Presentation fo Co-Brandes Repackaged Medicinal Products

Nordic courts have uniformly ruled that the use of parallel trader’s distinctive branding elements in connection with the properietor’s trademarks can damage the reputation of the proprietor’s trademark.

Price differences within the EU pharmaceutical market, and the principles of free movement of goods and exhaustion of trademark rights, create business opportunities for parallel traders buying and exporting medicines from countries of low price levels and importing and selling them to countries of high price levels.

Parallel traders cannot always market medicinal products in the target country in their original appearance used in the country of acquisition, e.g. due to local language requirements, and parallel traders may be required to make certain alterations or insertions to the package of the product or repackage the product to a new outer package, at the same time possibly affixing the proprietor’s trademark – the original name of the medicinal product – to the repackaged product. Such measures are generally referred to as repackaging.

The legal framework for repackaging of medicinal products is based on EU law, in particular on the trademark case law of the Court of Justice of the European Union (CJEU). This article outlines the ways in which the Nordic courts have applied this legal framework and evaluated the presentation of co-branded repackaged products. 

Key rules regarding repackaging

Over the period of some 30 years, the CJEU repackaging case law has formulated and elaborated five so-called BMS conditions referring to the CJEU ruling in the joined cases C-427/93, C-429/93 and C-436/93 Bristol-Myers Squibb v. Paranova. According to the BMS conditions, the proprietor of a trademark cannot prohibit repackaging if:

1.      the opposition would contribute to the artificial partitioning of markets between the Member States;

2.      the repackaging cannot adversely affect the original condition of the product inside the packaging;

3.      the new package states by whom the product has been manufactured and repackaged;

4.      the presentation of the repackaged product does not damage the reputation of the trademark and of its proprietor; and

5.      the proprietor of the trademark has been notified in advance that the repackaged product is put on market.

Each of the five BMS conditions includes a set of smaller rules and exceptions thereto, yet still leaving room for argument. However, it is well established in C-348/04 Boehringer Ingelheim v. Swingward that repackaging is admissible in so far as it is objectively necessary to market the product in the Member State, but the necessity requirement is solely directed at the fact of repackaging and not at the manner and style of the repackaging.

Having exceeded the necessity threshold, the presentation of the packaging should be assessed only against the condition that it should not be such as to be liable to damage the reputation of the trademark or that of its proprietor, as confirmed in C-276/05 Wellcome v. Paranova. Damage to the reputation is, however, a question of fact for the national courts to decide in the light of the circumstances of each case.

The Nordic approach on presentation of repackaging

The Nordic countries are generally considered to be the target countries of pharmaceutical parallel trade, and this has caused a somewhat substantial amount of co-branding cases in the Nordic courts.

In Danish Sø- og Handelsretten’s case Boehringer v. Paranova (V-25-03), the parallel trader Paranova used its in-house styles with the proprietor’s trademarks, namely e.g. its pentagon figure mark, stylised Paranova trade name and “P” letter, oval shaped Danish flag and horizontal and vertical coloured stripes.

Such use of Paranova’s distinctive symbols in close connection with the proprietor’s trademarks created a false impression of a commercial connection between Boehringer’s and Paranova’s trademarks, as well as an impression of a business relationship between the parties. The parallel trader’s repackaging presentation caused damage to the reputation of the trademarks, and was hence infringing. However, as to the coloured stripes, the court concluded that no infringement had occurred.

Sø- og Handelsretten has taken a similar approach in a number of subsequent cases. For example, in Merck v. Paranova Danmark & Paranova Pack (V-39-02 and V-87-03), the co-branding applied by the parallel trader was considered infringing, except for the use of coloured stripes.

In Sanofi-Aventis Danmark v. Orifarm (V-81-01), the parallel trader Orifarm’s use of its word mark ”ORIFARM” and a certain coloured triangle figure in a visible manner close together with the proprietor’s trademark constituted an infringement. In Pfizer v. Orifarm (V-12-02), Orifarm placed double stripes in colours next to Pfizer’s trade mark. Sø- og Handelsretten found that the coloured stripes did not constitute an infringement, as they were not distinctive enough to create a sign, in the sense of a trademark, although commonly used by Orifarm.

Similarly, a Swedish appellate court confirmed in GSK & Wellcome v. Paranova Läkemedel (Mål Ö 6628-07) that Paranova’s use of its stylised trade name and pentagonal coloured figure mark in connection with the proprietor’s trademark infringed the proprietor’s rights. The use of the parallel trader’s in-house coloured stripes did not, however, constitute an infringement. Such stripes did not have such trademark function that would have led to an infringement.

Fast reaction important

The Finnish Supreme Court’s approach to co-branding has been similar to the above framework. In Organon v. Paranova (KKO:2011:7), Paranova’s use of its visible and distinctive pentagonal figurative mark and stylised trade name together with the proprietor’s trademarks gave an impression to the public, contrary to the prevailing facts, that there was some special relationship between Paranova and the medicinal products. As such, the proprietor in principle had the right to oppose the use of such repackaging presentation.

However, the Finnish case was partly dismissed as, according to the court, the proprietor had not reacted within reasonable time to the other of the two repackaging presentations under dispute, which makes an important notion to the fact that according to the fifth BMS condition, the proprietor must in practice react to potential deficiencies and infringements almost immediately.

Use of non-distinctive elements

As outlined by the above examples, many of the Nordic cases have suggested that a parallel trader’s use of its own distinctive branding – such as word or figure marks or other distinctive design – in close connection with the proprietor’s trademarks may create a false impression, within the meaning of the CJEU’s case C-63/97 BMW v. Deenik, of a relationship between the parallel trader and the proprietor’s trademark. However, if the branding, such as simple coloured stripes, does not possess a certain degree of distinctiveness, such use generally cannot be considered an infringement.

The EFTA Court (E-3/02) has specifically discussed the topic of coloured stripes in Paranova v. Merck, which was referred to it by the Norwegian Supreme Court. According to the EFTA Court, the use of colours in product packaging is customary within the field of business and coloured stripes do not generally create uncertainty as to the existence of a connection between the parallel trader and the proprietor. Such guidelines were also followed by the Norwegian Supreme Court (2002/582), which noted that coloured stripes were not distinctive enough to constitute a trademark infringement.

The Danish Supreme Court came to the same conclusion in Merck v. Orifarm (234/2008), in which it noted that the use of colors in medicinal packaging is customary. Parallel coloured stripes were not used in a central place in the packaging and they were not distinctive enough to create an impression of a design or a trademark, hence no infringement had taken place.

However, colours can obviously be distinctive under certain circumstances. For example, in a Swedish District Court case Beecham & GlaxoSmithKline v. Ivax (Mål T 19823-01), the parallel trader’s use of its distinctive two-colour design in connection with the proprietor’s trademark created an impression of a business relationship between the parallel trader and the proprietor, hence constituting an infringement. Distinctiveness of the colour design in question was based e.g. on the fact that the parallel trader had expressed in its marketing that the colour was used as a trademark.

Uniform interpretation in the Nordic courts

Nordic courts have quite uniformly ruled that the use of parallel trader’s distinctive word or figure marks, stylised trade names or other distinctive branding elements in connection with the proprietor’s trademarks can damage the reputation of the proprietor’s trademark.

An infringement has occurred in many cases due to the fact that such repackaging presentation associates the proprietor’s trademark and the parallel importer, or gives the impression of a business relationship or other special relationship between the parties. However, branding elements that are not distinctive enough have not created such an impression.

References:

http://curia.europa.eu/
Case C-63/97, BMW v. Deenik
Joined cases C-427/93, C-429/93 and C-436/93, Bristol-Myers Squibb v. Paranova
Case C-348/04, Boehringer Ingelheim and others v. Swingward and others
Case C-276/05, Wellcome v. Paranova

http://www.eftacourt.int/ > Cases
EFTA Case E-3/02, Paranova v. Merck [2003] Ct. Rep. 101

www.domstol.dk > Højesteret > Nyheder > Domme mv.
Højesteret, 234/2008, Merck v. Orifarm, 17.10.2012 (in Danish)

www.domstol.dk > Sø- og Handelsretten > Retsafdelingen > Domsoversigt
Sø- og Handelsretten, V-25-03, Boehringer v. Paranova, 15.8.2007
Sø- og Handelsretten, V-81-01, sanofi-aventis Danmark v. Orifarm, 22.1.2008
Sø- og Handelsretten, V-12-02, Pfizer v. Orifarm, 7.3.2008
Sø- og Handelsretten, V-39-02 and V-87-03, Merck v. Paranova Danmark & Paranova Pack, 31.3.2008

Svea hovrätt, Ö 6628-07, GSK & Wellcome v. Paranova Läkemedel, 26.9.2007
Stockholms tingsrätt, T 19823-01, Beecham & GlaxoSmithKline v. Ivax, 30.4.2004

http://www.domstol.no/ > Norges Høyesterett> Avgjørelser> Avgjørelser 2004
Høyesterett, 2002/582, Paranova v. Merck, 4.6.2004 (in Norwegian)

http://www.finlex.fi › Oikeuskäytäntö › Korkein oikeus › Ennakkopäätökset › 2012
Korkein oikeus (Supreme Court), KKO 2011:7, 26.1.2011 (in Finnish)

Mette Vestergaard Huss
Senior Associate, Copenhagen

Janne Joukas
Senior Associate, Helsinki

Hannes Snellman Attorneys Ltd