The Judgment of the Brussels Court of Appeal is the latest development in the saga in Belgium where a Belgian parallel importer, PI Pharma NV, imported a generic Sandoz product from the Netherlands, repackaged and rebranded them, and placed them on the Belgian market alleging they were a Novartis’ originator product.
PI Pharma NV argued that its actions complied with applicable case law, but Novartis disagreed and sought an injunction before the Brussels Commercial Court. Novartis won the case in first instance. On appeal, the Brussels Court of Appeal decided to refer certain questions to the ECJ. In its decision of 17 November 2022, the ECJ decided, in short, that a trademark owner can oppose the sale of a generic product which was repackaged and rebranded as a reference product unless the two products were identical in all respects, and the rebranding complied with the BMS conditions, in which five cumulative conditions for a parallel importer to have a safe harbor from trademark infringement are set out, and more specifically if the repackaging/rebranding was objectively necessary (the first BMS condition, see client alert d.d. 29/11/2022).
In this latest development, the Brussels Court of Appeal was required to apply the principles laid down by the ECJ to the specific facts of the case. In its Judgment, the Brussels Court of Appeal noted a number of different points, including the following.
First, and as regards the identity of the products concerned, the Brussels Court of Appeal ruled that the products were, in fact, identical and rejected PI Pharma NV’s assertion that the medicinal product purchased in the Netherlands was merely an “alleged” generic product. In this regard the Brussels Court referred to paras. 63-66 of the ECJ decision. According to the Brussels Court, the Sandoz product was authorized and commercialized in the Netherlands under a generic name as a generic medicine. As such, it was not, according to the Court, the originator’s reference medicinal product. Even the Dutch Medicines Evaluation Board referred to the product as a generic.
With regard to the BMS conditions, in particular the first condition, the Brussels Court of Appeal ruled first of all that there was no objective need or “necessity” to rebrand the generic medicine. According to the Brussels Court, PI Pharma NV was able to market the product under its original trade mark by adapting its packaging to the requirements of the importing (Belgian) market. Referring to para. 73 of the Advocate General’s Opinion in this matter, the Brussels Court of Appeal recalls that, in principle, a Member State may not refuse to authorize the parallel import of a generic medicinal product where a marketing authorization (“MA”) has already been granted in that Member Sate for the corresponding reference medicinal product, unless that refusal is justified on grounds relating to the protection of human health and life. If the generic medicinal product is identical to the reference medicinal product for which the MA has been issued, it was impossible for the Court to see on what grounds the authority of the importing Member State could refuse to grant an MA for the parallel imported identical generic medicinal product. The Brussels Court held that this implied that there was no objective need for rebranding the product in this case, as the parallel importer should be considered as able to market the generic product under its original brand.
Second, PI Pharma NV had not demonstrated that it would not have been able to obtain a license to parallel import the generic Sandoz product from the Netherlands into Belgium under the original brand name after making the changes to the packaging required by Belgian law. The fact that PI Pharma NV had to specify the branded medicine Rilatine as the reference medicine in the MA application did not prevent it from obtaining such a MA. The Brussels Court ruled that there was no provision in the Belgian Royal Decree on parallel imports that required rebranding to the reference product in order to obtain an MA. According to the Brussels Appeal Court, an obligation to rebrand to the name of the reference medicinal product would always constitute a trademark infringement for medicinal products which do not have a common origin.
Third, the Brussels Court ruled that PI Pharma NV had failed to demonstrate that it could not have obtained a price or reimbursement. The fact that the medicines concerned were listed for reimbursement in Chapter IV of the Royal Decree of 21 December 2001 was not, according to the Court, an obstacle. The Brussels Court ruled that PI Pharma NV had not shown that it was impossible for it to have the generic Sandoz product included in the relevant sections of Chapter IV of the abovementioned Royal Decree, so as to ensure its reimbursement, irrespective of the application or authorization form to be used.
Fourth, according to the Brussels Court, PI Pharma NV could have marketed the generic Sandoz product on the Belgian market under that name, since it was a generic product and Belgian doctors and pharmacists are familiar with the designations of generic products, which consist of the substance name (INN) and the name of the marketing authorization holder. The Court noted that the INN was mentioned in the drug databases (of the NIHDI, the BFCI or the FAMHP) and that professionals consult those databases when prescribing and dispensing medicines. The Brussels Court also noted that all these databases contain a ranking of medicines based on the INN and can be consulted using the INN as a search term, and that the Sandoz brand name is known following prolonged presence on the Belgian market.
Fifth, the Brussels Court noted that the restriction on advertising imposed on PI Pharma NV (Article 8 of the Royal Decree on parallel import) did not prevent parallel import. Referring to the well-known INN, the Brussels Court was satisfied that the use of reminder advertising, in addition to economic advertising, would have a useful effect.
Finally, the Brussels Court noted the fact that the market share of the generics would subsequently likely remain more limited than that of the branded products – did not mean that the generics would not have access to the Belgian market at all. The Court held that it may be more difficult for the generics, but it was not impossible. In this context, the Court rejected PI Pharma NV’s argument concerning the “intra-brand” competition. PI Pharma NV had argued that a parallel importer, when parallel importing a generic medicinal product identical to the reference medicinal product, must be given access to all the brand names under which the trademark holder markets the medicinal product in the importing Member State because, if it did not, there would be an artificial partitioning of the markets. PI Pharma NV had drawn analogies and links with case-law on the use by a trademark holder of different packaging formats in the importing country. However, the Brussels Court did not follow that line of argument. According to the Court, if PI Pharma NV had so wished, it could have purchased the originator product in the Netherlands and marketed it in Belgium as such. However, PI Pharma NV had, according to the Court, decided to buy a generic product. As such, it was for the Court to decide whether the rebranding was objectively necessary to ensure effective access to the Belgian market in this case. According to the Court, no such objective necessity existed in the situation at hand in this case.
The Brussels Court of Appeal’s Judgment is not wholly surprising given the previous ECJ decision. That decision was quite unhelpful to PI Pharma NV’s position, and left the Brussels Court of Appeal with relatively little room for manoeuvre.
For further information, please contact:
Kristof Roox, Partner, Crowell & Moring
kroox@crowell.com
