Preliminary Ruling On International Exhaustion Of Trade Marks

On 17 July 2014, the Court of Justice of the European Union ("ECJ") answered a request for a preliminary ruling from a Greek Court (Monomeles Protodikeio Athinon) inquiring as to whether the use by Honda Giken Kogyo Kabushiki Kaisha ("Honda") of its trademarks to prevent the importation of Honda spare parts from Thailand into Greece breaches Article 101 or 102 TFEU or is in conflict with international trade rules, namely the General Agreement on Tariffs and Trade ("GATT") and the Agreement on Trade Related Aspects of Intellectual Property Rights ("TRIPS").

The underlying national proceedings case pitted Honda (a motor vehicle manufacturer and spare parts supplier) against Maria Patmanidi SA (a Greek importer of spare parts). Honda holds national and Community trademarks registered in Greece and distributes its products into the European Union through its authorised distributors and independent dealers. Maria Patmanidi made parallel imports of genuine Honda spare parts manufactured in Thailand.

Honda sought to prevent these parallel imports by arguing that: (i) the spare parts were not intended for the EU market but for the Asian market; (ii) it never granted its consent for such imports; and (iii) its EU distribution system was being undermined.

The Greek Court stayed proceedings and made a request for a preliminary ruling to the ECJ inquiring whether, and under what circumstances, the right of a trademark proprietor to prohibit parallel imports into the EU and the EEA of its products which were first supplied or put on the market in a country outside the EU and the EEA is compatible with Articles 101 and 102 TFEU as well as with a number of provisions of the GATT and TRIPs agreements (See VBB on Competition Law, Volume 2013, No. 12, available at www.vbb.com).

The ECJ considered that the question referred by the Greek Court was not different from the matter upon which it had already decided in 1998 in Case C-355/96, Silhouette International. In that case the ECJ held that European trade mark law does not allow Member States to provide for international trade mark exhaustion. Trade mark owners can, therefore, not be deprived of the possibility to exercise their rights and stop the parallel trade in goods...