The claimant in the proceedings was the German subsidiary of a Japanese group and was authorized to enforce the trademark rights of the parent company. High-quality, high-priced cosmetic products are offered and sold under these brands. The defendant in the proceedings is part of a chain of several hundred supermarkets in Germany which sell not only food but also household goods, electrical appliances, textiles, shoes and cosmetics. In particular, the defendant also offered luxury goods bearing the trademarks of the Japanese cosmetics manufacturer. It was undisputed between the parties that these goods offered by the defendant had been placed on the market in the European Union or the European Economic Area with the consent of the applicant.
If goods have been placed on the market in the European Union or the European Economic Area with the consent of the trademark owner, the trademark rights with regard to these products are generally exhausted, Art. 15 (1) UMV or Art. 24 (1) MarkenG. In these cases, the trademark owner can no longer assert his rights with regard to these goods.
However, such exhaustion of the trademark rights does not occur if “legitimate reasons” justify that the owner opposes further marketing of the goods, in particular if the condition of the goods has changed or deteriorated after they have been put on the market, Art. 15 (2) UMV or Art. 24 (2) MarkenG.
There was no subsequent alteration or deterioration of the goods in the present case.
The words “in particular” in Art. 15 (2) UMV or Art. 24 (2) MarkenG make it clear that there may also be other “legitimate reasons” which may justify an exception to the principle of exhaustion of rights.
The ECJ considers the existence of a legitimate reason possible even if the use of the trade mark is liable to damage its reputation (see ECJ, GRUR Int. 1998, p. 140 marginal 43 – Dior/Evora; see also Ströble/Hacker/Thiering, MarkenG, 12th ed., § 24 marginal 164).
In the case of luxury and prestige goods, the reseller may not unfairly act contrary to the legitimate interest of the trade mark owner. He must therefore take care that his advertising does not undermine the reputation of the trade mark by damaging the luxury and prestige character of the goods in question and the luxurious appearance emanating from them.
In the case decided, the Düsseldorf Higher Regional Court determined the following:
“The applicant’s cosmetic articles are found indiscriminately next to everyday and mass products and are also offered like these. A somehow elevated presentation of the product does not take place. The possibility of the financing makes it appear affordable for everyone. The products stand thereby on a level with the other offered articles and find themselves evenly straight also in a multiplicity of products of most different categories. The prestige value of the goods is thus cast into considerable doubt, as this form of distribution ultimately negates the applicant’s claim to securing the exclusivity and luxurious appearance of her branded goods and the quality requirements she sets for distribution.“
In the opinion of the Düsseldorf Higher Regional Court, such a presentation was therefore likely to damage the reputation of the trade mark in question for luxury goods. For this reason, the applicant’s trademark rights were not exhausted, with the result that the interim injunction applied for had to be issued.
