NXP BV v ID Management Systems

In a low-value trade mark claim alleging counterfeit goods, the court applies the balance of probabilities while keeping evidential requirements proportionate to the value and complexity of the case. A proprietor’s consent to marketing goods under its mark must be unequivocal and must demonstrate renunciation of the right to enforce. The trader alleging consent bears the burden. Silence, conduct merely consistent with consent, and general guidance recommending authorised suppliers do not suffice. These principles apply whether the goods are counterfeit or genuine.

NXP BV, proprietor of MIFARE trade marks, claimed that ID Management Systems had infringed those marks by selling two batches of RFID cards. The first batch, sold through REACT, was alleged to be counterfeit. The second batch, supplied through STC and Edom, was alleged to be counterfeit but was supported by conflicting authenticity evidence.

The defendant relied on the claimant’s technical material and on alleged consent to market the cards in the EEA. The issues were whether each batch was counterfeit and whether NXP had unequivocally consented to its marketing under the MIFARE marks.

1. Proof and proportionality. The applicable standard was the balance of probabilities. In a low-value IPEC claim, the court had to assess the evidence proportionately, without insisting on unnecessary perfection. The claimant’s in-house technical report, evidence linking the tested cards to the defendant’s sale, and the absence of properly pleaded or effectively challenged objections established that the REACT cards were counterfeit. The report’s disclaimer did not undermine that conclusion.
2. Pembrokeshire cards. The technical report was ambiguous because it did not clearly identify whether printed or blank cards had been tested. The claimant’s email evidence was unexplained, while the defendant’s retained sample produced genuine or substantially genuine results under available testing systems. The claimant therefore failed to prove on the balance of probabilities that these cards were counterfeit.
3. Consent. Under Case C-414/99 Zino Davidoff v A&G Imports [2001] ECR I-8691 and Mastercigars Direct v Hunters & Frankau [2007] EWCA Civ 176, [2007] RPC 24, consent must unequivocally demonstrate that the proprietor has renounced enforcement of its exclusive rights. “Unequivocal” concerns the nature of the act, not the standard of proof. The trader asserting consent bears the burden, and mere silence is insufficient.
4. Application and disposition. NXP’s security white paper warned against counterfeit and unauthorised products and recommended purchases from approved suppliers. It did not amount to unequivocal consent. Nor did the incomplete Edom document establish authority to distribute the products in the EEA. The action therefore succeeded in relation to both the REACT and Pembrokeshire cards.

The claim began in the Small Claims Track and was transferred to the IPEC multi-track by order of District Judge Alan Johns QC dated 26 April 2017. The present judgment was a first-instance decision.