DELIVERED ON 8 OCTOBER 1981 (1)

Mr President,

Members of the Court,

1. The preliminary questions which are to be answered in the present proceedings concern the delicate subject of the limits imposed by Community law (and specifically by Article 36 of the EEC Treaty) on the protection of trade marks. There are three factors in this case: the parallel importation of a medicinal preparation from one Member State into another; the repackaging of the product by or on behalf of the importer; and the reaction of the proprietor of the trade mark in the importing State, who seeks to rely on the exclusive nature of his right in order to prevent the sale of the repackaged product. There are clear points in common with the circumstances which gave rise to Case 102/77, Hoffmann-La Roche v Centrafarm, in which the Court gave judgment on 23 May 1978 ([1978] ECR 1139) and Case 3/78, Centrafarm v American Home Products, in which judgment was given on 10 October of the same year ([1978] ECR 1823). It is understandable therefore that those two cases should have been cited by the parties, who have however drawn different conclusions from them.

2. It is appropriate to state the salient facts in greater detail. The German undertaking Eurim-Pharm imported from the United Kingdom into the Federal Republic of Germany an antibiotic called Vibramycin, produced by the British subsidiary of the multinational company Pfizer. In Germany, the same medicinal preparation is sold by the German subsidiary of Pfizer and is protected by a registered trade mark of which the parent company is the proprietor. The Vibramycin tablets are packed by the manufacturer in blister strips, on the reverse of which are printed the words “Vibramycin Pfizer”; each strip contains five tablets. In turn, the strips are enclosed in packs of two (10 tablets) or of ten (50 tablets). The importer, Eurim-Pharm, replaced those packages with new cardboard boxes, placing one of the original strips in each of them. Since the boxes are made of transparent material on one side the wording “Vibramycin Pfizer”, appearing on the reverse of the strip, is clearly visible. On the other side of the boxes, beneath the words “widespectrum antibiotic”, are first the words “Manufacturer: Pfizer Ltd., Sandwich, Kent, GB” and further down, “Importer: Eurim-Pharm GmbH, wholesalers of pharmaceutical products, 8229 Piding; repackaged by the importer: Vertrieb Eurim-Pharm GmbH, 8229 Piding”. An instruction leaflet complying with German regulations is inserted in the new packaging and the statement that the product has been repackaged by the importer is repeated.

3. Pfizer, maintaining that the repackaging of the product in question by Eurim-Pharm constitutes an infringement of its trademark right under German law, brought before the Landgericht [Regional Court] Hamburg both an action seeking to establish that the above infringement had taken place and interlocutory proceedings seeking to have the importing undertaking immediately prohibited from repackaging the Vibramycin and offering it for sale in the new packaging. In the interlocutory proceedings the court upheld the application, first issuing an order (dated 27 July 1979) and subsequently a judgment (10 August 1979). But on appeal, the Hanseatische Oberlandesgericht [Hanseatic Higher Regional Court], by judgment of 24 January 1980, took the converse view that the exercise of the trademark right was precluded, in this case, by the provisions of Articles 30 and 36 of the EEC Treaty. Subsequently, the trial on the main issue having proceeded before the court of first instance, the latter decided to refer the following two questions to the Court pursuant to Article 177 of the EEC Treaty:

1. “1. Is the proprietor of a trade mark protected in his favour in Member State A entitled under Article 36 of the EEC Treaty, in reliance upon this right, to prevent an importer from buying from a subsidiary undertaking of the proprietor of the trade mark medicinal preparations to which the proprietor's trade mark has been lawfully affixed with his consent in Member State B of the Community and which have been placed on the market under that trade mark, from repackaging those products in accordance with the different practices of doctors in prescribing medicaments prevailing in Member State A and from placing those products on the market in Member State A in an outer packaging designed by the importer on the reverse side of which there is a transparent window through which is visible the label of the proprietor of the trade mark which is on the reverse side of the blister strip directly surrounding the product?

2. Is it sufficient, for the purpose of establishing that there is an unlawful restriction of trade as envisaged by the second sentence of Article 36 of the EEC Treaty, for the use of the national trademark right in connection with the marketing system adopted by the proprietor of the trade mark objectively to lead to a partitioning of the markets between Member States, or is it necessary, on the contrary, for it to be shown that the proprietor of the trade mark exercises his trademark right in connection with the marketing system which he employs with the ultimate objective of bringing about an artificial partitioning of the markets?”

3. 4. It is recognized that, in principle, the proprietor of an industrial property or commercial property right protected by the legislation of a Member State may not rely on that legislation in order to oppose importation of a product already offered for sale on the market of another Member State by or on behalf of the proprietor of the right or with his consent. The case-law of this Court in that respect is clear; I shall confine myself to mentioning the judgments of 31 October 1974 in Case 16/74, Centrafarm v Winthrop ([1974] ECR 1183), of 10 October 1978 in Case 3/78, Centrafarm v American Home Products (mentioned above) and of 20 January 1981 in Joined Cases 55 and 57/80, Musik-Vertrieb membran GmbH ([1981] ECR 147). Any measure which prevents a “parallel” importer from selling a product lawfully acquired by him in another Member State is intrinsically incompatible with Article 30 of the EEC Treaty, inasmuch as it has an effect equivalent to a quantitative restriction on imports, a fact of which the court of trial showed itself to be well aware.

4. 5. It is also recognized that Article 36 allows exceptions to be made to the principle of the free movement of goods only in so far as a derogation therefrom appears necessary to safeguard the rights constituting the specific subject-matter of industrial and commercial property (cf. the judgment in Centrafarm v Winthrop cited above, paragraph 7 of the decision). As regards the trade mark, the Court has taken the view that “the guarantee that the owner of the trade mark has the exclusive right to use that trade mark, for the purpose of putting products ... into circulation for the first time, thus protecting him against competitors wishing to take advantage of the status and reputation of the trade mark by selling products illegally bearing that trade mark” (judgment in Centrafarm v Winthrop cited above, paragraph 8 of the decision) falls within the specific subject-matter of industrial and commercial property. Clearly, in cases of parallel importation such as the one under discussion here, the first introduction of the product onto the market had already taken place when the proprietor of the mark instituted legal proceedings. But the Court has also usually attached importance to the “essential function” of the mark, which is to guarantee the identity of the origin of the marked product to the consumer or ultimate user (cf. the abovementioned judgments in Hoffmann-La Roche v Centrafarm, paragraph 7 of the decision, and Centrafarm v American Home Products, paragraph 12 of the decision). That guarantee of origin implies in particular protection of the consumer's confidence that there will be no alteration to the original condition of the product at the hands of third parties without authorization from the proprietor of the mark (judgment in Hoffmann-La Roche v Centrafarm, cited above, paragraph 7 of the decision).

5. 6. In this case, the central problem may therefore be expressed in the following terms: where an importer repackages a medicinal preparation, by merely replacing the external packaging but without touching the internal packaging, so that the trade mark affixed by the manufacturer to that packaging is visible, may it be said that the original condition of the product has been altered in a manner such as to detract from the guarantee of origin? In fact, it is essentially on this problem that the courts of first and second instance expressed opposing views. According to the Landgericht, repackaging in the manner adopted by Eurim-Pharm was equivalent, from the legal point of view, to affixing the trade mark on the external packaging, in breach of the guarantee of origin which related to the whole package. According to the Oberlandesgericht, however, it was appropriate to take the view that the new presentation of the product did not lead to misconceptions as to its origin and that the Vibramycin tablets remained in the state in which they had been placed by the manufacturer (that is to say inside the strips and bearing its trade mark).

6. 7. In my opinion, the abovementioned judgment of 23 May 1978 in the case of Hoffmann-La Roche v Centrafarm provides all that is necessary for a solution to the problem described above. I note that in that case too the preliminary questions arose from a situation where a medicinal preparation had been imported from Great Britain into the Federal Republic of Germany and repackaged by the importer, and opposition proceedings had been initiated against the latter, under German trademark legislation, by the subsidiary of the multinational group to which the British manufacturer of the product also belonged. But the repackaging had affected the entire package (bottles and packets) and the importer had printed the manufacturer's trade mark on the new wrapping. The Court, having made clear what it was that had to be established (specifically “whether the repackaging of a trademarked product... is capable of affecting the original condition of the product”; paragraph 9 of the decision), admitted the possibility “of the repackaging being undertaken in such a way that the original condition of the product cannot be affected” and added “this may be so where, for example, the proprietor of the trade mark has marketed the product in a double packaging and the repackaging affects only the external packaging, leaving the internal packaging intact...” (paragraph 10 of the decision). In the operative part of the judgment, the Court considered that “The proprietor of a trademark right which is protected in two Member States at the same time” is justified, within the meaning of the first sentence of Article 36 of the EEC Treaty, “... in preventing a product to which the trade mark has lawfully been applied in one of those States from being marketed in the other Member State after it has been repacked in new packaging to which the trade mark has been affixed by a third party”. But immediately thereafter it stated: “However, such prevention of marketing constitutes a disguised restriction on trade between Member States within the meaning of the second sentence of Article 36 where: It is established that the use of the trademark right by the proprietor, having regard to the marketing system which he has adopted, will contribute to the artificial partitioning of the markets between Member States; It is shown that the repackaging cannot adversely affect the original condition of the product; The proprietor of the mark receives prior notice of the marketing of the repackaged product; It is stated on the new packaging by whom the product has been re-packaged.”

8. 10. It has been seen that, according to the operative part of the judgment of 23 May 1978 in the case of Hoffmann-La Roche v Centrafarm, the first requirement that must be fulfilled before there can be any talk of a disguised restriction on trade between Member States is proof that the exercise of the trademark right on the part of the proprietor thereof, having regard to the marketing system adopted by him, would contribute to the artificial partitioning of the national markets within the Community. In its second question, the Landgericht Hamburg is concerned essentially to establish whether it is sufficient to demonstrate that a partitioning of the markets has taken place as an objective consequence of the exercise of the trademark right or whether a subjective factor is also necessary, namely an intention on the part of the proprietor of the right to bring about such partitioning.

9. 11. In general terms therefore, in order to establish whether the exercise of a trademark right is equivalent to a restriction on trade contrary to the second sentence of Article 36, it is not necessary to ascertain whether there is a subjective intention to act unlawfully, it being sufficient to establish that as a result of the exercise of that right an artificial partitioning of the markets within the Community takes place. Furthermore, it should not be forgotten that the exercise of the trademark right is to be considered within the framework of the marketing system used by the proprietor of the mark; and although it is true that that system must be examined objectively in so far as it represents a de facto situation, it nevertheless undeniably falls within the scope of the commercial strategy adopted by the manufacturer. This means that there is an implied subjective element in one of the circumstances which has to be proved; but the decisive factor is that that element is not necessarily to be identified with the intention to partition the markets and in any case should not be a matter requiring specific proof.

10. In view of the foregoing considerations I suggest, in conclusion, that the Court should reply as follows to the preliminary questions submitted by the Landgericht Hamburg by its order of 5 November 1980.

1. Under Article 36 of the EEC Treaty the proprietor of a trade mark registered in a Member State may not prevent an importer who has purchased from a subsidiary of that proprietor in another Member State a medicinal preparation bearing that trade mark and who has repackaged it in accordance with the different practices of local doctors in prescribing medicaments, from placing such products on the market in the new packaging where (a) repackaging is limited to replacement of the outer wrapping of the product, the original internal wrapping remaining intact; (b) the original trade mark affixed to the internal pack is visible through the new external packaging; (c) it is stated on the latter packaging that repackaging has taken place; and provided that (d) the exercise of the trademark right by the proprietor thereof, having regard also to the marketing system adopted by him, is liable artificially to partition the national markets within the Community.

2. In order to establish that there is a restriction on trade prohibited under the second sentence of Article 36 of the EEC Treaty, it is sufficient that the exercise of the trademark right, viewed within the framework of the marketing system used by the proprietor of the trade mark, should be objectively capable of partitioning the national markets within the Community, whatever the objective pursued by the said proprietor.

(1) Translated from the Italian.