NV Organon v Paranova Oy, KKO 2011:7, Supreme Court of Finland, 26 January 2011
Journal of Intellectual Property Law & Practice (2011), doi: 10.1093/jiplp/jpr031, first published online 31 March 2011
The Supreme Court of Finland held that the package layout of medicinal products could have created an inappropriate impression as to the commercial origin of the products or the relationship between the manufacturer and the parallel importer, but since the claimant had not opposed the presentation until 77 working days from the date of the defendant's notification, it could not asserts its right of prohibition.
Legal context
In accordance with section 10a(1) of the Trade Marks Act (7/1964, as amended), the proprietor of a trade mark may not prevent the use of the trade mark on goods that the proprietor, or another person with his consent, has placed on the market under his trade mark within the territory of the European Economic Area. However, subsection (2) provides that this does not apply if the proprietor has justifiable grounds for objecting to the goods being placed on the market once again, in particular if alterations have been made to the goods or if they have deteriorated after having been placed on the market. The content of section 10a is thus essentially the same as that of Directive 2008/95 of the European Parliament and of the Council to approximate the laws of the Member States relating to trade marks, Article 7.
The Court of Justice of the European Union has stated that part of the specific subject matter of the trade mark right is the right attributed to the proprietor of preventing any use of the trade mark which is likely to impair the guarantee of origin (Case 102/77 Hoffmann-La Roche v Centrafarm [1978] ECR 1139, para 7). According to the Court of Justice, the change brought about by any new carton or relabelling of a trade-marked medicinal product creates by its very nature real risks for this guarantee of origin that the mark seeks to protect (Case C–348/04 Boehringer Ingelheim and Others [2007] ECR I-3391, para 30).
Interpreted in the light of Article 36 of the Treaty on the Functioning of the European Union, Article 7(2) of the Directive and therefore section 10a(2) of the Act mean that the trade mark owner may legitimately oppose the further marketing of a pharmaceutical product where the importer has repackaged the product and reaffixed the trade mark unless (see Case C–427/93 Bristol-Myers Squibb v Paranova [1996] ECR I-3457, para 79):
– reliance on trade mark rights would contribute to the artificial partitioning of the markets between Member States,Facts
– the repackaging cannot affect the original condition of the product inside the packaging,
– the new packaging clearly states who repackaged the product and the name of the manufacturer,
– the presentation of the repackaged product is not such as to be liable to damage the reputation of the trade mark and of its owner, and
– the importer gives notice to the trade mark owner before the repackaged product is put on sale.
The packages of medicinal products offered to the public by Paranova carried both its mark and Organon's trade mark MERCILON or MARVELON. Uppermost on the front side of the outer packaging was Organon's trade mark; undermost was Paranova's complex mark consisting of a coloured pentagonal design and a stylised trade name and between, in smaller characters, were appellations ‘parallel importer’ and ‘re-packager’ in Finnish and Swedish, the national languages of Finland. Information about Organon as the manufacturer of the pharmaceutical and the proprietor of its trade marks was either on the back or the narrow side of the outer packaging.
Paranova had given notice to Organon of its intention to commence the parallel import of both Mercilon and Marvelon products. Organon opposed the supplied specimens of the repackaged products, eight (as regards Mercilon) and 77 (as regards Marvelon) working days from the date of notification. Despite such reactions, Paranova commenced imports. Organon instituted proceedings and pressed for a declaration of infringement, prohibition of proceeding with and repeating said infringements, destruction or alteration of infringing product packages as well as compensation for damages.
Analysis
Lower courts had found that Paranova had presented sufficient evidence of the necessity of repackaging, of the product per se remaining unaffected, of the new packaging clearly stating who repackaged the product and of the trade mark owner being given notice before the repackaged products were put on sale. The point of dispute before the Supreme Court was whether the presentation of the repackaged products was such as to be liable to damage the reputation of Organon or its trade marks.
The Supreme Court noted that, when trade-marked goods have been put on the Union market by the trade mark proprietor or with his consent, a reseller is free to make use of the trade mark in order to bring to the public's attention the further commercialisation of those goods. The mere fact that the reseller derives an advantage from using the trade mark does not disapply the exhaustion of the rights conferred by the mark. Moreover, it does not appear from the provisions or case law that a parallel importer of pharmaceutical products could not additionally use its own distinctive mark on the new packaging. The decisive circumstance, according to the Supreme Court, is the overall impression of the packages, which should be assessed having regard to the information that the parallel importer gives and the way that information and respective marks have been emphasised on the different sides of the package.
It was held that displaying both Organon's and Paranova's trade marks together on the front side of the packaging was capable of associating the medicinal product with the person who carried out the repackaging. This had given the public a false impression of the commercial origin of the medicinal products and the relationship between the manufacturer and the parallel importer. Paranova had failed to show that there was no detriment to the repute of Organon's trade marks owing to the presentation of the repackaged product. Organon had therefore a prima facie entitlement to prohibit the use of trade marks MERCIOLON and MARVELON in relation to sales packaging notified and imported into the Finnish market by Paranova.
Practical significance
Of interest is the Supreme Court's analysis concerning Organon's power to assert its right of prohibition. Neither the Trade Marks Act nor the Directive contains an express provision on the consequences a trade mark owner may incur if it neglects to object to the parallel importer's form of packaging within a reasonable period of time. The Supreme Court stated that the forfeiture of the right to prohibit does not mean the forfeiture of the exclusive rights conferred on the proprietor. It is merely a matter of losing the special entitlement provided for in Article 7(2) of the Directive in relation to goods that have been put on the market in a manner that exhausts the rights conferred by a trade mark.
Conversely, such forfeiture would not apply where the same goods are repackaged in a way not previously notified to the trade mark owner, provided that there still exist legitimate reasons for the opposition. Similarly, a trade mark entitles the proprietor to prohibit the use of the mark in question where goods are repackaged in a way that the proprietor has not previously intervened in with relation to a different trade mark.
In this case, Organon was found to have hung back on its other opposition for a longer period thatn was deemed reasonable under the circumstances. The action was dismissed insofar as it was based on the use of trade mark MARVELON.
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