What qualifies as a legitimate reason to object to parallel trade of medicines in Europe?

Parallel trade seeks to exploit price differences in different geographical markets – goods will be purchased at a lower price in one market and resold at a higher price in another. While the free movement of goods is a fundamental principle of the EU, it is not absolute and can be subject to various restrictions, including the protection of industrial and commercial property.

Trade mark owners have the exclusive right to place goods on the market using their trade mark, subject to the concept of exhaustion. This means that once goods have been placed on the market by the trade mark proprietor or with their consent, the rightsholder cannot restrict further distribution or sale of the goods.

However, the principle of exhaustion is also not absolute and does not apply when there are legitimate reasons for a trade mark proprietor to oppose further commercialisation of its goods.

In the medicines context, there are a number of legitimate reasons for trade mark proprietors to object to parallel trade, and this area has recently received attention from the Court of Justice of the EU.

Osborne Clarke's Life Science and Healthcare brands team has delved into the relevant case law and brought together information on what constitutes legitimate reasons to object in the case of the re-labelling, re-boxing, re-branding, de-branding and co-branding of parallel imported medicines.