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Opinion highlights trade mark infringement risk for EU product refillers

Out-Law News | 26 May 2022 | 1:17 pm | 2 min. read

Businesses that specialise in refilling or repackaging products made by others will need to justify the necessity of those activities and limit their brand promotion when relabelling to avoid trade mark infringement, according to a new opinion issued for the EU’s highest court.

Advocate general Giovanni Pitruzzelli advised the Court of Justice of the EU (CJEU) to rule that conditions laid out in EU case law that have, to-date, only governed the repackaging of goods for sale across borders within the EU should also apply to repackaging where the repackager is only selling those goods in the same national market as the original product.

Pitruzzelli’s opinion is non-binding, but the CJEU often follows the advice of its advocates general.

Brand protection expert Emily Swithenbank of Pinsent Masons said the opinion has potentially significant implications for many businesses engaged in the circular economy.

Swithenbank said: “The so-called ‘Bristol Myers Squibb (BMS) conditions’ have applied for more than 25 years in the context of the cross-border trade, or ‘parallel importing’, of pharmaceutical products. Parallel importing of medicines is common because of the price differentials between EU and UK markets but repackaging is normally needed to meet local regulatory requirements. The BMS conditions were introduced effectively to strike a balance between the rights of importers and resellers to trade in this way and the rights trade mark holders have to the protection of their brand.”

“Advocate general Pitruzzelli’s opinion is that the BMS conditions apply beyond the scope of cross-border trade of pharmaceuticals to the repackaging and refilling of branded products for sale within national markets. Given the growing sustainability drive that involves the reusing, repairing and refurbishing of existing materials, if this opinion is followed by the CJEU, there will be a significant number of businesses that will now need to consider whether their reutilisation of branded goods or containers meets the BMS conditions. This includes the need to give notice of their repackaging to brand owners,” she said.

There are five BMS conditions.

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

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

The third condition is that the new packaging states who the repackaging has been done by.

The fourth condition requires that the form of repackaging does not damage the brand in some other way, such as where the repackaging is of such poor quality that it negatively impacts the impression given of the trade mark holder.

The fifth and final condition is that the repackager must give notice of its repackaging to the trade mark owner so that the rights holder has an opportunity to review the repackaged product and raise any concerns.

Advocate general Pitruzzelli considered whether the BMS conditions applied in a case referred to the CJEU from a court in Finland, where the companies behind the Sodastream brand have objected to bottle refilling activities undertaken by a rival company, MySoda.

Both Sodastream and MySoda sell devices that produce carbonated drinks. The Sodastream products come with a refillable aluminium carbon dioxide cylinder engraved with trade marks Sodastream owns. The Sodastream bottles can be used in MySoda’s devices. MySoda receives used Sodastream bottles, refills them with carbon dioxide and then relabels them before they are resold in Finland. Though the repackaged bottles contain MySoda’s label, the Sodastream trade 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 the relabelling through the eyes of a normally informed and reasonably observant consumer and that that should take into account the sector-specific practices concerned. The labelling must be clear and unequivocal both as to the original manufacturer of the bottle and as to the identity of the party who last filled the bottle.”

“Trade mark infringement is assessed at a national level and the sector-specific practices concerned may well differ from country to country. Therefore, refillers and repackagers cannot assume that labelling that is deemed clear and unequivocal in one country will be considered the same in another as practices and consumer awareness of those practices will likely differ. The relabelling will need to be assessed for each country,” she said.