"Beauty for less"

Trade mark exhaustion in relation to several trade marks on a retailer’s shipping box

The German Federal Court of Justice (Bundesgerichtshof, BGH) has analysed the prerequisites of trade mark exhaustion at the interface of product and company-related advertising.

The claimant is the licensee of the trade marks JOOP and DAVIDOFF. The defendant sells via its online shop (genuine) cosmetic products from various brand manufacturers, including JOOP and DAVIDOFF. Although the defendant is not an authorised retailer of these two brands, it nevertheless undisputedly distributes the goods lawfully. The defendant uses for shipping its products boxes on which various brands are printed (including JOOP and DAVIDOFF), as well as a hazardous goods sign and the lettering "beauty for less". One of the printed trade marks was wrongly spelt ("GAUTIER" instead of "GAULTIER").

The claimant filed a lawsuit against the use of this shipping box on the grounds that the use of its trade mark on the box was a trade mark infringement and that there was no case of exhaustion in this respect.

The Regional Court dismissed the claim and both the appeals were dismissed. The Federal Court of Justice shared the interpretation of the lower courts that there was no case of trade mark infringement under Article 9(2)(a) of the EUTMR since the claimant's rights were exhausted pursuant to Article 15 of the Regulation.

In its statement of grounds, the German Federal Court of Justice argued that — regardless of whether the respective products of the relevant trade marks were in the box or not — the trade marks, insofar as they were printed on the cardboard box, were used for products that had been placed legitimately on the EU market.

It further stated that the situation was therefore comparable to that of a retailer displaying on posters the trade marks of the products it sells. In this respect, the necessary reference was made to the products, namely to those that are part of the retailer’s range of goods. In addition, it was not necessary that the retailer already have the products in stock; it sufficed that the retailer has them available without trade mark infringement at the time of sale.

Moreover, the court stated no legitimate interests of the claimant were affected by the actual use under Article 15(2) of the Regulation: The claimant had failed to prove that the advertising at issue was uncommon; in spite of the typing error with the "GAULTIER" trade mark as well as the lettering "beauty for less" and the hazardous goods sign, using the trade marks on the cardboard box did not harm the reputation of the claimant's trade marks.

Comment

The decision deals in a detailed and clear manner with the requirements of the objection to trade mark exhaustion and in particular with the distinction between the use of the trade mark for product-related or enterprise-related advertising. This is relevant since exhaustion can only occur in the first case.

Case ref: I ZR 221/16