Brealey & Anor v Nomination De Antonio E Paolo Gensini SNC & Anor

Where goods bearing a trade mark have been put on the EEA market with the proprietor’s consent, exhaustion applies unless there is a legitimate reason under Article 13(2) of Regulation 207/2009 to oppose further commercialisation. Likely damage to the mark’s reputation from inferior packaging may constitute such a reason. An appellate court should not replace a trial judge’s fact-sensitive evaluation where the conclusion was open on the evidence. In passing off, advertising a bundle of goods from different sources may misrepresent their origin if a significant proportion of the relevant public believes that the defendant’s goods were supplied by the goodwill owner. The use-in-relation-to-goods requirement under Article 9(1)(a) concerns use as a trade mark; likelihood of confusion does not necessarily establish that requirement for every item.

Nomination brought claims against JSC Jewellery for trade mark infringement and passing off arising from the sale on eBay of bundles containing a JSC charm link and a genuine Nomination base link.

The High Court of Justice, Intellectual Property Enterprise Court, held that JSC infringed the trade marks by supplying Nomination links in packaging likely to damage their reputation and by advertising the bundles in a way that used the NOMINATION mark in relation to JSC’s links. It also found passing off. The appeal challenged both conclusions. The central issues were whether the packaging gave Nomination a legitimate reason to oppose further commercialisation and whether the advertising constituted trade mark infringement or passing off.

1. The appeal was dismissed. The Court of Appeal upheld the judge’s conclusions on the packaging and passing-off issues.
2. Under Article 9(1)(a) of Regulation 207/2009, prima facie infringement requires six conditions, including use of an identical sign in relation to identical goods and an effect, or liability to affect, a function of the trade mark. Where genuine goods have been put on the EEA market by or with the proprietor’s consent, Article 13(1) provides an exhaustion defence, subject to Article 13(2).
3. Applying the principle stated in Copad SA v Christian Dior Couture SA [EU:C:2009:260], damage to the reputation of a trade mark may be a legitimate reason to oppose further commercialisation. The Court assumed, without deciding otherwise, that the proprietor bore the relevant burden and that damage had to be established. The judge was entitled to find that the inferior blister-pack and plastic-bag presentation was likely to damage the reputation associated with Nomination’s luxury packaging. The appellate court was not justified in substituting its own evaluation, particularly since the trial judge had heard the evidence and examined the exhibits.
4. The Court expressed reservations about the analysis of the second trade mark complaint. The use-in-relation-to-goods test asks whether the sign was used for the purpose of distinguishing the goods, as a trade mark, following Bayerische Motorenwerke AG v Deenik [1999] ECR I-905, Anheuser-Busch Inc v Budejovicky Budvar np [2004] ECR I-10989 and Céline SARL v Céline SA [2007] ECR I-7041. A likelihood of confusion does not necessarily establish use in relation to all relevant goods. The Court considered that the issue would have been better analysed under Article 9(1)(b), but did not need to resolve it because the passing-off finding independently supported the result.
5. The judge was entitled to find that the advertising caused a significant proportion of the relevant public to believe that the Daisy Charm links were supplied by Nomination. The listing created an insufficiently clear impression about the different sources of the two links, and the evidence of actual confusion was capable of supporting the finding. The weight of the communications was for the judge, particularly where JSC had not applied under rule 33.4 of the Civil Procedure Rules 1998 for their authors to be cross-examined.

• Court of Appeal (Civil Division): The appeal was dismissed. [2020] EWCA Civ 103.
• High Court of Justice, Intellectual Property Enterprise Court: His Honour Judge Hacon found trade mark infringement and passing off. [2019] EWHC 599 (IPEC). That decision was appealed.