On 24 August 2010 the Court of Appeal handed down a judgment in favour of M-Tech Data Limited in its trade mark infringement dispute with Oracle America Inc which may lead to clarification of the law on parallel imports and the availability of so called Euro defences.
Oracle Inc., a US based company which manufactures Sun computer hardware, accused M-Tech, an independent UK computer trader, of infringing its trade mark by importing second-hand Sun hardware into the UK from a dealer in the US without Oracle's consent. EU trade mark law states that it is an infringement to import goods bearing a trade mark into the EEA from outside the EEA without the trade mark holder's consent, even if the goods are genuine.
Oracle sought summary judgment in the High Court. In its defence, M-Tech maintained that Oracle had breached Articles 34 and 36 TFEU (formerly Articles 28 and 30 EC), which deal with the freedom of movement of goods between Member States. M-Tech argued that Oracle had not made it possible for dealers to distinguish between genuine Sun products first marketed in the EEA by Oracle and those first marketed outside the EEA and had prevented the attainment of a single market within the EEA.
Further, M-Tech argued that Oracle's agreements with its resellers were contrary to Article 101 TFEU, as these agreements required resellers to buy Oracle equipment, whether new or second-hand, from within the supply network. It was maintained that these provisions formed part of an overall scheme for excluding secondary traders from the market and were connected to the enforcement of Oracle's trade mark rights.
In December last year, the High Court granted Oracle summary judgment, ruling that M-Tech's 'Euro defences' had no real chance of succeeding if heard in full trial. M-Tech appealed.
The Court of Appeal has now over-turned the High Court, finding that M-Tech's defences are 'arguable' and that the matter should go to full trial. The Court of Appeal also stated that as M-Tech's defences raise issues of economic policy which may affect the whole of the EU, they may merit a reference to the European Court of Justice to decide certain questions, particularly as regards the extent to which competition law can be used as a defence in IP infringement claims.
The Court of Appeal noted that the case could have serious "financial and economic implications" for companies operating on "the grey market in Oracle, and possibly other, computer-hardware goods."
It remains to be seen whether an ECJ reference will be made and whether the trial judge will ultimately uphold M-Tech's Euro defences. The ruling by the Court of Appeal has however provided an opportunity for these defences to be heard in full and could potentially open the door to a shift in the relationship between brand owners and parallel importers
To view Community Week, Issue 486; 27th August 2010 in full, Click here
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