The CJEU has once again ruled on the possibility to re-use packaging for a product other than the original one. From the perspective of trade mark law, such an action violates the preliminary function of the trade mark, i.e. to indicate the origin of goods from a specific source. A product from company Y is put into packaging with a trade mark X. By doing so, the link between the trade mark and the product is broken. Additionally, the right owner loses control over the use of its trade mark.
The CJEU once again concluded that such an action is permissible if it does not result in customers being misled as to the genuine origin of the goods due to the new label attached to the packaging by the company dealing with repacking. The judgment was passed in a case where the packaging could have been considered to be a separate product as it has been a reusable packaging, i.e. a bottle used for preparation of sparkling water from tap water.
The issue is significant especially in view of the practice of marketing, where in certain industries and markets the practice of refilling bottles is already well-established, and in view of trade mark law, specifically, the principle of exhaustion of rights to trade marks.
(CJEU judgement dated 27 October 2022, ref. C- 197/21)
SodaStream produced and sold carbonisers for the preparation of sparkling water and flavoured carbonated drinks from tap water. It marketed them together with a reusable carbon dioxide bottle, also offers separately. It is the owner of the trade marks SODASTREAM and SODA CLUB. The trade marks are on the label of the bottle and directly on the bottle in the form of an engraving.
MySoda markets beverage carbonation equipment in packaging that do not normally contain carbon dioxide bottles. From June 2016 MySoda has been selling carbon dioxide bottles that are compatible with both its own devices and SodaStream’s devices. Some of those bottles were originally marketed by SodaStream and then collected from consumers by distributors. MySoda refills them with carbon dioxide and replaces the original labels with its own labels, leaving engraved SodaStream trademarks visible on the bottles.
Also, one of the labels provides a statement that MySoda is not affiliated either with the original supplier of the bottles or with the registered trademark engraved on the bottle. Further, this label provides reference to MySoda’s website for further information.
SodaStream brought in Finland an action to establish that MySoda infringed the rights to trade marks SODASTREAM and SODA CLUB by marketing and selling refilled carbon dioxide bottles marked with those trade marks without permission of the right owner.
Requests for a preliminary ruling
The court examining the matter referred to the CJEU a number of questions about the rule of exhaustion of trade mark rights and the conditions for repackaging of original goods set out in the judgment of the CJEU in Bristol Myers Squibb and Others. (C 427/93, C 429/93 and C 436/93.
The CJEU analysed one general issue, i.e. whether, in the circumstances of this case, the trade mark owner could oppose the refilling of a bottle by a third party vis-a-vis the trade mark owner indicated on the bottle.
It was correct for the CJEU to go away from reference to the judgment in Bristol Myers Squibb et al. because that judgment does not correspond to the facts of this case. Indeed, the case concerning the repackaging of a pharmaceutical involved the necessity to change the packaging, while the product was still original. In the case at hand, it is the packaging that is original, while the goods are not from the trade mark owner.
The CJEU, following largely the judgement in Viking Gas case, C 46/10, considered that SodaStream could not object to refilling by MySoda of SodaStream’s bottles or labelling them with a new trade mark, and leaving the trade mark of the producer of the bottles. It is a condition of legality of operations that the new label does not give to the consumers a false impression that there is a business link between the distributor and the trade mark owner. This likelihood of confusion must be assessed in whole in the light of the indications placed on goods and on their new label and in the light of the distribution practices existing in a given industry and the level of consumer knowledge of these practices. Thus, the CJEU held that the rights to the trade mark were exhausted (Article 15(1) of Regulation 2017/1001 and Article 15(1) of Directive 2015/2436); further marketing of goods can be opposed if the conditions set out by the CJEU do not apply (Article 15(2) of Regulation 2017/1001 and Article 15(2) of Directive 2015/2436).
The ruling is surely beneficial to entities that deal with re-filling of all types of reusable containers and, it seems, to a lesser extent to consumers themselves. Consumers lose certainty as to from whom they are purchasing a product that has been placed in reusable packaging. Putting a new label on a bottle from a different producer will always lead to some kind of confusion. In such a situation the trade mark is no longer a guarantee of the origin of the goods from a specific business.
As regards the principle of exhaustion of trade mark rights, we opine that as long as the original producer markets the reusable container only together with the goods, the rights are exhausted as long as the packaging contains the original goods. The use of the packaging to market other content will be an infringement of the rights to a trade mark because there has de facto occurred labelling of a third party’s goods with a trade mark of the trade mark owner. Adding own label will not change anything in this respect. If, however, the bottle is placed on the market on own, i.e. without its content, the rights to the trade mark put on it are exhausted to that packaging, as the packaging itself is an independent good. It will be a decision of the trade mark owner according to which formula such owner wishes to market own containers. The trade mark affixed to such a bottle will indicate the origin of the bottle from a particular company and not the origin on product with which it will be filled.
As regards the principles of equity, it could be be that practical considerations require that the principles of trade mark law concede and in the case of reusable packaging, even that that has been originally filled by the producer, its re-use by an entity other than the trademark owner should be permitted. However – in our opinion – such a limitation of trade mark rights should be a decision of the legislator and not of the CJEU. The rulings passed in the recent years, even those very casuistic or controversial ones, find support in the legislation. Though it seems that the judgements concerning refilling of bottles are law-making in its nature, for which the CJEU has no competence.