The CJEU clarified in a judgment last week that the likelihood of such a false impression must be assessed on the basis of the indications appearing on the product and on its relabelling, as well as on the basis of the commercial practices of the industry concerned. and the level of consumer awareness of these practices.
According to experts, the decision could be particularly important for companies operating in the “circular economy”. It was issued in a case brought before the CJEU by a Finnish court, after the companies behind the Sodastream brand objected to the filling of their bottles by rival company Mysoda.
Sodastream and Mysoda sell devices that produce carbonated drinks. Sodastream products come with a refillable aluminum carbon dioxide bottle engraved with trademarks owned by Sodastream. Sodastream bottles can be used in Mysoda devices. Mysoda receives used Sodastream bottles, fills them with carbon dioxide, then re-labels them before they are resold in Finland. Although the reconditioned bottles contain Mysoda’s label, the engraved Sodastream marks remain visible on the product.
Desiree Fieldstrademark law expert at Pinsent Masons, said: “The judgment provides useful guidance on a complex subject which involves a delicate balance between the rights of trademark holders and resellers. Essentially, each case will involve a careful analysis of the facts, taking into account the relevant distribution practices of the industry concerned, as to whether a trademark holder can prevent the further marketing of its products which have been relabelled.The most crucial point in deciding whether the right to object exists is an assessment of the perception of the consumers concerned, which means that any relabelling must not give consumers the false impression that there is an economic link between the retailer and the owner of the mark.”
In its judgment, the CJEU stated that “the sale of a refillable gas cylinder by the owner of the marks affixed to it exhausts the rights that the owner of the mark derives from the registration of these marks”. The trademark owner’s right to freely dispose of the bottle has been transferred to the buyer. This includes the right to “exchange the bottle or have it filled at a company of one’s choice”. This also meant that competitors were in principle entitled to refill and exchange empty bottles of the brand owner.
At the same time, however, the CJEU pointed out that the trademark owner can object to the continued distribution of its products by a reseller in individual cases if this gives the consumer the “false impression” that he there is an economic link between the trademark holder and the retailer.
The CJEU said that this applies in particular if the dealer removes the label with the origin mark and affixes his own label to this product, but an origin mark engraved on the product remains visible – as c This is the case with recycled Sodastream bottles.
According to the CJEU, in order to assess whether a “reasonably informed and reasonably attentive consumer” is given such a false impression, account must be taken of the “circumstances surrounding the reseller’s activity”. These include the way in which bottles with the new label are presented to consumers, the conditions of sale and above all the practices in force in the sector concerned. The overall impression created for the buyer is key, the CJEU said. It should also be taken into account that “consumers are used to bottles being refilled by traders other than the original brand holder”.
Referring specifically to the Mysoda case, the CJEU concluded that it can be presumed that “a consumer who turns directly to an economic operator other than the owner of the original mark in order to have an empty bottle filled or exchanging it for a refilled bottle can more easily see that there is no link between this economic operator and the trademark owner.”
At the same time, however, the CJEU also indicates that there is a risk of confusion in the mind of the consumer as to the relationship between Mysoda and Sodastream, since the consumer has no direct contact with the retailer. Indeed, neither Sodastream nor Mysoda offer their bottles directly to consumers – both products are only available in retail stores.
The CJEU also pointed out that it was up to the Finnish court, which had referred the case, to assess whether there was a likelihood of confusion in the specific case. However, he could base his decision on the guidance of the CJEU. “Trademark counterfeiting is assessed at a national level and the relevant industry practices may very well differ from country to country,” said Emily Swithenbank, also an expert in trademark law at Pinsent Masons. “Therefore, restockers and repackagers cannot assume that labeling that is deemed not to give the impression of an economic connection in one country will be seen as the same in another, because the practices and awareness of consumers to these practices will likely be different Re-labelling will need to be assessed for each country.
In its decision, the CJEU referred, inter alia, to its 2011 decision judgment in the Viking Gas case, which concerned the filling of gas cylinders. The CJEU said that decision and others were closer to the Sodastream case than to the Stop Bristol Myers Squibb of 1996, to which the Finnish court referred in its questions to the CJEU. The Bristol-Myers-Squibb judgment concerns parallel imports of repackaged medicinal products.
Advocate General Giovanni Pitruzzelli had suggested to the CJEU in his opinion that the criteria for drug repackaging set out in the Bristol Myers Squibb case also be applied to this Sodastream case.
“It should be noted that the CJEU declined to answer the express question of the referring court as to whether the so-called BMS conditions apply in the context of this case,” Swithenbank added. “The BMS conditions are stricter than the ‘economic link’ test applied by the CJEU and require reconditioners to demonstrate the need to recondition and to inform brand owners of their activities beforehand. Gas cylinder refillers in the EU have some certainty However, traders of other products in the circular economy or post-Brexit UK are not and could face the challenge that their labeling constitutes trademark infringement although it does not gives no impression of an economic link with the owner of the mark”.