Kabushiki Kaisha Sony Computer Entertainment v Nuplayer Ltd.

A trade mark proprietor may prevent the importation and sale in the United Kingdom of genuine goods first marketed outside the EEA without its consent. The exhaustion defence applies only where the goods were put on the market in the EEA by, or with the consent of, the proprietor.

Trade mark use can occur even where an internet customer does not see the mark before the contract is concluded. Stocking goods under the sign and the likely post-sale perception of consumers are relevant. Removing or obscuring marks does not cure otherwise infringing conduct, particularly where the goods continue to be sold under the marks or the removal is publicised.

Sony sought summary judgment and, alternatively, interim injunctive relief against Nuplayer, which imported genuine PSP consoles and games from Japan and sold them to United Kingdom consumers through its website before Sony’s planned European launch.

Sony relied on registered trade marks appearing on the consoles, packaging and accessories. Nuplayer argued that the marks were not used in its internet sales because customers did not see them before purchase, and offered to remove or obscure them. The central issues were whether the imports infringed the marks, whether obliteration defeated infringement, and whether summary or interim relief should be granted.

1. Trade mark exhaustion. Goods first placed on the market outside the EEA are not exhausted for EEA purposes. Under the Trade Marks Act 1994, the proprietor may restrain unauthorised use, including offering goods for sale, stocking them under the sign and importing them under the sign. The court applied the principles in Zino Davidoff and Levi Strauss [2001] ECR I-8691.
2. Use of the marks. The fact that Nuplayer sold through the internet and that consumers did not see the marks before concluding the transaction did not prevent infringement. Section 10(4)(b) expressly includes stocking products under the sign. The court applied Arsenal Football Club plc v Reed [2003] RPC 9, including its recognition that post-sale consumer perceptions may affect the functions of a trade mark.
3. The descriptive-use qualification recognised in Hölterhoff [2002] ECR I-4187 did not assist Nuplayer. The marks were not being used merely to describe characteristics of the goods. The case fell on the trade mark-use side of the distinction explained by the European Court.
4. Obliteration. Nuplayer’s proposed removal or concealment of the marks did not provide an arguable defence. Section 15(1) concerns a possible remedy after infringement and does not make otherwise infringing goods lawful. The proposed notification to consumers that the marks had been removed would itself involve use of the marks.
5. Relief. Summary judgment was appropriate because Nuplayer had no arguable defence. Even if there had been a serious issue to be tried, an interim injunction was justified: damages would not adequately compensate Sony for harm to its launch strategy and commercial relationships, Nuplayer’s financial position was uncertain, and the balance of convenience favoured Sony. The court was also concerned that the goods might not lawfully bear CE marking.
6. Sony was entitled to an injunction substantially in the terms sought. The precise form of relief was left for further argument.