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(C-129/17 Mitsubishi v. Duma Forklifts and G.S. International BVBA – July 25, 2018)

Background

Duma and GSI have acquired from a company within the Mitsubishi group, outside the EEA, forklift trucks that they bring into EEA territory where they place them under a customs warehousing procedure. They then remove from those goods all the signs identical to the Mitsubishi marks, make the necessary modifications to render those goods compliant with European Union standards, replacing the identification plates and serial numbers with their own signs. Once this done, those goods are imported and marketed both within and outside the EEA.

Mitsubishi filed an action before the Rechtbank van koophandel te Brussel (Commercial Court of Brussels) in order to obtain the cessation of those activities.

The action was rejected by a judgment of March 17, 2010. Mitsubishi then filed an appeal before the Hof van beroep te Brussel (Court of Appeal of Brussels).

This jurisdiction decided to stay the proceedings and to ask the Court of Justice of the European Union (CJEU) whether the activities committed by Duma and GSI constitute a use that the owner of a mark can prohibit.

 

Court decision

The CJEU considers that the owner of a trademark is entitled to oppose a third party, who removed all the signs identical to that mark and affixed other signs on products, without its consent, with a view to importing them or trading them in the EEA where they have never yet been marketed.

It does not matter that the removal of the mark and affixation of new signs have occurred while the products were placed in custom warehousing since the operations were made in view of the importation and marketing of said goods in the EEA.

The Court of Justice did not retain the argument of Duma and GSI, according to which they should be regarded as the manufacturers of the forklift trucks because of the modifications made on those trucks and the removal of the Mitsubishi brand.

The decision of the Court is based on several grounds.

First, the Court recalled that it is essential that the owner of the trademark registered in one or several Member States could control the initial marketing of goods bearing that mark in the EEA.

By removing the trademark of MITSUBISHI, Duma and GSI have prevented the concerned goods from bearing the mark the first time they are placed on the market in the EEA. Consequently, MITSUBISHI was deprived from controlling the initial marketing of said goods in the EEA.

Secondly, the Court held that the behavior of Duma and GSI affects the function of the trademark. In particular, the defendants prevented the proprietor from being able to retain customers by the quality of its goods. This also affects the functions of investment and advertising of the mark. Especially since the concerned goods were not yet sold by the proprietor in EEA by him or with his consent.

It is interesting to note that the fact that the forklift trucks can still be identified by the relevant consumer as originating from the owner of the mark has no impact in favor of the Defendants and is even considered as an aggravating circumstance of the harm caused to the essential function of the mark.

Last, the CJEU grounded its decision on the fact that trademark rights constitute an essential element in the system of undistorted competition which EU law is intended to establish and maintain,

In this regard the Court held that the purpose of Duma and GSI was to circumvent the owner’s right to prohibit the importation of goods bearing its mark without its consent, which is contrary to the objective of ensuring undistorted competition.

Comment

This decision clearly strengthens the rights of trademark owners, which can legitimately oppose the removal of their mark by third parties without their consent under certain circumstances.

It may be observed that the removal of a trademark was already considered as a trademark infringement under French law (see Article L 713-2 of the Code de la Propriété Intellectuelle).

We can only validate the position of the CJEU which takes into consideration the work and investments realized by the trademarks owners to promote their activities, and recalls, if needed, the value of the trademarks rights.

Karine MAMOU, European Trademark Attorney, INLEX IP EXPERTISE

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