1 June 2020
Brands update - June 2020 – 10 of 10 Insights
The EU Court of Justice (CJEU) has given a preliminary ruling on the question of whether a person who does not engage in trade as an occupation and who takes delivery of, releases for free circulation in a Member State and retains trade mark infringing goods may be regarded as using the infringed trade mark in the course of trade, within the meaning of Article 5(1) of the Trade Mark Directive (2008/95).
B, a natural person resident in Finland, received a consignment of 150 ball bearings, weighing 710 kg in total. The sign "INA", an international word trade mark owned by A, was affixed to the ball bearings.
The customs clearance was completed in B's name. B collected the consignment from the customs warehouse at Helsinki-Vantaa International Airport and stored it in his home. The consignment was then delivered to a third party in order for it to be exported to Russia. In exchange for these services, B received a carton of cigarettes and a bottle of brandy.
In criminal proceedings for trade mark infringement brought against B, the Court of First Instance of Helsinki acquitted B, but ordered him not to continue or repeat his activities and to pay compensation and damages to A.
B challenged those orders before the Court of Appeal of Helsinki.
The Court of Appeal held that A's claim for compensation and damages was unfounded after deciding that B's activity did not amount to use of the sign in the course of trade. B's activity did not amount to use in the course of trade because:
A appealed this judgment to the Supreme Court of Finland.
The Supreme Court decided to stay the proceedings and refer a number of questions to the CJEU.
The CJEU amalgamated those questions into the single question of:
"…whether Article 5(1), read in conjunction within Article 5(3)(b) and (c),… must be interpreted as meaning that a person who does not engage in trade as an occupation, who takes delivery of, releases for free circulation in a Member State and retains goods that are manifestly not intended for private use, where those goods were sent to that person’s address from a third country and where a trade mark, without the consent of the proprietor of that trade mark, is affixed to those goods, must be regarded as using that trade mark in the course of trade, within the meaning of Article 5(1)."
The CJEU held that such acts must be regarded as using that trade mark in the course of trade within the meaning of Article 5(1).
The CJEU said that courts must look solely at objective factors when deciding whether the conditions in Article 5(1) are met. Accordingly, the expression "use in the course of trade" meant that the exclusive rights conferred by a trade mark may only be exercised by the trade mark owner against economic operators, only in the context of a trading business. Furthermore a person acts in the course of trade where they carry out transactions which, by reason of their volume or frequency, go beyond the scope of a private activity.
In the CJEU's view, the consignment of ball bearings was manifestly not intended for private use, because ball bearings are generally used in heavy industry and the consignment weighed 710 kg. Therefore, the relevant transactions fell within the scope of a trading business. However, the CJEU acknowledged that this was a matter for the Supreme Court of Finland to decide.
The CJEU also held that:
Case reference: C-772/18
by Julia King