When is relabelling trade mark infringement?
The Court of Justice of the EU (CJEU) has clarified the application of the so-called BMS conditions on repackaging and relabelling in a case concerning the resale of carbon dioxide bottles (Case C-197/21).
The case was brought by Soda-Club and SodaStream, which sell carbonation devices with refillable carbon dioxide bottles, against MySoda. The latter is a Finnish company that refills SodaStream bottles and adds its own labels to them, while leaving the original SodaStream marks visible.
SodaStream argued that MySoda infringed its trade marks by marketing and selling the refilled bottles without the authorisation of the trade mark owner.
The dispute reached the Finnish Supreme Court, which found that EU law does not provide detailed rules concerning the conditions for establishing the existence of legitimate grounds justifying the proprietor of the trade mark to oppose the marketing of products after they have been placed on the market.
It referred four questions to the CJEU, including regarding the application of the BMS conditions, which were set out in a 1996 decision concerning parallel imports of pharmaceuticals.
Opposing subsequent marketing
The Court’s judgment (which is not yet available in English) provides useful guidance on when trade mark proprietors can oppose the subsequent marketing of their products.
The Court emphasised the “essential function” of the trade mark, namely to guarantee the identity of the product to the end user. It also said that the trade mark proprietor’s right to oppose the subsequent marketing of products is “not without limits”.
However, It added that trade mark holders can oppose further marketing of their products “when legitimate reasons justify such opposition”. The Court said the legislation does not provide an “exhaustive list of legitimate reasons likely to exclude the application of the principle of exhaustion”.
The BMS conditions were an attempt to do that in the context of parallel imports of repackaged pharmaceutical products. Based on these, the Court said, “an erroneous impression” in the minds of consumers regarding an economic link between the trade mark and proprietor and retailer is a legitimate ground for the proprietor to oppose the subsequent marketing of products.
In determining whether such an erroneous impression exists, national courts should take account of all relevant circumstances, including:
the scope of the information appearing on the new labels;
the practices in the sector and the level of knowledge of these practices by consumers; and
the fact that the mark of origin of the bottle remains visible despite the additional labelling.
The Court said the answer to the questions referred was therefore that Article 15(2) of the EU Trade Mark Regulation should be interpreted such that a trade mark proprietor is not entitled to oppose the subsequent marketing of products in the circumstances of this case “unless this new labelling creates the erroneous impression, in the minds of consumers, that an economic link exists between the retailer and the proprietor of the trade mark”. It added:
“This likelihood of confusion must be assessed globally with regard to the indications appearing on the product and on its new labelling as well as with regard to the distribution practices of the sector concerned and the level of knowledge of these practices by consumers.”
A timely judgment
Both sustainability and cost pressures are encouraging greater use of recycling and the circular economy, so arguments about trade mark exhaustion are likely to continue to be highly relevant.
This judgment provides helpful guidance on this specific question of relabelling, but inevitably the issues will vary depending on the types of products and the sector. If you have a question about how your trade mark rights are affected by repackaging/relabelling, our trade mark team can provide tailored advice.