C-173/98

SEBAGO AND MAISON DUBOIS V G-B UNIC

OPINION OF ADVOCATE GENERAL JACOBS delivered on 25 March 1999 *

1. In its recent judgment in the case of he has consented to the marketing within Silhouette, 1the Court held that national the EEA of other batches of identical or rules providing for the exhaustion of trade- similar articles. mark rights in respect of products placed on the market outside the European Eco- nomic Area ('the EEA') under the mark by the proprietor or with his consent are contrary to Article 7(1) of the Trade Marks Directive. 2Thus it is only the placing of products on the market within the EEA by the trade-mark proprietor or with his The facts consent which prima facie 3 exhausts trade-mark rights: placing products on the market outside the EEA by the trade-mark proprietor or with his consent does not 3. The first appellant, Sebago Inc., is a exhaust such rights. Community trade- company incorporated in the United States mark law accordingly recognises a princi- of America. It is the proprietor of two ple of 'EEA exhaustion' but not 'interna- Benelux trade marks in the name 'Dock- tional exhaustion'. sides' and three Benelux trade marks in the name 'Sebago'. All five trade marks are registered, inter alia, for shoes.

2. The main question raised by the Cour d'Appel, Brussels, in its request for a 4. The second appellant, Ancienne Maison preliminary ruling is whether the proprietor Dubois et Fils SA, is the exclusive distribu- of a trade mark can be said to have tor in Benelux of Sebago's shoes and other consented to the marketing within the footwear articles. I shall refer to the EEA of a batch of his products imported appellants collectively as 'Sebago'. from outside the EEA on the grounds that

Salvador' from a company incorporated under which the trade-mark proprietor's under Belgian law which specialises in consent may be deemed to have been given. parallel importation (and which had thus presumably imported the shoes in question from outside the EEA). In the tenth issue of its 1996 brochure entitled 'La quinzaine Maxi-GB', announcing prices valid from 8. Concerning the second question GB- 29 May until 11 June 1996, GB-Unic Unic argues that in order to satisfy the advertised 'Docksides Sebago' shoes for requirement of consent in Article 13A(8) it sale in its Maxi-GB hypermarkets. It sold is sufficient that similar goods bearing the its entire stock during the summer of 1996. same trade mark have been lawfully mar- keted in the EEA with the consent of the proprietor of the trade mark. It quotes in support of that view two judgments of the Tribunal de Commerce, Brussels. 4Sebago, on the other hand, argues that its consent must be obtained in relation to each defined parcel of goods, i.e. each consign- ment imported at a particular time by a 6. Sebago does not dispute that the shoes particular importer. Thus it considers that it sold by GB-Unic were genuine goods. It can be deemed to have given its consent contends, however, that since it had not only if GB-Unic can prove, which it has consented to sale of those shoes in the not, that it obtained the shoes in question Community GB-Unic had no right to sell from a seller who was part of the distribu- them there. Sebago relies on Article 13A(8) tion network established by Sebago in the of the Uniform Benelux Law on Trade Community, or from a reseller who, Marks, as amended by the Protocol of although not part of the network, had 2 December 1992. Article 13A(8) is in obtained those shoes lawfully within the similar terms to Article 7(1) of the Trade Community. Marks Directive ('the Directive'), which was the subject of the Court's judgment in Silhouette, and which is set out at para- graph 14 below. 9. GB-Unic also argued before the national court that Sebago did not prohibit its licensee in El Salvador from exporting its goods to the Community and that Sebago should accordingly be deemed to have given its implied consent to the marketing of those goods in the Community. How- 7. The Cour d'Appel observes that the ever, the Cour d'Appel expressly dismisses parties' interpretation of Article 13A(8) the relevance of that argument on the differs in two material respects: first, as to ground that it has not been proven that whether or not that provision lays down Sebago granted a licence to use its trade the principle of international exhaustion (GB-Unic's contention) or the principle of Community exhaustion only (Sebago's con- 4 — Prés. Com. Bxl, 16 April 1997, unreported, GTR Group/ GB-Unic 8c Exmin Europe; Prés. Com. Bxl, 8 September tention); and, secondly, as to the conditions 1997, unreported, Texeuropean/Parimpex Belgium.

— either where goods bearing the trade mark — which are identical to the 'Is Article 7(1) of First Council Directive genuine goods bearing the same trade 89/104/EEC of 21 December 1988 to mark but imported in parallel either approximate the laws of the Member States directly or indirectly from countries relating to trade marks (OJ 1989 L 40, p. 1) outside the European Community or to be interpreted as meaning that the right the European Economic Area — are, or conferred by the trade mark entitles its have already been, marketed within the proprietor to oppose the use of his trade Community or the European Economic mark in relation to genuine goods which Area by the proprietor of the trade have not been put on the market in the mark or with his consent, European Economic Community (extended to Norway, Iceland and Liechtenstein by virtue of the Agreement of 2 May 1992 establishing the European Economic Area) by the proprietor or with his consent, where: — or where goods bearing the trade mark — which are similar to the gen- uine goods bearing the same trade mark but imported in parallel either directly or indirectly from countries outside the European Community or — the goods bearing the trade mark come the European Economic Area — are, or directly from a country outside the have already been, marketed within the European Community or the European Community or the European Economic Economic Area, Area by the proprietor of the trade mark or with his consent.'

— the goods bearing the trade mark come from a Member State of the European 11. GB-Unic, the French Government and Community or the European Economic the Commission have submitted written Area in which they are in transit with- observations. At the hearing Sebago, GB- out the consent of the proprietor of the Unic and the Commission were repre- trade mark or his representative, sented.

(b) offering the goods, or putting them on the market or stocking them for these purposes under that sign, or offering or ' 1 . The registered trade mark shall confer supplying services thereunder; on the proprietor exclusive rights therein. The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade : (c) importing or exporting the goods under the sign;

(a) any sign which is identical with the trade mark in relation to goods or (d) using the sign on business papers and in services which are identical with those advertising.' for which the trade mark is registered;

14. Article 7, however, limits the rights (b) any sign where, because of its identity conferred under Article 5 in the following with, or similarity to, the trade mark terms: and the identity or similarity of the goods or services covered by the trade mark and the sign, there exists a like- lihood of confusion on the part of the public, which includes the likelihood of ' 1 . The trade mark shall not entitle the association between the sign and the proprietor to prohibit its use in relation to trade mark. goods which have been put on the market

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in the Community under that trade mark Appraisal by the proprietor or with his consent.

5 —OJ 1994 L 1, p. 3. 6 — 1 May 1995 in relation to Liechtenstein. 18. The key issue in the present case is 7 — P. 483. Moreover, a protocol to the Agreement, Protocol 28 accordingly the second point at issue on intellectual property, contains an article, Article 2, headed 'Exhaustion of rights'. Article 2(1) provides: 'To between the parties: does the consent of a the extent that exhaustion is dealt with in Community trade-mark proprietor to the marketing of measures or jurisprudence, the Contracting Parties shall p rovide for such exhaustion of intellectual property rights as one batch of a certain type of goods within aid down in Community law. Without prejudice to future developments of case-law, this provision shall be interpreted in accordance with the meaning established in the relevant rulings of the Court of Justice or the European Communities given prior to the signature of the Agreement.' 8 — Case C-355/96, cited in note 1.

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the EEA bearing his trade mark mean that imposed upon the exercise of trade-mark he has exhausted his right to object to the rights, resellers wishing to sell trade- marketing within the EEA of other batches marked goods which they have lawfully of his identical (or similar) goods bearing acquired could in theory be obliged to the same trade mark ? 9 In other words, can obtain the consent of the trade-mark pro- the reference in Article 7(1) of the Directive prietor to such re-sale and any further to 'consent' to the placing on the market in dealings concerning the goods. the Community of 'goods' be read as meaning consent to the marketing of a certain type of product (i.e. product line), rather than to each batch of a certain type of product?

20. It is useful first to consider the nature of the exhaustion principle when applied in a purely intra-Community context. Under Community law, the exercise of intellectual property rights may hinder the free move- 22. It is true that the exhaustion principle ment of goods within the Community but has usually been expressed rather loosely may be justified under Article 36 of the EC by reference simply to exhaustion of intel- Treaty. Since the 'use' of a trade mark is a lectual property rights in relation to the very wide concept, 10 many different deal- 'goods' placed on the market by the trade- ings with goods may constitute trade-mark mark proprietor or with his consent. That infringement. Thus, if no limitation were wording is reflected in Article 7(1) of the Directive. However, Article 7(1) should be read in conjunction with Article 7(2) con- 9 — That question might have arisen in Case C-352/95 Phy- cerning exceptions to the exhaustion prin- theron International v Bourdon [1997] ECR I-1729, were it not for the way in which the facts were described in the order for reference (see paragraphs 11 and 12 of my Opinion in that case). 10 — See Article 5(3) of the Directive, cited at paragraph 13 11 — See, for example, paragraph 8 of the judgment in Case above. 16/74 Centrafarm v Winthrop [1974] ECR 1183.

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26. GB-Unic seeks to justify its view by 24. It is accordingly abundantly clear, at arguing that, in cases concerning the mar- least as regards the purely intra-EEA con- keting of genuine products outside the text, that the Community law principle of EEA, the import of such products into the the exhaustion of trade-mark rights relates EEA does not prejudice the functions of a to individual goods or batches of goods, mark as an indication of the origin and not whole product lines. quality of the product. As I observed in my Opinion in Silhouette, such arguments are extremely attractive. However, they were insufficient to defeat the conclusion in that case that the Directive prohibits Member States from practising international exhaus- 25. I turn now to the question whether the tion. They can accordingly not be invoked trade-mark owner has the right to prevent now in order effectively to overturn that the import of a particular batch of goods judgment, which, as I shall show, would be the practical effect of accepting GB-Unic's interpretation of Article 7(1). 12 —Case C-337/95 Parfums Christian Dior v Evora [1997] ECR I-6013. 13 — Paragraph 37 of the judgment. 16 — Although in the present case it is not clear whether there 14 — Case C-63/97, judgment of 23 February 1999, ECR I-905. was even consent to marketing outside the EEA: see 15 — At paragraph 57 of the judgment. paragraph 9 above.

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30. The Court cannot in my view be expected to stand legislation on its head in order to achieve an objective, even were it to be considered desirable. If the Direc- tive is found to have effects which are unacceptable, the correct remedy is to 28. To say that once a trade-mark proprie- amend the Directive or, as the Court tor has consented to the marketing of one observed in paragraph 30 of its judgment particular batch of products within the in Silhouette, to enter into international EEA he must be deemed to have consented agreements in order to extend the principle to the marketing of other identical (or of exhaustion to products put on the similar) batches would accordingly deprive market in non-member countries, as was the Court's limitation of the exhaustion done in the EEA Agreement. principle to EEA-wide exhaustion of much of its practical effect. It would for most practical purposes effectively impose a rule 17 — See paragraphs 18 and 19 of the judgment and paragraphs of international exhaustion since, in the 31 and 32 of my Opinion in that case.

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31. I conclude, therefore, that Sebago can- meaning that where goods have been not be deemed to have consented to the marketed by the trade-mark owner or with placing on the market in the EEA of the his consent within the EEA, he is not particular batch of products in question by thereby precluded from exercising his virtue of having consented to the marketing trade-mark rights to oppose the importa- within the EEA of other batches of identical tion into the EEA of other identical or or similar goods. Article 7(1) of the Direc- similar goods bearing his mark. tive must accordingly be interpreted as