Supreme Court Reverses Court Of Appeal Decision Concerning Importation Of 'Sun' Branded Products

Oracle America Inc (formerly Sun Microsystems Inc) v M-Tech Data Ltd [2012] UKSC 27, 27 June 2012

In a decision that will be welcomed by brand owners, the Supreme Court has upheld an appeal by a trade mark owner, Oracle America Inc (formerly Sun Microsystems Inc), confirming Oracle's right to prevent importation of trade mark branded goods into the European Union – but the Supreme Court noted that, whilst not relevant to the appeal, there may be a claim for damages against Oracle for preventing M-Tech (the importer) from selling Sun products because of Oracle's policy of withholding information about the origin and previous history of such products.

The claimant Oracle America Inc (formerly Sun Microsystems Inc) is a manufacturer of computer systems and related goods and the registered proprietor of Community trade marks and UK trade marks for use in connection with computer hardware. The defendant M-Tech Data Ltd is a supplier of computer hardware in Manchester.

In 2009, M-Tech bought 64 new Sun disk drives through a broker in the United States and imported them into the United Kingdom. The disk drives had originally been supplied by Sun to purchasers in China, Chile and the United States. Sun had not consented to the disk drives being put on the market in the European Economic Area (which includes the European Union) and pursued M-Tech for trade mark infringement alleging that MTech had put the disk drives on that market without Sun's consent. On the face of it, therefore, M-Tech infringed the marks contrary to article 5.1(a) of the Trade Marks Directive (2008/95/EC) by using them in circumstances where Sun's exclusive right had not been exhausted under article 7.1.

Sun sought summary judgment seeking damages for the infringement and an injunction restraining any further infringements. Validity of the trade marks and the facts alleged to constitute infringement were not challenged. In the High Court, Oracle was granted an order for summary judgment. M-Tech's appeal was allowed by the Court of Appeal. Oracle appealed to the Supreme Court.

M-Tech put forward "Euro-defences" arguing that Sun's trade marks were not enforceable because (i) the object and effect of enforcement would be to partition the EEA market in Sun hardware contrary to the treaty provisions relating to the free movement of goods (articles 34 to 36 of the Treaty on the Functioning of the European Union ("TFEU")); and (ii) the exercise of Sun's trade mark rights was...