Notice highlights risk of trademark infringement for distributors of EU products

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Advocate General Giovanni Pitruzzelli has advised the Court of Justice of the EU (CJEU) to rule that the conditions set out in EU case law which have, to date, only governed the repackaging of goods intended for cross-border sale within the EU should also apply to repackaging where the repackager only sells these goods in the same national market as the original product.

Pitruzzelli’s opinion is not binding, but the CJEU often follows the advice of its Advocates General.

Trademark protection expert Emily Swithenbank of Pinsent Masons said the notice had potentially significant implications for many companies committed to the circular economy.

Swithenbank said: “The so-called ‘Bristol Myers Squibb (BMS) terms’ have applied for more than 25 years in the context of cross-border trade, or ‘parallel import’, of pharmaceuticals. Parallel importation of medicines is common due to price differentials between EU and UK markets, but repackaging is normally necessary to meet local regulatory requirements. The BMS terms were introduced effectively to strike a balance between the rights of importers and resellers to trade in this way and the rights of trademark owners to have their trademark protected.

“The opinion of Advocate General Pitruzzelli is that the BMS conditions apply beyond the framework of cross-border trade in pharmaceutical products to the repackaging and refilling of branded products intended for sale in national markets. Given the growing momentum for sustainable development which involves the reuse, repair and refurbishment of existing materials, if this opinion is followed by the CJEU, a significant number of companies will now have to consider whether their reuse of products or of branded containers meets the GTB Conditions. This includes the need to notify brand owners of their repackaging,” she said.

There are five BMS conditions.

The first condition for repackaging original branded products is that it is necessary to avoid an artificial partitioning of the market within the EU.

The second condition requires that the repackaging does not damage the condition of the underlying product in any way.

The third condition is that the new packaging indicates by whom the repackaging was carried out.

The fourth condition requires that the form of repackaging does not otherwise infringe the mark, for example where the repackaging is of such poor quality that it adversely affects the impression given by the owner of the the brand.

The fifth and final condition is that the repackager must notify its repackaging to the trademark owner so that the rights holder has an opportunity to examine the repackaged product and raise any concerns.

Advocate General Pitruzzelli examined whether the BMS conditions applied in a case referred to the CJEU by a Finnish court, where the companies behind the Sodastream brand objected to the bottle filling activities carried out by a company competitor, MySoda.

Sodastream and MySoda sell devices that produce carbonated drinks. Sodastream products come with a refillable aluminum carbon dioxide bottle engraved with trademarks owned by Sodastream. Sodastream bottles can be used in MySoda devices. MySoda receives used Sodastream bottles, fills them with carbon dioxide, then re-labels them before they are resold in Finland. Although the reconditioned bottles contain the MySoda label, the Sodastream marks remain visible on the product.

Swithenbank said: “Advocate General Pitruzzell notes that it is for national courts – in this case, the Finnish Supreme Court – to determine the understanding of relabelling through the eyes of a normally informed and reasonably observant consumer and that this should take into account relevant industry practice Labeling should be clear and unambiguous both as to the original manufacturer of the bottle and as to the identity of the person who filled the bottle in last “.

“Trademark counterfeiting is assessed at the national level and the relevant industry practices may very well differ from country to country. Therefore, restockers and repackagers cannot assume that labeling deemed clear and unambiguous in one country will be considered the same in another, as practices and consumer awareness of those practices will likely be different. Relabeling will need to be assessed for each country,” she said.

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