Can a trade mark proprietor oppose the "de-branding" of his products?

Pursuant to Article 5 of the Trade Mark Directive (TMD) and Article 9 of the European Union Trade Mark Regulation (EUTMR), a trade mark proprietor has the right to prevent third parties from “using” any sign identical with his trade mark in the course of trade without his consent.

The European Court of Justice (ECJ) has rendered numerous decisions on the scope of the “use” of a trade mark that can be opposed by a trade mark proprietor. However, the Court had not yet decided whether the removal of a trade mark from branded goods with the view of importing those goods, altered and rebranded, in the European Economic Area (EEA) should be regarded as “use” of a trade mark. What is peculiar about the removal of a trade mark, as opposed to other positive and visible acts, is that the imported goods which are allegedly infringing a trade mark do not bear the protected sign. The trade mark is in fact absent from the market and is not perceptible to consumers.

This question was referred by the Hof van Beroep te Brussel (Court of Appel of Brussels) to the ECJ in a case opposing (i) the Japanese company Mitsubishi (Mitsubishi), proprietor of the Mitsubishi trade marks, and Mitsubishi Caterpillar Forklift Europe BV (MCFE), a company established in the Netherlands, exclusively authorised to manufacture and place on the market in the EEA forklift trucks under the Mitsubishi brand, and (ii) Dumas Forklift Europe BV, a Belgian company active in the purchase and sale of new and second hand forklift trucks and G.S. International BVBA, also established in Belgium, which constructs and repairs forklift trucks with the view of importing and exporting them worldwide.

The case concerned imports into the EEA of Mitsubishi branded forklift trucks by Duma and GSI. The latter acquired the trucks outside the EEA with the view to importing them into the EEA. Before the trucks were marketed in the EEA, Duma and GSI removed all the Mitsubishi signs, made the necessary adjustments to bring the trucks in line with European standards and applied their own signs.

Mitsubishi claimed that the removal of its trade mark (outside the EEA) and the subsequent marketing (within the EEA) was infringing its rights conferred by the Mitsubishi trade marks, partly because of the finding that trucks remained recognisable as Mitsubishi trucks for the consumer because of the appearance of the products. Duma and GSI, on the other hand, considered that no trade mark use took place within the EEA. They submitted in particular that as they had modified the goods to make them compliant with European standards they should be regarded as the manufacturers of the forklift and as a result were entitled to replace the Mitsubishi trade marks with their own brands.

Opinions on the question were divided. Some (mostly English and German) case law ruled that the mere removal of a trade mark did not constitute trade mark use and that the trade mark owner could therefore not take action against this. Other (mostly French) judges, on the other hand, considered that this caused damage to the trade mark owner, who should be able to act.

The ECJ rendered its decision on 25 July 2018 and, although the Advocate General had expressed a different opinion, it ruled in favour of Mitsubishi and held that the actions of Duma and Duma constituted use of the trade mark in the EEA.

The ECJ based its decision mainly on the finding that the actions of Duma and GSI denied Mitsubishi the possibility of claiming its right to control the first marketing of the goods (bearing that trade mark) in the EEA. The fact that consumers still recognise the products as originating from Mitsubishi is not essential here although it makes the infringement worse. The ECJ further stated that as the acts of Duma and GSI were done with the view to importing and marketing the trucks in the EEA, there is trade mark use within the EEA in spite of the fact that the trade mark was removed outside of the EEA.

With this decision the ECJ considerably increases the scope of protection of trade mark proprietors. They can now also take action against third parties who remove their trade marks, even if the removal took place before the goods were imported and put on the market in the EEA.

We are now waiting for the decision of the Hof van Beroep te Brussel (Court of Appel of Brussels) which will have to apply this decision.