Honda Motor Co Ltd & Anor v David Silver Spares Ltd

In a trade mark infringement claim involving parallel imports, the defendant normally bears the burden of pleading and proving exhaustion under Article 7(1) of the Trade Marks Directive and section 12(1) of the Trade Marks Act 1994. That burden may be reversed only where the defendant establishes a real risk of partitioning national markets if it must prove where the goods were first marketed. The risk is fact-sensitive and is not established automatically by an exclusive distribution system.

A claimant with reasonable grounds for alleging infringement need not identify individual infringing items or rely on trap purchases. The pleading must nevertheless state facts sufficient to inform the defendant of the case it must meet.

Honda, owners of UK and Community trade marks for HONDA, alleged that David Silver Spares was dealing in genuine Honda motorcycle parts first put on the market outside the EEA without Honda’s consent.

David Silver applied to strike out the amended claim or obtain summary judgment. It argued that Honda had to plead and prove the relevant place of first marketing and had failed to identify particular infringing transactions. The application therefore concerned the burden of proving exhaustion and the required particularity of a trade mark infringement pleading.

1. Application dismissed. Honda was permitted to amend its Particulars of Claim in the draft form before the court.
2. Under Article 5(1) and Article 7(1) of the Trade Marks Directive, and sections 9(1), 10(1) and 12(1) of the Trade Marks Act 1994, the claimant establishes a prima facie infringement by pleading and proving unauthorised use of the mark in relation to relevant goods. Exhaustion is an exception and the defendant bears the burden of pleading and proving that the goods were put on the market in the EEA by the proprietor or with its consent.
3. The decision in Van Doren + Q GmbH v Lifestyle Sports + Sportswear Handelsgesellschaft mbH [2003] ETMR 75 did not automatically reverse that burden whenever a proprietor used exclusive distributors. Reversal arises only if the defendant establishes a real risk of partitioning national markets. That is a factual question, and the issue had not been properly raised or supported on the present application.
4. The pleading principles stated in Philipps v Philipps (1878) 4 QBD 127 remained valid, but this was not a speculative or fishing claim. Honda had pleaded facts giving reasonable grounds for alleging unauthorised dealings in Honda parts.
5. There was no requirement to proceed by trap purchases or to identify a specific item for each alleged infringement. Depending on the evidence, infringement could be established without identifying individual infringing items. The pleaded allegations, although broad in places, were sufficient to tell David Silver the case it had to meet.
6. David Silver’s criticisms potentially supported an exhaustion defence, but did not show that the claim had no reasonable basis or no real prospect of success. The court also noted that disclosure and costs powers could restrain oppressive or speculative litigation.

Not stated in the judgment. The decision concerns a first-instance application to strike out the claim or obtain summary judgment.