 2017/1001) and Articles 10(2) and 15(2) of the Trade Marks Directive ((EU) 2015/2436)). However, when parallel importers repackage medicinal products to suit local requirements (for instance, to update package leaflets and replace anti-tampering devices), there are some scenarios which may confer onto proprietors the right to oppose. 

Three recent CJEU decisions, Merck Sharp & Dohme BV and others v Abacus Medicine A/S and Novartis AG C-224/20 (“Merck”), Bayer Intellectual Property GMBH v Kohlpharma GMBH C-204/20 (“Bayer”), and Novartis Pharma GMBH v Abacus Medicine A/S C-147/20 (“Novartis”) all relate to the circumstances in which repackaging medicinal products in a new outer packaging bearing the proprietor’s trade mark would allow that proprietor to oppose the product’s marketing by a parallel importer.

The Falsified Medicines Directive creates a further issue – with parallel importers arguing that the need for tamper-free packaging enables them lawfully to repackage parallel imported pharmaceuticals. The argument is that consumers won’t trust pharmaceutical products where there are visible traces of interference by the parallel importer. However, the CJEU disagreed, holding in each case that the trade mark owner may oppose repackaging where: (i) the visible traces are clearly attributable to the repackaging by the parallel importer; and (ii) the traces would not cause a strong enough consumer resistance as to create a barrier to the effective access to the market. 

Moreover, as shown in the cases of Merck and Bayer, the CJEU will always have in mind the key functions of a trade mark (particularly the essential function of indicating the product’s origin) when considering repackaging. Merck considered, among other things, the scenario where the new packaging contains the proprietor’s trade mark, but none of the other trade marks or distinctive signs which had appeared on the original packaging. In that case, the CJEU held that proprietors are also entitled to oppose the repackaging where the new packaging is “liable to damage the reputation of the trade mark” or where it has an adverse effect on “the function of indicating the origin of the mark”. 

In Bayer, the CJEU also considered whether proprietors could oppose the marketing of repackaged products where it is possible instead to relabel the original packaging. Drawing again on the need to protect the key functions of a trade mark and the legitimate interests of trade mark owners, the CJEU held that owners may oppose repackaging provided that the relabelled product still: (i) complies with the safety-feature requirements set out in the Falsified Medicines Directive; and (ii) has effective access to the destination market.

As noted above, innovative pharmaceutical companies have welcomed the rulings, as requiring the minimum intervention possible with the original packaging in which the trade mark owner marketed the products. The CJEU has carefully balanced the trade mark owners’ rights, whilst also ensuring that parallel importation can take place.

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This content was originally published by Allen & Overy before the A&O Shearman merger