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If it's not for sale, it's not put on the market. Duh.

By Johanna Gibson, David Pearce, Jeremy Phillips and Ilanah Simon.

Article 7(1) of the First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks in its original version provided:

?The trade mark shall not entitle the proprietor to prohibit its use in relation to goods which have been put on the market in the Community under that trade mark by the proprietor or with his consent.?

(The Agreement on the European Economic Area merely replaced ?in the Community? by ?in a Contracting Party?.) According to well?established case?law, Articles 5 to 7 of Directive 89/104 effect a complete harmonisation of the rules relating to the rights conferred by a trade mark and accordingly define the rights of proprietors of trade marks in the Union.

The question referred to the ECJ by the Oberlandesgericht Nürnberg in Coty Prestige Lancaster Group GmbH v Simex Trading AG was whether perfume testers, the packaging of which bears the information that the product is intended for advertising purposes and not for sale, which are made available to contracted distributors on an interim basis and without a transfer of ownership, are "put on the market" in the sense of Article 7(1) of Directive 89/104/Article 13(1) CTM Regulation. The perfume testers in the case at hand had been been obtained by a Coty dealer based in Singapore. It was therefore fairly clear that those testers had not been put on the market with Coty's consent within the EU. The ECJ did also address, however, the more interesting question whether perfume testers supplied by Coty under the conditions described above to retailers in the European Economic Area had been "put on the market" in the sense of the Directive.

There appears to be quite a market for "perfume testers", with the vendors claiming that "In many cases, the only difference between the original perfume you would buy, and the tester, is the outer box. In many cases people will just throw the boxes away when they open the perfume, so why pay extra?" (you can find pertinent sites by googling for "perfume testers"). Understandably, the trade mark owners have an interest in shutting down this secondary market, but can they?

The ECJ today ruled that they can. The decisive factor for the extinction of the trade mark rights was whether the "putting on the market" occurred with the consent of the trade mark owner. Such consent could be implied, which could be inferred from facts and circumstances prior to, simultaneous with or subsequent to the placing of the goods on the market outside or inside the EEA which, in the view of the national court, unequivocally demonstrate that the proprietor has renounced his rights (par. 38). The packaging of the perfume bottles in question was clearly labelled "not for sale". To quote (par. 43):

That statement [sc. "not for sale"], since it clearly reflects the intention of the proprietor of the trade mark concerned that the goods bearing it should not be sold, whether inside or outside the EEA, constitutes, in itself and in the absence of evidence to the contrary, a decisive factor precluding a finding that the proprietor consented to a putting on the market in the EEA within the meaning of Article 7(1) of Directive 89/104.

This Kat thinks the ECJ got it right, but well-argued comments to the contrary are always welcome.

JUDGMENT OF THE COURT (Fourth Chamber) in Case C?127/09.

Full post as published by IPKat on June 03, 2010 (boomark / email).