Soft drink giant awarded moral damages for unauthorised parallel imports

Greece
The Piraeus Court of First Instance has granted The Coca-Cola Company's request for a permanent injunction against a parallel importer of Coca-Cola cans in Greece (Decision 4182/2010, September 28 2010).

The products at issue - 2,496 boxes containing genuine Coca-Cola cans - were shipped from Norfolk (United States). Their release was originally suspended by the Piraeus Customs Authorities pursuant to proceedings under the EU Customs Regulation (1383/2003). After examining some samples, Coca-Cola confirmed to the customs authorities that the regulation did not apply and, immediately afterwards, sought an interim injunction preventing the release of the goods on the grounds that it had not authorised their parallel importation. The Piraeus Court of First Instance granted a temporary restraining order to stop the release of the goods.
 
Subsequently, Coca-Cola filed a main action against the parallel importer, arguing that it had never consented to the circulation of the products at issue in Greece. In support of its claim, Coca-Cola cited the bottling agreement between Coca-Cola and the US-based bottler of the detained products, which prevented the latter from offering Coca-Cola products for sale outside the United States. 

Moreover, Coca-Cola argued that the parallel importation of Coca-Cola drinks constituted an act of unfair competition, as the circulation of the unauthorised goods in the Greek market would harm the advertising function of its well-known marks. Based on the above, Coca-Cola requested:
  • a permanent injunction preventing the sale of the detained goods and any unauthorised importation of Coca-Cola products in the future;
  • the destruction of the detained goods; and
  • moral damages.
In response, the defendant contended that:
  • Coca-Cola had exhausted its trademark rights;
  • it was not aware of Coca-Cola’s objection to the parallel import of the goods; and
  • its supplier did not impose any territorial restrictions upon it with regard to the marketing of Coca-Cola products.
The Piraeus Court of First Instance ruled in favour of Coca-Cola, thus confirming that the principle of international exhaustion of trademark rights did not apply. In particular, it recognised that the parallel importation of Coca-Cola products originating from the United States, without Coca-Cola’s consent, amounted to trademark infringement. Therefore, the court ordered the destruction of the infringing Coca-Cola cans and issued an injunction preventing the defendant from importing Coca-Cola products, and from distributing and selling any parallel-imported Coca-Cola products in the Greek market.

Moreover, the court recognised that Coca-Cola's trademarks were well known and ruled that the parallel importer intended to take unfair advantage of the reputation of the marks, since:
  • it would benefit, without paying any compensation, from Coca-Cola's marketing efforts; and
  • the marketing of the parallel-imported cans by the defendant would give the impression that the goods had been placed on the market by Coca-Cola or its authorised distributors.
Finally, the court awarded Coca-Cola €10,000, plus legal interest, in moral damages.
 
The decision offers valuable guidance to trademark practitioners seeking to apply the decisions of the Court of Justice of the European Union in parallel importation cases (see Silhouette (Case C-355/96), Sebago (Case C-173/98) and Zino Davidoff (Case C-414/99)) in the Greek courts. In particular, it establishes that:
  • a trademark owner's implied consent to the parallel importation of trademarked goods within the European Union cannot be inferred from the fact that the owner has not communicated to all subsequent purchasers that it was opposed to the marketing of the goods within the European Union; and
  • the fact that the importer was not aware of the trademark owner’s objections did not mean that the latter had exhausted its exclusive rights. 
Interestingly, the court awarded Coca-Cola moral damages even though the products had not entered the Greek market, thus recognising that the attempt to commercialise unauthorised imports is, in itself, sufficient to harm the interests of the owner of a famous mark. This is undoubtedly good news for brand owners seeking to enforce their rights before the Greek courts.
 
Stelios Malliaris, Dontas Law Offices, Athens

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