ECJ clarifies doctrine of implied consent

European Union

In Makro Zelfbedieningsgroothandel CV v Diesel SpA (Case C-324/08, October 15 2009), the European Court of Justice (ECJ) has issued its decision in a reference for a preliminary ruling from the Hoge Raad der Nederlanden (Netherlands).

This case involved an unusual set of facts. Distributions Italian Fashion SA (Difsa), a Spanish company, distributed DIESEL-branded products in Spain, Portugal and Andorra. In 1994 Difsa entered into an exclusive distribution agreement with Flexi Casual SA, under which Flexi was granted exclusive rights to sell shoes under the trademark DIESEL in those countries. Under the agreement, Flexi was authorized to conduct ‘market tests’ with a view to determining market requirements.

Later that year, the contract was extended to allow Flexi Casual to manufacture and distribute its own shoes to test the market, so that those goods could be offered to Diesel SpA for distribution. In 1997 a member of Flexi's board granted to Cosmos World SL a licence to manufacture and sell shoes, bags and belts bearing the DIESEL mark.

In 1999 Dutch retailer Makro Zelfbedieningsgroothandel CV sold some Diesel shoes acquired by two Spanish undertakings which had bought them from Cosmos. Neither Diesel nor Difsa had given their express consent to the marketing of the shoes by Cosmos. Diesel brought an action against Makro before a Dutch court alleging infringement of its copyright and trademark rights.

The case made its way to the Hoge Raad der Nederlanden (the Supreme Court of the Netherlands). The defendants claimed that the rights conferred by the DIESEL mark were exhausted because Cosmos had marketed the shoes in question with Diesel’s consent within the meaning of Article 7(1) of the First Trademarks Directive (89/104/EEC). The parties disagreed on the criteria to be applied to determine whether Diesel had implicitly given its consent within the meaning of Article 7(1) - in particular, they disagreed on the relevance of the interpretation of Article 7(1) given in Zino Davidoff (Joined Cases C-414/99 to C-416/99) since, in that case, the goods had been put on the market for the first time outside the European Economic Area (EEA). The issue was thus whether, where trademarked goods have first been placed on the market within the EEA, but not by the trademark owner or with its express consent, the same criteria should be applied in determining whether this has occurred with the implied consent of the trademark owner.

The Hoge Raad decided to refer some questions to the ECJ concerning the interpretation of the concept of exhaustion - and, in particular, the notion of consent.

The ECJ, citing Davidoff, stated that:

the consent to the placing on the market in the EEA of goods previously marketed outside the EEA may result not only from an express statement of that consent, but may also ‘be inferred from facts and circumstances prior to, simultaneous with or subsequent to the placing of the goods on the market outside the EEA which, in the view of the national court, unequivocally demonstrate that the proprietor has renounced his rights’. In paragraphs 53 to 58 of that judgment, the court added that such implied consent must be based on evidence capable of positively establishing that the trademark proprietor has renounced any intention to enforce his exclusive rights, and that, in particular, such consent cannot be inferred from the mere silence of the proprietor.”

It explained that nothing in Davidoff allowed to make a distinction depending on whether marketing first occurred outside the EEA or within it. In addition, Article 7 of the directive, combined with Article 5, led to the conclusion that as far as the concept of exhaustion is concerned, "what is important is only the fact that the goods in question have been marketed within the EEA".

The ECJ thus concluded that:

"Article 7(1) [...] must be interpreted as meaning that the consent of the proprietor of a trademark to the marketing of goods bearing that mark carried out directly in the [EEA] by a third party who has no economic link to that proprietor may be implied, insofar as such consent is to be inferred from facts and circumstances prior to, simultaneous with or subsequent to the placing of the goods on the market in that area which, in the view of the national court, unequivocally demonstrate that the proprietor has renounced his exclusive rights."

Richard Milchior, Granrut Avocats, Paris

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