Packaging case ends in victory for parallel traders

Related tags European union

Parallel traders in pharmaceuticals fend off moves to force them to
use plain white boxes and black print in their packaging; they
argue that such a restriction could lead to patient safety

Companies which specialise in parallel imports of pharmaceuticals to European Union (EU) countries have escaped stringent limitations on the packaging they can use for their products.

Parallel traders source lower-priced pharmaceutical products in other countries and import them into countries where they can charge higher prices, making a profit on the difference. There has been a long and drawn-out battle between the drug manufacturers and the parallel traders and, in the latest skirmish, Merck & Co and GlaxoSmithKline have challenged parallel traders' use of packaging to differentiate itself in the marketplace.

Merck took its case to the European Free Trade Area (EFTA) court in Luxembourg in an attempt to force the trader, the Norwegian subsidiary of Paranova, to use plain white cartons with plain black lettering for its products.

The multinational was unhappy about the use of coloured vertical and horizontal stripes on Paranova's repackaged products that varied in accordance with the colour scheme used on the original brands. It argued that the shape and position of the stripes gave an impression of a specific product range, and were not necessary to achieve market access.

The traders argued that use of such non-differentiated packaging would increase confusion in the pharmacy and might lead to erroneous product use by patients. The EFTA court was swayed by the latter argument, and concluded that the 'necessity' criterion for repackaging, as derived from the case law of the European Court of Justice (ECJ), did not apply to packaging design.

It was only relevant to consider if the repackaging was liable to damage the reputation of the trade mark owner, the court said.

GSK had objected to the use of any colour whatsoever on the repackaging of parallel traded products in the UK to which its trade mark had been affixed, arguing that colour could have trade mark significance.

Following Justice Laddie's February 2003 interpretation of last year's ECJ ruling on this case, the claimants had tried to suggest that the 'completely plain boxes' he referred to then meant only black labelling on white boxes.

Following the latest hearing on 11 July, Justice Laddie disagreed, according to the European Association of Euro-Pharmaceutical Companies, which represents the EU parallel import industry.

He concluded that "simple colour schemes, in my view, do not carry with them an automatic trade mark impact."

EAEPC Secretary General Donald Macarthur said: "Parallel traders have a commitment to their customers and will continue to fight litigation that prevents them receiving medicines presented in anything but a safe, professional way."

The pharmaceutical manufacturers argue that parallel imports cut into their revenues and places the future of company-sponsored drug research in the EU at risk.

Related topics Drug Delivery

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