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In brief
According to the court in The Hague, B&S divisions Kamstra and PHI traded inverted blood tests.
An unpublished judgment shows that the companies must hand over illegally obtained profits.
The reseller of the counterfeit packaging tests, H&H Wholesale, must pay US $26.5 million in damages.
According to the court in The Hague, companies of the listed Dutch wholesale group B&S BSGR€5.24-0.76% are guilty of illegal international trade in counterfeit blood tests.
These are Kamstra International and PHI Logistics from Farmsum in Groningen. They are part of the Holland Trading Group of B&S, according to an unpublished judgment dated November 30 that is in possession of Het Financieele Dagblad.
The civil lawsuit in The Hague against the B&S divisions was brought by the American company Abbott ABT$113.61+0.09% . This pharmaceutical giant with 113,000 employees, is active in 160 countries and is listed in New York.
B&S was originally a tax-free empire. Dutch businessman Willem Blijdorp holds two-thirds of the shares. Kamstra International was one of the first companies to start his business career in 1970. According to its website, it supplied duty-free products to small ships in the North Sea.
Today, B&S also supplies beverages, snacks, and tobacco products to airports and the United States military through other subsidiaries. The medicine trade is a relatively small business unit.
Under the brand name Freestyle, Abbott produces a device that people with diabetes can use to measure the glucose level in their blood. The test strips that are placed in it are called Freestyle Lite, and the retail price of it is higher in the United States than elsewhere. Abbott also sells the tests in that country in different packaging and with different package inserts.
High liability risks
On October 11, 2016, US Customs discovered Freestyle blood tests in counterfeit packaging originating in China. The shipment was part of Kamstra's first order with a supplier.
The supplier immediately reported to Kamstra that the delivery was delayed because US customs stopped it. In the meantime, Abbott was also informed about the shipment, and customs instituted a stricter control regime to import blood tests.
Abbott's investigation revealed that discarded original international packaging from the Freestyle blood tests had been found at an intermediary in the Northern Ireland capital of Belfast. The tests were then converted into counterfeit packaging for the American market. Often, the best-before date, among other things, was lost. The court found that Abbott was exposed to "potentially high risks of liability" from these counterfeits.
Kamstra sent an e-mail to the supplier on November 2, 2016, in response to the message about the delay. "I really think the stuff is fake," a Kamstra sales manager wrote in it. More than two months later, he asked for documentation proving that the items were genuine and about a previously offered discount. The supplier indicated that he could not provide the documents but could give a discount on future orders as compensation.
Kamstra also knew from February 2017 that US Customs was monitoring the import of the blood tests more closely, according to the verdict. Still, it continued to trade the overhauled blood tests. According to the court, the other B&S subsidiary, PHI, a logistics service provider, facilitated this. Because the parts continued to 'willfully' infringe Abbott's trademark law, the court ruled that there was 'bad faith'.
Transfer profit
The court sentences Kamstra and PHI to recover sold counterfeit tests. The B&S companies must inform Abbott of their profit from the counterfeit tests and pay them off. They must also destroy any remaining inventory and notify the public, customers, and other business associates that they have infringed Abbott's rights. If Kamstra and PHI fail to implement this ruling, they will have to pay a maximum of €2.6 million in penalty payments to Abbott.
Kamstra, which has since been spun off by B&S and has been placed in a separate foundation, and PHI can still appeal against the verdict. Both these companies and B&S do not answer questions. Abbott and its lawyers also declined to comment. It does not appear that B&S has informed shareholders of the verdict.
Meanwhile, US wholesaler H&H Wholesale, a customer of Kamstra who resold these test strips in counterfeit packaging, appears to have been ordered by a US court to pay Abbott $26.5 million in damages.
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Read the full article:
https://fd.nl/bedrijfsleven/1464902/b-s-bedrijven-verkochten-omgekatte-bloedtesten
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