Parallel Imports: When Is Rebranding Generic Medicinal Products Justified?

• Published date: 08 June 2023
• Subject Matter: Intellectual Property, Media, Telecoms, IT, Entertainment, Trademark, Advertising, Marketing & Branding
• Law Firm: Novagraaf Group
• Author: Volha Parfenchyk

Parallel imports, also known as 'exhaustion of trademark rights' or the 'first sale doctrine', are a well-known limitation to the rights of trademark owners. Volha Parfenchyk discusses the practice in the context of two recent EU rulings on the branding of generic medicinal products.

Parallel importers have the right to export a medical product from one EU country and to import it into another EU country without the explicit permission of the trademark owner. But, do they also have the right to repackage and rebrand generic medicinal products ('generics') to include the trademark of the (often more reputable) reference medicinal product (RMP) before selling them in the import country? This was the question before the Court of Justice of the EU (CJEU) last year in two joined cases (C-253/20 and C-254/20).

Parallel imports and trademark use in the EU

Swiss multinational pharmaceutical corporation Novartis markets two RMPs, protected by EU trademarks (EUTMs) in the Netherlands and Belgium. The first is marketed under the EUTM 'Femara' in both countries (Case C-253/20); the second is marketed under the EUTM 'Rilatine' in Belgium and 'Ritalin' in the Netherlands (Case C-254/20).

Sandoz, an affiliate of Novartis, marketed the generic equivalents of these products in Belgium and the Netherlands: the first under the name 'Letrozol Sandoz 2.5 mg' and the second as 'Methylphenidate HCl Sandoz 10 mg'.

Both generics were exported from the Netherlands (where they are significantly cheaper) and resold in Belgium (where they are more expensive) by two parallel importers Impexeco and Pi Pharma. Importantly, in Belgium they were also repackaged and rebranded referencing the Novartis EUTMs and not under the names affixed to the exported generic products themselves.

Novartis brought an action before the Brussels court, claiming infringement of its trademark rights, and won in both cases. Appealed by the parallel importers, the Court of Appeal referred the case to the CJEU for a preliminary ruling.

That court passed its decision on 17 November 2022, concluding that parallel importers can only legitimately repackage and rebrand imported generic products if two conditions are met. First, there should be an "objective necessity" to repackage and rebrand the products, for example, to be able to put the products on the market and commercialise them. Secondly, both products (the generic and the reference medicinal products) have to be identical.

Parallel imports and the objective...