Parallel Trading

On 1 April 2008, Advocate General Ruiz-Jarabo Colomer gave his opinion on a reference from a Greek court, in the context of disputes between Greek pharmaceutical wholesalers and GlaxoSmithKline Greece, asking whether a refusal by a dominant company to meet the full orders of wholesalers, with the objective of preventing parallel trade, amounts to an abuse of dominance contrary to Article 82 of the EC Treaty. The Advocate General considers that such conduct would amount to an abuse of dominance, but that it could, in theory, be objectively justified. Such justification could be based on the fact that the undertaking was compelled to adopt its conduct by the regulation of the market, that the conduct was intended to protect the legitimate commercial interests of the undertaking and that the conduct had economic benefits. However, the Advocate General does not believe that GlaxoSmithKline has shown grounds for such objective justification in the circumstances of this case.

The House of Lords has confirmed that an EC "free trade defence" cannot protect an English seller of bootleg Beatles' recordings imported from Germany, despite the fact that no equivalent copyright protection exists in Germany.

A prohibition in German law on the use of the ® symbol in relation to unregistered trade marks was held by the European Court of Justice (ECJ) to infringe Article 30 of the EC Treaty, in that it was capable of hindering trade between member states and was not justified on other grounds.

On 16 September 2008, the European Court of Justice (ECJ) handed down its judgment on a reference from a Greek court, in the context of disputes between Greek pharmaceutical wholesalers and GlaxoSmithKline Greece, asking whether a refusal by a dominant company to meet the full orders of wholesalers, with the objective of preventing parallel trade, amounts to an abuse of dominance contrary to Article 82 of the EC Treaty. The ECJ has ruled that an undertaking that is dominant on the relevant market for medicinal goods which, in order to stop parallel exports by certain wholesalers, refuses to meet ordinary orders from those wholesalers, is abusing its dominant position. However, it is for the national court to determine whether the orders are "ordinary" with regard to the size of the orders in relation to the requirements of the market in the member state and the previous business relations between the undertaking and the wholesalers.

A company assigning a trade mark registered in one country to an unconnected person can oppose the import of goods bearing the mark into his country. The European Court has confirmed that the trade mark rights of the assigning company take precedence over the rules preventing restrictions on the free movement of goods.

Strategies for controlling parallel imports, looking at the relationship between EC and UK competition law, intellectual property protections (such as trademarks, copyright and patents) and the exhaustion of rights.

See IP, Technology and Telecoms.

Tesco has been granted the right to take its legal battle against Levi's to the European Court of Justice (ECJ).

The European Court of Justice (ECJ) has ruled that a company can use its trade mark in one country to prevent the importation into that country of similar goods bearing the same or a similar trade mark by the owner of that trade mark in another member state where that other owner did not acquire its rights to that trade mark with the consent of the first company.

The Advocate General has advised the European Court of Justice that the Trade Marks Directive has excluded the possibility of a doctrine of worldwide exhaustion of trade mark rights.