INTA Reflects on Exhaustion of EU Trademark Rights in Parallel Import Cases

INTA’s International Amicus Committee recently submitted an amicus brief before the Court of Justice of the European Union (CJEU) in Harman International Industries, Inc. v. AB SA (CJEU Case C-175/21), concerning the exhaustion of trademark rights in parallel import cases. In the brief, which was filed with the CJEU on January 7, 2022, the Association comments on the wording of court action claims and court orders, as well as reiterates its long-standing position on the principle of national/regional exhaustion and burden of proof in parallel import cases.

In this case, Harman International Industries Inc. (Harman) brought proceedings against the defendant before the Regional Court in Warsaw, Poland, based on Harman’s EU-registered trademarks, arguing that the defendant imported genuine Harman goods into Poland without its consent and on goods Harmon had not previously put on the market within the European Economic Area (EEA). The plaintiff claimed violation of parallel imports provisions and requested that the court prohibit the importation, putting on the market, offering, advertising, and the stocking of these goods and their packaging bearing any of the applicant’s EU trademarks as long as such goods have not previously been put on the market within the EEA by Harman or with their consent. Harman further requested that the court order the defendant to either withdraw from the market or destroy such goods and their packaging.

The referring court decided to stay the proceedings and seek guidance from the CJEU on how orders from the EU’s national courts in main infringement actions and in temporary measures actions should be formulated in cases of parallel imports when the actions are being upheld, so that the court orders do not overly burden the defendant, while securing a free movement of goods and adequate protection of the claimant’s intellectual property (IP) rights. More specifically, the referred question concerns how claimants formulate claims in court actions introduced before a national court.

In its brief, INTA reflected on Article 15(1) of the EU Trademark Regulation concerning exhaustion of EU trademark rights and the second sentence of Article 36 of the Treaty on the Functioning of the European Union regarding prohibition of imports based on IP rights. The Association concluded that when ordering remedies provided under the Enforcement Directive in parallel import cases, the practice of EU member states’ national courts to describe the goods to which the above remedies apply as “goods which have not been put on the market within the European Economic Area (EEA) by the right holder or with his consent,” does not violate the above-mentioned provisions of EU legislation concerning parallel imports.

Further, INTA argued that if the national courts were to adopt a wording that does not stem from the EU legislation—as proposed by the referring court—this would entail the risk of escaping the CJEU’s uniform interpretation of these provisions and could also result in multiple levels of protection in EU member states. The Association also explained why the above-mentioned wording does not contribute to a partitioning of markets per se while the referring court’s proposed solution would not contribute to the elimination of any such risk. Moreover, INTA submitted that the proposed solution could also result in trademark owners being de facto unable to enforce their rights.

Finally, while referring to the applicable EU case law on parallel imports and, more specifically, the burden of proof in parallel import cases, INTA argued that the referring court’s proposed solution would shift the burden of proof to the trademark owner, which would contradict existing CJEU case law and undermine the protection of the trademark owner’s rights under the regional EU trademark system. As the latter provides a delicate balance of rights and liabilities in the form of remedies available to both the trademark owner and the importer, the shift in burden of proof would undermine this balance.

This was the first amicus brief filed by the International Amicus Committee in the 2022–2023 Committee Term.

Although every effort has been made to verify the accuracy of this article, readers are urged to check independently on matters of specific concern or interest.

© 2022 International Trademark Association