Can you rebrand medicines in the EU – a European Court decision

The European Court has ruled in joined cases C‑253/20 and C‑254/20 Impexeco NV v Novartis AG which target the issue of pharmaceutical products rebranding and parallel importation. The cases have the following background:

Case C‑253/20

Novartis developed a medicinal product with the active substance letrozole, marketed in Belgium and the Netherlands under the EU trademark ‘Femara’, of which Novartis is the proprietor.

That medicinal product is sold on the market in packages of 30 and 100 film-coated tablets of 2.5 mg in Belgium, and in packages of 30 film-coated tablets of 2.5 mg in the Netherlands.

Sandoz BV and Sandoz NV, respectively in the Netherlands and in Belgium, market the generic medicinal product ‘Letrozol Sandoz 2.5 mg’, in packages of 30 film-coated tablets in the Netherlands, and 30 and 100 film-coated tablets in Belgium.

According to the referring court, the medicinal products marketed under the names ‘Femara’ and ‘Letrozol Sandoz’ are identical.

By letter of 28 October 2014, Impexeco informed Novartis of its intention to import from the Netherlands and to place on the Belgian market, from 1 December 2014, the medicinal product ‘Femara 2.5 mg x 100 tablets (letrozol)’. It is apparent from the order for reference that that medicinal product was, in actual fact, the medicinal product ‘Letrozol Sandoz 2.5 mg’, repackaged in new outer packaging to which Impexeco intended to affix the trade mark ‘Femara’.

By letter of 17 November 2014, Novartis opposed the parallel import planned by Impexeco, claiming that a new marking of that product with the trade mark of the reference medicinal product produced by Novartis, that is to say, the trade mark ‘Femara’, constituted a manifest infringement of its rights in that mark and was likely to mislead the public.

In July 2016, Impexeco marketed in Belgium the medicinal product ‘Letrozol Sandoz 2.5 mg’, repackaged in new packaging bearing the trade mark ‘Femara’.

According to the referring court, the public price of the medicinal products ‘Femara (Novartis) 2.5 mg’, ‘Letrozol Sandoz 2.5 mg’ and ‘Femara (Impexeco) 2.5 mg’ are identical in Belgium. By contrast, the public price of ‘Letrozol Sandoz 2.5 mg’ is significantly lower in the Netherlands.

Claiming that the marketing referred to in paragraph 19 above infringed its trade mark rights, on 16 November 2016, Novartis brought an action against Impexeco before the Court of Cessations, Brussels, Belgium.

By letter of 10 April 2017, Impexeco also informed Novartis of its intention to market in Belgium the medicinal product ‘Femara 2.5 mg’ in packaging of 30 film-coated tablets imported from the Netherlands and re-labelled. It is apparent from the order for reference that that medicinal product was the medicinal product ‘Letrozol Sandoz 2.5 mg’ and that Impexeco intended to re-label that product and to affix the trade mark ‘Femara’ to it.

Case C‑254/20

Novartis developed a medicinal product with the active substance methylphenidate. Novartis Pharma NV markets that medicinal product in Belgium under the Benelux word mark ‘Rilatine’, of which it is the proprietor, inter alia in packs of 20 tablets of 10 mg. In the Netherlands, that medicinal product is marketed by Novartis Pharma BV under the trade mark ‘Ritalin’, inter alia in packs of 30 tablets of 10 mg.

Sandoz BV places on the market in the Netherlands the generic medicinal product ‘Methylphenidate HC1 Sandoz 10 mg’ in packaging of 30 tablets.

According to the referring court, the medicinal products marketed under the names ‘Methylphenidate HC1 Sandoz 10 mg tablet’ and ‘Ritalin 10 mg tablet’ are identical.

By letter of 30 June 2015, PI Pharma informed Novartis Pharma NV of its intention to import from the Netherlands and to place on the Belgian market the medicinal product ‘Rilatine 10 mg x 20 tablets’. It is apparent from the order for reference that that medicinal product was, in actual fact, the medicinal product ‘Methylphenidate HC1 Sandoz 10 mg’, in new outer packaging on which PI Pharma intended to affix the trade mark ‘Rilatine’.

In a letter of 22 July 2015, Novartis stated its opposition to the parallel import planned by PI Pharma, claiming that a new marking of the medicinal product ‘Methylphenidate HC1 Sandoz 10 mg’ with the trade mark of the reference medicinal product of Novartis, that is to say, the trade mark ‘Rilatine’, manifestly infringed its rights in that trade mark and was likely to mislead the public.

In October 2016, PI Pharma marketed that repackaged medicinal product in Belgium in new packaging bearing the trade mark ‘Rilatine’.

The referring court states that, in Belgium, the public price of the medicinal product ‘Rilatine 10 mg x 20 tablets Novartis’ is EUR 8.10 (EUR 0.405 per tablet) and the price of the medicinal product ‘Rilatine 10 mg x 20 tablets PI Pharma’ is EUR 7.95 (EUR 0.398 per tablet), while in the Netherlands the public price of the medicinal product ‘Methylphenidate HC1 Sandoz 10 mg’ is EUR 0.055 per tablet.

Claiming that the marketing referred to in paragraph 28 above infringed its trade mark rights, on 28 July 2017, Novartis brought an action against PI Pharma before the Court of Cessations, Brussels.

Factors common to the disputes in the main proceedings

By two judgments of 12 April 2018, the Court of Cessations, Brussels held that the two actions referred to in paragraphs 21 and 30 above were well founded on the ground, inter alia, that the practice of affixing the trade marks ‘Femara’ and ‘Rilatine’ respectively to the repackaged generic medicinal products ‘Letrozol Sandoz 2.5 mg’ and ‘Methylphenidate HC1 Sandoz 10 mg’, imported from the Netherlands, infringed the trade mark rights of Novartis, for the purposes, respectively, of Article 9(2)(a) of Regulation No 207/2009 and of Article 2.20(1)(a) of the Benelux Convention. Consequently, the Court of Cessations, Brussels ordered that that practice be discontinued.

Impexeco and PI Pharma, respectively, appealed against those two judgments before the referring court.

Before that court, they argue that the practices of using different packaging and different trade marks for the same product both contribute to the partitioning of Member States’ markets and, therefore, have the same adverse effect on trade within the European Union.

Relying on paragraphs 38 to 40 of the judgment of 12 October 1999, Upjohn (C‑379/97, EU:C:1999:494), Impexeco and PI Pharma submit that the opposition of the proprietor of a trade mark to the reaffixing of a trade mark by a parallel importer constitutes an obstacle to intra-Community trade creating artificial partitioning of the markets between Member States, where such reaffixing is necessary in order for the products concerned to be marketed by that importer in the importing Member State. That case-law can be applied to a situation in which a generic medicinal product is given a new marking by affixing the trade mark of the reference medicinal product, where those medicinal products have been placed on the market in the EEA by economically linked undertakings.

Novartis submits that, under Article 13(1) of Regulation No 207/2009 and Article 2.23(3) of the Benelux Convention, the rights conferred by a trade mark may be exhausted only in respect of goods which have been placed on the market in the EEA ‘under that trade mark’ by the proprietor or with its consent, and not where a parallel importer gives the goods concerned a new marking.

Taking the view, in those circumstances, that the disputes pending before it raise questions of interpretation of EU law, the hof van beroep te Brussel (Court of Appeal, Brussels, Belgium) decided to stay the proceedings and to refer the following questions, which are worded identically in Cases C‑253/20 and C‑254/20, to the Court of Justice for a preliminary ruling:

(1) Must Articles 34 to 36 TFEU be interpreted as meaning that, where a branded medicine (reference medicine) and a generic medicine have been put on the market in the EEA by economically linked undertakings, a trade mark proprietor’s opposition to the further commercialisation of the generic medicine by a parallel importer after the repackaging of that generic medicine by the affixing to it of the trade mark of the branded medicine (reference medicine) in the country of importation may lead to an artificial partitioning of the markets of the Member States?

(2) If the answer to that question is in the affirmative, must the trade mark proprietor’s opposition to that [new marking] be assessed by reference to the … conditions [set out in paragraph 79 of the judgment of 11 July 1996, Bristol-Myers Squibb and Others (C‑427/93, C‑429/93 and C‑436/93, EU:C:1996:282)]?

(3) Is it relevant to the answer to those questions that the generic medicine and the branded medicine (reference medicine) are identical or have the same therapeutic effect as referred to in Article 3(2) of the … Royal Decree of 19 April 2001 on parallel imports [of medicinal products for human use and the parallel distribution of medicinal products for human and veterinary use, as amended by the Royal Decree of 21 January 2011]?’

The EU Court decision:

Article 9(2) and Article 13 of Council Regulation (EC) No 207/2009 of 26 February 2009 on the European Union trade mark, as amended by Regulation (EU) 2015/2424 of the European Parliament and of the Council of 16 December 2015, and Article 5(1) and Article 7 of Directive 2008/95/EC of the European Parliament and of the Council of 22 October 2008 to approximate the laws of the Member States relating to trade marks, read in the light of Articles 34 and 36 TFEU,

must be interpreted as meaning that the proprietor of the trade mark of a reference medicinal product and the trade mark of a generic medicinal product may oppose the placing on the market of a Member State, by a parallel importer, of that generic medicinal product imported from another Member State, where that medicinal product has been repackaged in new outer packaging to which the trade mark of the corresponding reference medicinal product has been affixed, unless, first, the two medicinal products are identical in all respects and, second, the replacement of the trade mark satisfies the conditions laid down in paragraph 79 of the judgment of 11 July 1996, Bristol-Myers Squibb and Others (C‑427/93, C‑429/93 and C‑436/93, EU:C:1996:282); in paragraph 32 of the judgment of 26 April 2007, Boehringer Ingelheim and Others (C‑348/04, EU:C:2007:249); and in paragraph 28 of the judgment of 17 May 2018, Junek Europ-Vertrieb (C‑642/16, EU:C:2018:322).

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Amazon may be liable for trademark infringement after a European Court decision

The European Court has ruled in joined cases C‑148/21 et C‑184/21Christian Louboutin v Amazon

The main issue that focuses our attention, in this case, is whether Amazon can be liable for unauthorized use of trademarks shown in ads of third parties.

As it is well-known, Amazon is the biggest online retailer in the world offering a myriad of goods, directly or through third parties that use Amazon’s platform to sell their products.

The problem arises when these third parties offer fake goods bearing trademarks of other companies without permission and promote them through Amazon ads.

Several months ago, the Advocate General of the EU Court Maciej Szpunar gave its opinion that in such a situation Amazon is not liable for ads that infringe other trademarks, because the company does to use these marks itself.

The European Court, however, disagreed with the Advocate General, and conclude that Amazon may be liable for trademark infringement related to such ads.

The reason for this is the fact that Amazon itself uses ads to promote the same, but original, goods. These ads are very similar to those used by third parties but for fake goods. Thus it is difficult for consumers to make a distinction between the ads which in turn can lead to misleading about the fact that the fake goods can originate from Amazon. From that perspective, Amazon can be held liable for unauthorized trademark use.

In addition, the possible confusion between the ads is enhanced by the fact that Amazon is often involved in the storage, shipping, and management of returns for third-party products on its sites.

Source: Marks & Clerk – Megan Rannard for Lexology.

The new edition of the WIPO Magazine is available

WIPO has issued a new edition of its WIPO Magazine where you can find the following main topics:

1. Tencent, video games, the metaverse and diversity: an insider’s view

2. Fashion forward: pioneering African designer eyes luxury brands market

3. Brazilian agri-tech startup digitizes farm management with dividends for cattle farmers and sustainability

4. Why vaccine independence is so important for Africa

5. Green trademarks and the risk of greenwashing

For more information here.

Using a trademark as a decorative element is not the best option for its protection in the EU

The General Court of the European Union has ruled in the case T‑323/21 Castel Frères v Shanghai Panati Co., which reminds us how essential is one registered mark to be used correctly in order for its protection to be viable.

The case has the following background:

On 29 May 2018, Shanghai Panati Co filed an application with EUIPO for revocation of the EU trademark that had been registered further to an application filed on 17 March 2008 for the following figurative sign:

The goods covered by the contested mark, in respect of which a declaration of invalidity was sought, were inter alia in Class 33 of the Nice Agreement: ‘Still wines’.

The ground relied on in support of the application for revocation was the lack of genuine use of the contested mark within a continuous period of five years.

Evidence was submitted by Castel Frères that the mark was used for wine labels in the following way:

On 3 April 2020, the Cancellation Division rejected the application for revocation.

On 24 April 2020, Shanghai Panati Co. filed a notice of appeal with EUIPO against the decision of the Cancellation Division.

By the contested decision, the Board of Appeal upheld the appeal and revoked the contested mark. The Board of Appeal found, in essence, that the differences between the contested mark and the mark as used were such as to alter the distinctive character of the contested mark.

The Court upheld this decision.

According to the Court, it must be borne in mind that the contested mark in its registered form is a figurative mark consisting of three characters from the Chinese alphabet. As the Board of Appeal correctly notes the relevant public will not be able to verbalise or to memorise those Chinese characters, which will rather be perceived as meaningless, abstract signs or as decorative elements referring to China or to Asia. It is appropriate, therefore, to find that, with regard to the goods at issue, the Chinese characters forming the contested mark have a lower-than-average degree of distinctive character.

In that regard, it must be emphasised that on the product packaging or in the advertisements, the contested mark, which appears in a very small size, is almost systematically accompanied by the word elements ‘dragon de chine’ and by the representation of a dragon, which appear together and are very close to one another. Moreover, in so far as the contested mark is composed of three characters from the Chinese alphabet, in a very small size, the added elements are always clearly visible and dominate the overall impression.

The Board of Appeal was therefore right to find that the contested mark as used, that is to say, in an ancillary position and in a much smaller size than the distinctive and dominant word elements ‘dragon de chine’ and the representation of a dragon, would be perceived by the relevant public as a decorative element and not as an indication of origin of the goods.

That finding cannot be called into question by the argument that, in essence, it is common in the wine sector for two or more trademarks to be used jointly and autonomously on labels, with or without the name of the manufacturer’s company, as is the case here with the mark Dragon de Chine. It must be stated that the word elements ‘dragon de chine’ are always clearly visible in that they occupy a dominant position in the overall impression created by the mark as used. In any event, even if it were established that those elements are a trademark, the fact remains that that is not capable of weakening the alteration by those terms of the distinctive character of the contested mark, since the relevant public no longer perceives those three characters from the Chinese alphabet as an indication of the origin of the goods in question, in accordance with the case-law.

Having regard to the above examination of the distinctive and dominant character of the added elements, based on the intrinsic qualities of each of those elements and on the relative position of the various elements, it must be held that the variations in use demonstrated alter the distinctive character of the contested mark as registered, as the Board of Appeal rightly found.

This decision comes to remind us that one trademark should always be used as an indication of trade origin and not as a complimentary or decorative element. In a similar case, Apple lost a dispute regarding its trademark Think Differently because of the way the mark was used on the package of the product.

Is the re-use of branded carbonated gas bottles allowed – an EU Court ruling

The European Court has ruled in the case C‑197/21 Soda-Club (CO2) SA, SodaStream International BV v MySoda Oy. The main question, in this case, is whether refilled by someone else carbonated gas bottles infringes the trademark rights of the original producer of the bottles. The dispute has the following background:

SodaStream, a multinational corporation, manufactures and sells carbonation devices that enable consumers to make carbonated water and flavored carbonated beverages from tap water. In Finland, SodaStream markets these devices with a refillable carbon dioxide bottle, which it also sells separately. The companies that form SodaStream are the owners of the European Union trademarks and the national trademarks “SODASTREAM” and “SODA-CLUB”. The specified brands are found on the label and engraved on the aluminum body of these bottles.

MySoda, a company based in Finland, markets in that Member State carbonation devices under the brand name ‘MySoda’ in packaging that does not normally include a carbon dioxide bottle. Since June 2016, MySoda has been offering Finnish-filled carbon dioxide bottles for sale, which are compatible with both its own carbonators and those of SodaStream. Some of these bottles were originally marketed by SodaStream.

After receiving empty SodaStream bottles returned by consumers through distributors, MySoda refills them with carbon dioxide. It replaces the original labels with its own, leaving visible the SodaStream branding engraved on the bottles’ bodies.

For this purpose, MySoda uses two different labels. The first has the MySoda logo and the words “Finnish carbon dioxide for carbonation equipment” in large print in pink, and in small print MySoda’s name as the company that filled the bottle, as well as a link to its website for more detailed information. The second white label has the words “carbon dioxide” in capital letters in five different languages, and among the product information, in small print, MySoda’s name as the company that filled the bottle, as well as a statement that it has no relation to the original supplier of the bottle or his company or the claimed brand that appears on the bottle. In addition, this label contains a link to the MySoda website for more information.

SodaStream initiated a lawsuit for trademark infringement. The Supreme Court of Finland wasn’t sure whether such refilling and use of a trademark was a real infringement and asked the EU Court for clarification.

According to the EU Court:

Article 15, paragraph 2 of Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trademark and Article 15, paragraph 2 of Directive (EU) 2015/2436 of the European Parliament and of the Council of 16 December 2015 on the approximation of the laws of the Member States on trademarks

shall be interpreted to mean that:

the proprietor of a trademark who has placed on the market in a Member State good bearing that trademark which are intended for repeated use and refilling, shall not be entitled under these provisions to oppose the further marketing of those goods in that Member State by a reseller, who has refilled them and replaced the original brand label with another label, leaving the original brand visible on those goods, unless this new label gives consumers the false impression that there is an economic relationship between the reseller and the brand owner. This likelihood of confusion must be assessed in light of the information on the product and its new label, as well as distribution practices in the relevant sector and the extent to which consumers are aware of those practices.

(unofficial translation from the Court’s decision)