Thursday, 15 March 2012

The filling of packaging on the instructions of another company does not constitute third-party trademark infringement. Judgment handed down by the CJEU on 15 December 2011, Red Bull (C-119/10).

1.         Background.  The company Smart Drinks, Ltd. (Smart Drinks) instructed Frinsdranken Industrie Winters BV (Winters) to fill cans with fizzy drink.  The empty cans had previously been supplied to Winters by Smart Drinks and bore various distinctive signs, some of which were similar to the well-known energy drink trademark RED BULL.

Red Bull GmbH (Red Bull) filed proceedings with the Dutch courts against Winters for infringement of its RED BULL trademark.  The issue of whether the filling of packaging supplied by a third party bearing a certain sign constitutes use of that sign within the meaning of Article 5.1 of the First Trademark Directive was referred to the Court of Justice of the European Union, which held that that it does not.

2.         Findings.  The Court of Justice of the European Union exempts Winters from liability for any infringement of Red Bull’s trademarks.  It holds that Winters merely executed a technical part of the production process of the final product, without having the slightest interest in the product’s trade dress or in the signs affixed to the packaging.  In that regard, the Court refers to the findings laid down in the judgment of 23 March 2010, Google France and Google (C-236/08 & C-238/08), in which it was affirmed that creating the technical conditions necessary for the use of a sign and being paid for that service does not mean that the party offering the service itself uses that sign within the meaning of Directive 89/104.

As an additional factor to support the finding that Winters had not infringed any trademark rights, the judgment adds that the necessary identity or similarity between the goods covered by the RED BULL trademark registrations (which identify a drink) and the services rendered by the company in question, consisting of the filling of packaging, is lacking.

3.         Remarks.  Red Bull and the European Commission had expressed their concerns to the Court of Justice of the European Union that trademark rights could be infringed through the strategy of dividing the production process into several stages, and entrusting those stages to different service providers.  The judgment expressly rejects this argument on the grounds that the protection conferred on the trademark owner is guaranteed by means of the possibility of holding the party contracting those successive services in order to obtain the final product to which the infringing sign is affixed liable for the acts of infringement.  In view of this doctrine, it will therefore be necessary for the trademark owner to design an adequate strategy to be followed so that defensive action can be instituted against the party that is truly liable for the trademark infringement.

Author: Carlos Morán Medina

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