Parallel importation trademark infringement

Parallel importation trademark infringement

Parallel importation trademark infringement Hollister Case
 
Hollister Inc v Medik Osotomy Supplies Ltd
 
Court of appeal
 
[2013] F.S.R. 24
 
Parallel importation trademark infringement – Registered trade-marks – Parallel importation
 
 Facts
 
Medik parallel imported Hollister’s medical products into the United Kingdom and repackaged them for sale.  Hollister owned trade marks for those medical products. There can be no objection to this activity provided the conditions explained by the Court of Justice in Joined Cases C-427/93, C-429/93, C-436/93 Bristol-Myers Squibb v Paranova A/S [1996] ECR I-3457  are met. These conditions, often referred to simply as the BMS conditions, include, as BMS condition (5), a requirement that the importer gives notice to the trade mark owner before any repackaged product is put on sale, and, on demand, supplies him with a specimen. Hollister claimed that Medik was in breach of this requirement.
 
HHJ Birss QC, ruled that failure to meet the requirements was a “breach of a procedural requirement”. Medik appealed submitting that the judge had failed to properly apply Boehringer Ingelheim KG v Swingward Ltd [2008] EWCA Civ 83 and was wrong to regard the failure to give notice as  “a breach of a procedural requirement”.  Further Medik argued that Hollister had suffered no relevant damage or loss of profits. Medik also appealed on other grounds including the methodology of accounting for profits and the calculation of net profits but this article is limited to the issue of parallel importing and the exhaustion of trade mark.
 
The Court of Appeal held that Medik breached the procedural requirement by failing to give notice.
 
It has therefore performed acts prohibited by Article 5  Directive 2008/95/EC (“the Directive”), and Article 9 of Council Regulation (EC) No 207/2009 (“the Regulation”)).  Further, the exhaustion principles in Article 7(1) of the Directive, and Article 13(1) of the Regulation did not apply.
 
This is because any repackaging of a trade-marked medical product creates an inherent risk of interference with the original condition of the product. Hollister had a legitimate interest in wanting to inspect the product and the repackaging, including inter alia protection of its reputation and the prevention of counterfeiting. Medik had failed to give prior notice to Hollister and any subsequent importation of the product infringed Hollister’s rights.