EXHAUSTION OF RIGHT OR CONSENT OF THE TM HOLDER?

Exhaustion of the trademark right is one of the most important limitation of the trademark right, which allows further trade of goods with trademarks originating from the right holder. In the EU reality, this exhaustion is related to one of the treaty freedoms – the free movement of goods between member states.

The issue of exhaustion of trademark rights was the subject of one of the recent Supreme Court decisions. In this case, there was a certain duality of rights arising from trademarks. Plaintiff – the car cosmetics seller had local, national trademarks. However, the actual manufacturer of these products (sold in the country by the Plaintiff), an Italian company, had national Italian and international trademarks.

The defendant in the case purchased products with trademarks from an Italian company in, among others, the Netherlands and then sold these products in Poland. The plaintiff claimed that his trademark rights had been violated and an act of unfair competition had been committed. First, the District Court, then the Court of Appeal and the Supreme Court did not agree with his position. According to the latter, in the circumstances of the case, the trademark rights had been exhausted. The defendant purchased the product from the owner of the trademark (an Italian company), so it had the right to resell it in the EEA. The plaintiff was aware and accepted the fact that the Italian manufacturer sold goods with identical trademarks on other European markets, therefore this should be treated as consent, which resulted in the exhaustion of the right to the trademark in the territory of Poland pursuant to Article 155 of the Industrial Property Law Act.

The court also did not agree that an act of unfair competition had been committed in the case. Since no infringement of industrial property rights was found, the Plaintiff would have to demonstrate that the Defendant’s action was contrary to the Act or the principles of social coexistence.

It seems that while the decision regarding no infringement of trademark rights is correct, its justification is not entirely accurate. In the circumstances of the case, there were two sets of trademarks similar in scope, domestic and foreign (Italian, international), belonging to different but cooperating entities. The exhaustion of trademark rights occurred in relation to the legal situation of the Italian manufacturer and the goods he introduced to the market. In relation to the Plaintiff, there was no indication of “illegality” under Article 296(2) of the Industrial Property Law, since the Defendant’s actions were within the scope of the legal order. The conclusive consent that undoubtedly must have existed on the part of the Plaintiff was not, however, the consent referred to in Article 155 of the IPL, but a consent to tolerate on the EU market another entity with identical trademark registrations, and the issue of exhaustion of the right to Italian trademarks and the possibility of selling the goods on in the territory of the Republic of Poland by the defendant (as part of the withdrawal of the EEA) was only a consequence of the above.

SUPREME COURT JUDGMENT OF  22/02/2022, II CSKP 94/22