Judgment of the Court of Justice of January 18, 2024, Hewlett Packard (C-367/21)
Facts
This judgment arises from a request for a preliminary ruling submitted by the Polish courts to the Court of Justice regarding the interpretation and scope of Article 13(1) of Regulation (EC) No. 207/2009 on the Community trademark (now Article 15(1) of Regulation 2017/1001 on the EU trademark (“EUTM”)) in relation to Articles 34 and 36 TFEU.
The facts of the case were as follows:
Hewlett Packard Development Company LP (“Hewlett Packard”) is the owner of two MUEs for the HP trademark. Hewlett Packard markets computer equipment products under those trademarks through authorized representatives who agree not to sell them—except to end users—to persons outside their distribution network. Furthermore, those authorized dealers are required to purchase those products exclusively from other authorized dealers or from Hewlett Packard itself. HP products do not include any marking system that, on its own, would allow one to determine whether or not a particular unit is intended for the European Economic Area (EEA) market.
Senetic, S.A. (“Senetic”) is engaged in the distribution of computer equipment. Senetic introduced products bearing HP MUEs into Poland. It purchased those products from sellers established within the EEA, other than the official distributors of Hewlett Packard products, after receiving assurances from those sellers that the sale of such products within the EEA did not infringe on Hewlett Packard’s exclusive rights. In addition, Senetic unsuccessfully requested that Hewlett Packard’s authorized representatives confirm that those products could be marketed in the EEA without infringing on Hewlett Packard’s exclusive rights.
Hewlett Packard filed a trademark infringement lawsuit against Senetic in Polish courts to halt Senetic’s sales of HP products. In its defense, Senetic invokes the exhaustion of the rights conferred by the plaintiff’s EU trademarks, arguing that the HP products were previously marketed in the EEA by Hewlett Packard or with its consent.
The Polish court of first instance decided to stay the proceedings and refer two questions to the CJEU for a preliminary ruling regarding the interpretation of Article 15(1) of the EU Marriage Regulation.
Statements
In its judgment, the Court of Justice addresses only the second preliminary ruling. That question asks the Court of Justice whether, in circumstances such as those at issue in the main proceedings, the burden of proof regarding the exhaustion of the rights conferred by the MUEs may rest exclusively with the defendant.
In its response, the CJEU notes, as a starting point, that neither the EUTM Regulation nor Directive 2004/48 addresses the issue of the burden of proof regarding trademark exhaustion. This is a matter that, in principle, is governed by national law. However, the Court adds that national procedures for administering and assessing proof of trademark exhaustion must comply with the requirements arising from the principle of the free movement of goods and, therefore, must be amended where they could allow the trademark owner to partition national markets.
This leads the Court to conclude that, under circumstances such as those present in this case, it is possible to modify the rules governing the burden of proof. That is, when, on the one hand, the products originating from a parallel market:
- do not bear any markings that would allow third parties to identify the market in which they are intended to be sold;
- are distributed through a selective distribution network whose members may resell them only to other members of that network or to end users; and
- were acquired by the defendant in the EU/EEA after receiving assurances from the sellers that they could be legally marketed in that area,
Furthermore, the trademark owner refused to verify the legality of the products in question on its own at the request of the purchaser (the defendant), and the defendant’s suppliers were unwilling to disclose their own sources of supply.
Specifically, under these circumstances, the burden of proof must be allocated in such a way that:
- it is up to the trademark owner to prove that it has placed the products in question on the market for the first time outside the EU/EEA, or that it has authorized such placement;
- And if this fact is established, it is up to the defendant to prove that those same items were subsequently imported into the EEA by the trademark owner or with the owner’s consent.
Comment
The ruling in question is significant because it modifies the current rules on the burden of proof (see Van Doren + Q (C-244/00)) to balance the interests of trademark owners and legitimate parallel importers.
However, this change to the system is not comprehensive, since the reversal of the burden of proof proposed by the Court of Justice is intended to apply only with respect to proving the non-EU origin of the product from parallel trade (which, under the new doctrine, would fall on the trademark owner); but only within the framework of the factual circumstances described above (see paragraphs 61 and 67 of the judgment).
Enrique Armijo, Partner in the Legal Department at ELZABURU.