European Union: A Recent Case Strengthens Rights of Trademark Holders in the European Union

Last Updated: 12 December 2001
Article by Paola Sangiovanni

The Recent Decision

On November 20, 2001 the European Court of Justice ruled upon an important case concerning the interpretation of trademark law. The Court’s decision shed light on controversial issues, which had sparked heated political debate at Community and national levels.

In the Levi Strauss vs. Tesco and Costco cases, the defendants, two British chains of department stores, bought Levi’s 501 jeans from authorized dealers in the United States, Mexico and Canada and sold them at substantially reduced prices in the UK. While Tesco and Costco maintained that they were not bound by any specific restriction on the importation of goods in Europe, Levi Strauss had not in fact expressed its consent to the importation of such goods in the European Union ("EU"). Could such consent be implied?

The Legal Framework.

A brief overview of the legal framework surrounding this issue will provide a better understanding of the implications of this case. The European Directive on Trademarks of 19891 establishes an exclusive right of the proprietor of a trademark to use his mark and consequently a right to prohibit third parties from using the trademark for any purpose, including the importation of original goods bearing his trademark. However, such an exclusive right of the proprietor is limited by the doctrine of "trademark exhaustion", which is embodied in Article 7 of the Directive and according to which the proprietor of a trademark is not entitled to prohibit its use in relation to goods put on the market in the EU by the proprietor himself or with his consent. In other words, once the trademarked goods have been imported into the EU by the proprietor or with his consent, then the trademark holder’s rights to control the use of its trademark are considered exhausted and the goods can freely circulate within the EU.

This particular regime is also referred to as the "European exhaustion" of trademark rights, as not any sale of trademarked goods by the trademark holder or with his consent exhausts his rights (such as in "international exhaustion"), but only sales within the EU trigger the exhaustion of trademark rights. In previous cases (e.g. Case C-355/96, the Silhouette case) the European Court of Justice had clarified that European exhaustion had to be adopted by every Member State, even by those whose legal systems had traditionally provided international exhaustion and where there was a strong presence of parallel traders taking advantage of the varying prices of original goods in different markets.

The Political Issues At Stake.

The issue amounts to a commercial and political struggle between trademark holders, who are interested in controlling the distribution of goods bearing their trademarks, and retailers, who advocate the unrestricted trade of original goods once they are first sold. The same dynamics are mirrored in the EU scenario, where countries who have strong trademark holders, such as Italy or France, are in favor of maintaining the European exhaustion regime, while other countries, such as Sweden or the UK, press for a change in the law to international exhaustion, maintaining that consumers’ interests should prevail over trademark holders’ rights. Current international legal trends promote both free trade between countries and stronger protection of intellectual property rights. Thus, it remains to be seen what balance will be struck between these two tendencies in the long run.

The Interpretation Of Consent.

Current law requires that a trademark holder consents to the initial importation of trademark goods into the EU. The requirement of obtaining the proprietor’s consent is crucial, as it allows him to control the imports of trademarked goods in the EU. In the absence of such consent, a trademark holder is entitled to stop any unauthorized importation of goods by parallel importers who source original goods from low priced markets. However, opposing views on the interpretation of the concept of "consent" were debated before the national courts and were later brought before the European Court of Justice. In the Levi Strauss vs. Tesco and Costco cases, for example, no explicit consent to the import of Levi’s 501 jeans was expressed.

The Court’s Ruling.

The European Court of Justice ruled that such consent must be unequivocally expressed or inferred by facts or circumstances that unequivocally demonstrate that the proprietor renounced his rights. Furthermore, the burden of proof has been placed on the trader, who must prove the alleged consent of the trademark holder, and therefore it is not for the trademark proprietor to demonstrate its absence. Consequently, implied consent cannot be inferred from the mere silence of the trademark holder. The Court also pointed out that it is not relevant that the trader is or is not aware that the proprietor objects to the placement of trademarked goods in the EU, hence making any bona fide exception eventually set forth by the trader unsuccessful.

Conclusion And Possible Developments.

The European Court of Justice has significantly strengthened the rights of trademark holders with regard to their exclusive control over the importation of original goods in the EU. The activity of importing original trademarked goods from outside the EU without the proprietor’s unequivocal consent is, therefore, a trademark violation. As a consequence, parallel imports of goods without the trademark proprietor’s consent may only be made between EU Member States. Unless the lobbying efforts of traders succeed in amending the current legislation, parallel trade may become attractive again only when new countries with lower priced consumer goods enter the EU.


1) Implemented in Italy by means of Legislative Decree no.480 of December 4, 1992.


The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions