The matter at hand
Trade mark proprietor SodaStream placed carbon dioxide-filled cylinders on the market, with its mark affixed to the label on the cylinder and engraved on the cylinder neck. MySoda, an unaffiliated third party, refilled the cylinders with carbon dioxide with a view to reselling the cylinders. For this purpose, it removed the original label from the cylinders, and replaced it with a label bearing its own mark, while the SodaStream mark remained visible in the engraving on the bottle neck.
SodaStream brought an action against MySoda in Finland, seeking a declaration that MySoda had infringed its trade marks, claiming that MySoda’s conduct created the false impression that there is a commercial or economic connection between SodaStream and MySoda. After a part of SodaStream’s claims were awarded in first instance, the matter went to the referring court, the Korkein oikeus (Supreme Court, Finland).
The referring court set out that EU law does not lay down detailed rules on the conditions for establishing whether there are ‘legitimate reasons’ justifying the trade mark proprietor to oppose the commercialisation of goods after their placing on the market within the meaning of Article 15(2) Trade Mark Regulation 2017. The referring court therefore decided to stay the proceedings and to refer questions to the ECJ for a preliminary ruling regarding, in principle, which conditions are relevant in determining if the trade mark proprietor can rely on said ‘legitimate reasons’.
The judgment of the ECJ
In light of the fact that the carbon dioxide cylinders in question had been put on the market in the EU by the proprietor of the marks, the ECJ calls into mind its earlier findings in Viking Gas (C-46/10), that the exhaustion of trade mark rights “transfers to the purchaser the right to use that bottle freely, including the right to exchange it or have it refilled by an undertaking of his or her choice. That right of the purchaser has, as its corollary, the right of competitors of the proprietor of the marks affixed on that bottle to refill and exchange the empty bottles” (paragraph 39). However, the ECJ continues, “the activity of a reseller consisting of refilling the cylinders in question […] and affixing to them its own labels […], while leaving visible the original mark on the cylinders, is capable of falling within the scope of Article 15(2) Trade Mark Regulation 2017” (paragraph 40).
Upon assessing whether the required ‘legitimate reason’ for the trade mark proprietor exists, the ECJ refers to its judgment in Portakabin (C‑558/08), where it held that the trade mark proprietor may oppose further commercialisation of the goods, when the reselling “seriously damages the reputation of that mark or when that use is carried out in such a way as to give the impression that there is a commercial connection between the trade mark proprietor and that third party, and in particular that that third party is affiliated to the proprietor’s distribution network or that there is a special relationship between those two persons” (paragraph 43).
According to the ECJ, “in order to assess whether such a false impression exists, account must be taken of all the circumstances relating to the reseller’s activity, such as the way in which the cylinders are presented to consumers following the new labelling and the conditions under which they are sold, in particular the practices of refilling those cylinders which prevail in the sector concerned” (paragraph 45). And, although the ECJ acknowledges that “it is for the referring court to assess whether there is a false impression as to the economic connection”, it does provide three elements which may be useful in this context (paragraph 46).
Firstly, consideration must be given to the extent of the information on the new label and whether that information gives the impression of an economic link (paragraph 47).
Secondly, account must also be taken of practices in the sector concerned and whether consumers are accustomed to the cylinders being refilled by operators other than the trade mark proprietor (paragraph 48). The ECJ adds that “if it were impossible to use compressed or liquefied gases independent of the metal containers holding them and if that type of cylinder may, accordingly, be regarded as packaging […], those cylinders – in so far as they are intended to be reused and refilled numerous times, according to the logic of recycling – will not necessarily be perceived as having the same commercial origin as the gas which they contain” (paragraph 49) and “that a consumer, who goes directly to an operator other than the proprietor of the original mark to have an empty cylinder refilled or to exchange it for a refilled cylinder, will be more readily in a position to be aware that there is no economic connection between that competitor and the trade mark proprietor” (paragraph 50).
Thirdly, a relevant factor is that the original mark remains clearly visible on the bottle, even after affixing an additional label, thus ruling out the possibility that the labelling has altered the condition of the bottles by masking their origin (paragraph 53).