Trade Mark Rights And Relabelling Notice Requirements
In the recent decision in respect of a strike out application in Dansac A/S v Salts Healthcare Ltd ( EWHC 104 (Ch)), the High Court has further clarified the notice requirements in respect of parallel imported goods which are subject to relabelling, and the criteria applicable to enforcing registered trade mark rights in relation to such goods.
The First Claimant in the case, Dansac A/S (“Dansac”), is an international company that develops, manufactures and markets ostomy care products under their trade marks registered in the UK and in the EU.
Salts Healthcare Ltd (“Salts Healthcare”), one of four Defendants in the case, is a provider of stoma care products and accessories. The other three Defendants include: Moorland Surgical Supplies Ltd (“Moorland”), Medik Ostomy Supplies Ltd (“Medik”) and Hemang Chhotalal Badiani (“Hemang”). Medik is a parallel importer of medical products, including Dansac’s goods, from other countries within the European Economic Area (EEA). Some of those parallel imported goods were relabelled, whereas the others were sold without relabelling. Hemang is one of Medik’s directors, whereas Salts Healthcare and Moorland are Medik’s customers.
In accordance with the criteria established in an earlier case, Bristol Myers Squibb Co v Paranova A/S (C-427/93), importers of parallel imported goods are required to provide a notice of relabelling to the originator of such goods (i.e. to the trade mark owner) prior to making the relabelled goods available for sale. It is also necessary for the importer to provide a specimen of the repackaged goods to the trade mark owner upon request.
Dansac argued that the sale of the parallel imported goods that were not relabelled was unlawful due to the fact that the labels did not include an English language version of the information that is required to be included on the packaging in accordance with the relevant EU Directive (93/42) and with the Medical Devices Regulations 2002 (the “Statutory Requirements”). Dansac, and its co-Claimant, Hollister Inc (“Hollister”) claimed that this amounted to damage to the reputation of their trade marks, and therefore brought trade mark infringement proceedings in the UK.
Following Dansac and Hollister issuing its trade mark infringement claim, the Court of Justice of the European Union (CJEU) ruled in a separate decision in Junek that the Bristol Myers Squibb requirements do not apply to relabelling of goods that does not cause the importer’s label to obscure the originator’s label and branding, which meant that a trade mark owner would not be in a position to use its trade mark rights to prevent sale of the relabelled parallel imported goods.
In the course of trade mark infringement proceedings brought by Dansac and Hollister, the Defendants applied to the High Court to strike out Dansac and Hollister’s claim.
In their application, the Defendants argued that the case brought by Dansac and Hollister in respect of the relabelled parallel imported goods was strikingly similar to Junek, and consequently, it should be struck out. With regards to the unrelabelled goods, the Defendants stated that the instructions included with those goods were pictorial, they did not use words, and any damage to the reputation of the Claimants’ trade marks and/or businesses was unlikely. Consequently, the Defendants argued that this part of the claim should also be struck out.
The Claimants contested that the decision in Junek did not have the wide application which the Defendants alleged and that the circumstances in their case were different, namely: (1) one of the originators’ trade marks was included in the new label, (2) the text included in the new labels looked smudged and untidy, and therefore amounted to damage to the reputation of the originators’ trade marks and to their reputation as businesses, and (3) even if the Bristol Myers Squibb requirements were not applicable in this case, there were other grounds on which parallel imported goods should be prevented from being sold, such as the fact that the trade marks included in the new labels were inconsistent, the new labels incorrectly stated that the Claimant’s UK trade marks were equivalent to their European trade marks, there were various typographical errors included in the new labels, and they also contained the barcodes that were used by the Claimants in the UK.
With respect to the unrelabelled goods, the Claimants argued that because non-compliance with the Statutory Requirements was a criminal offence, this necessarily damaged the reputation of their trade marks.
Upon hearing of the Defendants’ application, the Court has held that the Bristol Myers Squibb requirement that a notice of relabelling is provided to the originator of such goods, does not apply to parallel imported goods that had been relabelled without obscuring the originator’s label and branding, unless the new label creates a risk in relation the guarantee of origin of those goods.
The Court has reiterated that the decisions in Bristol Myers Squibb and in Junek do not contravene each other, and that determining whether there is a risk of harm in relation to guarantee of origin of the relabelled goods is a question of fact, i.e. the answer may vary depending on the particular label. In other words, for the Claimants to be successful in their claim, they would have to prove that the label in question does indeed cause risk of harming the guarantee of origin provided by their trade mark. It was not sufficient for the Claimants to simply rely on the lack of Bristol Myers Squibb notice in respect of the relabelled parallel imported goods, as such notice may not be required in the first place. Consequently, the Claimants partially failed in its attempt to enforce the notice requirements and their registered trade mark rights to prevent parallel import of goods.
The Court also held that the inclusion of the Claimants trade marks and the statement that the Claimants UK trade marks were equivalent to their European trade marks in the new labels distinguished the circumstances of this case from those in Junek, and that, if such inclusions create a risk of harming the guarantee of origin, then the Claimants may succeed in their argument. The Court held that these two issues should be determined at trial. Other arguments brought by the Claimants have been dismissed.
In respect of the unrelabelled goods, the Court held that facts that gave rise to a criminal offence are capable of giving rise to grounds to oppose the sale of the relevant goods under trade mark law where the trade mark’s reputation is thereby damaged. Since there was an arguable case in respect of the breaches of the Statutory Requirements, this issue will also be determined at trial.
The decision with regards to the application brought in the Dansac case provides interesting observations from the High Court on the relabelling criteria applicable to parallel imported goods providers, particularly in circumstances where the relabelling does not obscure the originator’s trade marks, and also in respect of the scope of the CJEU’s decision in Junek in this regard. However, it is worth noting that the proceedings are ongoing and that there are several outstanding issues in respect of which the High Court’s decision is awaited. Clarification of those should be of further practical assistance to the importers. We will continue to monitor the developments in this case and to provide our commentary in due course.
If you have any queries in respect of the protection or infringement of your Intellectual Property Rights, our dedicated Life Sciences team at Geldards will pleased to assist you – if you have any queries, please do not hesitate to contact us.
1Junek Europ-Vertrieb GmbH v Lohmann & Rauscher International GmbH & Co KG (C-642/16)