Repackaging Setback for Pharmaceutical Vendor

April 22, 2014

Repackaging Setback for Pharmaceutical Vendor

The law on 'grey' or 'parallel' importing, especially of products that are sold under different names (such as many pharmaceuticals) has a balancing act to perform. On the one hand, it must protect the interests of the consumer by preventing unfair restriction of market access. On the other hand, the law should support the trade marks of the companies that own them and have often invested heavily in them. A recent case illustrates the issues.

It involved a firm which imported pharmaceutical products and then repackaged and resold them. The established position has been that the trade mark owner cannot oppose this practice if certain criteria are met, the chief ones being:

  • The repackaging could not affect the quality of the product;
  • The repackaging identifies the original manufacturer;
  • The repackager gives notice to the manufacturer that the repackaged product is being put on sale before it happens (and supplies samples if requested); and
  • The repackaging is done in a way that will not damage the reputation of the manufacturer.

The importer sold the product into the generic prescription market. The brand name used in the country of origin was replaced with the brand name used by a UK company which had been granted an exclusive licence over the brand.

The arguments turned on whether it was 'objectively necessary...to replace the original trade mark by that of the importing Member State in order that the product in question could be placed on the market in that State by the parallel importer'.

The High Court took the view that it was not necessary, and thus the use of the UK brand was merely an attempt to 'piggy back' on the marketing efforts of the authorised importer. Accordingly, the rebranding exercise infringed the trade mark of the licensee.

The area of product descriptions is fraught with pitfalls where brand names and commonly used names for products are concerned.