27 June, 2018

A Terrible Cover-Up - Addition of a Small Label is not Repackaging (and Doesn't Infringe TMs), says CJEU

Repackaging branded goods can be a legitimate way to resell branded goods in a different jurisdiction, avoiding the potential confusion of where the goods actually originate from (and whether they are counterfeit). The allowance is still a tough line to toe, particularly when minimal efforts are taken to repackage the relevant goods. In the light of this, what amounts to repackaging, and what would be a potential minimum standard for repackaging so as to avoid trademark infringement in the EU? Luckily, the CJEU was poised to answer this question in a case that was decided last month.

The case of Junek Europ-Vertrieb GmbH v Lohmann & Rauscher International GmbH & Co KG concerned the sale of medical dressings made by Lohmann, sold under the brand "Debrisoft" (TM No. 8852279). Junek parallel imported and sold sanitary preparations in Austria, including Debrisoft products. In a package of Debrisoft, purchased by Lohmann in Austria, Junek had affixed a label onto the box that contained its address and telephone number, a barcode and a central pharmaceutical number. The label was applied to a non-printed part of the packaging. Junek had not notified Lohmann of the reimportation of the products, nor had they supplied Junek with the modified packaging. Lohmann then took Junek to court for trademark infringement.

The referring court set out a single question for the CJEU, which, in essence, asked "…whether Article 13(2) of [the CTM Regulation] must be interpreted as meaning that the proprietor of a mark may oppose the further commercialisation, by a parallel importer, of a medical device in its original internal and external packaging when an additional label, such as that at issue in the main proceedings, has been added by the importer". Additionally the court asks whether the principles in the cases Bristol-Meyers Squibb and Boehringer Ingelheim apply without restrictions to parallel imports of medical devices.

When it comes to repackaging of goods, the Court emphasised that any repackaging done by a third party without the proprietor's consent could create a risk in terms of the guarantee of origin of the goods. Even so, original proprietors cannot prevent the importation of repackaged goods simply to derogate from the free movement of goods, although the repackaging should not adversely affect the original condition of the goods or the reputation of the mark.

When repackaging, be honest
The CJEU has previously in the above two cases set out the principles under which exhaustion of rights operates in relation to parallel imports. A proprietor can oppose the further commercialisation of pharmaceutical products imported from another Member State in its original internal and external packaging with an additional external label applied by the importer, unless:

(i) it is established that the use of the trade mark rights by the proprietor thereof to oppose the marketing of the relabelled products under that trade mark would contribute to the artificial partitioning of the markets between Member States; (ii) it is shown that the repackaging cannot affect the original condition of the product inside the packaging; (iii) the new packaging states clearly who repackaged the product and the name of the manufacturer; (iv) the presentation of the repackaged product is not such as to be liable to damage the reputation of the trade mark and of its owner; thus, the packaging must not be defective, of poor quality, or untidy; and (v) the importer gives notice to the trade mark proprietor before the repackaged product is put on sale, and, on demand, supplies him with a specimen of the repackaged product.

In the light of the above, 'repackaging' of goods also includes relabeling the products bearing the mark.

The Court distinguished the current case from the facts of Boehringer Ingelheim, which dealt with repackaging, albeit both affixing an external label and opening the packaging and inserting an information leaflet. In contrast, Junek had only affixed a small label on the outside of the packaging, which didn't obscure the mark or any other details. The Court concluded that their actions therefore would not amount to repackaging as set out in Boehringer Ingelheim. Due to this the Court precluded Junek from preventing the importation of the goods to the Member State.

The Court summarised its answer to the question as "… Article 13(2)… must be interpreted as meaning that the proprietor of a mark cannot oppose the further commercialisation, by a parallel importer, of a medical device in its original internal and external packaging where an additional label… has been added by the importer, which, by its content, function, size, presentation and placement, does not give rise to a risk to the guarantee of origin of the medical device bearing the mark".

Clearly the Court drew a line in the impact a small label could have to the guarantee of origin of goods, as it does not affect the consumer's knowledge of the origin or the contents of the package. One can indeed appreciate this common sense approach, as the prohibition of the addition of a parallel importer's details could also result in the impossibility of resolving any issues with the product when imported separately from the original proprietor.

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