Reviewing the (Shrinking) Principle of Trademark Exhaustion in the European Union (Ten Years Later)

Article excerpt

  I. INTRODUCTION                                                 258  II. RECENT DECISIONS OF THE COURT OF JUSTICE OF THE      EUROPEAN UNION ON TRADEMARK EXHAUSTION                       262      A. Makro Zelfbedieningsgroothandel v. Diesel S.p.A.          262      B. Copad SA v. Christian Dior Couture SA                     264      C. Coty Prestige Lancaster Group GmbH v. Simex Trading AG    266      D. Portakabin Ltd. v. Primakabin, BV                         268      E. L'Oreal v. eBay                                           270      F. Joined Cases Orifarm AS and Paranova AS v. Merck         Sharp & Dohme                                             272 III. EEA-WIDE TRADEMARK EXHAUSTION UNDER ATTACK?                  273  IV. CONCLUSION                                                   280 

I. Introduction

Ten years ago, I published an article in the Marquette Intellectual Property Law Review titled, "Trademark Exhaustion in the European Union: Community-Wide or International? The Saga Continues.'" (1) In that article, I described the development of the principle of trademark exhaustion in the European Union (EU) and analyzed the interplay among trademark protection, trademark territoriality, and the treatment of the parallel importation of gray market products--unauthorized genuine goods imported from foreign countries--under Article 7 of the Trademark Directive (Article 7). Article 7 was the first provision that directly addressed the exhaustion of trademark rights in the EU and harmonized the national laws of EU Member States. (2) During the late 1990s, the main question in this area was primarily whether the language of Article 7(1) (3) permits the importation into a EU Member State of gray market products exclusively when the products have been put into the market in the European Economic Area (EEA) (4) or whether, instead, the provision also permits the importation of gray market products when the products have first been distributed outside the EEA. (5) Although Article 7(1) states that trademark rights have to be considered exhausted with respect to products that are "put on to the market in the Community" (Community-wide or EEA exhaustion), the provision does not expressly exclude, in fact, the possibility for individual Members States to extend this principle to products put into the market outside the EEA (International exhaustion). (6)

As I described in my 2002 article, this ambiguity led to several years of heated debate over the geographical application--Community-wide or International?--of the principle of trademark exhaustion in the EU. (7) In turn, because of this ambiguity, national courts repeatedly referred questions to the Court of Justice of the European Union (CJEU or Court) to clarify the interpretation of Article 7(1), namely, whether individual Member States could apply the broader standard of international exhaustion within their national territories. (8) In the late 1990s and early 2000s, the CJEU then issued a series of decisions, in which the Court invariably stated that Article 7(1) had to be interpreted as establishing a general principle of Community-wide trademark exhaustion to be applied in all Member States. This principle, the Court repeated, was not just a minimum standard, but the exclusive standard for trademark exhaustion for all Member States, including those previously practicing international exhaustion within their national territories. (9) Despite these decisions, in the early 2000s European institutions and interested parties continued nonetheless to consider whether a change from EEA-wide exhaustion toward international trademark exhaustion could be possible or desirable within the EU (EEA). (10) Ultimately, however, after several rounds of consultations between European institutions, consumer associations, and representatives of the industry, no change was suggested to the text of Article 7(1). The principle of EEA-wide exhaustion was thus confirmed as the only applicable principle within the territory of the EEA (11) or, as it has often been defined by commentators, "Fortress Europe. …


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