EU Anti-Counterfeit Regulation Does Not per se Allow Repackaging of Parallel Imported or Parallel Traded Pharmaceuticals | Jones Day
The Situation: European Union (“EU”) trademark law permits the repackaging of pharmaceuticals that are imported or traded in parallel from one Member State to another only in limited circumstances. In view of recent EU product regulations requiring a safety feature on outer packages, the question has arisen whether parallel importers or parallel traders may repackage a product and affix a new safety feature on the new box, after having opened the original box—in order to make the product otherwise compliant with the regulations for the destination market.
The Result: In three decisions dated November 17, 2022, the Court of Justice of the EU (“CJEU”) clarified that the opening of the safety feature alone is not reason enough to repackage a product in a new box. This remains permissible only if this is otherwise required for the product to gain access to the destination market.
Looking Ahead: EU trademark owners may oppose repackaging of parallel imports or parallel trade where pharmaceutical products are merely repackaged on the grounds of the safety feature having been opened.
For pharmaceuticals that are parallel imported (authorized nationally) or parallel traded (authorized centrally), EU case law permits full repackaging in new outer packaging only in limited circumstances. In light of a recent introduction for prescription products to carry a unique identifier and an anti-tampering device, also referred to as a safety feature (EU Directive 2001/83, Article 54 (o) and Delegated Regulation 2016/161, Article 10), the question arose whether the mere fact that parallel traders or importers need to break the seal allows them to use a new outer packaging altogether (affixing a new anti-tampering device).
On November 17, 2022, the CJEU handed down three decisions and answered the questions in the negative (Merck Sharp & Dohme BV and others v. Abacus Medicine A/S and others, C-224/20) (“MSD Case“); Bayer Intellectual Property GmbH v. Kohlpharma GmbH, C-204/20 (“Bayer Case“) and Novartis Pharma GmbH v. Abacus Medicine A/S, C-147/20 (“Novartis Case“).
Choice of Repackaging Method in Light of the Safety Features
The CJEU specified in the Bayer Case (§52) that full repackaging and (just) relabeling constitute equivalent forms of the safety features required under EU law.
However, based on previous case law, the CJEU recalled (Bayer Case, §§65 and 66) that full repackaging constitutes a greater interference with the rights of the trademark owner than relabeling. Accordingly, trademark owners may oppose the full repackaging where it is also possible to relabel the product; provided that the relabeled product provides effective access to the relevant market (CJEU Boehringer Ingelheim and Others, C‑143/00).
Consequently, the CJEU ruled that opening a product with a safety feature does not automatically justify full repackaging, and a trademark owner is entitled to oppose the commercialisation of a fully repackaged product provided that (i) it is objectively possible to (only) relabel the product in compliance with the requirements provided for by EU law regarding safety features and (ii) the relabeled product could actually access the destination market (Bayer Case, §68).
Furthermore, the CJEU ruled in all three decisions that the visible traces of opening that would be left on the original outer packaging (due to the replacement of the original anti-tampering device in accordance with EU law) are not, per se, sufficient to justify the repackaging in a new outer packaging instead of relabeling such products. Instead, a trademark owner may assert its rights to a fully repackaged product provided that: (i) there is no doubt that the visible traces of opening, which would result from the replacement of the anti-tampering device, are attributable to the repackaging carried out by the parallel importer; and (ii) those traces would not cause a strong consumer resistance on the relevant market constituting an obstacle to effective market access, to be assessed on a case-by-case basis (Bayer Case, §86; Novartis Case, §74; MSD Case, §79).
The CJEU further ruled that EU law does not require a barcode with a unique identifier (which must be affixed to products) to be necessarily printed on the outer packaging of a relabeled product and that such barcode can be affixed on the outer packaging by means of an adhesive label; provided however that (i) such label cannot be removed without being damaged and (ii) the barcode remains perfectly readable throughout the supply chain until the latest between (a) one year after the expiry date of the product and (b) five years after the date on which the product was released (in accordance with the Delegated Regulation 2016/161, Article 6) (Novartis Case, §84 and §90)).
Repackaging and Modifications to Distinctive Signs
In the MSD Case (§118 and 130), the CJEU also ruled that trademark owners may oppose fully repackaged products where:
- The trademark, which appeared on the original outer packaging, has been replaced by a different product name;
- Although having reaffixed the trademark of the owner, other trademarks and/or other distinctive signs that appeared on the original outer packaging were not reaffixed on the new one, provided that such presentation is susceptible to damage the reputation of the trademark or does not enable normally informed and reasonably attentive consumers (or only with difficulty) to ascertain whether that product originates from the owner of the trademark or an undertaking economically linked to such owner or, on the contrary, originates from a third party.
Member State Cannot Provide Different Rules
The CJEU added in the MSD Case (§§100 and 107) that a national legislation requiring parallel importers to fully repackage products rather than having them relabeled would have no effect on trademark owners.
Three Key Takeaways
- The full repackaging of imported or parallel traded pharmaceuticals remains limited to certain conditions, is not justified per se by the need to open the anti-tampering device, and the possibility to merely relabel the products continues to take precedence.
- Under certain conditions, trademarks owner may oppose the commercialisation of parallel imported medicinal products with a new outer packaging, which does not include all of the trademarks and distinctive signs affixed to the original packaging.
- Any national legislation imposing full repackaging cannot curtail a trademark owner’s rights.