EUROPEAN PERSPECTIVES

More Light Shed on Parallel Imports

In two recent cases (Boehringer Ingelheim and others v Swingward and others; Merck, Sharp & Dohme v Paranova Pharmazeutika), the European Court of Justice (ECJ) has issued further guidance on the parallel importation of pharmaceutical products in the European Union.

The Boehringer case involved the parallel importation of various branded drugs into the United Kingdom from other EU countries. The questions put by the English Court to the ECJ sought guidance, in particular, on the circumstances under which it was deemed necessary for a parallel importer to repackage the original product, as well as whether it was mandatory for the parallel importer to give notice to the originator of his planned importation. The Court gave the following preliminary rulings:

• o The trade mark proprietor's opposition to repackaging was not justified if it hindered effective access of the imported product to the country of importation.

• Effective access was hindered where - The imported product could not be marketed because of national rules or practices relating to packaging. - Sickness insurance rules in the country of import made reimbursement of medical expenses dependent on a certain type of packaging. - Well established medical prescription practices in the country of import were based, inter alia, on standard pack sizes recommended by professional groups and sickness insurance institutions. - There was strong resistance from a significant proportion of consumers to relabelled (or over-stickered), imported pharmaceutical products. What constituted "strong resistance" was for the national Court to decide.

• The parallel importer must give adequate notice to the originator of any proposed repackaging. In the absence of such notice, the sale of the parallel imported product could be opposed by the trade mark owner. It was for the national Court to decide what constituted an adequate period of notice. In the view of the ECJ, however, if the parallel importer provided the originator with both notice and a sample of the planned, imported product at least 15 working days before the first sale, the originator should be in a position to react to the planned repackaging.

In the MSD case, the product was repackaged Proscar imported by Paranova from Spain to Austria. The Austrian health authorities had recommended replacement packaging by Paranova rather than over-stickering. The Austrian Court also requested guidance on the circumstances that could justify repackaging. The ECJ again ruled that repackaging could be justified, in the absence of national rules or practice, where a strong consumer resistance to over-stickered products hindered effective market access.

Comment

These are the latest cases heard by the ECJ in which the Court has attempted to develop a compromise between the commercial interests of the research industry and parallel importers.

The compromise appears to be that the parallel importer can repackage the original product and therefore trespass significantly on the rights of the trade mark owner only if such an activity is necessary to achieve effective market access. In some circumstances, of course, repackaging is required so that a parallel importer can enter a market at all. The real controversy occurs, however, where it is consumer resistance to over-stickered, imported products that restricts sales rather than the rules or practice imposed by official or unofficial bodies. This is the major battleground in the war of pharmaceutical parallel imports, which is why we can expect more ECJ cases in the near future dealing with the questions, "What constitutes strong consumer resistance?" and "What is or is not effective market access?"