Bottling out: Supreme Court overturns first instance trademark infringement ruling
Since 2001 BP Gas has been marketing bottled gas in Denmark in a new lightweight composite bottle. The bottle was manufactured by a Norwegian company, Ragasco A/S, and had been registered as three-dimensional trademark. In Denmark, the bottle was sold according to an agreement between BP Gas A/S and Ragasco, whereby BP Gas was appointed the sole dealer and was given an exclusive licence to use the composite bottle as a trademark in Denmark. The bottle that BP Gas sold in Denmark was also provided with a trademark belonging to BP Gas containing, among other things, the designation 'BP' engraved into the bottle.
Viking Gas A/S owned a gas-filling station and had filled and sold some of the composite bottles, which it had marked with a label bearing its own trademark, VIKING GAS.
It was uncontested that the bottles became the property of consumers when they bought them from BP Gas, and that consumers were permitted to let anyone fill the bottles. However, the system was such that, when the consumer delivered his or her bottle to a Viking Gas dealer, the dealer handed over another already filled bottle. The consumer was therefore of the belief that he or she had bought a bottle of gas.
BP Gas had obtained an interim injunction against Viking Gas and asked the Maritime and Commercial Court to confirm the injunction.
In a December 21 2006 ruling (Case V-182-05), the court found that Viking Gas' business was to sell gas, and that the composite bottle was merely packaging. However, the consumption rules did not mean that someone who had bought a branded item and used it had obtained the right to use, for example, the bottle, the container or any other packaging on which the trademark had been affixed for the delivery of other similar goods, which thereby might obtain the appearance of being the original. Consequently, the court found that Viking Gas had violated BP Gas' trademark and Ragasco's trademark in relation to the bottle. In addition, Viking Gas was found to have been acting in violation of the Marketing Practices Act.
On November 7 2012 the Supreme Court reversed the decision in Viking Gas A/S v Kosan Gas A/S (previously BP Gas A/S) (Case 16/2007).
Following the decision of the Maritime and Commercial Court, BP Gas had sold its Danish gas business to Kosan Gas A/S, which carried on the lawsuit.
Before making its decision, the Supreme Court had submitted questions to the European Court of Justice (ECJ), which were answered in a July 14 2011 judgment (Case C-446/10). After considering the ECJ's comments, the Supreme Court found for Viking for the following reasons:
"According to the judgment of July 14 2011 from the ECJ, the Supreme Court finds that the sale of the composite bottle to the consumers consummate those trademark rights which are consistent with the form of the bottle and those trademarks which have been applied to the bottle, cfr the Act on Trademarks § 6, 1 and Article 7, 1 of Council Directive 89/104. Following the purchase, the consumer basically has a right to dispose freely of the bottle including a right to exchange it for a full bottle or to have it refilled at Kosan Gas or at one of this company's competitors according to the free choice of the consumer. As a reflection of this right, the competitors of Kosan Gas have a right to fill and exchange the empty bottles.
The question following this is solely whether Kosan Gas has a reasonable right to oppose Viking Gas' continued marketing, which must be decided according to the Act on Trademarks § 6, 2, which implements Article 7, 2 of Council Directive 89/104.
It appears from the practice of the ECJ that there is reasonable reason for a trademark owner to oppose continued marketing of the goods according to Article 7, 2 of Council Directive 89/104 if the use by a third party of signs which are identical to, or look like, a trademark implies serious damage to the reputation of a trademark or where this use has taken place in such a manner that an impression is made that there is an economic connection between the trademark owner and this third party, especially that it belongs to the trademark owner's distributor network, cfr ECJ judgment of July 14 2011, premise 37. In this connection, it will be decisive whether the labelling of the composite bottles may lead the average consumer, who is reasonably well informed and reasonably observant and circumspect, to consider that there is a connection between Kosan Gas and Viking Gas or that the gas which is used to refill those bottles comes from Kosan Gas, cfr the ECJ judgment, premise 40. It also appears from premise 40 that, in order to assess this, it is necessary to take into account the practices in that sector and, in particular, whether consumers are accustomed to gas bottles being filled by other dealers.
On the evidence, it must be considered that it is normal that a party other than the original gas supplier sells gas by refilling the bottles of the original supplier. Consequently, it must be considered that the consumers, when buying a composite bottle, expect that the bottle may be reused when it is empty.
Those composite bottles which Viking Gas has filled are supplied with two clear white labels applied to the coloured part of the bottle. On one of the labels is printed 'Filled by Viking Gas' and on the other label is printed: 'Filled by Viking Gas – your gas supplier'.
Against this background, it must be presumed that a consumer who is exchanging his empty bottle with a filled composite bottle will not connect Viking Gas with Kosan Gas or believe that the gas which has been put into the composite bottle originates from Kosan Gas. It leads to no other result that Kosan Gas' marks cannot be removed or covered.
The Supreme Court finds that the argument that Kosan Gas has claimed in relation to the understanding of premise 41 in the ECJ judgment of July 14 2011, and concerning the risk of lacking product security and that Kosan Gas may be liable for product liability due to errors made by Viking Gas, cannot lead to the result that Kosan Gas can oppose Viking Gas's marketing. The same applies to Kosan Gas' remarks concerning the Act on Marketing Practice."
The Supreme Court ordered Kosan Gas to pay Dkr519,810 as costs.
Mads Marstrand-Jørgensen, Norsker & Co, Copenhagen
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