Resale of branded products - when can the trade mark owner intervene?

Resale of branded products - when can the trade mark owner intervene?

Once a branded product has been put on the European market with the trade mark owner’s consent, EU rules on the free movement of goods kick in to allow the product to circulate freely throughout the European Economic Area without any further consent needed from the trade mark owner. However, in this case involving an Italian designer charm bracelet, disassembly and repackaging of the product in a way which did not accord with the luxury impression conveyed by the original packaging constituted a legitimate reason for the trade mark owner to object.

Italian charm

Nomination Italy, the claimant, sold a ‘composable bracelet’ made of individual links that could be detached and reordered by the user. The basic bracelet consisted of stainless steel links each bearing the Nomination registered trade marks – consisting of the word Nomination and this word in a special script. The basic bracelet could be enhanced by a variety of decorated links and links with charms attached. Prices of the decorated links started at about £10 but some included precious stones, gold and silver and were priced much higher. The Nomination bracelet was presented in an elegant little box with foam support and put into a cardboard bag tied with a ribbon – a high quality presentation.

Daisy Charm

The defendant, JSC Jewellery, sold their own composable bracelet under their trade name Daisy Charm. Their links were compatible with the Nomination bracelet and could be fitted into the bracelet interchangeably with Nomination links and charms. JSC bought basic Nomination bracelets from various European retailers, disassembled them and sold the individual, branded Nomination links in bundles of two links - one branded Nomination and one Daisy Charm link. The packaging consisted either of two blister packs or a Daisy Charm in a blister pack with the Nomination link in a small plastic bag.

Did the disassembling and repackaging of the Nomination bracelets infringe the trade marks?

Judge Hacon in the Intellectual Property Enterprise Court saw no objection to the disassembly and sale of the individual links as such.  However, he held that Nomination’s packaging conveyed an image of luxury and that repackaging the links into the blister packs or plastic bags which did not convey an impression of quality was likely to damage the reputation of Nomination and of its trade marks. JSC was therefore guilty of trade mark infringement on this ground.

Customer confusion

In addition, the judge found that JSC’s advertisements conveyed a blurred message about the manufacturing source of the two links, and the evidence also suggested that some customers receiving the branded Nomination link together with the Daisy Chain link believed that the latter was a genuine Nomination link. On this ground also, JSC was liable for trade mark infringement and also for passing off its own links as being supplied by Nomination.

Implications of the case

The case will be welcomed by trade mark owners in particular for highlighting that resale of branded, luxury goods in lower quality packaging can constitute trade mark infringement. The confusion arising from JSC’s manner of reselling the links is also a good example of the kind of situation in which trade mark infringement and passing off may arise in relation to the sale of genuine, branded goods: although JSC had the right to resell the bracelet links they did not have the right to do so in a way which suggested that there was a commercial connection between Nomination and themselves.

 

Case: Nomination di Antonio E Paolo Gensini SNC and Nomination SRL v Sebastian and Victoria Brealey (trading as JSC Jewellery) [2019] EWHC 599 (IPEC)

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