The combined effect of the Silhouette, Sebago and Zino Davidoff/Levi Strauss cases is that a trade mark owner's right to prohibit use of his mark in relation to particular goods is only exhausted when he has put those goods onto the market, or expressly or impliedly consented to their sale by a third party, in the EEA. But who carries the burden of proof to demonstrate that consent was (or was not) given to the sale of goods in the EEA? Is it for the parallel importer to show consent, or for the trade mark owner to prove its absence? The ECJ tackled this difficult question giving its judgment yesterday in thevan Doren case.
Van Doren was the exclusive German distributor of STUSSY, Inc., the Californian owner of the trade mark "STSSY". It brought proceedings against the defendant Lifestyle for selling goods bearing the STSSY trade mark in Germany. Van Doren alleged that those goods were first put on the market in the USA, and the trade mark owner had not consented to their distribution in Germany. The defendant argued that the trade mark rights had been exhausted because the goods were sourced in the EEA, where they were put on the market by the trade mark owner or with his consent. Under German law, exhaustion operates as a defence to trade mark infringement and as such most be proved by the defendant parallel importer.
The Bundesgerichtshof asked the ECJ whether this national rule was consistent with Articles 28 and 30 EC Treaty. Advocate General Stix-Hackl had outlined the difficulties in her Opinion published in June last year; whilst the defendant parallel importer may be able to name his suppliers, he will not be able to compel them to disclose their sources. Moreover, even if the defendant parallel trader was able to provide the relevant evidence, in so doing he would reveal his supply source, enabling the trade mark owner to identify the gap within his distribution system, and in all likelihood block the defendant parallel importer's legitimate sources. If the burden of proof lies with the parallel importer, the trade mark owner could exploit the alleged infringer's dilemma to strengthen his market position.
The ECJ decision
The Advocate General concluded that where a national rule places the entire burden of proving exhaustion on parallel importers there is "an unjustifiable, at least potential, impairment of the free movement of goods" and proposed that the burden of proof should be shared. She suggested that...