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).

Debranding, rebranding and use of a trademark in the EU – the Mitsubishi case

The European court has ruled in C‑129/17, Mitsubishi Shoji Kaisha Ltd v Duma Forklifts NV. The case at hand concerns the following:

Mitsubishi, established in Japan, is the proprietor of the following marks (‘the Mitsubishi marks’):

–  The EU word mark MITSUBISHI, registered on 24 September 2001 under number 118042 for, inter alia, goods in Class 12 of the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks of 15 June 1957, as revised and amended, including motor vehicles, electric vehicles and forklift trucks;

–  The EU figurative mark, represented below, registered on 3 March 2000 under number 117713, designating in particular the products in Class 12 of that Agreement, including motor vehicles, electric vehicles and forklift trucks:

–  The Benelux word mark MITSUBISHI registered on 1 June 1974 under the number 93812, designating inter alia the goods in Class 12, including land vehicles and means of transport and Class 16, including books and printed matter;

–  The Benelux figurative mark MITSUBISHI registered on 1 June 1974 under the number 92755, designating inter alia the goods in Class 12, including land vehicles and means of transport and Class 16, including books and printed matter, identical to the EU figurative mark.

MCFE, established in the Netherlands, is exclusively authorised to manufacture and place on the market in the EEA forklift trucks supplied under the Mitsubishi mark.

Duma, established in Belgium, has as its main activity the worldwide purchase and sale of new and second hand forklift trucks. It also offers for sale its own forklift trucks under the names ‘GSI’, ‘GS’ and ‘Duma’. It was previously an official subdealer of Mitsubishi forklift trucks in Belgium.

GSI, also established in Belgium, is affiliated with Duma, whose administration and head office it shares. It constructs and repairs the forklift trucks that it imports and exports wholesale, with their components, on the world market. It adapts them to the applicable European standards, gives them their own serial numbers and delivers them to Duma, providing EU declarations of conformity.

It is stated in the order for reference that, in the period from 1 January 2004 to 19 November 2009, Duma and GSI proceeded to make parallel imports in the EEA of forklift trucks bearing the Mitsubishi marks, without the consent of the proprietors of those marks.

Since 20 November 2009, Duma and GSI have acquired from a company within the Mitsubishi group, outside the EEA, forklift trucks that they bring into EEA territory where they place them under a customs warehousing procedure. They then remove from those goods all the signs identical to the Mitsubishi marks, make the necessary modifications to render those goods compliant with European Union standards, replacing the identification plates and serial numbers with their own signs. They import those goods and then market them both within and outside the EEA.

Mitsubishi and MCFE applied to the Rechtbank van koophandel te Brussel (Commercial Court, Brussels, Belgium) seeking, in particular, that the court order the cessation of those activities. Their applications were rejected by a judgment of 17 March 2010, and so they appealed to the Hof van beroep te Brussel (Court of Appeal, Brussels, Belgium), before which they sought the prohibition of both the parallel trade in forklift trucks bearing the Mitsubishi mark and the importation and marketing of forklift trucks on which signs identical to those marks have been removed and new signs affixed.

Before that court, Mitsubishi submitted that the removal of the signs and affixing of new signs on forklift trucks purchased outside the EEA, the removal of identification plates and serial numbers, and the importation and marketing of those forklift trucks in the EEA, infringed the rights conferred on them by the Mitsubishi marks. It submitted in particular that the removal of the signs identical to those marks, without its consent, was an infringement of the right of the proprietor of the mark to control the first placing on the market in the EEA of the goods bearing that mark and harmed the mark’s functions of indicating origin and quality, as well as the functions of investment and advertising. It observed, in that regard, that despite that removal, the Mitsubishi forklift trucks remained recognisable to the consumer.

Duma and GSI submitted in particular that they must be regarded as the manufacturers of the forklift trucks that they purchased outside the EEA because they made modifications to those trucks in order to render them compliant with European Union regulation, and they were therefore entitled to affix their own signs.

As regards the parallel import into the EEA of forklift trucks bearing the Mitsubishi marks, the referring court held that that was a breach of the law on trademarks and upheld the applications made by Mitsubishi and MCFE. With regard to the importation and marketing in the EEA, with effect from 20 November 2009, of Mitsubishi forklift trucks originating in countries that are not members of the EEA on which the signs identical to the Mitsubishi marks were removed and new signs affixed, it observed that the Court had not yet ruled on the question of whether actions, such as those undertaken by Duma and GSI, constituted a use that the proprietor of the mark could prohibit, while observing that the Court’s case-law gave indications that led it to suppose that that question called for a positive response.

It was in those circumstances that the Hof van beroep te Brussel (Court of Appeal, Brussels) (Belgium) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

(1) (a) Do Article 5 of Directive 2008/95 and Article 9 of Council Regulation No 207/2009 cover the right of the trade mark proprietor to oppose the removal, by a third party, without the consent of the trademark proprietor, of all signs identical to the trademarks which had been applied to the goods (debranding), in the case where the goods concerned have never previously been traded within the EEA, such as goods placed in a customs warehouse, and where the removal by the third party occurs with a view to importing or placing those goods on the market within the EEA?

(b) Does it make any difference to the answer to question (a) above whether the importation of those goods or their placing on the market within the EEA occurs under its own distinctive sign applied by the third party (rebranding)?

(2) Does it make any difference to the answer to the first question whether the goods thus imported or placed on the market are, on the basis of their outward appearance or model, still identified by the relevant average consumer as originating from the trade-mark proprietor?’

The Court’s decision:

Article 5 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 and Article 9 of Council Regulation (EC) No 207/2009 of 26 February 2009 on the European Union trademark must be interpreted as meaning that the proprietor of a mark is entitled to oppose a third party, without its consent, removing all the signs identical to that mark and affixing other signs on products placed in the customs warehouse, as in the main proceedings, with a view to importing them or trading them in the EEA where they have never yet been marketed.

Image: Tama66 on Pixabay.