Q&As

Where a distributor sells a product, that has been put on the market in the EEA by the rightsholder and to which a registered trade mark has been applied, in an EEA state for a purpose that the product is not fit for, does the exhaustion of rights principle still apply or is this trade mark infringement?

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Produced in partnership with Robert Cumming of Appleyard Lee
Published on LexisPSL on 15/04/2020

The following IP Q&A produced in partnership with Robert Cumming of Appleyard Lee provides comprehensive and up to date legal information covering:

  • Where a distributor sells a product, that has been put on the market in the EEA by the rightsholder and to which a registered trade mark has been applied, in an EEA state for a purpose that the product is not fit for, does the exhaustion of rights principle still apply or is this trade mark infringement?

Where a distributor sells a product, that has been put on the market in the EEA by the rightsholder and to which a registered trade mark has been applied, in an EEA state for a purpose that the product is not fit for, does the exhaustion of rights principle still apply or is this trade mark infringement?

A trade mark proprietor has the exclusive right to use a trade mark, which is infringed by the use of the trade mark without his consent. However, such rights are exhausted by a sale of the product on the market within the EEA, unless there are legitimate reasons. Legitimate reasons include cases where the distributor changes the condition of goods or where packaging has been improperly applied, provided that the essential function of the trade mark is affected. This suggests that a proprietor should be able to prevent resale of products to which its trade mark is applied which are not fit for purpose, assuming that such incidents are not isolated cases.

Each case will turn on its own merits and the ‘reasonableness’ of the alternative application and consumers’ perception of what is the original purpose of the product and what is the representation made by the reseller. Exhaustion means exhaustion only in the context of the original purpose of the product.

Section 9(1) of the Trade Marks Act 1994

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