Procter & Gamble won an important lawsuit in the EU regarding the HUGO BOSS trademark

The European Court has ruled in the case C‑355/21 sp. z o.o. sp.k. v Procter & Gamble International Operations SA. The case focuses our attention on the issue of original products illegally sold in the EU without the trademark owner’s (in this case the exclusive licensee’s) permission. The case has the following background:

Procter & Gamble is a producer of perfumery products. Under a licensing agreement granted by HUGO BOSS Trade Mark Management GmbH Co. KG (‘HUGO BOSS TMM’), it alone was authorised to use the EU word mark HUGO BOSS (‘the HUGO BOSS mark’) and to initiate and pursue, in its own name, actions relating to the infringement of the rights over that mark. The mark was registered in respect of the following goods in Class 3:

‘Fragrant sprays; perfumes, deodorants for personal use; soaps; articles for body and beauty-care’.

In order for customers to be able to test the goods bearing the HUGO BOSS mark, HUGO BOSS TMM makes available free of charge to sellers and authorised distributors, samples of products or ‘testers’, solely for the purpose of presenting and promoting cosmetics, in bottles identical to those used for their sale under the HUGO BOSS mark. Their external packaging is a uniform bright colour with clear information stating that the samples are not intended for sale, for example, by one of the following indications: ‘not for sale’ (not intended for sale), ‘demonstration’ or ‘tester’. The samples are not placed on the market in the European Economic Area (EEA) either by HUGO BOSS TMM or with its consent.

Since January 2012, has been operating a wholesale perfumery business through an online shop. It regularly sends price lists to sellers of online cosmetics, offering for sale, in particular, samples of perfumery products bearing the HUGO BOSS mark and marked ‘Tester’, stating that the samples do not differ in terms of scent from the normal product. The referring court states that does not remove or cover bar codes that appear on the external packaging of goods bearing that mark, and that, relying on its contractual partners as to the lawful origin of the goods it buys, it does not verify the origin of those goods nor check whether those bar codes have been removed.

On 28 July 2016, pursuant to a protective order, a court bailiff seized in Poland perfumes, eau de toilette and scented water in packaging bearing the HUGO BOSS mark, namely, testers not intended for sale, products designated by codes indicating, according to Procter & Gamble’s statement, that the manufacturer intended them to be placed on the market outside the EEA and products in respect of which the bar codes affixed to the packaging had been removed or obscured.

Procter & Gamble brought an action before the Regional Court, Warsaw, Poland, which, by judgment of 26 June 2017, ordered, inter alia, to destroy perfumes, eau de toilette and scented water whose packaging bore the HUGO BOSS mark, in particular testers, which had not been placed on the market in the EEA by HUGO BOSS TMM or with its consent.

By judgment of 20 September 2018, the Court of Appeal, Warsaw, Poland dismissed the appeal brought by That court stated, inter alia, that, in accordance with Article 102(2) of Regulation No 207/2009, the EU trade mark court may take the measures provided for by the applicable law which it deemed to be appropriate in the circumstances of the case and that that provision permitted the application of Article 286 of the Intellectual Property Law. It found that the Regional Court, Warsaw had applied that article without erring.

First, it considered that, on its wording, Article 286 of the Intellectual Property Law applied only if the products had been manufactured or marked illegally and that that was not the case in the dispute before it. Procter & Gamble did not dispute that the perfumes seized were original products, but argued that HUGO BOSS TMM had not consented to their being placed on the market in the EEA and that had not proved the existence of such consent.

Next, that court found that Article 286 should be interpreted in accordance with Article 10(1) of Directive 2004/48, which it transposes into Polish law, and that all goods infringing intellectual property rights had to be considered to be illegally manufactured within the meaning of Article 286.

Lastly, it noted that the perfumes seized bore masking stickers, preventing identification of the geographical region for which they were intended, and that masking codes had been affixed in place of the removed safety codes. It stated that, even if there was no evidence that the removal of those codes was the act of, the latter should have known, as a perfumery professional, that the goods were placed on the market despite their doubtful origin. It also pointed out that testers had been offered for sale by, which should have been fully aware that HUGO BOSS TMM had not consented to their being placed on the market in the EEA. brought an appeal on a point of law before the referring court, the Supreme Court, Poland, alleging, inter alia, infringement of Article 286 of the Intellectual Property Law. In that regard, it submits that Procter & Gamble contends a lack of consent on the part of the proprietor of the HUGO BOSS mark to the placing on the market in the EEA of the goods seized, without denying that those goods are original products.

That court observes that the lower courts hearing the case in the main proceedings drew attention to the wording of Article 10(1) of Directive 2004/48 and interpreted Article 286 of the Intellectual Property Law in a manner consistent with EU law. It notes that, according to those courts, Article 10(1) of Directive 2004/48 concerns goods which are found to infringe an intellectual property right and that, therefore, the destruction of goods may be ordered, even where they have not been illegally ‘manufactured or marked’ under national law.

The referring court notes, on the one hand, that several arguments also accepted in the legal literature support a literal interpretation of Article 286 of the Intellectual Property Law, in particular the fact that the amendment of that article in 2007 resulted from the implementation of Directive 2004/48. On the other hand, taking account of the obligation to interpret national law in conformity with EU law, the interpretation of Article 286 should be based on the interpretation of Article 10(1) of that directive.

In those circumstances the Supreme Court decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:

‘Must Article 10 of Directive [2004/48] be interpreted as precluding the interpretation of a provision of national law to the effect that a protective measure in the form of destruction of goods relates only to goods illegally manufactured or illegally marked, and cannot be applied to goods illegally placed on the market in the [EEA] which cannot be found to have been illegally manufactured or illegally marked?’

The Court’s decision:

Article 10(1) of Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights, must be interpreted as:

precluding the interpretation of a provision of national law according to which a protective measure in the form of the destruction of goods may not be applied to goods which have been manufactured and to which an EU trade mark has been affixed, with the consent of the proprietor of that mark, but which were placed on the market in the European Economic Area without his or her consent.