The General Court of EU rules in Case C‑291/16 Schweppes SA v Red Paralela SL. This case is interesting and important especially in light of a situation where an identical mark has different proprietors. The case concerns the following:
Article 7 of Directive 2008/95, entitled ‘Exhaustion of the rights conferred by a trade mark’, provides:
‘1. The trade mark shall not entitle the proprietor to prohibit its use in relation to goods which have been put on the market in the Community under that trade mark by the proprietor or with his consent.
2. Paragraph 1 shall not apply where there exist legitimate reasons for the proprietor to oppose further commercialisation of the goods, especially where the condition of the goods is changed or impaired after they have been put on the market.’
Directive 2008/95 is repealed with effect from 15 January 2019 by Directive (EU) 2015/2436 of the European Parliament and of the Council of 16 December 2015 to approximate the laws of the Member States relating to trade marks (OJ 2015 L 336, p. 1), which entered into force on 12 January 2016 and Article 15 of which corresponds, in essence, to Article 7 of Directive 2008/95.
The dispute in the main proceedings and the questions referred for a preliminary ruling
The sign ‘Schweppes’ has a reputation worldwide for, in particular, ‘tonic water’, available in several varieties. That sign is not the object of a single registration as an EU trade mark, but has been registered for a long time as a national word and figurative mark in each of the Member States of the European Union and the European Economic Area (EEA). Those national trade marks are, in essence, identical.
Initially, all the Schweppes trade marks registered in the EEA (‘the parallel trade marks’) belonged to Cadbury Schweppes.
In 1999, Cadbury Schweppes assigned some of those parallel trade marks, including those registered in the United Kingdom, to Coca-Cola/Atlantic Industries (‘Coca-Cola’). Cadbury Schweppes remained the proprietor of the rest of the parallel trade marks, including those registered in Spain.
The shaded areas of the map below indicate the Member States of the EEA and its environs in which Coca-Cola is the proprietor of Schweppes trade marks:
Following various acquisitions and restructurings, the parallel trade marks retained by Cadbury Schweppes now belong to Schweppes International Ltd, a company operating under United Kingdom law.
The latter company has granted Schweppes an exclusive licence over the Spanish parallel trade marks at issue in the main proceedings.
Schweppes and Schweppes International are both controlled by Orangina Schweppes Holding BV, a company operating under Netherlands law, which is the ultimate parent company of the Orangina Schweppes group.
On 29 May 2014, Schweppes initiated infringement proceedings against Red Paralela in respect of the Spanish parallel trade marks, on the ground that the defendants in the main proceedings had imported and distributed in Spain bottles of tonic water bearing the trade mark Schweppes and originating in the United Kingdom. Schweppes maintains that that marketing in Spain is unlawful, given that those bottles of tonic water were manufactured and placed on the market, not by itself or with its consent, but by Coca-Cola, which, according to Schweppes, has no economic or legal connection with the Orangina Schweppes group. It submits in that context that, in view of the identical nature of the signs and goods in question, consumers are in no position to distinguish the commercial origin of those bottles.
In their defence, Red Paralela contend that the trade mark rights resulting from tacit consent, in so far as concerns the Schweppes goods originating in Member States of the European Union where Coca-Cola is the proprietor of the parallel trade marks, have been exhausted. In addition, Red Paralela consider that there are undeniable legal and economic links between Coca-Cola and Schweppes International in their joint exploitation of the sign ‘Schweppes’ as a universal trade mark.
According to the findings made by the referring court, the relevant facts for the purposes of the present proceedings are as follows:
– despite being the proprietor of the parallel trade marks in only some Member States of the EEA, Schweppes International has promoted a global image of the Schweppes trade mark;
– Coca-Cola, which is the proprietor of the parallel trade marks registered in the other Member States of the EEA, has contributed to maintaining that global trade mark image;
– that global image is a cause of confusion for the relevant public in Spain as regards the commercial origin of ‘Schweppes’ goods;
– Schweppes International is responsible for the European website that deals specifically with the Schweppes trade mark (www.schweppes.eu), which not only provides general information about goods bearing that trade mark, but also contains links to various local websites, in particular the United Kingdom website managed by Coca-Cola;
– Schweppes International, which holds no rights in the Schweppes trade mark in the United Kingdom (where the mark is owned by Coca-Cola), refers on its website to the British origins of that mark;
– Schweppes and Schweppes International use the image of ‘Schweppes’ goods originating in the United Kingdom in their advertising;
– Schweppes International engages, in the United Kingdom, in activities promoting ‘Schweppes’ goods to customers and informing customers about those goods on social networks;
– the presentation of ‘Schweppes’ goods marketed by Schweppes International is very similar — and in some Member States, such as Denmark and the Netherlands, identical — to that of ‘Schweppes’ goods originating in the United Kingdom;
– Schweppes International, whose registered office is in the United Kingdom, and Coca-Cola coexist peacefully in the United Kingdom;
– following the assignment, which took place in 1999, of a proportion of the parallel trade marks to Coca-Cola, the two proprietors of the parallel trade marks in the EEA have, in their respective territories, applied for the registration of new, identical or similar Schweppes trade marks in respect of the same goods (such as, for example, the trade mark SCHWEPPES ZERO);
– even though Schweppes International is the proprietor of the parallel trade marks in the Netherlands, the trade mark is exploited in that country (that is to say, the product is prepared, bottled and marketed) by Coca-Cola in its capacity as licensee;
– Schweppes International is not opposed to ‘Schweppes’ goods originating in the United Kingdom being marketed online in various Member States of the EEA in which it is the proprietor of the parallel trade marks, such as Germany and France; furthermore, ‘Schweppes’ goods are sold via websites throughout the EEA, with no distinction as to their origin;
– Coca-Cola has made no opposition, on the basis of the rights which it holds in the parallel trade marks, to Schweppes International’s application for registration of a Community design containing the word element ‘Schweppes’.
The referring court considers that the circumstances of the dispute in the main proceedings are clearly distinct from those in the cases giving rise to the case-law of the Court regarding the exhaustion of trade mark rights and that they could make further reflection necessary on the balance between the protection of those rights and the free movement of goods within the European Union.
In those circumstances, the Juzgado de lo Mercantil n° 8 de Barcelona (Commercial Court No 8, Barcelona, Spain) has decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:
‘(1) Is it compatible with Article 36 TFEU and with Article 7(1) of Directive 2008/95 and Article 15(1) of Directive [2015/2436] for the proprietor of a trade mark in one or more Member States to prevent the parallel importing or marketing of goods coming from another Member State which bear a trade mark that is identical or practically identical and is owned by a third party, when that proprietor has promoted a global trade mark image that is associated with the Member State from which the goods whose import it seeks to prohibit originate?
(2) Is it compatible with Article 36 TFEU and with Article 7(1) of Directive 2008/95 and Article 15(1) of Directive 2015/2436 for goods to be sold under a trade mark, which is well known, within the European Union when the registered proprietors maintain throughout the EEA a global trade mark image which gives rise to confusion in the minds of average consumers concerning the commercial origin of the goods?
(3) Is it compatible with Article 36 TFEU and with Article 7(1) of Directive 2008/95 and Article 15(1) of Directive 2015/2436 for the proprietor of identical or similar national trade marks registered in various Member States to oppose the importation into a Member State where it owns the trade mark of goods, bearing a trade mark identical or similar to its own, coming from a Member State in which it is not the proprietor, when in at least one other Member State where it is … the proprietor of the trade mark it has expressly or tacitly consented to the importation of those same goods?
(4) Is it compatible with Article 7(1) of Directive 2008/95 and Article 15(1) of Directive 2015/2436 and with Article 36 TFEU for the proprietor A of a trade mark X registered in one Member State to oppose the importation of goods bearing that trade mark if those goods come from another Member State where a trade mark Y, identical to trade mark X, belongs to another proprietor B which markets it and:
– proprietors A and B maintain intense commercial and economic relations, although, strictly speaking, there is no dependency between them regarding the joint exploitation of trade mark X;
– proprietors A and B maintain a coordinated trade mark strategy deliberately promoting vis-à-vis the relevant public an appearance or image of a single global trade mark; or
– proprietors A and B maintain intense commercial and economic relations, although, strictly speaking, there is no dependency between them regarding the joint exploitation of the trade mark X, and in addition they maintain a coordinated trade mark strategy deliberately promoting vis-à-vis the relevant public an appearance or image of a single global trade mark?’
The Court’s decision is:
Article 7(1) of Directive 2008/95/EC of the European Parliament and of the Council of 22 October 2008 to approximate the laws of the Member States relating to trade marks, read in the light of Article 36 TFEU, must be interpreted as precluding the proprietor of a national trade mark from opposing the import of identical goods bearing the same mark originating in another Member State in which that mark, which initially belonged to that proprietor, is now owned by a third party which has acquired the rights thereto by assignment, when, following that assignment,
– the proprietor, either acting alone or maintaining its coordinated trade mark strategy with that third party, has actively and deliberately continued to promote the appearance or image of a single global trade mark, thereby generating or increasing confusion on the part of the public concerned as to the commercial origin of goods bearing that mark,
– there exist economic links between the proprietor and that third party, inasmuch as they coordinate their commercial policies or reach an agreement in order to exercise joint control over the use of the trade mark, so that it is possible for them to determine, directly or indirectly, the goods to which the trade mark is affixed and to control the quality of those goods.