Reselling branded, luxury goods in lower quality packaging can constitute trade mark infringement

The Court of Appeal has upheld a judgment of the Intellectual Property Enterprise Court (IPEC), which found that an Italian jewellery company could object to its bracelets being disassembled, repackaged and resold in a way that did not accord with its luxury image.

The dispute[i]

The claimant, Nomination Italy (Nomination), manufacture and market combinable charm bracelets and links under the trade mark “NOMINATION”. The bracelets are made up of individual links that can be detached and replaced with links that are available to purchase separately.

The defendant, JSC Jewellery (JSC), sold its own combinable charm bracelets, and in 2013 it began disassembling Nomination bracelets and marketing bundles of two links, one of which was a JSC charm link and one of which was a genuine, branded Nomination link. These bundles were then sold in blister packs or polythene bags.

Nomination brought a claim against JSC for trade mark infringement and passing off in the IPEC, which held that JSC’s inferior packaging was liable to damage the reputation of the NOMINATION trade marks. Further, the judge held that JSC’s advertising amounted to passing off as customers were confused about the origin of JSC’s links.

The appeal

JSC, questioned how genuinely “luxurious” Nomination’s image was, arguing that the judge had failed to take into account evidence of Nomination bracelets being sold on Amazon in clear plastic bags and not always in “luxury” packaging. The Court of Appeal accepted that the judge had not referred to this evidence in his judgment but held that this did not invalidate his findings, among other things because it did not detract from the finding that consumers who had previously purchased Nomination bracelets had been exposed to its “luxury” packaging. Overall, the Court concluded that JSC’s sales in blister packs and plastic bags were likely to have damaged the reputation of the Nomination trade marks. In relation to the advertising of the bundles, the Court of Appeal agreed that the use of the NOMINATION name in the advertisements had led a significant proportion of the public to believe that the JSC links were supplied by Nomination.  The appeal was dismissed and findings of trade mark infringement and passing off upheld.

Comment

The case confirms that the resale of luxury trade marked goods in inferior quality packaging can constitute trade mark infringement. Although JSC were entitled to purchase genuine Nomination goods within the European Economic Area and to break them up and sell the links on, their use of inferior packaging which might affect the reputation of the Nomination brand was not acceptable and could legitimately be opposed by the brand owner.