Relabelling of SodaStream gas cylinders held to constitute trademark infringement

The First Instance Court has ruled that Swedish company Vikingsoda was not allowed to remove the trademarks SODASTREAM and ALCO2JET from Soda-Club's gas cylinders and relabel them with its own VIKINGSODA mark (Case T-17919-09, Stockholm District Court).

Soda-Club is the maker of SodaStream, a consumer home carbonation product. The SodaStream product consists of two parts: the carbonation machine itself and a gas cylinder, which can be replaced. Soda-Club’s original gas cylinders are engraved with the trademark SODA-CLUB, and are also labelled with the removable trademarks SODASTREAM and ALCO2JET.

Soda-Club claimed that Vikingsoda infringed its Community trademark (CTM) rights since it had carried out the following acts without permission:

• used Soda-Club’s CTM SODA-CLUB;
• removed Soda-Club’s CTMs SODASTREAM and ALCO2JET and relabelled gas cylinders with Vikingsoda's own VIKINGSODA mark; and
• used the trademark VIKINGSODA in connection with the trademark SODA-CLUB.

Vikingsoda argued as follows:

• Use of the trademark SODA-CLUB concerned goods that Soda-Club had made available on the internal market; therefore, Soda-Club's trademark rights were exhausted.
• The process of removing the trademarks SODASTREAM and ALCO2JET and relabelling the cylinders with Vikingsoda's mark, and the use of the trademark VIKINGSODA alongside the SODA-CLUB mark, were necessary for Vikingsoda to access the market.
• Soda-Club had a market share of 60 to 70% of the relevant market and, therefore, had a dominant position. This dominant position should be taken into consideration when assessing the "objective necessity" of relabelling and the competitive interest of allowing independent gas refill companies to use Soda-Club’s gas cylinders.

The court held that Soda-Club’s trademarks had been made available on the internal market and, therefore, Soda-Club’s trademark rights were exhausted. Vikingsoda thus had the right to use Soda-Club's gas cylinders.

However, the exhaustion of trademark rights does not generally give a new user the right to relabel the goods in question. There are exceptions to be found in the EU case law regarding the relabelling of pharmaceuticals. According to this case law, a trader may relabel goods in certain circumstances (eg, the relabelling must be an objective necessity to market the goods, the original manufacturer must be specified and the relabelling must not damage the reputation of the original brand). The court found that EU case law was applicable in the present case. However, it found that Vikingsoda had no acceptable objective grounds to relabel the gas cylinders. Therefore, the relabelling was not necessary for Vikingsoda’s market access.

Furthermore, the court held that the trademarks of different parties can coexist in some cases, but not if such coexistence gives the impression that there is an economic or commercial collaboration between the trademark holders.

Regarding Soda-Club’s dominant position on the relevant market, the court concluded that a dominant position could not, on its own, be an argument in favour of Vikingsoda’s actions. The competition rules will be taken into consideration in assessing whether trademark infringement has occurred only if there has been an abuse of dominant position. Vikingsoda did not refer to any circumstances that could be considered as an abuse of dominant position. Therefore, the competition rules did not affect the court's judgment.

Tom Kronhöffer and Emelie Norberg-Kling, von lode advokat ab, Stockholm