Neutral Citation Number: [2004] EWCA (Civ) 757
Case No: 2003/0678/0680/
0681/0682/0689/
0690/0691/0692
0693/0694
ON APPEAL FROM CHANCERY DIVISION
The Hon Mr Justice Laddie
HC 1999 No 0017/HC 1999 No 1894/
HC 1999 No 2053/HC 1999 No 2051/
HC 1999 No 2054/HC 1999 No 2094/
HC 1999 No 3040
Royal Courts of Justice
Strand, London, WC2A 2LL
Before :
LORD JUSTICE KENNEDY
LORD JUSTICE CLARKE
LORD JUSTICE JACOB
Between :
(1) Boehringer Ingelheim KG (2) Boehringer Ingelheim Pharma GmbH & Co KG | Appellants/Claimants |
- and - | |
Swingward Limited | Respondent/Defendant |
Between: | |
(1) Boehringer Ingelheim KG (2) Boehringer Ingelheim Pharma GmbH & Co KG (3) Boehringer Ingelheim Limited | Appellants/Claimants |
- and - | |
Dowelhurst Limited | Respondent/Defendant |
Between: | |
Glaxo Group Limited | Appellant/Claimant |
- and - | |
Swingward Limited | Respondent/Defendant |
Between: | |
Glaxo Group Limited | Respondent/Claimant |
- and - | |
Dowelhurst Limited | Appellant/Defendant |
Between: | |
(1) Smithkline Beecham plc (2) Beecham Group plc (3) Smithkline and French Laboratories Limited | Respondents/Claimants |
- and - | |
Dowelhurst Limited | Appellant/ Defendant |
Between: | |
Eli Lilly and Company | Respondent/Claimant |
Dowelhurst Limited | Appellant/Defendant |
(Transcript of the Handed Down Judgment of
Smith Bernal Wordwave Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Messrs Nicholas Green QC and Mr Richard Arnold QC (instructed by Messrs
Roiter Zucker) appeared on behalf of Dowelhurst Limited and
Swingward Limited
Messrs Simon Thorley QC and Mr Geoffrey Pritchard (instructed by Messrs CMS
Cameron McKenna) appeared on behalf of Eli Lilly
Messrs Michael Silverleaf QC and Richard Hacon (instructed by Messrs
Jones Day) appeared on behalf of Glaxo Group Limited,
Boehringer Ingelheim and Smithkline Beecham plc
Judgment
Lord Justice Jacob:
Following the judgment of this Court given on 5th March 2004 the parties were asked to liase and if possible to agree the form of questions to be sent to the ECJ. What have been produced (after an overlong time) are two independent complete sets of questions. The defendants produced a first set. The claimants, instead of responding with suggestions of amendments or additions, produced an independent second set. This has, as was inevitable, made the Court’s task harder.
Since in the end the questions are those of the Court and not the parties, I conclude that there is no need for further oral argument.
The defendants’ proposed questions are:
“Reboxed products
1. In circumstances where a parallel importer markets in one Member State a pharmaceutical product imported from another Member State in its original internal packaging but with a new exterior carton printed in the language of the Member State of importation (a “reboxed” product):
(a) does the importer bear the burden of proving that the new packaging complies with each of the conditions set out in Joined Cases C-427/93, C-429/93 and C-436/93 Bristol-Myers Squibb v Paranova or does the trade mark proprietor bear the burden of proving that those conditions have not been complied with or does the burden of proof vary from condition to condition?
(b) does the first condition set out in Bristol-Myers Squibb v Paranova as interpreted in Case C-379/97Upjohn v Paranova and Case C-143/00Boehringer v Swingward, namely that it must be shown that it is necessary to repackage the product in order that effective market access is not hindered, apply merely to the fact of reboxing (as held by the EFTA Court in Case E-3/02 Paranova Inc v Merck & Co Inc) or does it also apply to the precise manner and style of the reboxing carried out by the parallel importer?
(c) is the fourth condition set out in Bristol-Myers Squibb v Paranova, namely that the presentation of the repackaged product is not such as to be liable to damage the reputation of the trade mark or its owner, only infringed if the packaging is defective, of poor quality or untidy or does it extend to anything which damages the reputation of the trade mark?
(d) if the answer to question 1(c) is that the fourth condition is infringed by anything which damages the reputation of the trade mark, is it damaging to the reputation of a trade mark for this purpose if either (i) the trade mark is not affixed to the new exterior carton (so-called “de-branding”) or (ii) the parallel importer applies either his own logo or a house-style of get-up or a get-up used for a number of different products to the new exterior carton (so-called “co-branding”)?
Overstickered products
2. In circumstances where a parallel importer markets in one Member State a pharmaceutical product imported from another Member State in its original internal and external packaging to which the parallel importer has applied an additional external label printed in the language of the Member State of importation (an “overstickered” product):
(a) do the five conditions set out in Bristol-Myers Squibb v Paranova apply at all?
(b) if the answer is question 2(a) is yes, does the importer bear the burden of proving that the overstickered packaging complies with each of the conditions set out in Bristol-Myers Squibb v Paranova or does the trade mark proprietor bear the burden of proving that those conditions have not been complied with or does the burden of proof vary from condition to condition?
(c) if the answer is question 2(a) is yes, does the first condition set out in Bristol-Myers Squibb v Paranova as interpreted in Upjohn v Paranova and Boehringer v Swingward, namely that it must be shown that it is necessary to repackage the product in order that effective market access is not hindered, apply merely to the fact of overstickering or does it also apply to the precise manner and style of overstickering adopted by the parallel importer?
(d) if the answer is question 2(a) is yes, is the fourth condition set out in Bristol-Myers Squibb v Paranova, namely that the presentation of the repackaged product is not such as to be liable to damage the reputation of the trade mark or its owner, only infringed if the packaging is defective, of poor quality or untidy or does it extend to anything which damages the reputation of the trade mark?
(e) if the answer to question 2(a) is yes and the answer to question 2(d) is that the fourth condition is infringed by anything which damages the reputation of the trade mark, is it damaging to the reputation of a trade mark for this purpose if either (i) the additional label is positioned so as wholly or partially to obscure one of the proprietor’s trade marks or (ii) the additional label fails to state that the trade mark in question is a trade mark owned by the proprietor or (iii) the name of the parallel importer is printed in capital letters?
(f) if answer to question 2(a) is yes, is the applicable period of notice for the purposes of the fifth condition set out in Bristol-Myers Squibb v Paranova 15 working days or a shorter period such as 7 working days?
Notice
3. If a parallel importer has failed to give notice in respect of a repackaged product as required by the fifth condition of Bristol-Myers Squibb v Paranova, and accordingly has infringed the proprietor’s trade mark(s) for that reason only:
(a) is every subsequent act of importation of that product an infringement or does the importer only infringe until such time as the proprietor has become aware of the product and the applicable notice period has expired?
(b) is the granting of remedies to the proprietor in respect of such acts of infringement by the importer subject to the principle of proportionality?
(c) is the proprietor entitled to claim compensation for any damage suffered by the proprietor by reason of the importer’s acts of infringement and, if so, upon what basis should such compensation be assessed given that the products in question were marketed by the importer were placed on the market within the EEA by the proprietor or with his consent?
(d) is the proprietor entitled to claim from the importer a sum representing all the profits made the parallel importer by reason of the importer’s acts of infringement?”
The claimants’ proposed questions are:
Where a trader purchases a pharmaceutical product bearing a trade mark or marks (the original trade mark) in one Member State and markets it in another Member State in its original internal packaging but with new external packaging, does the condition of necessity laid down in Bristol-Myers Squibb v Paranova and subsequent cases, namely that it must be shown that the repackaging is necessary in order to market the product in the Member State of import, apply only to the question whether the trader may place the product in new external packaging or does it also apply to the appearance of the new external packaging used by the trader?
If the answer to question 1 is that the condition of necessity applies to the appearance of the new external packaging, is it a breach of that condition for the new external packaging:
not to have affixed to it the original trade mark; or
to have affixed to it the trader’s own trade mark(s); or
to bear decorative elements applied by the trader such as a logo, get-up or house style (a single get-up used for more than one product); or
to bear the trader’s own name in a type or style more prominent than that of the manufacturer
unless it is shown in each case that such features of the external packaging are necessary to enable effective market access in the Member State in which the trader markets the goods?
If the answer to question 1 is that the condition of necessity does not apply to the appearance of the new external packaging, what is the test for determining whether the appearance of the replacement packaging may be objected to by the trade mark owner?
Does the fourth condition laid down in Bristol-Myers Squibb v Paranova, namely that the presentation of the repackaged product is not such as to be liable to damage the reputation of the original trade mark or its owner, apply only to packaging which is defective, of poor quality or untidy or does it extend to anything which damages that reputation?
If the answer to question 4 is that the fourth condition extends to anything which damages that reputation, are any of the following in themselves damaging to that reputation, namely where the new external packaging:
does not have affixed to it the original trade mark; or
has affixed to it the trader’s own trade mark(s); or
bears decorative elements applied by the trader such as a logo, get-up or house style; or
bears the trader’s own name in a type or style more prominent than that of the manufacturer?
To the extent that the circumstances set out in question 5 are not in themselves damaging to the reputation of a mark, how is the actual effect on the reputation of the trade mark to be assessed?
Are the answers to any of the foregoing questions different where the trader, instead of placing the product in new external packaging, affixes additional labels in the language of the Member State of importation to the original external packaging? In particular, are those answers different where the labels:
wholly or partly obscure the original trade mark on the original external packaging; or
do not bear the original trade mark; or
have affixed to them the trader’s own trade mark(s); or
bear decorative elements applied by the trader such as a logo, get-up or house style; or
bear the trader’s own name in a type or style more prominent than that of the manufacturer?
Where a parallel importer has failed to give notice in respect of a repackaged imported product as required by the fifth condition laid down in Bristol-Myers Squibb v Paranova and accordingly has infringed the proprietor’s trade mark(s) for that reason only:
Are the remedies which the court may grant in respect of such infringements subject to the principle of proportionality?
If so, are the remedies granted for acts of infringement in those circumstances to be determined under the applicable national law or does European law regulate the granting of such remedies?
If European law regulates the granting of such remedies, what are the principles of European law to be applied in relation thereto?
Either version illustrates the large number of uncertainties still surrounding the vexed question of reboxing or relabelling of parallel imported products. It is to be hoped that the ECJ will, in providing the answers, also be able to provide a single comprehensive code setting out all the rules.
Furthermore, in the hope that the Court will be able to produce a single code, I consider it is better to err on the side of including or perhaps including, questions which have already been answered or partially answered. For that reason I would include questions which the claimants say are unnecessary. For that reason also, I would base the Court’s questions on the defendant’s proposed questions, in some places shortening them and in others taking due account of the claimant’s comments and proposals.
In the result the questions which I consider this Court should ask are as follows:
Reboxed products
Where a parallel importer markets in one Member State a pharmaceutical product imported from another Member State in its original internal packaging but with a new exterior carton printed in the language of the Member State of importation (a “reboxed” product):
does the importer bear the burden of proving that the new packaging complies with each of the conditions set out in Joined Cases C-427/93, C-429/93 and C-436/93 Bristol-Myers Squibb v Paranova or does the trade mark proprietor bear the burden of proving that those conditions have not been complied with or does the burden of proof vary from condition to condition, and if so how?
does the first condition set out in Bristol-Myers Squibb v Paranova as interpreted in Case C-379/97Upjohn v Paranova and Case C-143/00Boehringer v Swingward, namely that it must be shown that it is necessary to repackage the product in order that effective market access is not hindered, apply merely to the fact of reboxing (as held by the EFTA Court in Case E-3/02 Paranova Inc v Merck & Co Inc) or does it also apply to the precise manner and style of the reboxing carried out by the parallel importer, and if so how?
is the fourth condition set out in Bristol-Myers Squibb v Paranova, namely that the presentation of the repackaged product is not such as to be liable to damage the reputation of the trade mark or its owner, only infringed if the packaging is defective, of poor quality or untidy or does it extend to anything which damages the reputation of the trade mark?
if the answer to question 1(c) is that the fourth condition is infringed by anything which damages the reputation of the trade mark and if either (i) the trade mark is not affixed to the new exterior carton (“de-branding”) or (ii) the parallel importer applies either his own logo or a house-style or get-up or a get-up used for a number of different products to the new exterior carton (“co-branding”) must such forms of box design be regarded as damaging to the reputation of the trade mark or is that a question of fact for the national court?
If the answer to question 1(d) is that it is a question of fact, on whom does the burden of proof lie?
Overstickered products
Where a parallel importer markets in one Member State a pharmaceutical product imported from another Member State in its original internal and external packaging to which the parallel importer has applied an additional external label printed in the language of the Member State of importation (an “overstickered” product):
do the five conditions set out in Bristol-Myers Squibb v Paranova apply at all?
if the answer is question 2(a) is yes, does the importer bear the burden of proving that the overstickered packaging complies with each of the conditions set out in Bristol-Myers Squibb v Paranova or does the trade mark proprietor bear the burden of proving that those conditions have not been complied with or does the burden of proof vary from condition to condition?
if the answer to question 2(a) is yes, does the first condition set out in Bristol-Myers Squibb v Paranova as interpreted in Upjohn v Paranova and Boehringer v Swingward, namely that it must be shown that it is necessary to repackage the product in order that effective market access is not hindered, apply merely to the fact of overstickering or does it also apply to the precise manner and style of overstickering adopted by the parallel importer?
if the answer to question 2(a) is yes, is the fourth condition set out in Bristol-Myers Squibb v Paranova, namely that the presentation of the repackaged product is not such as to be liable to damage the reputation of the trade mark or its owner, only infringed if the packaging is defective, of poor quality or untidy or does it extend to anything which damages the reputation of the trade mark?
if the answer to question 2(a) is yes and the answer to question 2(d) is that the fourth condition is infringed by anything which damages the reputation of the trade mark, is it damaging to the reputation of a trade mark for this purpose if either (i) the additional label is positioned so as wholly or partially to obscure one of the proprietor’s trade marks or (ii) the additional label fails to state that the trade mark in question is a trade mark owned by the proprietor or (iii) the name of the parallel importer is printed in capital letters?
Notice
Where a parallel importer has failed to give notice in respect of a repackaged product as required by the fifth condition of Bristol-Myers Squibb v Paranova, and accordingly has infringed the proprietor’s trade mark(s) for that reason only:
is every subsequent act of importation of that product an infringement or does the importer only infringe until such time as the proprietor has become aware of the product and the applicable notice period has expired?
is the proprietor entitled to claim financial remedies (i.e. damages for infringement or the handing over of all profits made by infringement) by reason of the importer’s acts of infringement on the same basis as if the goods had been spurious?
is the granting of financial remedies to the proprietor in respect of such acts of infringement by the importer subject to the principle of proportionality?
If not, upon what basis should such compensation be assessed given that the products in question were placed on the market within the EEA by the proprietor or with his consent?
Finally there is the question of costs. The defendants, having won a number of issues raised by cross-appeal (principally the necessity for reboxing and passing off) suggest that we should make an order now for their costs of the cross-appeal along with an order for interim payment in the sum of £100,000. Whilst in principle the Defendants may be right about this, in the overall context and scale of these cases, I think it better to defer all questions of costs until the result of the reference is known and the overall result of the case is determined. I would make no order for costs at this stage.
Lord Justice Clarke:
I agree.
Lord Justice Kennedy:
I also agree.
Order: Referred to Europe for them to answer questions here in hence appeals adjourned until result from Europe.
(Order does not form part of the approved judgment)