In his conclusions for Case C94/17, Paolo Mengozzi explained that EU law precludes reliance on an exclusive right if, given the economic links between their respective proprietors, it is clear that the marks are under unitary control and where it is clear that the proprietor of the mark in the importing state has the possibility of determining the products to which the mark in the exporting state may be affixed in the exporting state.
Schweppes International Ltd. is the proprietor of the mark ‘Schweppes’ in Spain, where it has exclusive right to exploit that mark. In 2014, it initiated infringement proceedings against Red Paralela for importing into and marketing in Spain bottles of tonic water from the United Kingdom bearing the mark ‘Schweppes’ where the mark ‘Schweppes’ is owned by Coca-Cola. According to Schweppes SA, those actions are unlawful, in that the bottles of tonic water were put up and placed in the market not by itself or with its consent. Red Paralela argues that this results from tacit consent between the two companies and the legal and economic links between Coca-Cola and Schweppes International in the common exploitation of the sign ‘Schweppes’ as a universal mark, which justifies this situation.
Commercial Court No 8 in Barcelona referred the question to the European Court of Justice (ECJ) in order to ascertain whether or not Schweppes SA could invoke exclusive rights for marketing.
Mr Mengozzi points out in his conclusions that on 22 June 1994 in Case C-9/93, the ECJ the principle of exhaustion of the rights conferred by the trade mark "applies where the owner of the trade mark in the importing state and the owner of the trade mark in the exporting state are the same or where, even if they are separate persons, they or where, even if they are separate persons, they are economically linked”. In light of this case law, the Advocate General considers that the exclusive right was exhausted when the trademark was subject to the joint control of two separate persons that act, in the exploitation of the mark, as one and the same centre of interests.
Mr Mengozzi also points out that the proprietors of parallel marks may be regarded as ‘economically linked’ when they coordinate their commercial policies with a view to exercising joint control over the use of their respective marks. However, in order for the right to be exhausted, such unitary control of the mark must allow the entities which exercise that control the possibility of determining directly or indirectly the goods to which the mark may be affixed and of controlling their quality in other member states.
The Advocate General considers that it is for the importer to bear the burden of such proof (Red Paralela in this case) and put forward a body of precise and consistent evidence showing a collaboration in trade policies between the owners of the trademarks. It would then be for the proprietor to prove that there is no collaboration between the two parties.
Mr Mengozzi therefore concludes that EU law precludes reliance on an exclusive right, when three conditions are in place: where it is clear from the economic links existing between the proprietor of the mark in the importing state (Schweppes) and the proprietor of the mark in the exporting state (Red Pararela); that those marks are under unitary control and that the proprietor of the mark in the importing State has the possibility of determining directly or indirectly the goods to which the mark in the exporting state may be affixed and of controlling their quality.
It will fall to the national court, in the light of all the circumstances of the case at issue to determine whether Schweppes International’s has exclusive marketing rights or not. (Original version in French by Lucas Tripoteau)