- Alert: AG opines on parallel import rules for brands with a global image (Schweppes v Red Paralela)
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IP analysis: The Advocate General has opined on a reference from the Barcelona Commercial Court concerning the exhaustion of rights in the context of the voluntary fragmentation of parallel trade mark rights in the SCHWEPPES mark. Cadbury Schweppes (which has since become Orangina Schweppes Group), the original proprietor of the SCHWEPPES portfolio, had sold the rights to the mark in 13 states of the EEA to The Coca-Cola Company in 1999, and retained the rights in 18 other states. The exclusive licensee of its Spanish subsidiary initiated infringement proceedings against the Red Paralela companies in relation to the importation into and sale in Spain of bottles of tonic water bearing the SCHWEPPES mark which had been placed on the market in the UK not by Schweppes or with its consent, but by Coca-Cola, which it argued had no connection with the Orangina Schweppes Group. The Advocate General considered the case law relating to the exhaustion of rights in the case of brands with a ‘global image’ and opined that, in principle, Article 36 TFEU and Article 7(1) of Directive 2008/95/EC preclude the licensee of the proprietor of a national trade mark from invoking its trade mark rights in such circumstances, if, given the economic links existing between the proprietor of the mark in the importing state and the proprietor of the mark in the exporting state, it is clear that the marks are under unitary control and that the proprietor of the mark in the importing state has the possibility of determining directly or indirectly the goods to which the trade mark in the exporting state may be affixed and of controlling their quality. If the Court of Justice follows this opinion, it will then be necessary for the Spanish court to assess, on the facts, whether the parties are ‘economically linked’ in this particular case, and therefore whether the conditions for exhaustion have been met.
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