The matter at hand

Novartis markets two types of medicine in Belgium and The Netherlands under the EU trade marks ‘Femara’ and ‘Rilatine’, referred to as ‘reference’ medicines. Its affiliated company Sandoz markets in The Netherlands the respectively corresponding generic medicines ‘Letrozol Sandoz’ and ‘Methylphenidate Sandoz’. The referring court assessed the medicines to be identical.

Impexeco and PI Pharma, two companies which are active in the parallel trade of medicinal products, informed Novartis of their intention to import the ‘Letrozol Sandoz’ and ‘Methylphenidate Sandoz’ products from The Netherlands, and to place these products on the Belgian market under the trade marks of the reference medicines, ‘Femara’ and ‘Rilatine’.

Claiming that Impexeco and PI Pharma – by trading in the medicines with the trade marks of Novartis affixed to them – infringed its trade mark rights, Novartis brought infringement proceedings in Belgium.

In appeal of these proceedings, the hof van beroep te Brussel (Court of Appeal, Brussels, Belgium) refered preliminary questions to the ECJ. It raised the question whether Article 34 to 36 TFEUTreaty on the Functioning of the European Union must be interpreted as meaning that in case both the reference medicine and the 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 repackaging and affixing the trade mark of the corresponding reference medicine in the country of importation, may lead to an artificial partitioning of the markets of the Member States. In addition, the referring court asked (if the latter question is answered in the affirmative), if the trade mark proprietor’s opposition must meet the conditions of, inter alia, case C-427/93 (Bristol-Myers Squibb and others).

The judgment of the ECJ

As a preliminary observation, the ECJ reiterates that although Article 13 of Trade Mark Regulation 207/2009Council Regulation [EC] No 207/2009 of 26 February 2009 on the Community trade mark and Article 7 of Trade Mark Directive 2008/95Directive 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 regulate the question of the exhaustion of the rights conferred by a trade mark in detail, the regulation and directive, must be interpreted in the light of the TFEUTreaty on the Functioning of the European Union rules on the free movement of goods, more specifically Articles 34 to 36 TFEUTreaty on the Functioning of the European Union.

As to the first question, the ECJ holds that a disguised restriction (Article 36 TFEUTreaty on the Functioning of the European Union) “will exist where the exercise by a trade mark proprietor of its right to oppose repackaging contributes to artificial partitioning of the markets between Member States and where, in addition, the repackaging is done in such a way that the legitimate interests of the proprietor are respected” (paragraph 51).

Hence, the ECJ recalls that in case the repackaging is ‘necessary’ within the meaning of case C-427/93 (Bristol-Myers Squibb and others), i.e., in order to enable the further commercialisation of the parallel imported product, opposing against the repackaging may contribute to the artificial partitioning of the markets between Member States (paragraph 54).

The ECJ emphasises that in the present case the medicinal products being traded in parallel are generic medicines, whereas the trade marks affixed to the new outer packaging of those medicines are the trade marks of the corresponding reference medicines. In addition, the ECJ emphasises that, although the generic medicines at issue are identical to the corresponding reference medicines and are manufactured by economically linked entities, they  are however marketed under two different trade marks.

In these circumstances, the key question is whether the replacement of the trade mark is objectively necessary in order for those medicines to be marketed in the country of importation.

The ECJ rules 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”, inter alia, case C-427/93 (Bristol-Myers Squibb and others) (paragraph 74).