Several judgments from the CJEU on the parallel import of pharmaceutical products are good news for brand owners in the pharmaceutical industry. Egon Engin-Deniz, member of the MARQUES Council and Anti-Counterfeiting and Parallel Trade Team discusses them in the first of two blog posts.

The Court of Justice of the European Union (CJEU) issued four judgments on November 17 2022, which addressed matters related to the exhaustion of trade marks in the European Union. These judgments included significant guidance on parallel imports of pharmaceutical products.

Three of the cases focused on whether parallel-imported pharmaceutical products must be repackaged or relabelled. The cases, namely C-147/20 Novartis v Abacus, C-204/20 Bayer v kohlpharma (both referred to the CJEU by the Regional Court Hamburg), and C-224/20 Merck Sharp & Dohme et al. v Abacus et al (referred to the Court of Justice by the Maritime and Commercial Court, Denmark), centred on parallel imports of pharmaceutical products.

The final judgment, which concerned Joined Cases Impexeco v Novartis and PI Pharma v Novartis (C-253/20 and C-254/20), dealt with parallel importers’ claim to import generic products into a member state and rebrand them with the original trade mark of the trade mark owners’ pharmaceutical products.

This post will focus on the first three cases. A follow-up post will look at the Impexeco and PI Pharma judgment and provide some overall conclusions.

Right to object to repackaging

The CJEU provided guidelines in its first three judgments on a trade mark owner’s right to object to a parallel importer’s repackaging of a medicinal product bearing their trade mark in compliance with the EU’s medicinal safety regulations.

These regulations, including the Falsified Medicines Directive (FMD) (2011/62/EU) and Delegated Regulation 2016/16, require pharmaceutical manufacturers to include unique identifiers and anti-tampering devices in their product packaging to reduce the risk of counterfeit medicines and ensure public safety.

The Court clarified that parallel importers can only repackage pharmaceutical products if it is objectively necessary, and under EU trade mark law, they cannot freely choose between repackaging and relabelling. Instead, they must opt for the method that is less invasive to the trade mark owner’s proprietary rights, which is relabelling.

Compliance without repackaging

Furthermore, the Court confirmed that the principle of complying with safety regulations can be achieved without repackaging pharmaceutical products, despite the claims made by parallel importers.

The importers argued that compliance with the FMD requires opening the original outer packaging for example to place the information leaflet in the local language inside the box, which would result in visible tampering and a need for new outer packaging. They believed that consumers would be hesitant to purchase previously opened products.

However, the CJEU strengthened the position of pharmaceutical trade mark owners in Bayer v kohlpharma (C-204/20), stating that safety regulations can be met through relabelling, and therefore trade mark owners may object to repackaging where relabelling is objectively possible for parallel importers.

This depends on whether the relabelling process can restore the safety features without creating a packaging that would be strongly resisted by a significant portion of consumers in the import market and therefore act as a market barrier. An assessment is to be made on a case-by-case basis.

However, if parallel importers can prove that visible traces on the original packaging would significantly affect consumers and create market obstacles, trade mark owners cannot oppose repackaging.

Visible traces on outer packaging

In its ruling in Merck, the CJEU expanded on the issue of visible traces on the outer packaging resulting from the process of opening and relabelling the original packaging, stating that such traces would not create a market barrier if it were obvious and unambiguous that the replacement of safety features was carried out by the parallel importer.

In the Novartis case, the court clarified that the unique product identifier barcode could be affixed to the outer packaging using a sticker that could not be removed without being destroyed and remained legible during distribution and marketing.

Egon Engin-Deniz is a partner of CMS Reich-Rohrwig Hainz in Vienna, a member of the MARQUES Council and a member of the Anti-Counterfeiting and Parallel Trade Team. The second part of this article will be published on Monday 16 October.

The photo shows the CJEU and is taken from the Court's website.