But I've Done Nothing Wrong! - Can You Infringe a Trademark Without Using the Trademark At All?

Quite often the simple use of a mark will amount to trademark infringement (to put things very simply). While there is some level of uncertainty that related to the specific assessment of infringement, many practitioners have no problems establishing trademark infringement when a particular mark is used by an unauthorised third-party. Even with that in mind, a recent case in the CJEU has challenged the simplicity in assessing trademark infringement; can you infringe a mark without ever using it? This puzzling question landed on the CJEU's desk late last month, which sets an interesting precedent for future infringement cases.

The case of Mitsubishi Shoji Kaisha Limited v Duma Forklifts NV concerns the sale of Mitsubishi forklifts, for which Mitsubishi's European arm has the exclusive rights to. The forklifts of course include the Mitsubishi logo, which the company has had as a registered trademark for nearly 20 years (EUTM 117713), and its name. Duma is a company that specialises in the sale of new and second-hand forklifts, including some under its own brands, and historically operated as the sub-dealer for Mitsubishi forklifts in Belgium. Since then Duma parallel imported Mitsubishi forklifts from outside the EEA to Europe, without authorisation, removing all signs from them identical to ones owned by Mitsubishi, and bringing them up to spec under EU regulations. All identification plates and serial numbers were also replaced. Mitsubishi took Duma to court over trademark infringement over the matter, with the case ending up all the way at the CJEU this summer.

The referring court asked the CJEU two questions, which it considered together, asking in essence "…whether Article 5 of Directive 2008/95 and Article 9 of Regulation No 207/2009 must be interpreted as meaning that the proprietor of a mark may oppose a third party removing all the signs identical to that mark and affixing other signs, without its consent, on products placed in the customs warehouse… with a view to importing them or trading them in the EEA where they have never yet been marketed". The articles are identical, so we're only concerned with the interpretation of the newer 2009 Regulation.

The Regulation, as decided in the Davidoff case, allows for the marketing of goods outside the EU, as is the case here, without losing your rights in the EU to those goods and the marks they bare, so long as those marks are registered within the EU. The Regulation also affords the proprietor the right to protect those rights within the EU against third parties, should they employ an identical mark in the marketing and/or selling of the goods in the EU.

After chiselling the badge off of his car for an hour
Tony realized it was a big mistake

What makes this case tricky is the removal of all Mitsubishi marks from the forklifts, and necessary modifications to comply with EU law, before they are imported into the EU. The court did, however, consider that the removal of the marks "…deprives the proprietor of that trade mark of the benefit of the essential right… to control the initial marketing in the EEA of goods bearing that mark". The placing of new marks on the goods also, according to the court, adversely affects the functioning of the original mark in the EU. The court considers that, as discussed in the TOP Logistics case "…any act by a third party preventing the proprietor of a registered trade mark in one or more Member States from exercising his right to control the first placing of goods bearing that mark on the market in the EEA, by its very nature undermines that essential function of the trade mark" (emphasis added). Clearly the court's thinking is that the act of removal should be reserved only for the proprietor of the mark, and Duma undertaking to do so undermines the function of that mark, or at least the choice in the use of the mark in the territory by the proprietor.

The Court also noted that consumers could identify the forklifts simply from their outwards appearance, and the removal of the marks from those goods and the subsequent harm to the marks would only be accentuated by that fact.

The removal of the mark additionally precludes the proprietor "…from being able to retain customers by virtue of the quality of its goods and affects the functions of investment and advertising of the mark where, as in the present case, the product in question is not still marketed under the trade mark of the proprietor on that market by him or with his consent". The placing of the goods without the mark further highlights the Court's reluctance to allow for the choice of introducing the goods to the market to be taken away from the proprietor by a third-party. They also emphasise the loss in reputation and economic value, among other things, due to the removal and subsequent marketing/sale of the goods in the EU by the third-party, and not by the proprietor.

The Court noted that the removal of the marks is also, in their view, a way to try and avoid the possibility of the prevention of the goods' importation into the EU by the proprietor, further adding to their reluctance to take away power from the proprietor (and therefore preventing distorted competition).

Importantly, the Court saw that the in concept of 'use in the course of trade' (a key component in establishing infringement) "…an operation consisting, on the part of the third party, of removing signs identical to the trade mark in order to affix its own signs, involves active conduct on the part of that third party, which, since it is done with a view to importing those goods into the EEA and marketing them there and is therefore carried out in the exercise of a commercial activity for economic advantage… may be regarded as a use in the course of trade". This only emphasises the removal of the choice from the proprietor, and the Court is clearly protecting the ability to do so for the proprietor, and also the easy avoidance of trademark infringement.

In short: "…Article 5 of Directive 2008/95 and Article 9 of Regulation No 207/2009 must be interpreted as meaning that the proprietor of a mark is entitled to oppose a third party, without his consent, removing all the signs identical to that mark and affixing other signs on the products placed in the customs warehouse, such as in the main proceedings, with a view to importing them or trading them in the EEA where they have never yet been marketed".

The decision is definitely an oddity, but to this writer at least, is clearly a marker being put down by the Court to protect the interests and rights of trademark holders, and to prevent the avoidance of infringement through the removal of registered marks from goods. What makes the decision weird is that the Court is saying that the removal of marks equates to the use of an identical trademark, even though no such mark exists on the goods themselves. In the end, it seems like the decision is one that will stand out, particularly from a trademark infringement perspective, and it will be interesting to see whether the decision will have more significant impact than you would initially think.