Pharmaceutical IP and competition law in Germany: overview
A Q&A guide to pharmaceutical IP and competition law in Germany.
The Q&A gives a high level overview of key issues including patents, trade marks, competition law, patent licensing, generic entry, abuse of dominance and parallel imports.
For information on pharmaceutical pricing and state funding, manufacturing, marketing, clinical trials, advertising, labelling, and product recall and liability, visit Medicinal product regulation and product liability in Germany: overview.
To compare answers across multiple jurisdictions, visit the Pharmaceutical IP and competition Country Q&A tool.
The Q&A is part of the global guide to life sciences law. For a full list of jurisdictional Q&As visit www.practicallaw.com/lifesciences-guide.
Conditions and legislation
Patent protection for Germany can be obtained through different national and international routes. However, irrespective of the selected route, a medicinal product is only suitable for patent protection if it is or involves an invention, and the invention is new, involves an inventive step and is capable of industrial application. Further, clear and complete disclosure of the invention is mandatory.
A national German patent can be obtained under the Patent Act (Patentgesetz) and a number of national ordinances (Verordnungen), providing in particular further details on the filing and application requirements. The Patent Act governs in particular the aspects of patentability, opposition, infringement and invalidity proceedings, as well as licensing.
In mid-2015, the German Patent and Trademark Office (GPTO) joined the Global Patent Prosecution Highway (GPPH), a multilateral pilot programme in which all national and regional patent offices can take part. The GPPH will significantly reduce the duration of patent applications in the (currently 21) participating patent offices.
In Germany, inventions can also be protected as a utility model under the Utility Model Act (Gebrauchsmustergesetz). A utility model is somewhat similar to a patent. However, the term of protection is shorter and patentability requirements are less stringent, namely the interpretation of the novelty requirement.
Most inventions, especially medicinal products, are made by employees in the context of their employment. Germany provides for an Employee Invention Act (Arbeitnehmererfindergesetz) which needs to be considered in that context. Under the Employee Invention Act all commercial rights as to a relevant invention transfer from the employee to the employer, unless the employer rejects the transfer within four months after proper notification of the invention.
Patent protection for Germany can also be obtained through international routes, in particular under the European Patent Convention (EPC). The EPC is an international treaty. It allows applicants to obtain patent protection in the 38 EPC member states by filing a single patent application. However, at the end of the application process the applicant does not become the proprietor of one single patent valid for up to 38 member states. An EPC patent only gives its proprietor the same rights as conferred by a national patent granted in a specific EPC member state. Therefore national law, in Germany the Patent Act, is the relevant legal basis when it comes, for example, to an infringement and revocation of an EPC patent in a specific EPC member state. The Patent Cooperation Treaty (PCT) provides an even wider international option to apply for patent protection. By filing only one PCT patent application, applicants can start the process to seek national patent protection in up to 148 countries, including Germany.
Until the UK's "Brexit" vote in June 2016, it was very likely, now it is questionable but still possible, that in 2017 an entirely new and ground-breaking European patent system will come into force: the European patent with unitary effect (Unitary Patent). For the first time, the Unitary Patent will create a single unitary patent for all EU member states other than Spain, Croatia and Poland. At the same time a corresponding court system will be introduced, the Unified Patent Court (UPC).
The Unitary Patent and the UPC will be governed by:
Regulation (EU) No 1257/2012 on the creation of unitary patent protection.
Regulation (EU) No 1260/2012 on the creation of unitary patent protection with regard to the applicable translation arrangements.
The Agreement on a Unified Patent Court (UPC Agreement).
These two regulations are already in force. However, they only apply as of the date of entry into force of the UPC Agreement. The UPC Agreement needs to be ratified by at least 13 member states, and ratification in Germany, France and the UK, as the three member states in which the highest number of EPC patents had effect in 2012, is mandatory (Article 89, UPC Agreement). As of the third quarter of 2016, ten member states, including France, had already ratified the UPC Agreement.
The Unitary Patent will be a further option for obtaining patent protection in Germany and many other EU member states, that is, the Unitary Patent will not replace any of the above options for obtaining patent protection. The application process for a Unitary Patent will be the same as for a European patent according to the EPC. However, at the end of the international phase and before commencement of the national phase, an applicant has to decide whether it wants to declare an opt-in and thereby make its patent a Unitary Patent. Further information about the Unitary Patent and the UPC are available at www.eupatentsmatter.com .
Scope of protection
Pharmaceutical inventions can be protected as product (substance) claims. Such claims can refer to, for example:
An active ingredient of a medicinal product.
A combination of active ingredients.
A composition containing one or more active ingredients.
An interim production product.
Methods for treatment of the human body by surgery or therapy and diagnostic methods practised on the human body are excluded from protection. However, products for use in any of these methods can, generally, be patented. Therefore, a product in the state of the art is still patentable for use or specific use in one of such methods, provided that its use for any such method is not in the state of the art ("X for use in treating Y"). In other words, first and second medical use patents are permissible.
The manufacturing of a medicinal product can be protected by a process claim. Process claims cover the process as such but also the direct product of a process.
The options to obtain patent protection for biotechnological inventions are relatively limited. The general guidelines have been set by Directive 98/44/EC on the legal protection of biotechnological inventions, which has been implemented in Germany.
The human body, at the various stages of its development, and the simple discovery of one of its elements, including the sequence or partial sequence of a gene, are not patentable. However, an element isolated from the human body or otherwise produced by means of a technical process, including the sequence or partial sequence of a gene, can be a patentable invention. Plant and animal varieties as well as essential biological processes for manufacturing plants and animals can, generally, not be patented.
However, it is possible to patent inventions which concern either:
Plants or animals, if the technical feasibility of the invention is not confined to a particular plant or animal variety.
A microbiological or other technical process, or a product obtained by means of such a process.
Application and guidance
Applications for a national German patent must be filed with the GPTO, Munich and Jena, the Technical Information Centre, Berlin, or certain other patent information centres. The GPTO's website provides guidance on the application procedure and fees in both English and German, at www.dpma.de.
Applications for an EPC patent can be filed with the European Patent Office (EPO) in Munich, its branch at The Hague, or its sub-office in Berlin, but not with the EPO's further sub-offices in Vienna and Brussels.
Applications for an EPC can also be filed with the central intellectual property office or other competent authority of an EPC member state if the law of that country so permits or prescribes, that is, in Germany with the GPTO. Guidance as to the application procedure and the fees is available at the EPO's website (www.epo.org) in English, French and German. It is very likely that the application proceeding will be the same for Unitary Patents.
The filing options for international patent application according to the PCT largely depend on national law and the applicant's nationality or place of residence. Applicants that reside in Germany can file the application with the GPTO, the EPO or directly with the World Intellectual Property Organization (WIPO). Further information is available at the websites of the GPTO and the WIPO. The WIPO website is available at www.wipo.int and provides information on the application procedure and fees in various languages.
Process and timing
The GPTO reviews whether obvious obstacles to patenting exist, examines the substantive patentability and, if the application fulfils all requirements, grants the patent. The GPTO claims that the patenting procedure for national German patents takes about two and a half to three years on average, provided that the examination request has been filed within four months from the filing date and the examination fee has been paid. In practice, the duration of the proceeding very much depends on the technical sector and the complexity of the innovation and the patent.
The EPC patent application process starts with an examination on filing followed by a formalities examination. At the same time a search report is prepared and sent to the applicant, together with a copy of any cited document and an initial opinion as to the compliance of the application with the EPC. The application is published (often together with the search report) 18 months after the date of filing or the priority date. Upon request of the applicant for a substantive examination or at least a confirmation of an earlier request, the substantive patentability is reviewed. If the EPC patent is granted most contracting states, for the patent to retain its protective effect and be enforceable in case of infringements, require that the patent must be validated in accordance with national law and requirements. The EPO says that the international part of the procedure takes about three to five years from filing of the application. The time required for the national validation in, for example Germany, needs to be added.
Duration and renewal
The maximum term for patent protection in Germany is 20 years for both national German and German parts of EPC patents. In each case annual renewal fees need to be paid after the third year.
In Germany, protection for medicinal products can in principle be extended by obtaining a supplementary protection certificate (SPC) in accordance with Regulation (EC) 469/2009 concerning the supplementary protection certificate for medicinal products (SPC Regulation) in conjunction with section 16a of the Patent Act.
The SPC Regulation provides for a mechanism to extend protection for up to five years for medicinal products, and for up to five and a half years for medicinal products for paediatric use after the expiration of a respective patent. To use the maximum extension of protection for medicinal products for paediatric use the respective medicinal products must be authorised in all EU member states, and the application for marketing authorisation must include the results of all studies conducted in compliance with an agreed paediatric investigation plan (Article 36, Regulation (EC) 1901/2006 on medicinal products for paediatric use).
An SPC can be obtained if the filing deadlines and the other formal requirements of the application are met and:
The active ingredient or combination of active ingredients of a medicinal product (Product) for which SPC protection is requested is protected by a patent in force.
A valid marketing authorisation for the Product has been granted in accordance with the regulatory regime applicable for the medicinal product, and the marketing authorisation is the first one to place the Product on the market as a medicinal product.
The Product has not already been the subject of a SPC.
Even though the Court of Justice of the European Union (CJEU) has rendered a number of judgments as to the interpretation of these requirements, considerable legal uncertainty exists as to the exact conditions for obtaining SPC protection. The legal basis of an SPC is the SPC Regulation but an SPC only covers an individual EU member state. However, it is possible to obtain various SPCs to cover different member states. It seems as if the European Commission is considering a legislative process to create a unitary SPC.
A similar mechanism to extent the duration of patent protection exists for plant protection products under Regulation (EC) No. 1610/96.
Both national German and EPC patents can be revoked in opposition proceedings and nullity actions. For national German patents, an opposition can be filed within nine months after the date of grant of the patent has been published. The opposition must be filed with the GPTO. An opposition against an EPC patent can be filed within the same deadline. The opposition must be filed with the EPO.
Actions for revocation of national German patents and the German part of an EPC patent must be filed with the Federal Patent Court (Bundespatentgericht). Such actions can only be filed after the deadline for filing an opposition has expired.
There is an exclusive list of grounds for an opposition and for an action for revocation of a patent, for both national German and European patents. The grounds are:
Lack of patentability, for example, because the invention is not new, does not involve an inventive step, or is excluded from patent protection such as discoveries, scientific theories and mathematical methods.
The patent does not disclose the invention in a sufficiently clear and complete way for it to be carried out by a skilled person.
The patent extends beyond the content of its application.
For oppositions against national German patents and for actions for revocation of national German and the German part of EPC patents, in case of an illegitimate usurpation, in particular if the essential content of the patent has been taken from third parties.
Conditions for infringement
Infringement of a patent takes place if the relevant action falls into the protected scope of a German patent or the German part of a European patent. A patent's scope of protection is determined by its claims, whereby the patent's description and the drawings are used to interpret the claims.
A patent can be literally infringed or it can be infringed under the doctrine of equivalence. A patent is literally infringed if the features of a product or process fall within the meaning of at least one of the patent claims. Even if this is not the case the patent might still be infringed under the doctrine of equivalence. According to the doctrine of equivalence a patent will normally be infringed according to a three step test:
Does the product or process achieve the effect of the patented invention, despite its deviating features?
Could a skilled person have found the deviating combination of features at the priority date without inventive efforts?
Would a skilled person recognise the patented invention and the deviating combination of features to be equivalent?
German patent law distinguishes between direct and indirect patent infringement.
A product patent is directly (literally or under the doctrine of equivalence) infringed if an infringing good is manufactured, offered, used, put on the market, imported or exported for such purposes. When a medicinal product can be used for more than one indication but only the use for one of the indications is patented, objective evidence is needed to establish a direct infringement, that is, a manifest arrangement of the intention that the medicinal product will be used for the patented indication. Such manifest arrangement might result from instructions on the label, a formulation, dosage, packaging or provision of ready-to-use preparation and marketing materials.
A process patent is infringed if the process is applied or, subject to certain additional requirements, the process is offered. Further, in case of a process patent it is prohibited to offer, put on the market, use, import or export for such purposes goods that have been directly obtained by the process.
The concept of indirect infringement is directed against acts occurring before the direct infringement. According to such concept it is prohibited to offer or supply essential means of an invention for use in Germany, if it is at least obvious for the party offering or supplying the means that such means are suitable and intended to be used for the invention. The concept of indirect infringement is more or less analogous to a contributory infringement under US patent law. In practice, the term "means" is interpreted broadly. "Means of an invention" do not need to be part of a product claim or direct element of a process claim. The reference to "essential" is also interpreted broadly and, therefore, any element of a patent claim can be "essential" even though it is already known from prior art.
It is also prohibited to intentionally induce a third party to commit or assist a third party in the commission of a direct and indirect patent infringement (abetting and aiding).
Claim and remedies
The Patent Act provides for a number of claims that can be raised against an infringing party. Therefore an entitled person, normally the patent owner, can request the infringing party to:
Cease and desist from using the infringing product or process.
Pay damages for all losses that have been incurred and will still be incurred as a result of a patent infringement.
Provide information on, among other things, the origin of infringing products and their distribution channels, the names and addresses of the manufacturers, suppliers or other previous owners, the commercial customers and the quantity of the products manufactured or supplied.
Render account regarding the revenue and expenditure in connection with the infringing activities, including detailed statements of the profits earned.
Destroy the protected products which are in the possession or ownership of the infringer.
Recall or remove the protected products from the distribution channels.
Under certain circumstances a right to publish a court decision can be invoked.
A cease and desist claim can be enforced through a preliminary injunction. In case of an obvious infringement a preliminary injunction can also be granted ex parte.
The patent owner is entitled to select whether it wants damages to be paid based on its lost profits, the infringing party's profits or on a licence analogy, that is, a reasonable license fee paid according to a licence in a comparable scenario.
Germany provides for exclusively competent specialised patent courts, dealing with both infringements of German patents and the German part of EPC patents. A new court system will be introduced with regard to Unitary Patents (see Question 1).
Very often a patent infringement not only triggers liability under civil law but is also a criminal offence.
Border seizure measures are available.
The Medicinal Products Act (Arzneimittelgesetz, GAMP) provides for a non-patent related way to extend an exclusive position. Under the Medicinal Products Act, an application for marketing authorisation of a generic medicinal product can only refer to the data of the reference medicinal product if the reference medicinal product has been authorised for at least eight years (data exclusivity). The reference medicinal product can be a medicinal product with a German marketing authorisation, a marketing authorisation in another EU member state, or with a central EU marketing authorisation.
However, the generic medicinal product can only be placed on the market after an additional period of two years (market exclusivity).
Market exclusivity can be extended by one more year if the marketing authorisation holder of the reference medicinal product, during the first eight years after marketing authorisation, obtains authorisation for one or more new therapeutic indications with significant clinical benefit in comparison with existing therapies.
Consequently, the maximum period for data and market exclusivity is 11 years (8+2+1 years).
Regulation (EC) No 141/2000 on orphan medicinal products applies in Germany. Therefore, orphan medicinal products enjoy market exclusivity for ten years. Orphan medicinal products are products intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition affecting no more than five in 10,000 persons in the EU. During this period another application for a marketing authorisation will neither be accepted nor will a marketing authorisation for the same therapeutic indication be granted for a similar medicinal product. Moreover, an application to extend an existing marketing authorisation for such medicinal product will not be accepted. The period of market exclusivity can be reduced under certain circumstances. However, for paediatric orphan medicinal products it can be extended up to 12 years in accordance with Regulation (EC) 1901/2006 on medicinal products for paediatric use.
Conditions and legislation
Trade mark protection for Germany can be obtained through different national and international routes. However, irrespective of the selected route, a sign is only suitable for trade mark protection if it is capable of being represented graphically and is generally capable of distinguishing the goods or services of one undertaking from those of other undertakings. Therefore, a variety of signs can in principle be registered as a trade mark, including words, devices, combinations of words and devices, three dimensional trade marks and sounds.
Trade mark registration is open for national German trade marks under the Trade Mark Act (Markengesetz). A unitary European Union Trade Mark (EUTM) with effect in all 28 member states can be registered according to Regulation (EC) No 207/2009 on the European Union Trade Mark. Further, Germany can be designated according to the WIPO Madrid Agreement Concerning the International Registration of Marks 1891 (Madrid Agreement) and the WIPO Protocol Relating to the Madrid Agreement 1989.
A respective international registration will, if successful, ultimately lead to a German national trade mark.
However, a sign will only be registered as a trade mark if no absolute grounds for refusal exist. The most important absolute grounds for refusal are:
A lack of distinctive character with regard to the goods and service for which the sign will be registered.
The sign consisting exclusively of indications which may serve to designate characteristics of the goods or services, such as the kind of product/service, its quality, quantity or geographical origin.
Therefore, an international non-proprietary name (INN) cannot be registered as a trade mark.
Trade marks also cannot be misleading. Market participants might incorrectly believe that a cosmetic product also has a medicinal effect, if the cosmetic product is designated with a trade mark which is also used for medicinal products. It is therefore important to avoid market participants being misled if a trade mark is, for example, under an umbrella trade mark concept expanded from medicinal products to other product categories such as cosmetics, and vice versa.
German trade mark law allows unregistered trade marks, provided certain requirements, particularly certain thresholds as to the degree of awareness of the trade mark among the relevant market participants, are met.
Scope of protection
The exact scope of protection conferred by a trade mark can only be assessed on a case-by-case basis. However, the distinctive character of a trade mark certainly has an impact on its scope of protection. A lower degree of distinctiveness will lead to a smaller scope of protection. Therefore, the scope of protection conferred by a trade mark similar to a generic or international non-proprietary name will be relatively small. However, the distinctive character of a trade mark can substantially increase due to its use and, thereby, its scope of protection will also become wider.
Application and guidance
German trade marks must be filed with the GPTO. The GPTO's basic filing fees are EUR300 for a traditional filing and EUR290 for an electronic filing. The basic filing fees cover up to three classes. An additional filing fee of EUR100 applies for each additional class. An accelerated examination can be requested against a fee of EUR200. The GPTO's website provides guidance on the application procedure and the fees in both English and German, at www.dpma.de.
EUTMs must be filed with the European Union Intellectual Property Office (EUIPO). The EUIPO's basic filing fees are EUR1,000 for a traditional filing and EUR850 for an electronic filing. The basic filing fees cover one class. The additional filing fee for the second class is EUR50 and for each additional class the additional filing fee is EUR150. The EUIPO's website provides guidance on the application procedure and fees in all official languages of the EU, at www.euipo.eu.
A number of routes exist for filing international applications under the Madrid Agreement and Madrid Protocol. Guidance on the application procedure and fees is available, at the websites of the GPTO and, in various languages, the WIPO (www.wipo.int).
Process and timing
Once an application for a German trade mark has been filed, the application is reviewed as to its compliance with formal requirements. The GPTO also reviews the application with regard to absolute grounds for refusal. If the GPTO does not have objections to the registration of the trade mark it will usually be registered eight to 12 months after filing. Requesting an accelerated review will normally reduce this period to three to six months. If the GPTO rejects the application in whole or part, an appeal can be filed. Within three months after publication of a trade mark's registration, third parties can file oppositions based on relative grounds for refusal, that is, older rights. Such oppositions must be filed with the GPTO. The GPTO's decision can be appealed.
An EUTM is usually registered eight to ten months after an application has been filed, including a three months opposition period.
Relative grounds for refusal of a trade mark application are neither considered ex officio in the application for German trade marks nor for EUTMs.
GTMs and EUTMs can be infringed in three ways:
A sign is used for goods or services which are identical to those for which the trade mark is protected, and the sign is identical to the protected trade mark (so-called double identity).
A sign is used for goods or services which are identical or similar to those for which the trade mark is protected and the sign is identical or similar to the protected trade mark, if there is a likelihood of confusion.
A sign is identical or similar to the protected trade mark even though it is used for goods or services which are not even similar to those for which the trade mark is protected, provided that the protected trade mark has a reputation in the applicable geographic market, and the use of the sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or repute of the protected trade mark.
Claim and remedies
Claims and remedies are essentially the same as for patent infringements (see Question 5).
A variety of tools exist to tackle counterfeiting in the pharmaceutical sector. A counterfeited medicinal product is often a trade mark infringement, in particular under double identity (see Question 11).Therefore, a variety of civil law, criminal law and administrative law (border seizure) measures can be initiated.
Further, it is prohibited to put most medicinal products on the market without marketing authorisation under the Medicinal Products Act, and creating the impression of a medicinal product already triggers the marketing authorisation requirement. To avoid patients and medical staff being misled, a number of laws, including the Medicinal Products Act, prohibit putting falsified medicinal products on the market, and a breach of such provisions can create liability under civil, criminal and administrative laws.
Germany is already relatively far in implementing the Directive 2011/62/EU relating to medicinal products for human use as regards the prevention of the entry into the legal supply chain of falsified medicinal products. Further information on the implementation under the securPharm project can be found at www.securpharm.de/en/index.html.
IP and competition law issues
The Act against restraints of Competition (Gesetz gegen Wettbewerbsbeschränkungen) is the major German legal source when it comes to competition law. It deals in particular with prohibitions of agreements and other agreed behaviours restricting competition, as well as abusive behaviour (similar to Articles 101(1) and 102 of the Treaty on the Functioning of the European Union, TFEU). It also covers merger control and the award of public contracts.
Enforcement takes place on a civil law and administrative law basis. The Federal Cartel Office and the cartel offices of the German federal states are responsible for enforcement under administrative law (www.bundeskartellamt.de/EN/Home/home_node.html). The Federal Cartel Office can impose substantial fines on businesses and individuals of up to 10% of the worldwide turnover of a group of companies and EUR1 million, respectively.
A further reform of the Act against restraints of Competition will probably take place at the end of 2016. A major part of the reform will be the German implementation of the Directive 2014/104/EU on certain rules governing actions for damages under national law for infringements of the competition law. In addition, it is being heavily discussed whether Germany should introduce a concept according to which an (ultimate) parent company should be jointly liable with a subsidiary for the subsidiary's violation of competition law.
As German competition law has been widely aligned with European competition law there are only small differences.
According to the Act against restraints of Competition a compulsory licence must be granted if the licensee has attempted to obtain a licence for a reasonable period of time at fair and reasonable conditions and the public interest requires granting a compulsory licence. However, as far as the authors can see no compulsory licence has been granted in Germany in the life sciences sector.
In respect of the awards of public contracts, Germany's largest reform for more than a decade came into effect at the end of February 2016. The reform led to a substantial change of the Act against restraints of Competition (sections 97 et seq). The respective provisions are of particular importance when it comes to rebate agreements with sick funds. The value of such agreements normally meet the European threshold (currently EUR209,000) integrated into the Act against restraints of Competition system. Therefore, the Act's provisions regarding awards of public contracts apply in such cases. As a consequence each company with an interest in the contract and claiming that its rights have been violated by non-compliance with the provisions governing the award of public contracts can apply for review of the proceeding (section 155, Act against restraints of Competition).
Also in connection with rebate agreements, sick funds can be subject to the bans regarding agreements restricting competition and abusive behaviour (sections 1, 19 and 20, Act against restraints of Competition).
According to both German and European competition law any activity between actual and potential competitors which is capable of reducing uncertainty between them can infringe section 1 of the Act against restraints of Competition or Article 101 of the TFEU. This is particularly true with regard to:
Settlement agreements which contain reverse payments in the context of pharmaceutical patent litigation. In particular, where payments are made by originator pharmaceutical companies to their potential generic competitors in return for their agreement not to enter the market for a period of time or to operate in a market in a particular way (pay-for-delay agreements). A number of cases ended with substantial fines against the involved companies, for example European Commission vs Lundbeck and others re. Citalopram; European Commission vs Johnson & Johnson and Novartis re. Fentanyl; European Commission vs Servier and others re. Perindopril.
Illegitimate de facto patent extensions in connection with awards of public contracts.
For further competition issues associated with the generic entry of pharmaceuticals, see Question 16.
Originator pharmaceutical companies have developed a variety of strategies which have been found to be an abuse of a dominant position under national or European competition laws. To name just a few:
Selective marketing authorisation deregistration to hinder or delay the market entry of generics (European Commission vs AstraZeneca re. Losec and corresponding judgment of the CJEU, Case C-457/10 P).
Bad faith SPC applications (European Commission vs AstraZeneca and corresponding CJEU judgment, Case C-457/10 P; French competition authority vs Pfizer re. Xalatan).
Filing of patent clusters, in particular filing many and overlapping patents to prevent third parties from gaining an exact overview as to the patent protected technology (European Commission vs Servier and others. re. Perindopril).
Denigration of competitors and their products, in particular biosimilars (French competition authority vs Sanofi Aventis and Schering-Plough).
Product hopping, for example, by slightly reformulating the original and patent protected medicinal product with no substantive or relevant therapeutic advantage, and removing the original product from the market prior to the market entry of a generic product (UK competition authority vs Reckitt Benckiser re. Gaviscon).
As Germany is a member state with a relatively high price level for medicinal products, parallel imports to Germany take place on a day-to-day basis. Mainly due to regulatory requirements, it is often necessary for parallel importers to adapt the imported product to the German market by changing, for example:
The packaging language by introducing a new package or adhesive labels.
The packaging size by introducing a new package.
The language of the instruction for use by introducing a German instruction for use.
All such activities are generally referred to as repackaging.
According to settled case law of both the German Federal Court of Justice and the CJEU, a trade mark proprietor cannot enforce its rights where exercising such rights contributes to artificial partitioning of the markets between the EU member states and where, in addition, the legitimate interests of the trade mark proprietor in connection with the repackaging are respected. The courts apply a five step test and, if all five criteria are met, the parallel import cannot be stopped based on trade mark law:
The importer gives notice to the trade mark proprietor before the repackaged product is put on sale in Germany and, on demand of the trade mark proprietor, provides him with a specimen of the repackaged product.
The repackaging does not affect the original condition of the product inside the packaging.
The new packaging clearly states who repackaged the product and the name of the manufacturer.
The presentation of the repackaged product neither damages the reputation of the trade mark nor of its proprietor. Therefore, the packaging must not be defective, of poor quality, or untidy.
Enforcing the trade mark rights would contribute to the artificial partitioning of the markets between the EU member states.
Under patent law a parallel import might be blocked based on the Specific Mechanism, if a European accession member state had not allowed patenting of medicinal pharmaceutical products before the accession. The Specific Mechanism allows use of medicinal product patents and SPCs to prevent parallel imports from such accession states, if:
They were filed when the accession state did not permit such type of protection.
The person intending to import or market the product has given one month's prior notice to the holder or beneficiary of the patent or SPC (CJEU, judgment Merck Sharp & Dohme/Merck Canada vs Sigma Pharmaceuticals, Case C-539/13).
Neither licence agreements nor payment of royalties need to be approved by a public authority.
However, certain financial cross-border transactions need to be notified to the German Federal Bank. A violation of the notification requirement is subject to administrative fines. Further guidance is available in German, English and French at the German Federal Bank's website (www.bundesbank.de/Redaktion/EN/FAQ_List/Service/reporting_systems_external_sector_cross_border_payment_report.html).
Unless otherwise agreed or approved by the trade mark proprietor, an exclusive or non-exclusive trade mark licensee cannot enforce trade mark rights under the Trade Mark Act. However, an exclusive licensee of an EUTM can commence infringement proceedings if the proprietor of the EUTM, after formal notice, does not himself commence such proceedings within an appropriate period. Unless otherwise agreed or approved by the trade mark proprietor, a non-exclusive EUTM trade mark licensee cannot enforce trade mark rights resulting from a EUTM.
Unless otherwise agreed, an exclusive licensee of a patent can commence infringement proceedings under the Patent Act. A non-exclusive patent licensee cannot commence infringement proceedings, unless otherwise agreed or approved by the patent owner.
Marc L Holtorf, Partner, Head of Intellectual Property and Life Sciences Germany
Pinsent Masons Germany LLP
Professional qualifications. Germany, Frankfurt bar, 1997; Munich bar, 2013.
Areas of practice. Intellectual Property (patents, trade marks, unfair competition); life sciences (medicinal products, medical devices, food, cosmetics, digital health)
- Advising an international pharmaceutical company on a revocation action, re: a competitor's supplementary protection certificate.
- Advising a medical device company on market access/reimbursement in Germany.
- Advising an international pharmaceutical company in a series of unfair competition proceedings against a German organisation for the protection of fair trade.
Languages. German, English
- Lecturer, University of Augsburg, Basic Course Drug Regulatory Affairs.
- Lecturer, Munich Business School, International Business Law.
- Member, German Association for Intellectual Property and Copyright (GRUR).
- Member, German Federation for Food Law and Food Science (BLL).
Publications. Include the following:
- Dieners/Reese, Handbook on Pharmaceutical Law (Handbuch des Pharmarechts), chapter on healthcare advertising by Reese/Holtorf.
- Gloy/Loschelder, Handbook on Competition Law (Handbuch des Wettbewerbsrechts), 4th Edition, chapters on unfair competition and anti-trust law by Holtorf.
- Compulsory licence defence after Huawei Technologies vs ZTE, published in GRURPrax 2016, 83, by Holtorf/Traumann.
Dr. Julia Traumann, Associate
Pinsent Masons Germany LLP
Professional qualifications. Germany, Munich bar, 2015
Areas of practice. Intellectual property (patents, trade marks, unfair competition); life sciences (medicinal products, medical devices)