2018/08 > Good news for parallel importers
“According to the court it could not be considered that the affixing of such a label had affected the specific subject matter of the trademark.”
Parallel importation of pharmaceuticals in the EU has, for a long time, raised many issues. National constraints require the parallel importer to modify the presentation of the products in order to comply with national laws, and the trademark owner has tried to make use of such alteration to oppose the commercialisation of the goods that were escaping its distribution network in that way.
Thus, for a long time, the jurisprudence has had fixed rules for such alteration and defined the ways in which an importer may place on an EU country’s market a marked product that was put into circulation for the first time in another member state by the rights owner or with its consent, before proceeding to its alteration and reaffixing the trademark without the owner having the chance to oppose.
The rules are that (i) the alteration shall not affect the original condition of the product; (ii) the presentation of the product shall not harm the brand image or that of its proprietor; (iii) if there is new packaging, it shall clearly indicate the person who altered the product in such a way that the indications are legible; and finally (iv) the importer must notify the trademark owner of the future sale of the altered product and provide at its request a specimen of the modification.
Unless it can be demonstrated that the opposition of the trademark owner would result in the artificial partitioning of the member states’ markets, the trademark owner keeps some control over the circulation of its products by parties that are not part of its distribution network.
New openings
The Court of Justice of the European Union’s decision in May 2018 (case C-642/16) should, however, offer new opportunities for parallel markets.
In this particular case, the parallel importer of products for medical use and bandages had added a new label on the products prior to their commercialisation in Germany from Austria. The German manufacturer opposed this commercialisation on the grounds that the importer had failed to inform it about this reimport and the new packaging adopted.
These omissions are in principle contrary to existing rules and prevent the exhaustion of trademark rights of the manufacturer. However, the court refined its analysis and noted that in all cases of modification presented to it until then, the alteration had required the opening of the original packaging, which was not the case here. Indeed, the packaging had not been modified, nor the original presentation affected.
Thus, the court stated:
(i) That the importer had limited itself to affixing an additional label on an unprinted part of the original packaging of the medical device in question, which had not been opened; and
(ii) That this label was small and included as the sole information the name of the parallel importer and its address and telephone number, a bar code and a central pharmacological number necessary for organising the movement of the products to pharmacies (point 34).
Therefore, according to the court it could not be considered that the affixing of such a label had affected the specific subject matter of the trademark, which is to guarantee to the consumer or to the final user the provenance of the packaged product (point 36).
The court ruled that: “Article 13(2) of Council Regulation (EC) No 207/2009 of 26 February 2009 on the Community trademark must be interpreted as meaning that the proprietor of a trademark cannot oppose further commercialisation by a parallel importer of a medical device in its original inner and outer packaging when an additional label, such as that at issue in the main proceedings, has been added by the importer which by its content, function, size, presentation and location does not present a risk for the guarantee of origin of the medical device covered by the mark.”
It thus follows that the affixing of such a label does not in fact constitute a real modification. In addition, in such cases, the parallel importer has therefore no duty to provide information to the trademark owner.
As a result, adding a label rather than making an alteration gives more flexibility to the parallel importer and thereby limits the control that the trademark owner can have.