ON APPEAL FROM THE HIGH COURT OF JUSTICE
INTELLECTUAL PROPERTY ENTERPRISE COURT
His Honour Judge Hacon
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE FLOYD
LORD JUSTICE ARNOLD
| (1) SEBASTIAN BREALEY
(2) VICTORIA BREALEY
|- and -
|(1) NOMINATION DE ANTONIO E PAOLO GENSINI SNC
(2) NOMINATION SRL
Chris Pearson (instructed by B&M Law LLP) for the Respondents
Hearing date: 23 January 2020
Crown Copyright ©
Lord Justice Arnold:
The Trade Marks
"Precious metals and their alloys and goods in precious metals or coated therewith, not included in other classes; jewellery, precious stones; horological and chronometric instruments."
Nomination's products, distribution network and packaging
"Each bracelet sold by Nomination goes out to a retailer with packaging which separately accompanies the bracelet. The retailer puts the bracelet into the packaging for supply to consumers. I was shown an example of a sturdy and elegantly designed cardboard box with Nomination's name and logo prominently on the front and back. Inside the box there is a foam support in which the bracelet is contained. The evidence indicated that the bracelet and support are wrapped in yellow tissue paper. The box contains a leaflet which includes a guarantee. The box is presented in a similarly elegant cardboard bag, closed by a ribbon. I agree with [counsel for Nomination] that the impression given by Nomination's packaging is that its contents are of high quality."
The acts complained of
"The bundles either consisted of two blister packs, one for each of the Nomination and JSC links, or alternatively the JSC link was supplied in a blister pack and the Nomination base link was in a small plastic bag bearing a label 'Manufactured by Nomination Italy Repackaged by JSC Jewellery UK'."
"Condition: New with tags
Names on Charm: select
Quantity [ ]
Located in United Kingdom
Jscjewellery (61720 ()
99.8% positive feedback
Visit shop: JSC Jewellery UK
Condition: New with tags a brand-new, unused, unworn and undamaged item in the original packaging (such as the original box .
Brand: Daisy Charm
JSC Italian Charm DAISY CHARM Plus Nomination Charm
18mm (superlink) Family charm of your choice by Daisy Charm®, plus you also get a single branded Nomination link for your bracelet. So you will receive one branded Daisy Charm and one plain Nomination link, both compatible and for the classic size bracelet.
Mix and match with the thousands of Daisy Charm UK branded Italian charms for your classic Italian charm bracelet that can be found on our eBay store, just click on the door symbol near the top of the page.
The Daisy charm is 9mm x 18mm in size, has a matt finish, and the Nomination charm is 9mm in size and has a shiny finish. All our 9mm charms come individually packaged in a small blister packet and have our brand name Daisy Charm stamped on the back.
We are a UK based company that has been selling Italian charms since 2004 and were one of the first eBay sellers of Italian charms in the UK market. We have a large range of Italian charms designed for the UK market ."
The legal framework
Rights conferred by a Community trade mark
1. A Community trade mark shall confer 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:
(a) any sign which is identical with the Community trade mark in relation to goods or services which are identical with those for which the Community trade mark is registered;
Exhaustion of the rights conferred by a Community trade mark
1. A Community trade mark shall not entitle the proprietor to prohibit its use in relation to goods which have been put on the market in the Community under that trade mark by the proprietor or with his consent.
2. Paragraph 1 shall not apply where there exist legitimate reasons for the proprietor to oppose further commercialisation of the goods, especially where the condition of the goods is changed or impaired after they have been put on the market."
i) There must be use of a sign by a third party within the relevant territory.
ii) The use must be in the course of trade.
iii) The use must be without the consent of the proprietor of the trade mark.
iv) The use must be of a sign which is identical to the trade mark.
v) The use must be (a) in relation to goods or services (b) which are identical to those for which the trade mark is registered.
vi) The use must affect, or be liable to affect, one of the functions of the trade mark.
The first issue: did Nomination have a legitimate reason to oppose further commercialisation of the Nomination links in the Bundles?
" damage done to the reputation of a trade mark may, in principle, be a legitimate reason, within the meaning of art.7(2) of the Directive, allowing the proprietor of the mark to oppose further commercialisation of luxury goods which have been put on the market in the EEA by him or with his consent "
The judge's assessment
"45. As I have said, JSC supplied Nomination base links to their customers either in a small blister pack or in a small transparent plastic bag. No one could say that JSC's packaging conveys an impression of quality.
46. A potential difficulty for Nomination was the packaging sometimes used by their retailers for the sale of individual links. I was shown a Nomination base link in a transparent plastic bag as supplied by one of Nomination's authorised retailers. However, a customer going to an authorised Nomination retailer to buy an extra base link has already bought or been given a Nomination bracelet. The image of quality has already been conveyed by the bracelet's packaging.
47. JSC's customers may never have received a Nomination bracelet. In fact JSC's advertising promotes the idea of using a Nomination base link as an additional part of JSC's 'Italian charm bracelet'. So far as packaging is concerned, these customers would associate Nomination's product only with either a small blister pack or a small plastic bag.
48. [Counsel for JSC] pointed out that non-authorised traders other than JSC have supplied Nomination's base links in simple packaging and Nomination have not sought to stop such sales. I agree that Nomination have been relaxed about policing its rights. But that does not neutralise the rights if they exist.
56. I must reach a view as to whether it is likely that JSC's packaging will damage the reputation of the Trade Marks and thereby Nomination. I think it is likely. I am satisfied that the elegant packaging of Nomination's bracelets will convey an image of luxury to purchasers and that this increases the reputation of the Trade Marks. The receipt of Nomination's products in a small blister pack or polythene bag is likely to damage that reputation."
The second issue: did JSC's advertising of the Bundles infringe the Trade Marks or amount to passing off?
Trade mark infringement
"A typical reader of this and other online advertisements from JSC would reasonably have priorities other than pondering in depth which link is made by whom. However, I think a reasonable reader would have received a blurred message about the manufacturing source of the two bundled links and might have formed the impression that both are made for JSC, one of them being styled 'Nomination'."
Lord Justice Floyd:
Lord Justice Patten: