On 17 November 2022, the Court of Justice of the European Union (CJEU) delivered its preliminary ruling in joined cases C-253/20 Impexeco NV v Novartis (Impexeco), and C-254/20 PI Pharma v Novartis (PI Pharma), finding that where a parallel importer affixes the trade mark of a branded reference medicinal product onto the packaging of a generic product, the brand owner may oppose the placing of that generic product by the parallel importer on the market of a Member State. Though the CJEU provides an exception to this general rule, the authors query whether the exception will ever apply.

Importantly, this case compares: (i) the rules on when a parallel import licence can be obtained (which is a regulatory question), and (ii) when rebranding can legitimately take place for such products (which is an IP question). As set out below, the need for “identicality” is not the same for these two considerations.

Factual background

Novartis developed a medicinal product containing the active substance letrozole, marketed in Belgium and The Netherlands under the trade mark FEMARA. Novartis also developed a second medicinal product containing the active substance methylphenidate, marketed in Belgium under the trade mark RITALINE, and in The Netherlands under the trade mark RITALIN.

Sandoz, a company within the Novartis corporate group, held marketing authorisations for and marketed in The Netherlands and Belgium, generic versions of the Femara and Rilatine products. These products were branded under the Sandoz name.

Parallel traders Impexeco and PI Pharma imported Sandoz’s generic products from The Netherlands, and placed them on the market for sale in Belgium, after affixing Novartis’ FEMARA and RITALINE trade marks for the reference products on the outer packaging of the relevant generic products. Novartis brought separate trade mark infringement actions against each of the parallel importers and was successful at first instance before the Brussels Court of Cessations (stakingsrechter te Brussel). The parallel traders appealed both decisions on the basis that the practice of using different packaging and different trade marks for the same product by Novartis and Sandoz contributed to the partitioning of Member States’ markets. The Court of Appeal in Brussels stayed each of the proceedings and referred identical questions to the CJEU for a preliminary ruling. The CJEU joined the cases on 14 July 2020.

CJEU ruling

As set out our blog post published in August 2019, the CJEU has stated in the previous case of Delfarma, that a parallel trader can import a generic product into a Member State in which that product does not have a marketing authorisation by relying on the existing authorisation for the reference product in the country of import. The CJEU further stated that the imported and reference product in the country of destination do not have to be identical, but could be ‘substantially identical/essentially similar’, as long as there are no safety concerns. ‘Essential similarity’ was a prerequisite for approval of generics when Article 10 of Directive 2001/83/EC first came into force. Following legislative changes in 2004, Article 10 has been revised to remove this term but it, nonetheless, contains the same concept, meaning that generic products will nearly always meet this definition.

The Impexeco and PI Pharma joined cases are a natural extension of the Delfarma decision: considering the IP question of to what extent and in what circumstances a parallel importer can rebrand a generic product with the branding of the reference product.

The CJEU has concluded that a trade mark proprietor for the reference product can oppose the marketing of a generic product that has been rebranded as a reference product of that trade mark owner, unless two conditions are met, namely: (i) identicality of products and (ii) the BMS conditions are satisfied, in particular the necessity to rebrand.

1. First condition: identical in all respects

Although in these two particular joined cases, the generic product and the reference product had already been found to be identical by the referring court, such that it was not an issue in dispute for the CJEU to consider, the CJEU nevertheless stated that (emphasis added) “only a medicinal product which is identical in all respects to another medicinal product can be repackaged in new outer packaging bearing the trade mark of the other medicinal product”. The CJEU further noted that identicality may be the case particularly for a reference product and a generic product that are manufactured by ‘economically linked’ entities and are marketed under two different sets of regulatory rules.

This seems to be similar to earlier court decisions referring to the need for a ‘common origin’ to obtain a parallel import licence. Early case law of the CJEU on this issue concerned identical products placed on the market by the same company, or companies within the same corporate group. The fact that the products had a ‘common origin’ created an assumption of conformity in respect of the two products and this was viewed as necessary to allow the imported product to rely upon the authorisation of the reference product and justify import without further particulars being required. This has been relaxed by the Court over the line of case law, and instead, the focus has shifted to whether the parallel imported product is ‘substantially identical/essentially similar’.

However, for the trade mark question, the court has returned to the need for the products to be ‘identical in all respects’, which is a higher threshold than the requirement for generic medicinal products to have the “same qualitative and quantitative composition in active substances and the same pharmaceutical form as the reference medicinal product” from a regulatory point of view, as set out in Article 2(b), Directive 2001/83/EC (as amended by Directive 2004/27/EC). The Court notes that while a follow-on product may meet the definition of generic medicinal product in the legislation, there may be legitimate differences between the generic and reference products, for example in relation to excipients. Where these differences exist, this first condition for rebranding as set out by the Court would not be met.

2. Second condition: BMS conditions, in particular condition 1 (necessity)

Once the condition of identicality is met, a brand owner of a reference product may still legitimately oppose the rebranding of a parallel imported generic product if any of the five conditions laid down in the Bristol-Myers Squibb & Others joined cases are not also satisfied (see Bristol-Myers Squibb at paragraph 79; Boehringer Ingelheim at paragraph 32; Junek at paragraph 28 – colloquially referred to as the BMS conditions).

In this case, the CJEU focused on the condition of necessity, applying its decision in Upjohn as to whether it was ‘objectively necessary’ for the parallel importers to market the generic products as reference products in order to place them on the market, whilst also needing to respect the legitimate interests of the trademark owner. The CJEU noted that if the parallel importer is able to market the generic product under its trade mark of origin by adapting the product packaging to satisfy the market requirements of the importing Member State, it would not be ‘objectively necessary’ to rebrand.

As referenced above, the CJEU’s earlier decision in Delfarma concluded that a Member State could not refuse a parallel import licence for a generic product for which the reference product already had a marketing authorisation in the importing Member State, unless such refusal could be justified on grounds relating to quality, efficacy and safety. Given this, the CJEU reasons in Impexeco and PI Pharma that the condition of necessity “cannot be satisfied where a generic medicinal product corresponds in every respect to the reference medicinal product covered by that authorisation, given that, in such a situation, the parallel importer must be regarded as being able to market the generic product under its mark of origin”.

The CJEU has also made it clear that if the motivation to rebrand is solely to gain an economic advantage, it will not be considered ‘objectively necessary’ to rebrand, and in such circumstances, a trade mark owner’s right to oppose the parallel import is not impeded.

Practical implications

This is the first time that the CJEU has needed to consider and apply exhaustion of trade mark rights principles in circumstances in which a generic product is rebranded to that of the reference innovator product. As is often the case with CJEU decisions, there are a number of unanswered questions:

Economically linked:

It is unclear whether the operative part of the decision is limited to circumstances in which there is an economic link between the owners of the trade marks for the reference and generic products (e.g. as was the case with Novartis and Sandoz in the these joined cases). The CJEU guidance in this case is clear in that, where the trade mark owners are economically linked, trade mark rights are not exhausted unless the two medicinal products are ‘identical in all respects’ and the rebranding is ’objectively necessary’.

Given the CJEU’s view that objective necessity “cannot be satisfied where a generic medicinal product corresponds in every respect to the reference medicinal product covered by that authorisation” and that a generic product can obtain a parallel import licence by reference to the branded reference product, it is difficult to consider a scenario where products will be held to be identical in all respects and where the rebranding will also be held to be objectively necessary. Once identicality in all respects is established, a parallel importer would only be able to establish that rebranding is objectively necessary if the importing Member State refuses to grant a parallel import licence for the generic product. Earlier case law indicates that any such refusal could only be justified on grounds relating to the protection of human health and human life (i.e. quality, safety and efficacy grounds). This would indicate that the generic and reference medicinal products are not ‘identical in all respects’ and so the condition would not be met. It is therefore questionable whether there can be any circumstances in which both identity in all respects and objective necessity can be realistically established by a parallel importer. Putting it another way, it should not be necessary to rebrand a generic product as the reference product, as it should be possible to parallel import the generic version.


Although the UK is now a third country vis a vis the EU, and EU wide exhaustion of IP rights no longer apply to the UK, the UK does still recognise EEA exhaustion (as set out in The Intellectual Property (Exhaustion of Rights) (EU Exit) Regulations 2019, as amended by the Intellectual Property (Amendment Etc.) (EU Exit) Regulations 2020 (Si 2020/1050)) – see our previous blog post. Nevertheless, the UK is no longer bound by CJEU rulings delivered from 1 January 2021 (Section 6(1) European Union (Withdrawal) Act 2018), such that there is potential for the UK courts to adopt a different approach. Even if the UK courts are no longer bound by CJEU decisions, under the courts’ broad jurisdiction, they have discretion to consider foreign decisions and this is further codified in section 6(2) of the European Union (Withdrawal) Act 2018 which states that courts may have regard to anything done by the CJEU “so far as it is relevant to any matter before the court”.

In the factually similar pre-Brexit UK case of Flynn Pharma, Pfizer entered into a series of agreements with Flynn Pharma authorising the latter to launch in the UK a generic version of Pfizer’s Epanutin anti-epileptic drug containing Phenytoin Sodium as the active substance. Flynn’s generic product commanded a higher price in the UK than Epanutin, which parallel importers sought to exploit by rebranding Epanutin (reference product) as Phenytoin Sodium Flynn (generic product).Although Flynn’s product was manufactured by Pfizer, the Court of Appeal held that the arrangements between Pfizer and Flynn were “real, arm’s length transactions between independent companies” and they followed the first instance judge’s findings that Pfizer did not control the specification or branding of the product. Given this finding, the BMS conditions were not engaged as Epanutin had not been placed on the market with Flynn’s consent or by economically linked companies.

Whilst the Flynn Pharma decision is not inconsistent with the Impexeco and PI Pharma joined cases, it does not necessarily mean that UK courts would adopt a similar approach to the CJEU if a similar case comes before the UK courts. Flynn Pharma can also be distinguished from the Impexeco and PI Pharma joined cases as the former case did not consider the regulatory question (i.e. when a parallel import licence may be obtained), and the issues were limited to the interplay between IP law and competition law . 

On the same day that the decisions in the Impexeco and PI Pharma joined cases were delivered, the CJEU also delivered three other parallel import decisions, which provide welcome guidance to a trade mark owner’s right to oppose a parallel importer repackaging a medicinal product containing a unique identifier and an anti-tampering device. We will be posting a subsequent blog in relation to these CJEU rulings, so watch this space!