Sales of samples and testers infringes trademark rights
A trademark holder may prohibit sale of brand samples and testers if the holder reserves title to the items and expressly indicates that they are not for sale, the European Court of Justice held on 3 June 2010.
In Case C-127/09, Coty Prestige Lancaster Group GmbH, a producer and distributor of renowned perfume brands, brought suit against Simex Trading AG seeking an injunction against sale in Germany of testers bearing trademarks belonging to Coty.
The perfume testers were supplied to authorised distributors cooperating with Coty as marketing materials, and Coty retained title to the items. The testers were clearly marked “Demonstration” and “Not for Sale.” After conducting its own investigation, Coty learned that testers it had provided to one of its authorised distributors in Singapore were being offered for sale in Germany by Simex.
In response to a request for a preliminary ruling from a German court, the ECJ held that in order to assure protection of the trademark, it is necessary for the holder to be able to control the initial introduction of goods onto the market in the European Economic Area, even if the goods were previously introduced onto a market outside the EEA.
According to the justification for the judgment, including a clear statement on the testers that they are not for sale precludes a finding that the trademark proprietor consented to introduction of the testers onto the market in EEA territory.
Free trade in genuine trademarked goods in the EU is possible only after “exhaustion” of the trademark rights, i.e., after introduction of the goods onto the market in the EEA by the trademark proprietor itself or by a third party at its consent. Lack of consent means that sale of the products, even though they are genuine, is prohibited, and constitutes trademark infringement.
The ECJ’s interpretation of Art. 13(1) of the Community Trademark Regulation will make it easier for trademark holders to control unauthorised trading in genuine goods. In particular, as in the facts of this case, it has been confirmed that it is illegal to trade in testers and samples that are clearly marked as not for sale.