Trade mark owners fail to restrict EU parallel imports of pharmaceutical products in a recent CJEU decision

The Court of Justice of the European Union (CJEU) has limited the ability of trade mark owners to restrict the parallel importation of their medicinal products by providing a higher threshold for the concept of ‘repackaging’, in the case of Junek Europ-Vertrieb GmbH v Lohmann & Rauscher International GmbH & Co KG (Case C-642/16).

Regulations for the packaging and labelling of goods varies across EU member states. Companies attempting to move products across borders therefore often have to repackage them in order to comply with inconsistent national regulations. This has the potential to interfere with the rights of the trade mark holder, who may fear goods repackaged to an inferior standard could harm their company’s reputation.

In the case mentioned above, Lohmann had distributed German medical patches in Austria, which were then bought by Junek, who reimported them back to Germany to be sold at a profit. Junek had failed to give notice to Lohmann of the reimportation, and had modified the packaging by attaching a small additional label featuring its company information, a barcode and a central pharmaceutical number. Lohmann sued Junek for infringing its intellectual property rights.

The court ruled that since the label was so small that it did not conceal the product’s trade mark, modify or significantly affect the presentation of the packaging, it did not constitute ‘repackaging’. As a result, it has now been clarified that the trade mark owners can only oppose the repackaging of their medicinal products if the additional label threatens the product’s guarantee of origin.

The extent to which these regulations will be mimicked in the UK after Brexit is unclear. Once outside of the EEA, the UK will be able in theory to operate a system of national exhaustion. This, whilst not allowing companies to prevent their products from being resold by third parties within the UK, would allow UK intellectual property owners  to prevent the reimportation of their products which had been marketed abroad, as was the case with Lohmann.

This would provide strong protection for UK trade mark holders, but would potentially result in higher prices as the NHS currently relies on low-cost parallel imports. An international exhaustion system, on the other hand, would result in more free trade, but would make it harder to enforce quality control as UK drugs could be freely repackaged and sold on across markets. As with other aspects of the UK’s exit from the EU, it is unlikely that a confirmation of the UK’s position either way will come soon.

Tagged with

Published on 19. June 2018 in News, News EU, News UK