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.

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:

3. 

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.

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).

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 vas 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).

4. 

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”.

That decision must be the point of departure for the answers to the questions raised by the Landgericht Hamburg. Let us for the moment leave aside the question of the partitioning of national markets as a result of the exercise of the trademark right, which is the subject-matter of the second question. With regard to the other three conditions indicated in the judgment as prerequisites for the applicability of the second sentence of Article 36 of the EEC Treaty (in other words, for a disguised restriction on trade between Member States to be identified) I think it is justified to state: (a) that the original condition of the product is not adversely affected where the repackaging leaves the internal packaging intact; (b) that it is not essential to inform the proprietor of the trade mark that the repackaged product has been put on sale if the trade mark has not been reaffixed by the importer and the trade mark which is visible is the original one; and (c) that it is essential to indicate on the new external packaging that the importer has repackaged the product.

These three statements require some comment. With regard to point (a) I would mention that in the judgment in Hoffmann-La Roche v Centrafarm the Court did not follow the rigidly formalistic approach which the plaintiffs adopted on the basis of German law, seeing an infringement of the trademark right in any change, even if merely external, to the packaging. The Court's view was that that right can only be lawfully exercised to prevent interference by third parties with the packaging where such interference seems liable to entail a risk of adverse effects on the intrinsic properties of the product; and as an example of repackaging in which that risk was not inherent it specifically indicated replacement of the external packaging with the internal packaging being left intact. It is moreover clear that, if the whole packaging created by the manufacturer were included within the concept of “original condition of the product”, any repackaging would involve an alteration of that condition. Conversely, once it is admitted that a product may be repackaged without any change in its original condition, the simplest specific example is that of replacement of only the external packaging of a double-packed product. The example becomes still more persuasive if the original internal packaging is hermetically sealed, so that a change in the external box cannot jeopardize the intrinsic characteristics of the product.

With regard to point (b) it should be recalled on what basis the Court declared that the parallel importer was obliged to give prior notice to the proprietor of the trade mark that the repackaged product was to be put onto the market: “Since it is in the proprietor's interest that the consumer should not be misled as to the origin of the product”, the product is to be sold with the trade mark affixed to the new packaging (judgment in Hoffmann-La Roche, paragraph 12 of the decision). The situation differs considerably where the trade mark is not reaffixed by the importer on the new packaging but is the original trade mark, affixed by the manufacturer to the internal packaging, and the new packaging is confined to the external layer. In those circumstances, neither the origin nor the authenticity of the goods may be contested and there is no reason for requiring that the proprietor of the trade mark be informed of the action taken by the parallel importer. It is nevertheless essential, as I have stated under point (c), that the importer should declare that he has repackaged the product, since total safeguard of origin is thereby ensured from another point of view, for whilst visibility of the trade mark affixed by the manufacturer reassures the consumer regarding the origin of the product, the declaration by the importer prevents the public from regarding the whole packaging (including the external layer) as originating from the manufacturer.

5. 

The view which I have taken differs of course from that held by the national court which in this case found that there had been an infringement of German trademark law and adhered to a particular notion of the specific subject-matter of trade marks, namely that it includes the presentation chosen by the manufacturer for his product no less than the intrinsic characteristics of the product. In that regard, I confine myself to pointing out that the Court is not bound by that view and that, inasmuch as the Court is here concerned with the interpretation of Article 36 of the EEC Treaty, the objective and the function of the trade mark must be determined in the restrictive manner laid down in the case-law of the Community, in the light of the principle of the free movement of goods.

6. 

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.

This doubt would not appear to be justified by the language of the judgment in Hoffmann-La Roche v Centrafarm, which clearly refers to proof of the adverse effect on trade of the exercise of the trademark right in relation to the marketing system adopted by the manufacturer, and makes no reference to any examination of the intentions of the latter, or rather of the objective pursued by him. But it is true that in the judgment in Centraform v American Home Products of 10 October 1978 the accent was placed on a subjective element, the trademark proprietor's intention. In paragraph 1 (b) of the operative part of the judgment, the preventive action taken by the latter against the parallel importer is considered as equivalent to a disguised restriction on trade between Member States “if it is established that the proprietor of different marks has followed the practice of using such marks for the purpose of artificially partitioning the markets”.

With regard to this precedent, the Commission has rightly pointed out that the circumstances were special, in so far as the same undertaking was the proprietor, in the various Member States, of different trade marks for a single product. In such circumstances, the exercise of the trademark right inevitably has the effect of partitioning the national markets and therefore, on the basis of the objective criterion adopted in the judgment in Hoffmann-La Roche v Centrafarm, the proprietor of the parallel trade marks would ultimately find himself, in the light of Community law, in a position where he could never lawfully exercise his right. To avoid this excessively restrictive result, the Court took the view that in such circumstances it is not appropriate to speak of a disguised restriction on intra-Community trade except where the practice, adopted by or under the direction of the same proprietor, of using different trade marks for the same product in the various Member States is indicative of a plan to partition the markets. But it is clear that, in circumstances other than those just described, the precedent set by Centrafarm v American Home Products may not be relied, upon.

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.

7. 

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.