THE EUROPEAN COURT OF JUSTICE SHALL DECIDE ON THE CORRECT APPLICATION OF THE PRINCIPLE OF EXHAUSTION OF THE TRADE MARK
With a recent ruling, the Court of Justice of the European Union has settled the long-standing dispute between Schweppes International and the Spanish company Red Paralela over the use of the trademark “Schweppes”
Schweppes International owns the trade mark “Schweppes” in Spain, where the Spanish company Schweppes has the exclusive right to use that trade mark. In 2014, Red Paralela filed infringement proceedings against Red Paralela for importing and marketing in Spain tonic water bottles bearing the’ Schweppes’ mark from the United Kingdom, where the trade mark “Schweppes” is owned by Coca-Cola, which has acquired the rights following a transfer.
Schweppes claims that these acts are unlawful, since the bottles of tonic water were produced and marketed not by itself or with its consent but by Coca-Cola, which has no relationship with the Orangina Schweppes group. Schweppes also considers that, in view of the identity of the signs and products for which it is responsible, the acts referred to above are misleading for the consumer, who would not be able to distinguish the commercial origin of those bottles. Red Paralela, in its defence in that infringement action, pleaded exhaustion of the trade mark right which, in respect of goods bearing the trade mark’ Schweppes’ from Member States of the Union in which Coca-Cola is the proprietor of that trade mark, results from tacit consent. According to Red Paralela, between Coca-Cola and Schweppes International, the existence of legal and economic links cannot be denied in the joint exploitation of the sign’ Schweppes’ as a universal mark.
It is in this context that the Court of First Instance n. 8 of Barcelona decided to refer the matter to the Court of Justice in order to determine whether, in the light of the conduct of Schweppes and Coca-Cola following the territorially limited transfer of the trade mark’ Schweppes’, EU law precludes Schweppes from invoking its exclusive right under Spanish law to oppose the importation and marketing in Spain of’ Schweppes’ products from the United Kingdom. That court points out, in particular, that Schweppes International has strengthened the overall image of the trade mark’ Schweppes’, even though it is the proprietor of parallel marks in only a part of the Member States.
In its judgment of 20 December 2017, the Court ruled that “The Spanish company Schweppes cannot oppose the importation of bottles of tonic water bearing the trade mark‘ Schweppes‘ from the United Kingdom if it itself has given the impression that it is a single, global trade mark”. The Courts of Luxembourg then dismissed the question on the ground that the Spanish General Court made a reference for a preliminary ruling, stating that’ European Union law precludes the proprietor of a national trade mark from opposing the importation of identical goods bearing the same trade mark from another Member State, where that trade mark, which was originally the property of the same proprietor, is currently held by a third party who acquired the rights of that trade mark by transfer, whereas, as a result of that transfer, the owner of that trade mark.