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The burden of proof in another case before the CJEU

28.02.2024 | EN, News EN

The burden of proof in another case before the CJEU

28.02.2024

On 18 January 2024, the CJEU handed down its judgment in Case C-367/21 on request for a preliminary ruling from the Warsaw Regional Court. In its judgment, the Court indicated the possibility of reversing the burden of proof in case of exhaustion of EU trademark rights. In certain circumstances, it is the trade mark proprietor – and not the parallel importer – who must show that the rights to the trade mark have not been exhausted.

I. The actual state

The case concerned Hewlett Packard Development Company LP, which, being the proprietor of the trade marks EUTM 000052449 and EUTM 008579021 (the „HP trade marks”), markets computer hardware bearing the above-mentioned marks. The sale of the goods is carried out exclusively through authorised representatives, who, without the appropriate consent, cannot sell the goods to competitors, i.e. those not belonging to the distribution network. Hewlett Packard’s goods did not contain any markings that would allow third parties to identify the market where they are for sale.

The other party to the dispute is Senetic S.A., which conducts the business of distributing computer hardware. In the course of its business, the Polish company purchased goods bearing HP trade marks from sellers based in the EEA who were not official distributors of Hewlett Packard. The sellers assured that further sales of the goods did not infringe Hewlett Packard’s exclusive rights. For the avoidance of any doubt, Senetic S.A. contacted authorised representatives of Hewlett Packard in order to confirm the above assurances, but did not receive an appropriate response.

Subsequently, Hewlett Packard brought an action for an abstention from infringement of its rights under the EU trade marks, indicating that the goods had not been previously placed on the market in the EEA by Hewlett Packard or with its consent.

In response, Senetic S.A. pleaded exhaustion of the rights under the EU trade marks, arguing that the goods at issue had previously been placed on the market in the EEA by or with the consent of Hewlett Packard.

II. Preliminary ruling

The Warsaw District Court emphasised that it is, in practice, very difficult for an independent distributor to provide evidence that the goods were placed on the market in the EEA by the proprietor of those trade marks or with their consent.

Accordingly, the court had doubts as to whether, in the above-described actual state, it was possible to reverse the burden of proof, i.e. whether the interpretation of Article 15(1) of Regulation 2017/1001 (concerning the exhaustion of rights under an EU trade mark) in conjunction with Articles 34 and 36 TFEU (concerning the prohibition of quantitative restrictions between Member States) implies that the burden of proof of exhaustion of rights rests only on the defendant, in a situation where the goods were acquired by that party in the territory of the EEA after obtaining the relevant assurances from the sellers and the owner of the said trade mark refuses to to verify them.

III. The CJEU’s response

In its judgment, the Court stated that:

    • the rights of the trade mark proprietor are subject to exhaustion if the goods have been put on the market in the EU or EEA under that mark by the proprietor themselves or with their consent;
    • it is the national legislation that governs evidentiary matters and therefore, as exhaustion of trade mark rights is an objection raised in one’s defence, the burden of proof lies with the defendant;
    • requirements dictated by the protection of the free movement of goods may, however, require that this rule of evidence be subject to appropriate adjustments;
    • consequently, the national court should adjust the distribution of the burden of proof of exhaustion of rights by placing on the proprietor of the marks the burden of proving that they first placed the copies of the goods at issue on the market outside the EEA.

The above means that the Court, taking into account all of the facts set out in the case, it decided to transfer the burden of proof of the exhaustion of the trade mark rights from the entrepreneur who raises such an objection to the proprietor of the trade mark.

IV. Summary

The Court’s judgment in the present case is in line with its earlier judgment of 17 November 2022 in the Harman International Industries case (C-175/21), in which the Court held that the burden of proof should be reversed where failure to do so would enable the trade mark proprietor to divide national markets and maintain price differences between Member States.

However, the Harman International Industries judgment (C-175/21) concerned exclusive distribution, whereas the Hewlett Packard case concerns selective distribution. In fact, the main premise for reversal of the burden of proof is not the type of distribution, but the overall circumstances surrounding its operation.

Accordingly, the Court points out that, taking into account all the circumstances, i.e:

    1. Hewlett Packard’s goods did not bear any indications enabling third parties to identify the market for which they were intended for sale;
    2. the existence of a selective distribution system where its members can resell the goods only to other members of that network or to end users;
    3. the obtaining of assurances by Senetic S.A. from the sellers that the goods could be legally traded;
    4. unsuccessful attempts to verify the above assurances, due to the passivity of the trade mark owner;

it is possible to reverse the burden of proof of exhaustion of rights and place it on the proprietor of the trade mark.

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