Such a situation was highlighted by the Regional Court in Warsaw, when it examined a claim for cessation of infringement of the claimant’s trade mark rights with a request to prohibit the defendant from importing, marketing, importing, offering, advertising and storing goods imported from outside the EEA, and thus goods in relation to which the trade mark rights had not been exhausted.
A Polish court asked the CJEU about the possibility of formulating the operative part of a judgment upholding an action in a manner which, by virtue of its generality, leaves it to the authority competent to enforce that judgment to determine to which goods the prohibition applies.
In its judgment of 17 November 2022, Ref. C-175/21, Harman International Industries Inc. vs. AB S.A. the Court held that EU law does not cumber a national court from formulating the operative part of a judgment in general terms, as long as a party is afforded the opportunity to appeal the bailiff’s decision.
Background of the case
Harman International Industries Inc. (Claimant) is a manufacturer of audiovisual equipment. AB S.A. (Respondent) distributes the Claimant’s goods in Poland. The Complainant filed a lawsuit with the Regional Court in Warsaw, requesting that the Respondent should be prohibited from importing, marketing, importing, offering, advertising and storing loudspeakers and headphones and their packaging bearing the Complainant’s trademarks, which goods were not previously placed on the market in the European Economic Area by the Complainant or with its consent. In addition, it requested that the Respondent should be ordered to withdraw and destroy these goods and their packaging.
The trial court noted that in order to assess whether the goods were intended to be marketed in the EEA, information from the Plaintiff’s databases would have to be consulted in each case. It also pointed out that, in case law practice, Polish courts considering this type of action refer to „products which have not previously been placed on the market within EEA by the applicant (the proprietor of the EU trademark) or with its consent”. Thus, in the opinion of the Warsaw District Court, such a formulation „does not make it possible, at the stage of enforcement proceedings, to identify which products are covered by those proceedings and which are covered by the exception based on the exhaustion of the rights conferred by the trade mark [referred to in Article 155 of the Act of 30 June 200 – Industrial Property Law – note mine]”, and „the operative part of those decisions does not in fact differ from the general obligation that already flows from provisions of law”.
The Court emphasised that, in accordance with the principle of procedural autonomy, the Member States are free to regulate procedural matters in their internal legal orders, as long as the rules they lay down are not less favourable in situations governed by Union law than those relating to similar situations governed by national law, and that they do not render impossible or excessively burdensome the exercise of powers conferred by Union law.
According to the CJEU, in the Harman International Industries Inc. vs. AB S.A. case, the national legislation did not breach this principle. However, the Court made it clear that, in the situation of the general wording of the operative part of the judgment, „the defendant should benefit, at the enforcement stage, from all the guarantees of a fair hearing for the purposes of being able effectively to contest the existence of an infringement or threat of an infringement of the exclusive rights of the trade mark proprietor and to challenge the seizure of those items of products in respect of which the trade mark proprietor’s exclusive rights have been exhausted and which may therefore freely circulate within the EEA”.
So far, the courts in Poland have been reluctant to rule on such cases in general terms. This is because they argued that enforcement proceedings serve the purpose of enforcing a court judgment, which must be sufficiently clear, lucid and precise to leave no doubt in the bailiff’s mind.
In their jurisprudence, they have repeatedly emphasised that the judgment must be sufficiently detailed to be suitable for enforcement (see, inter alia, the judgment of the Appeal Court in Warsaw of 14 March 2006, ref. VI ACa 1012/05; the judgment of the Supreme Court of 26 July 2021, ref. I CSKP 175/21; judgment of the Appeal Court in Warsaw of 23 August 2021, ref. VII AGa 1094/20; decision of the Supreme Court of 28 October 2016, ref. I CZ 66/16; judgment of the Appeal Court in Warsaw of 19 December 1995, ref. I ACr 1013/95). Therefore, the judgments most often referred to specific goods in respect of which the plaintiff proved that they were not first placed on the market in the EEA by the trade mark holder or with its consent.
The CJEU judgment discussed above can be regarded as a landmark judgment. It may significantly influence the jurisprudential practice in Poland.
The Court allowed the general formulation of the operative part of rulings if the specifics of the case so require. In the case of trade mark infringement in the context of illegal parallel import, it seems that the CJEU’s ruling can be considered correct. It certainly concerns a prohibition claim. However, this claim is not enforceable by a bailiff. With regard to the claim for destruction of the goods, however, the CJEU judgment is questionable. This is because it means that the bailiff, when seizing the goods, must carry out a kind of evidentiary procedure as to whether the rights to the mark have been exhausted in relation to the goods to be destroyed.
Even more questions arise with respect to the possibility of a general formulation of claims in the case of counterfeit goods or goods bearing similar marks in a way that leads to a risk of confusion. Allowing such a possibility would mean that de facto the bailiff would be empowered to establish the grounds for infringement.
In our view, the Polish jurisprudence requiring precise determinations to be suitable for enforcement is correct. However, it can be understood that overly narrow adjudications, limited only to specific goods, may not adequately protect the right holder and may often result in the need to initiate another lawsuit. The search for a compromise and a reasonable balance of clashing interests is extremely difficult. It can be expected that this judgment is only the beginning of a discussion on this important issue. It will certainly also initiate a discussion on the grounds of the rules of Polish civil procedure.