Brands Bulletin - December 2009

Welcome to this month's Ashfords’ Brands Bulletin.

This month we are addressing the issue of parallel imports within the European Economic Area ("EEA") of genuine trade marked goods.

Parallel Imports and Exhaustion of Trade Mark Rights
 
Once a trade mark owner, or any of his authorised distributors, first puts goods onto the market in the EEA under his registered trade mark, he can no longer rely on his registered trade mark rights to prohibit further commercialisation of those goods, except in limited circumstances.  His trade mark rights are said to be 'exhausted'.

For example, in most circumstances he cannot use his UK registered trade mark rights to object to the importation into the UK of goods bearing his trade mark which he (or one of his distributors) first sold in France, or Germany, under that same trade mark.

This principle of trade mark law enables free movement of goods within the EEA and is designed to assist elimination of the price differentials between different EEA countries for the same trade marked goods.

But what about the situation where goods bearing a trade mark owner's trade mark were first sold by him, or one of his distributors, outside of the EEA, for example in the USA, Poland or Thailand?  Can he rely on his UK registered trade mark rights to object to the importation and sale in the UK of these genuine (non-counterfeit) goods bearing his trade mark?

The short answer is 'yes', he can.  His UK registered trade mark rights are not exhausted, provided he never consented to the importation and sale of the said goods anywhere in the EEA under his trade mark.  Such consent can be given explicitly, or by implication.

A recent case before the European Court of Justice of the European Union has reaffirmed the long established principle that a registered trade mark owner can only be held to have implicitly given his consent to the importation and sale of his genuine trade marked goods within the EEA where the facts and circumstances 'unequivocally demonstrate' that the trade mark owner has renounced his exclusive rights in the trade mark.  Such consent cannot be inferred from the mere silence of the trade mark owner.  

Therefore, if you are a trade mark owner you can rely on your registered trade mark rights to prevent imports into the EEA from outside of the EEA of your genuine trade marked goods, provided you have not given your consent.  This is sometimes known as creating a 'Fortress Europe' for your products.  It allows you to sell your products outside the EEA at cheaper prices than you sell the same products inside the EEA, with the comfort of knowing they cannot be imported and sold within the EEA without infringing your registered trade mark rights within the EEA.  Consumers don't like this, but the law allows it (subject to you making sure you comply also with relevant EEA competition law - a subject much too diverse to cover in this short update).  

Should you wish to receive further editions of the Ashfords' Brands Bulletin, please email  g.williams@ashfords.co.uk      

Ashfords LLP is regulated by the Solicitors Regulation Authority. The information in this note is intended to be general information about English law only and not comprehensive. It is not to be relied on as legal advice nor as an alternative to taking professional advice relating to specific circumstances.