In the judgment of October 13, 2022, the Court of Justice of the European Union (CJEU) confirmed that an order for the destruction of goods can be issued not only against illegally produced goods but also against original goods that have been placed on the market in the European Economic Area (EEA) without proper consent of the right holder.
Judgment of the Court dated 13 October 2022 in Case C-355/21
The claimant is perfume manufacturer Procter & Gamble; under a licence agreement with Hugo Boss Trade Mark Management it is exclusively entitled to use the EU word mark HUGO BOSS. Procter & Gamble, free of charge, provided perfume samples to retailers and distributors, exclusively for presentation and promotion of cosmetics. The tester bottles were identical to the packaging of the marketed products, but included a notice that they were not for sale (“not for sale,” “demonstration,” “tester”). The testers were not marketed in the EEA either by Procter & Gamble or with its consent. The defendant is Perfumesco.pl that operates as a wholesaler of perfume. The perfumery sold samples of Hugo Boss perfume labeled with the information “tester.” The District Court in Warsaw ordered the perfumery to destroy the products that had not been marketed in the EEA by the claimant or with its consent. The order was upheld by the Court of Appeal in Warsaw.
Requests for a preliminary ruling
The Polish Supreme Court observed that the courts of lower instances adopted the interpretation that the destruction of goods could also be ordered if the goods had not been “illegally manufactured or marked”, which under domestic law is required under Article 286 of the Intellectual Property Law act. Accordingly, the Supreme Court suspended the proceedings and referred the question to the CJEU for a preliminary ruling. The court sought to determine whether Article 10 of Directive 2004/48, similarly to the domestic provision, prevented an order for the destruction of goods from also being imposed on products that were illegally placed on the market in the EEA, but was manufactured or labeled in compliance with the law.
The CJEU agreed with the interpretation of Polish courts. It ruled that Article 10 of Directive 2004/48 does not limit the applicability of an order for the destruction of goods, like national law, exclusively to goods “illegally manufactured or marked” The said provision applies to goods found to infringe intellectual property rights, so, also the goods legally produced but illegally marketed in the EEA. It pointed out that it is a relevant judicial authority to decide what remedy to adopt to a specific case. This also follows from the TRIPS Agreement, transposed into the EU legal system, which does not limit the authorities’ application of measures to specific categories of violations. Moreover, the appropriate judicial authorities are obliged to take into account the proportionality between the gravity of the violation and the measures ordered, as well as the interests of third parties. Directive 2004/48 establishes minimum standards for the protection of intellectual property rights and does not prohibit Member States from introducing measures that extend the protection of the interests of right holders. At the same time, Member States are not entitled to narrow the scope of protection. Adopting an interpretation of Article 286 of the IPR, according to which an order for destruction is possible only in the case of illegally manufactured or marked products, would constitute a limitation of the possibility to apply measures to certain forms of infringements, contrary to EU law.
The CJEU’s judgment in the Perfumesco.pl case is beneficial to owners of intellectual property rights. EU law provides to trademark holders a minimum standard of protection that cannot be more narrowly regulated under the laws of Member States. The interpretation of the provisions adopted by the Court grants the right holder the possibility to seek corrective measures regardless of the form of the infringement, without limiting the applicability of Article 10 of Directive 2004/48 only to goods “illegally manufactured or marked” which was a disputed issue in the domestic proceedings due to the standard established in Article 286 p.w.p. It is irrelevant that the product is legally manufactured, but that which is relevant is that it was illegally marketed in the EEA. The argument raised by the defendant regarding the breach of Article 286 was therefore found to be groundless.