Boehringer Ingelheim KG v Swingward Ltd; Glaxo Group Ltd and Others v Dowelhurst Ltd and Another
| Jurisdiction | England & Wales |
| Judgment Date | 05 March 2004 |
| Neutral Citation | [2004] EWCA Civ 129 |
| Docket Number | Case No: 2003/0678/0680/; 0681/0682/0689/; 0690/0691/0692/; 0693/0694 |
| Court | Court of Appeal (Civil Division) |
| Date | 05 March 2004 |
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISIONPATENTS COURT
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/
Royal Courts of Justice
Strand,
London, WC2A 2LL
The Rt Hon Lord Justice Kennedy
The Rt Hon Lord Justice Clarke
The Rt Hon Lord Justice Jacob
Case No: 2003/0678/0680/; 0681/0682/0689/; 0690/0691/0692/; 0693/0694
Messrs Nicholas Green QC and Mr Richard Arnold QC (instructed by Messrs Roiter Zucker) appeared on behalf of Dowelhurst Limited and Swingward Limited
Mr Simon Thorley QC and Mr Geoffrey Pritchard (instructed by Messrs CMS Cameron McKenna) appeared on behalf of Eli Lilly
Mr Michael Silverleaf and Mr Richard Hacon (instructed by Messrs Jones Day) appeared on behalf of Glaxo Group Limited, Boehringer Ingelheim and Smithkline Beecham plc
Jacob LJ:
Introduction
These appeals and cross appeals are from two judgments of Laddie J of 28 th February 2000 and 6 th February 2003. Having heard the evidence prior to the first judgment, Laddie J made findings of fact. On the basis of these he referred some questions to the ECJ. The ECJ gave its answers on 23 rd April 2002. The parties could not agree its effect, hence the need for further argument and a second judgment.
The claimants in the various actions are well-known pharmaceutical manufacturers. The two defendants are parallel importers of trade-marked and dealers in generic pharmaceuticals. This case is about the defendants' parallel imports of trade-marked pharmaceuticals bought in other member states of the EU. Before us Mr Simon Thorley QC and Mr Geoffrey Pritchard appeared for Eli Lilly, Mr Michael Silverleaf QC and Mr Richard Hacon appeared for Glaxo (who have merged with SmithKlineBeecham) and Boehringer Ingelheim. Mr Nicholas Green QC and Mr Richard Arnold QC represented the defendants.
The actions were principally for infringement of registered trade marks. In addition Mr Silverleaf advanced a case of passing off on behalf of Boehringer Ingelheim. Laddie J rejected that in his first judgment. In his second judgment, he held that all the trade mark actions about reboxing succeeded but those about relabelling failed. Hence it is that the main appeals are by the parallel importers. Boehringer cross-appeals the rejection of its passing off claim. Glaxo and Boehringer cross-appeal the rejection of their objections to certain manners of relabelling. All the claimants submit that the 2 nd judgment should be upheld on the further ground that it was not proved that reboxing of parallel imported goods was necessary to achieve effective access to the UK market. Certain minor matters are also raised by way of cross-appeal.
I begin by describing the various things the defendants are doing. In each case they purchase in a Member State other than the UK the original pharmaceutical, packed in cardboard boxes appropriate for that Member State containing an appropriate instruction leaflet for that Member State. Some of the goods are pills packed in blister packs. Others are inhalers (commonly called "puffers") on which is stuck a label. There is no dispute that under the free-circulation rules (and particularly Art. 28) of the EC Treaty they are entitled, so far as trade mark law is concerned, to import and sell these goods in the packaging in which they were purchased.
The actual pharmaceuticals are the genuine goods, identical to those on the UK market. They may indeed come off the same production line since pharmaceutical production does not involve giant factories and distribution is cheap – you can get a lot of pills in a lorry. But the boxing, labelling and information leaflets as they stand are not suitable for this country. Information leaflets for this country must be in English and comply with our regulatory requirements which may differ from those in the country of origin. Moreover the boxes have instructions and details in foreign languages.
The parallel importers therefore, for regulatory and market acceptability reasons, make changes. What they mainly do so far as this case is concerned is called "reboxing". They take the contents of the foreign boxes out, and put them in fresh boxes designed for the UK market along with fresh information leaflets in English which comply with UK regulatory approval. In the case of inhalers, not only do the importers rebox, they also stick appropriate English language labels on the inhalers themselves, labels which completely overcover the foreign language label.
Reboxing generally involves re-affixing the original trade mark on the information leaflets and boxes. But in some instances the importer has instead only used the generic name of the drug on the box – not its trade mark. This was called "de-branding". In such a case the original trade mark is not removed from every aspect of the product – in particular blister packs and often the pills themselves bear it. For obvious reasons the mark cannot be removed from the pills or the blister packs without the risk of affecting the quality of the drugs themselves. So "de-branding" in the context of this case really means partial de-branding. The only affixing of the trade mark by the parallel importers is on the new information leaflet prepared for UK use.
In other cases the defendants' new boxes not only bear the trade mark of the drug, but also have a get-up which may serve as being distinctive of the importer. This is called "co-branding." Such co-branding has always had on the side of the box in clearly legible, but less prominent, small print, the information mentioned below.
An alternative operation is called "stickering". This involves sticking an appropriate label to an original foreign language box, having replaced the internal foreign information leaflet with an appropriate UK leaflet. Complaint is made of the form of some stickered products.
Whether there is reboxing or stickering, for the purposes of this case it is agreed that we should proceed on the basis that the importer has indicated clearly on the new box or sticker that the goods were procured in the EU and repackaged by the importer. An example of the sort of thing involved reads:
"Manufactured by Lilly SA, Spain. Procured within the EC and repackaged by the licence holder who is:
DOWELHURST LTD"
Actually some of the boxes with which we were concerned did not say all these things, but no point is taken about that.
This dispute is mainly about whether the defendants can rebox at all, and if so whether the way they have done it is lawful. Can the defendants co-brand or de-brand? It is the object of the claimants (a) to prevent re-boxing at all, and if that fails (b) to require that the parallel importer's box both carries the original trade mark and is otherwise as plain as possible.
The Provisions of the Treaty and Trade Mark Directive
Arts. 28 (formerly 30) and 30 (formerly 36) of the Treaty provide:
" Article 28 [EEC 30]
Quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between Member States.
Article 30 [EEC 36]
The provision of Articles 28 and 29 shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures possessing artistic, historic or archaeological value; or the protection of industrial and commercial property. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States."
Art. 5(1) of the Trade Mark Directive provides that:
"The registered trademark shall confer on the proprietor exclusive rights therein. The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade:
(a) Any sign which is identical with the trademark in relation to goods or services which are identical with those for which the trademark is registered."
Art. 5.3 of the Directive provides:
"The following, inter alia, may be prohibited under paragraphs 1 and 2:
a. Affixing the sign to the goods or to the packaging thereof;
b. Offering the goods, or putting them on the market or stocking them for those purposes under that sign, or offering or supplying services thereunder;
c. Importing or exporting the goods under the sign."
Art. 7 of the Trade Marks Directive provides as follows:
"Exhaustion of the Rights Conferred by a Trademark.
1. The trademark shall not entitle the proprietor to inhibit its use in relation to goods which have been put on the market in the Community under that trademark by the proprietor or with his consent.
2. Paragraph 1 shall not apply where there exist legitimate reasons for a proprietor to oppose...
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