Mitsubishi Shoji Kaisha Ltd,
Mitsubishi Caterpillar Forklift Europe BV
v
Duma Forklifts NV,
G.S. International BVBA
This case considers the question of whether the debranding (removal of a trade mark from goods) and the rebranding (replacing the mark with another) is use in the course of trade and protected by EU trade mark law.
Background
The defendants, Duma and G.S. International bought forklifts from a company within the Mitsubishi group outside of the European Economic Area (EEA) and stored them within a customs warehouse in the EEA. Whilst in storage, the Mitsubishi marks were removed from the forklifts and the machines were modified to bring them into compliance with EU regulations. Duma and G.S. International then affixed their own trade marks to the forklifts, replaced the identification plates and serial numbers with their own and imported and sold the rebranded goods within the EEA.
Mitsubishi tried to obtain an injunction before the Commercial Court in Brussels against parallel trade (importation in to the EU without consent of the trade mark holder) and the removal and reinstallation of the marks. Mitsubishi claimed that Duma and G.S. International had infringed the rights of the trade mark proprietor to control the first placing of goods bearing the mark in the EEA, and had harmed the function of the mark of indicating the origin of the product. The Commercial Court rejected Mitsubishi’s claims and on appeal the court referred the following questions to the ECJ.
1) a) Do Article 5 of Directive 2008/95/EC and Article 9 of Council Regulation (EC) No 207/2009 cover the right of the trade-mark proprietor to oppose the removal, by a third party, without the consent of the trade mark proprietor, of all signs identical to the trade marks which had been applied to the goods (debranding), in the case where the goods concerned have never previously been traded within the EEA, such as goods placed in a customs warehouse, and where the removal by the third party occurs with a view to importing or placing those goods on the market within the EEA?
b) Does it make any difference to the answer to Question (a) above whether the importation of those goods or their placing on the market within the EEA occurs under its own distinctive sign applied by the third party (rebranding)?
2) Does it make any difference to the answer to the first question whether the goods thus imported or placed on the market are, on the basis of their outward appearance or model, still identified by the relevant average consumer as originating from the trade-mark proprietor?’
Judgment
Whilst the opinion of the AG was that the removal of the trade mark and rebranding of the goods in the customs warehouse was not use of the mark, the ECJ disagreed. It reiterated that “use in the course of trade” is not limited to business to consumer relationships and that the list of types of use contained in Article 5(3) of Directive 2008/95 and Article 9(2) or Regulation 207/2009 is not exhaustive.
It found that the debranding and rebranding of the goods deprives the trade mark proprietor of the benefit of the essential right to control the initial marketing in the EEA of goods bearing that mark and adversely affected the functions of the mark.
The rebranding by Duma and GS International precludes Mitsubishi from being able to retain customers by virtue of the quality of the goods and affects the functions of investment and advertising of the mark. The actions of Duma and GS International, with a view to circumventing the proprietor’s right to prohibit the importation of goods bearing its mark, are contrary to the objective of ensuring undistorted competition.
In relation to the second question, the ECJ found that whilst the essential function of the mark may be harmed irrespective of whether or not a consumer can identify the debranded forklifts as those originating from Mitsubishi, any identification is likely to accentuate the effects of such harm.
In conclusion the ECJ decided that Article 5 of Directive 2008/95/EC and Article 9 of Council Regulation (EC) No 207/2009 must be interpreted as meaning that the trade mark proprietor is entitled to oppose the removal, without the proprietor’s consent, of a sign identical to the mark and affixing other signs to the goods placed in a customs warehouse with a view to importing them, or trading in them within the EEA where they have not yet been marketed by or with the consent of the brand owner.
Comments
The decision means that traders that acquire products outside the EEA, but import and rebrand the goods, with a different sign, prior to putting them on the market in to the EEA, still infringe the rights holder’s trade mark. This judgment potentially has further ramifications for the modified car industry and other traders who modifying or rebadge goods prior to selling them in the EEA.
