On 20 November 2012, the Court of Appeal of Brussels (the "Court") issued an interesting judgment discussing the obligations imposed on parallel importers of medicines. The Court clarified when parallel importers are allowed to repackage (as opposed to re-label or over-sticker) parallel imported medicines and how the parallel importer must inform the brand owner of the parallel importation.

Trade marks are, in principle, 'exhausted' after the first marketing of the product in the EU/EEA with the consent of the trade mark owner, and the trade mark proprietor can no longer rely on his exclusive rights unless there are legitimate reasons for the proprietor to oppose further commercialisation of the goods (Article 7 of Directive 2008/95/EC to approximate the laws of the Member States relating to trade marks - the "Trade Mark Directive"). The Court of Justice of the European Union (the "ECJ") accepts that repackaging (or re-labelling) can constitute a 'legitimate reason' within the meaning of Article 7(2) of the Trade Mark Directive for the trade mark proprietor to oppose the further commercialisation of parallel imported medicines.

However, the ECJ also determined criteria permitting the repackaging of parallel imported medicines. In particular, the ECJ set out five cumulative criteria in the BMS case (joined cases C-427/93, C-429/93 and C-436/93, judgment of 11 July 1996) (the "BMS criteria").

The BMS criteria for repackaging are as follows: (i) the trade mark holder's use of its trade mark results in the artificial partitioning of the market of Member States. This implies that the trade mark objects to the repackaging of medicines while the new package is necessary to market the product in the country of destination; (ii) the repackaging does not affect the original condition of the product; (iii) the new packaging clearly states who repackaged the product and the name of the manufacturer; (iv) the presentation of the repackaged product is not liable to harm the reputation of the trade mark holder (i.e., the packaging must not be defective, of poor quality, or untidy); and (v) the parallel importer gives notice to the trade mark holder before the repackaged product is put on sale, and, on demand, supplies him with a specimen of that product.

If all five conditions are satisfied, the parallel importer must be allowed to repackage the product. In contrast, if any of these five conditions is not met, the trade mark holder can claim that the repackaging infringes its trade mark.

In Belgium, the obligations of the parallel importer are contained in the Royal Decree of 19 April 2001 (Koninklijk Besluit betreffende de parallelinvoer van geneesmiddelen voor menselijk gebruik en parallelle distributie van geneesmiddelen voor menselijk en diergeneeskundig gebruik/Arrêté royal relatif à l'importation parallèle des médicaments à usage humain et à la distribution parallèle des médicaments à usage humain et à usage vétérinaire).

The case before the Court involved the parallel importation by PI Pharma of Venoruton®,, a product manufactured by Novartis. The issues before the Court related mainly to the first (necessity for repackaging) and fifth (information to the trade mark proprietor) of the BMS criteria.

First, Novartis claimed that PI Pharma had not demonstrated that the repackaging was necessary for the marketing of the imported product in Belgium. By contrast, PI Pharma claimed that repackaging was necessary to comply with the requirement of information in braille under Belgian law. Both parties agreed that the product could not be marketed in Belgium unchanged. However, Novartis maintained that a sticker would suffice to comply with the braille requirement. The Court sided with Novartis.

Second, as far as the information requirement is concerned, the Court held that the fifth BMS criterion obliged the parallel importer to inform the trade mark holder. Novartis argued that PI Pharma had only sent the required information to NV Novartis Consumer Health, i.e. the holder of the marketing authorisation (which is required to receive this information under the Royal Decree of 19 April 2001), and not to trade mark holders SA Novartis Consumer Health and Novartis AG. However, the Court reminded Novartis that the ECJ had emphasised that both parties must act in a loyal manner and take account of the interests of the other party. In this regard, the Court held that in the correspondence between both parties, Novartis had raised the impression that it represented the trade mark holders. As a result, the Court reasoned that the parallel importer had not fallen short of its obligation to inform the trade mark holders.

However, when informing Novartis, PI Pharma had failed to provide Novartis with a sample of the product that it would bring on the market, even though Novartis explicitly requested such a sample. Instead, PI Pharma had provided the text of the product leaflet, an original blister containing the product and a mock-up of the new packaging. Referring to the wording of both the ECJ BMS criteria ("specimen" of the product) and the Royal Decree of 19 April 2001 (exemplaar/exemplaire), the Court decided that the materials provided by PI Pharma failed to satisfy the legal requirements. The Court reasoned that the mock-up did not allow Novartis to determine whether the new packaging would not be not be defective, of poor quality, or untidy.

As a result, the Court concluded that PI Pharma had infringed the Royal Decree of 19 April 2001 and issued an injunction against the marketing of the parallel imported product.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.