The application of Community jurisprudence relating to relabelling and repackaging of pharmaceutical products
In the second judgment in Glaxo Group & Others the UK has ruled on the implementation of the decision of the European Court of Justice (ECJ) regarding the manner and extent to which pharmaceutical products may be repackaged or relabelled for parallel trade. Guidance was sought as to whether a proprietor of a trade mark could object to repackaging when neither the origin or quality functions of the mark had in reality been affected. The ECJ ruled that prima facie a proprietor can.
The ECJ was also asked to confirm whether or not a parallel importer is obliged to give prior notice of repackaging even where it would not be possible for the proprietor to object to it. The ECJ has made it clear that there is always such an obligation. In the UK Court’s view, this means there is little doubt that such notice will now also be required for mere relabelling. The judgment therefore significantly facilitates the ability of proprietors to interfere with parallel trade.
Glaxo Wellcome, Boehringer Ingelheim, SmithKline Beecham and Eli Lilly had all objected to the repackaging and relabelling by Dowelhurst and Swingward of various pharmaceutical products. This was because they felt there was no justification for it and it had been carried out in a way which was impermissible. Glaxo and Boehringer also argued that the notice requirements in Hoffman-La Roche had not been complied with.
In the first judgment, Laddie J concluded that in the light of the decisions in Parfums Christian Dior that a proprietor can only override the principle of the free movement of goods where there is substantial damage to the specific subject matter of the right, particularly damage to reputation, and the decision in Paranova which comments that hypothetical risk is insufficient for a proprietor to oppose repackaging, it was necessary for the proprietor to demonstrate real and substantial damage to the mark before being able to object. Therefore absent evidence of any real damage an importer was free to decide how to market the goods. However, since he felt that the jurisprudence in this area was not clear, he referred the matter to the ECJ for further explanation.
The ECJ’s response was that the UK Court had significantly overstated the position. In summary the ECJ reiterated that although a proprietor may interfere with the free movement of goods only to the extent necessary to safeguard the rights which form the specific subject matter of the mark, which is to guarantee origin, repackaging of pharmaceutical products is in itself inherently prejudicial to those rights. In such circumstances it is not necessary to assess the actual effects of repackaging.
There is therefore an irrebuttable legal presumption that repackaging is damaging and that a proprietor may object without demonstrating actual harm. This is subject however to the condition that if repackaging is objectively necessary for the importer to gain effective access to the market in the state of import, a proprietor may not object, provided that the repackaging is done in such a way that the legitimate interests of the proprietor are respected. The corollary of all this is that a proprietor may always object to repackaging when mere relabelling alone would suffice. The former is therefore deemed to be inherently harmful whilst the latter is not.
Repackaging and relabelling in Glaxo
In essence, the claimants’ objections to repackaging in Glaxo fell into two categories. The first relates to de-branding, where a proprietor’s mark is partially or entirely removed from the product, whilst the second relates to repackaging in a livery which serves to build up the importer’s reputation on the back of the proprietor’s product. Regarding de-branding, Eli Lilly and SmithKline Beecham both complained that the repackaging of their respective products, PROZAC, SEROXAT and FAMVIR had resulted in a reduction in the prominence and location of their marks whilst unfairly emphasising the association of the products with Dowelhurst. Since this had been carried out in a way which was not necessary, either to achieve market acceptance or to meet regulatory requirements, their objections to this repackaging were upheld.
With regard to the remaining claimants, Glaxo Wellcome and Boehringer Ingelheim, their primary complaints related to the relabelling of ATROVENT, giving undue prominence to the word DOWELHURST, and the repackaging of SEREVENT by Dowelhurst and Swingward in distinctive styles of livery. Since Laddie J had already found in the first judgment that the relabelling of ATROVENT had not in fact inflicted any real or substantial harm to the specific subject matter of the mark, and given that there is no presumption of damage in the case of relabelling, no objection could be justified. However, the repackaging of SEREVENT using distinctive livery was held to be objectionable for the same reasons that Eli Lilly’s and SmithKline Beecham’s objections to repackaging were upheld.
Finally, with regard to the question of giving prior notice to a proprietor when repackaging, the ECJ has confirmed that this is necessary in any event because the requirement does not depend on whether there is actual harm. In such circumstances notice is required so that the proprietor has the opportunity to assess whether there is any actual harm. Whilst there is no presumption of harm to a mark in the case of relabelling in the way there is in relation to repackaging, Laddie J has therefore held in the light of this and the decision in Loendersloot, which suggests that notice should be given for relabelling anyway, there are now no reasonable grounds to doubt that the ECJ will require notice to be given whenever there is a prima facie risk of infringement. The need to give advance notice therefore applies as much to parallel imported pharmaceuticals that have been relabelled as to those that have been repackaged.
Laddie J did express the view however that the 15 day notice period previously suggested by the ECJ in the case of repackaging was excessive in cases of mere relabelling. He therefore decided that 7 days should be sufficient since the only burden on proprietors in those circumstances would be to examine their own product to which a new label has simply been applied.
 Glaxo Group Ltd & Others v Dowelhurst Ltd and Swingward Ltd  EWHC 110 (Ch)
Bristol-Myers Squibb v. Paranova A/S  ECR I-3457
Hoffman-La Roche v Centrafarm  ECR 1139
 C-379/97 Upjohn  ECR I-6927
 To be determined by the national Court
 Famiclovir, pro drug of penciclovir
 Ipratroprium Bromide
 Loendersloot v. Ballantine  ECR I-6227