Two Great Steps Forward in the Fight Against Illegal Imports of Plant Protection Products (PPP)Two important court decisions:

• German Federal Court of Justice reverses the burden of proof in parallel import cases
• German court holds that the requirement of “common origin“ must be met

1.
In Germany, as well as throughout Europe, producers of PPP face the same problem: illegal parallel imports. The usual scenario is that an importer alleges to import a certain product for which an official registration exists in any other of the EU/EEA countries and which is chemically identical to a certain reference product having an official registration in Germany; he therefore has to apply for an import license with regard to the foreign product; this license is usually granted. Very often, however, the importer imports into Germany some counterfeit product manufactured elsewhere (and registered nowhere) which is not the original product for which the import license was granted. On the label you can find the original and official number of the import license, but the content is quite different. Needless to mention that these products can be offered at a much lower sales price than the original reference products. Since the importers do not have to disclose what the name and registration details of the foreign products they allege to import are, the holders of the German registrations have a hard time furnishing proof that the imported products constitute a breach of the relevant legal provisions. In the past they had to conduct comparative analyses between the import product and their own (reference) products to show that the alleged chemical identity did not in fact exist. Following a judgement the BGH (“Bundesgerichtshof”, the Federal Court of Justice) had rendered in 2002, the courts regularly assumed that the burden of proof lay with the plaintiff, the holder of the respective German registration, not the importer – who in many cases could simply remain passive and see if plaintiff was successful in furnishing this proof.

Ever since the 2002 decision, our firm - which represents several registration holders, both German and international - has argued vehemently against this principle. Our argument was that it is the importer who claims that his product is identical to the reference product, and it is him who reaps the benefits of this alleged fact, as he is entitled to market an import product with reference to the registered product. The BGH, in its decision of November 19, 2009 concerning a case in which we represented one of the largest German agrochemical enter-prises, followed our line of argument, holding that the 2002 judgement were to be overruled, and that the burden of proof in parallel import cases lies with the importer, not the holder of the registration for the German reference product. From now on it will be the importer of the (counterfeit) import product who has to prove that his product is identical to the reference product – a proof that more often than not will most likely fail. This judgement will have a huge impact on future parallel import cases in Germany.

2.
In another recent infringement action a US-based client of our firm asked for our legal sup-port. The client is the producer of a certain PPP and holder of the respective German regis-tration. All formal conditions for a legal parallel import seemed to be fulfilled. The compara-tive chemical analysis plaintiff conducted, revealed that the counterfeiter had done his job fairly well: proof that the differences between the import product and the reference product were in fact significant could not be established.
The case could have ended here – but it didn’t:

• In the written pleading we argued that the German statute on Plant Protection Law had to be interpreted in light of two recent decisions of the European Court of Justice; also, the argu-ment went, it had to be taken into consideration that on a European level the passing of new legislation were imminent, that a new Regulation (meanwhile in force) were soon to replace Council Directive 91/414/EEC. Therefore, even though it were not explicitly mentioned in German law, the additional requirement of “common origin“ would have to be observed as well.
• In its judgement, the court, one of the most experienced in this particular field and highly renowned for its expertise, held that in the course of a parallel import, only those PPP may be legally imported into Germany that have been produced by the same company as the Ger-man reference product (or by an affiliated company or a licensee). In other words: for a parallel import of a plant protection product into Germany, the requirement of ”common origin“ must be met even if it is not a legal condition according to the present German law.
• The judgement marks a major step for registration holders in Germany, as it is the first decision of any German court in which it was held that a parallel imported PPP needs to originate from the same source as the reference product. Lack of a common origin is much easier to establish in court proceedings than the fact that chemical differences detected in the course of a comparative analysis are significant. So it may be expected that this judgement, too, will have a major influence on future parallel import cases tried before German courts.

For further information on this topic please contact Peter E. Ouart at dr.ouart@ouart.de.