The Necessity of Repackaging and Relabelling Trade Marked Goods
(2005)Department of Law
- Abstract
- Trade marks perform a variety of economic functions in a commercial environment and plays an important role in a market economy. Therefore, there is a need to protect the distinguishing of competing goods and services offered by undertakings and accordingly to avoid consumer confusion. The origin function of the trade mark guarantees that all products bearing a trade mark emanate from the same commercial source. It thus enables the manufacturer to invest in the trade marks goodwill and functions as a guarantee that the product lives up to the consumers expectation of quality. Economists have generally accepted that international trade leads to optimising of output and income levels in the long run. By establishing an internal market, the... (More)
- Trade marks perform a variety of economic functions in a commercial environment and plays an important role in a market economy. Therefore, there is a need to protect the distinguishing of competing goods and services offered by undertakings and accordingly to avoid consumer confusion. The origin function of the trade mark guarantees that all products bearing a trade mark emanate from the same commercial source. It thus enables the manufacturer to invest in the trade marks goodwill and functions as a guarantee that the product lives up to the consumers expectation of quality. Economists have generally accepted that international trade leads to optimising of output and income levels in the long run. By establishing an internal market, the EU seeks to unite national markets into a single market having the characteristics of a domestic market. This will result in products most favoured by consumers being the most successful, regardless of country of origin. Ultimately, this will serve to maximise wealth-creation in the Community as a whole since it allocates resources most effectively when assets flow into areas of greatest economic advantage. Free movement of goods is provided for in Art. 28 of the E.C. Treaty. However, Art. 30 E.C. Treaty provides for an exception from the fundamental principle of free movement, if the provisions are justified for the protection of industrial and commercial property and does not constitute a disguised restriction on trade between Member States. The ECJ has construed this into stating that Art. 30 E.C. Treaty only allows exceptions from the free movement principle if the provisions are justified in order to safeguard the specific subject-matter of the intellectual property right. The specific subject-matter of trade marks is the guarantee that the trade mark proprietor has the exclusive right to put the products into circulation for the first time. When assessing a trade mark's specific subject-matter, regard must be had to its essential function, which is to guarantee consumers that all goods bearing the trade mark have the same origin. Furthermore, the exclusive right of an intellectual property is limited to placing the protected goods on the market for the first time. After that, the exclusive rights are exhausted. The trade mark proprietor is only allowed to oppose repackaging and relabelling to the extent necessary to enable the trade mark proprietor to safeguard rights which form part of the specific subject-matter of the trade mark. Thus, in those cases it is possible to derogate from the fundamental principles of free movement of goods. However, that cannot be accepted if the proprietor's opposition to repackaging constitutes a disguised restriction on trade between Member States within the meaning of Art. 30 E.C. Treaty. A disguised restriction will exist if the exercise by the trade mark proprietor's rights to oppose repackaging will contribute to an artificial partitioning of the markets between Member States. It must be regarded as contributing to artificial partitioning of the markets between Member States if the repackaging or relabelling is objectively necessary in order to enable the product to be marketed in the Member State of importation. In addition to showing that repackaging or relabelling is objectively necessary in order to obtain effective access to the market in the State of importation, the parallel importer must fulfil the following conditions: - The repackaging may not be carried out in such a way that it risks affecting the original condition of the product. - The parallel importer has to give prior notice to the trade mark proprietor before marketing the repackaged or relabelled product. - The new packaging has to indicate the identity of who executed the repackaging. - The presentation of the repackaged or relabelled product must not be liable to damage the reputation of the trade mark. Swedish courts have faced difficulties interpreting the ECJ body of case law consistently. The courts appear to have construed the principles much too strictly making it difficult for parallel importers to dispose of their products on the market in Sweden. One possible reason for this misconception of the ECJ case law might lie in the fundamental objectives of the courts. The ECJ's main objective is the establishments of market integration, thus focusing essentially on the product and its movement across national borders. National courts, on the other hand, tend to focus more on the occurrence of a trade mark right, resulting in a favouring of trade mark proprietors. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/1556496
- author
- Brdarski, Stojan
- supervisor
- organization
- year
- 2005
- type
- H3 - Professional qualifications (4 Years - )
- subject
- keywords
- EG-rätt, Immaterialrätt
- language
- English
- id
- 1556496
- date added to LUP
- 2010-03-08 15:55:19
- date last changed
- 2010-03-08 15:55:19
@misc{1556496,
abstract = {{Trade marks perform a variety of economic functions in a commercial environment and plays an important role in a market economy. Therefore, there is a need to protect the distinguishing of competing goods and services offered by undertakings and accordingly to avoid consumer confusion. The origin function of the trade mark guarantees that all products bearing a trade mark emanate from the same commercial source. It thus enables the manufacturer to invest in the trade marks goodwill and functions as a guarantee that the product lives up to the consumers expectation of quality. Economists have generally accepted that international trade leads to optimising of output and income levels in the long run. By establishing an internal market, the EU seeks to unite national markets into a single market having the characteristics of a domestic market. This will result in products most favoured by consumers being the most successful, regardless of country of origin. Ultimately, this will serve to maximise wealth-creation in the Community as a whole since it allocates resources most effectively when assets flow into areas of greatest economic advantage. Free movement of goods is provided for in Art. 28 of the E.C. Treaty. However, Art. 30 E.C. Treaty provides for an exception from the fundamental principle of free movement, if the provisions are justified for the protection of industrial and commercial property and does not constitute a disguised restriction on trade between Member States. The ECJ has construed this into stating that Art. 30 E.C. Treaty only allows exceptions from the free movement principle if the provisions are justified in order to safeguard the specific subject-matter of the intellectual property right. The specific subject-matter of trade marks is the guarantee that the trade mark proprietor has the exclusive right to put the products into circulation for the first time. When assessing a trade mark's specific subject-matter, regard must be had to its essential function, which is to guarantee consumers that all goods bearing the trade mark have the same origin. Furthermore, the exclusive right of an intellectual property is limited to placing the protected goods on the market for the first time. After that, the exclusive rights are exhausted. The trade mark proprietor is only allowed to oppose repackaging and relabelling to the extent necessary to enable the trade mark proprietor to safeguard rights which form part of the specific subject-matter of the trade mark. Thus, in those cases it is possible to derogate from the fundamental principles of free movement of goods. However, that cannot be accepted if the proprietor's opposition to repackaging constitutes a disguised restriction on trade between Member States within the meaning of Art. 30 E.C. Treaty. A disguised restriction will exist if the exercise by the trade mark proprietor's rights to oppose repackaging will contribute to an artificial partitioning of the markets between Member States. It must be regarded as contributing to artificial partitioning of the markets between Member States if the repackaging or relabelling is objectively necessary in order to enable the product to be marketed in the Member State of importation. In addition to showing that repackaging or relabelling is objectively necessary in order to obtain effective access to the market in the State of importation, the parallel importer must fulfil the following conditions: - The repackaging may not be carried out in such a way that it risks affecting the original condition of the product. - The parallel importer has to give prior notice to the trade mark proprietor before marketing the repackaged or relabelled product. - The new packaging has to indicate the identity of who executed the repackaging. - The presentation of the repackaged or relabelled product must not be liable to damage the reputation of the trade mark. Swedish courts have faced difficulties interpreting the ECJ body of case law consistently. The courts appear to have construed the principles much too strictly making it difficult for parallel importers to dispose of their products on the market in Sweden. One possible reason for this misconception of the ECJ case law might lie in the fundamental objectives of the courts. The ECJ's main objective is the establishments of market integration, thus focusing essentially on the product and its movement across national borders. National courts, on the other hand, tend to focus more on the occurrence of a trade mark right, resulting in a favouring of trade mark proprietors.}},
author = {{Brdarski, Stojan}},
language = {{eng}},
note = {{Student Paper}},
title = {{The Necessity of Repackaging and Relabelling Trade Marked Goods}},
year = {{2005}},
}