As Good as New' - Sale of Repaired or Refurbished Goods: Commendable Practice or Trade Mark Infringement?
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GRUR International, 00(0), 2021, 1–9
doi: 10.1093/grurint/ikaa187
Article
ANNETTE KUR*
‘As Good as New’ – Sale of Repaired or Refurbished Goods:
Commendable Practice or Trade Mark Infringement?
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Prolonging the life cycle of products in order to reduce waste and preserve resources is a call of our time.
Entrepreneurial activity on the market for used and repaired goods should therefore be encouraged. However, prob-
lems may arise where trade-marked products are offered for sale after repair or refurbishment by third parties. While
commercialisation of goods once put on the market by the trade mark holder or with their consent is free in principle,
this does not apply when the condition of the product was changed after the first sale. This may cause a dilemma for
persons who want to be active on the secondary market for repaired or refurbished goods: if the trade mark remains
on the product, this may result in infringement; on the other hand, under the jurisprudence of the CJEU removal of the
trade mark may equally be prohibited. This article explores the issue with a view to CJEU as well as German case law
on this and adjacent scenarios. It concludes that instead of a strictly binary choice – either the trade mark remains on
the product or is removed – a middle solution should apply that allows using the trade mark in relation to repaired or
refurbished goods in addition to providing further information.
I. Introduction mark after they had been repaired by a non-member of
the association. The request for preliminary decision was
In a recent lawsuit the Munich District Court had to de-
later withdrawn and the CJEU will not now have the op-
cide whether used and refurbished WLAN router boxes
portunity to rule on those matters.
can be sold under their trade mark, even though the
The cases demonstrate that there is uncertainty sur-
limited-function firmware contained in the original, spe-
rounding the conditions under which products can be
cial edition of the router had been exchanged against
commercialised under their trade mark after repair or re-
standard firmware operating without limitations.1 The
furbishment. And, whether or not one sympathises with
decisive question was whether the rights in the trade the defendant in the Munich router case, it is true that in
mark had been exhausted by the first marketing, or an age of growing concern about over-consumption and
whether the trade mark proprietor could invoke ‘legiti- waste control, prolonging the life cycle of – in particular –
mate reasons’ to oppose further commercialisation. The electronic products by repair or refurbishment can make
defendant argued that his actions saved the router boxes a meaningful contribution to ecology and sustainable de-
from being dumped, thereby contributing to goals set velopment.4 Incentivizing such activities by the original
forth in relevant legislation on the national and EU level.2 manufacturer, but also by third parties offering compet-
Furthermore, as the refurbished boxes complied with the ing services, lies in the interest of economy and society as
standard version of the product, consumers were neither a whole. For the same reason, the resale of repaired or
deceived, nor was the plaintiff’s reputation detrimentally refurbished goods saved from the dumpster should
affected. The Munich District Court nevertheless granted equally be encouraged. On the other hand, such sales
the claim, arguing that the changes undertaken after first might amount to trade mark infringement, if the products
marketing made the plaintiff’s request to stop further offered on the secondary market are no longer identical
commercialisation legitimate. with those originally released into commerce. Removing
Exhaustion also played a role in a case recently referred the trade mark from refurbished products before reselling
to the CJEU by the Supreme Court of the Netherlands them may not provide a safe solution either. As indicated
(Hoge Raad).3 The referring court asked whether the pro- in the CJEU decisions Portakabin5 and Mitsubishi,6 such
prietor of a collective mark for reusable pallets was enti- actions could equally be considered as infringing, with
tled to prohibit the commercialisation of pallets under the the exact ramifications still being unclear. This creates a
dilemma that could discourage third parties from entering
*Prof Dr, Max Planck Institute for Innovation and Competition, Munich.
1 District Court Munich I, decision of 9 April 2020, 17 HK O 1703/20.
2 For German legislation see Gesetz über das Inverkehrbringen, die
Rücknahme und die umweltverträgliche Entsorgung von Elektro- und 4 That goal is addressed inter alia in art 9(d) of Directive (EU) 2018/851
Elektronikgeräten (ElektroG), implementing Directive 2012/19/EU of the of the European Parliament and of the Council of 30 May 2018 amend-
European Parliament and of the Council of 4 July 2012 on waste electri- ing Directive 2008/98/EC on waste.
cal and electronic equipment (WEEE). Of course, as also noted by the 5 Case C-558/08 Portakabin v Primakabin ECLI:EU:C:2010:416 ¼
Munich District Court, the law does not authorise actions amounting to [2010] GRUR Int 861.
trade mark infringement. 6 Case C-129/17 Mitsubishi v Duma ECLI:EU:C:2018:594 ¼ [2018]
3 Case C-133/20 European Pallet Association v PHZ (withdrawn). GRUR Int 1187.
C Published by OUP and CH Beck on behalf of GRUR e.V. This is an Open Access article distributed under the terms of the Creative Commons Attribution-
V
NonCommercial-NoDerivs licence (http://creativecommons.org/licenses/by-nc-nd/4.0/), which permits non-commercial reproduction and distribution of the
work, in any medium, provided the original work is not altered or transformed in any way, and that the work is properly cited. For commercial re-use, please
contact journals.permissions@oup.com
12 Annette Kur
repair and resale markets, thus countering the economic have responded to that question, the following consider-
and societal aims highlighted above. ation will guide the presentation infra. The CJEU’s func-
In the following, the issues raised are considered and tions jurisprudence does not establish another dimension
put in context, in an attempt to outline a feasible route to- of trade mark protection; it only presents a taxonomical
wards a harmonised approach to using or removing trade scheme encapsulating the full spectrum of tasks that trade
marks from products which have been repaired or refur- marks are meant to perform in the context of competitive
bished by third parties, and which are sold thereafter markets. Within that scheme the essential function of
without the trade mark proprietor’s authorization. guaranteeing commercial origin corresponds to the ‘spe-
cific subject matter’ of trade mark law identified in earlier
II. Starting points CJEU decisions,13 while the additional trade mark func-
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tions designate further aspects of the proprietor’s interest
1. The relevant provisions sphere. Notably, however, the protection of those addi-
The legal basis for addressing the issues considered in this tional functions is limited in its scope by the principle that
article is found in several provisions of harmonised EU third-party actions remain possible where they comply
trade mark law. First, this concerns the conditions for in- with sound competition. In the special case of exhaustion,
fringement as set forth in Art. 9 of the European Union the conditions and limits of competition-conforming con-
Trade Mark Regulation (EUTMR).7 Because and insofar duct are enshrined in the pertinent provision, Art. 15(1)
as the trade mark used on (or removed from) the product and (2) EUTMR. Those conditions and limits remain
originally marketed under the mark is concerned, the valid irrespective of whether the actual conflict is resolved
‘double identity’ clause, Art. 9(2)(a) EUTMR,8 regularly via the double identity clause and the trade mark func-
applies. This means that in order to find for infringement, tions, or whether, after stating that the conduct falls in
it needs to be assessed whether the allegedly infringing principle within the ambit of the double identity clause,
conduct jeopardises or risks jeopardising in particular the the case is resolved on the basis of Art. 15(1) and (2). In
essential function of guaranteeing origin, or other pro- other words, the ultimate outcome does not depend upon
tected functions, such as the quality, advertisement, in- which route is taken.14 No additional criteria other than
vestment or communication functions.9 Second, even if those implied in the discussion of functions apply in the
the conduct falls within the ambit covered by the double framework of exhaustion. On the contrary, the exhaus-
identity clause, it must be assessed whether the right is tion principles govern the functions discussion in so far as
exhausted (Art. 15(1) EUTMR10), or whether legitimate an analysis conducted under Art. 9(2)(a) cannot lead to
reasons exist to oppose further commercialisation under different conclusions than what follows from Art. 15(2)
the mark. Such reasons exist especially where the condi- EUMTR and the jurisprudence developed in that
tion of the goods has been changed or impaired after they framework.
were put on the market (Art. 15(2) EUTMR11). Third, if
such reasons do exist, it must further be asked whether III. Related scenarios
and in which form the product can be commercialised at
all, and if so, whether the mark may be mentioned in that 1. Rendering and advertising repair services
context for informative purposes. In that regard the limi- In the cases presented in the introduction, the relevant
tation permitting descriptive and referential use (Art. products were meant to be sold after repair or refurbish-
14(1)(b) EUTMR12) is relevant as well. ment. Repair services rendered to (private) owners of a
product are to be distinguished from such cases. Those
2. Infringement or exhaustion? services are regularly unproblematic, and it does not mat-
In the pallets case, which was subsequently withdrawn ter whether the product is substantially changed in the
from the CJEU, the question was posed inter alia whether process15 because (and as long as)16 the use made of it
it suffices to consider the issue under the double identity remains a private matter and does not fall within the com-
clause and the trade mark functions implied therein, or mercial sphere.17 The only relevant question under
whether exhaustion must be considered separately (mean- aspects of trade mark law in such cases is whether, or
ing that additional reasons must be establish to justify op- rather in which way, the person providing the service
position against further commercialisation of the may use the mark in their advertisements. In BMW v
products). While it remains unclear how the CJEU would Deenik, the CJEU found that advertising such services in
7 Regulation (EU) 2017/1001 of the European Parliament and of the 13 See below, IV.1.
Council of 14 June 2017 on the European Union trade mark. The rele- 14 The CJEU’s case law offers examples for both kind of approaches; see
vant provisions in the EUTMR are exactly the same as in the Trade also below, IV.1.
Mark Directive, Directive (EU) 2015/2436 of the European Parliament 15 The German Federal Supreme Court even found that to be true in a
and of the Council of 16 December 2015 to approximate the laws of the case when a jeweller, on commission by private parties, ‘transformed’ a
Member States relating to trade marks (TMD). In the following, referen- standard version of Rolex watches into a luxury item resembling the
ces in the text only relate to the EUTMR, while the corresponding provi- ‘Royal Oyster’ model; Federal Supreme Court, decision of 12 February
sion of the TMD is indicated in the footnote. 1998, I ZR 241/95, [1998] GRUR 696 – Rolex-Uhr mit Diamanten.
8 art 10(2)(a) TMD. The double identity clause applies when an identical 16 This may be different if the changed products intended for commer-
sign is used in relation to identical products. cial sales and the person rendering the service is aware of that.
9 Established case law since Case C-206/01 Arsenal v Reed 2002 17 Joined Cases C-236/08 to C-238/08, Google and Google France v
ECLI:EU:C:2002:651 ¼ [2003] GRUR 55, para 47; for other functions Louis Vuitton et al 2010 ECLI:EU:C:2008:389 ¼ [2010] GRUR 445,
than that of guaranteeing origin see Case C-487/07 L’Oréal v Bellure para 50 with further references. Even sales of such products remain ‘pri-
ECLI:EU:C:2009:378 ¼ [2009] GRUR Int 1010, para 58. vate’ under legal aspects unless ‘owing to their volume, their frequency or
10 art 15(1) TMD. other characteristics, the sales . . . go beyond the realms of a private activ-
11 art 15(2) TMD. ity’; Case C-324/09 L’Oréal v eBay ECLI:EU:C:2011:474 ¼ [2011]
12 art 14(1)(b) TMD. GRUR Int 1025, para 55.‘As Good as New’ – Sale of Repaired or Refurbished Goods 3
terms like ‘specialist for X’ is permitted under the same In a somewhat different scenario, the defendant had
conditions as those applying to advertising the resale of filled, on commission by a third party not involved in the
goods.18 This means that such advertisement cannot be proceedings, energy drinks into cans marked with signs
prohibited if the mark is used in ways customary in the allegedly infringing the trade mark ‘Red Bull’.26 The
relevant sector of trade, without creating the impression CJEU found that the defendant only executed a technical
of commercial affiliation between the user of the mark part of the production process, and therefore did not ‘use’
and the trade mark proprietor, or otherwise seriously the allegedly infringing signs in the meaning of trade
damaging the reputation of the trade mark.19 However, mark law.27 Again, no infringement was found.
the mere fact that use of the mark, especially where it
enjoys a special reputation, lends ‘an aura of quality’ to 3. Sale of used goods
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the third party’s business is not sufficient to render the ad- Resale of used goods is another scenario closely related to
vertisement inadmissible.20 the one considered in this article. As follows from the rea-
soning in BMW v Deenik referred to above (1.), the CJEU
2. Refilling of containers considers advertising for such sales legitimate under cer-
Where liquids, gases or other products not marketable in tain circumstances, which necessarily implies that com-
loose form are sold in branded containers, issues may arise mercialisation of used goods under their mark is not
when refilling is undertaken by third parties. Because (and objectionable per se. In the same vein the CJEU noted in
as long as) the person purchasing the original product by Portakabin that that it was ‘settled case law’ that a
the transaction becomes the owner of the container, the pur- reseller of trade-marked goods placed on the market in
chaser is free to decide by whom the refilling is done. Such the EEA by the proprietor of the marks or with his con-
acts are undertaken in the private sphere and do not consti- sent may use the sign in his advertisement, ‘besides being
tute infringement. The only legally relevant question in this free to sell those goods’.28 The Court did not offer a spe-
cific reasoning on this point, apart from referring to its
context is whether the person undertaking the refilling can
previous decision in Dior v Evora.29 It did not make a dif-
be held liable for infringement. The CJEU had to deal with
ference that in contrast to Dior v Evora – which con-
this situation in Viking Gas v Kosan.21 The plaintiff held an
cerned parallel imports of new products – the original
exclusive license in the shape of composite gas bottles regis-
condition of BMW cars sold by Deenik was changed and
tered as a trade mark.22 The defendant refilled empty gas
probably impaired by the use which had been made of
bottles originally filled by the plaintiff and delivered them to
them, so that, based on a literal understanding of (then)
independent dealers, with additional labels bearing his name
Art. 7(2) TMD, a ‘legitimate reason’ might have existed
as well as additional information. Being asked whether this
to oppose further commercialisation under the sign. The
amounts to infringement, the CJEU responded that a bal-
CJEU obviously – and correctly – refrained from a for-
ance must be struck between the legitimate interests of the mal, literal reading of the exhaustion rule in favour of a
trade mark holder and the licensee, and the legitimate inter- contextual interpretation. In doing so the Court took ac-
ests of purchasers of those bottles, ‘in particular the interest count of the fact that buyers of used cars know what to
in fully enjoying their property rights in those bottles, and expect, namely a car which is no longer brand-new.
the general interest in maintaining undistorted competi- While the trade mark affixed to the product guarantees
tion.’23 The Court noted in this context that the trade mark that the car originated from the trade mark holder, it is
holder and the licensee had already fully realised the eco- understood that it does not – and cannot – guarantee its
nomic value of the bottle by the first sale,24 and that using current condition. As pointed out by the CJEU in
the mark to prevent the bottles from being refilled by others Portakabin, the consumers’ familiarity with the market
would unduly limit the purchaser’s choices and reduce com- for used goods regularly prevents that buyers are misled
petition on the downstream market.25 Infringement there- about commercial origin, or that the reputation of the
fore had to be denied. mark is seriously damaged.30
While resale of used goods is regularly unproblematic,
18 Case C-63/97 BMW v Deenik 1999 ECLI:EU:C:1999:82 ¼ [1999] sale of goods after repair or refurbishment is different in-
GRUR Int 438, para 63. sofar as changes are made which affect the substance of
19 ibid paras 49, 51 ff (with reference to Case C-337/95 Dior v Evora
ECLI:EU:C:1997:517 ¼ [1998] GRUR Int 140).
the goods to a (much) larger extent than mere use. The
20 BMW v Deenik (n 18) para 53. This was pronounced in regards to ex- depth of such interventions may, however, vary consider-
haustion, but it was declared equally applicable to advertisement of re- ably. In case of cars, for instance, this could concern re-
pair services (para 63). The limits drawn in that regard were not
respected in a judgment by the Federal Supreme Court concerning use of pair of small scratches or indents in the body parts, or
VW’s word/picture mark appearing in an advertisement for repair serv- exchange of major elements such as motor or brakes.
ices that contained a large number of other information – both text and That also precludes making general assumptions about
images – leaving no doubt as to the advertiser’s non-affiliation with VW.
Federal Supreme Court, decision of 14 April 2011, I ZR 33/10, [2011] consumers’ familiarity with the market of repaired goods,
GRUR 1135 – Große Inspektion. and the expectations they may entertain. This renders the
21 Case C-46/10 Viking Gas v Kosan ECLI:EU:C:2011:485 ¼ [2011] issue more complex, as is pointed out in more detail in
GRUR Int 827. Several years earlier the same situation was brought be-
fore the German Federal Supreme Court (Federal Supreme Court, deci- the following.
sion of 24 June 2004, I ZR 44/02, [2005] GRUR 162 – Soda Stream),
with the same result.
22 In addition, the plaintiff also sold gas in standard bottles on which the 26 CJEU Case C-119/10 Frisdranken v Red Bull ECLI:EU:C:2011:837 ¼
licensor’s word mark was affixed. In all other aspects the cases as well as [2016] GRUR 375.
the response by the CJEU were the same. 27 ibid para 30.
23 Viking Gas v Kosan (n 21) para 31. 28 Portakabin v Primakabin (n 5) para 77.
24 ibid para 32. 29 Dior v Evora (n 19).
25 ibid para 34. 30 Portakabin v Primakabin (n 5) para 84.4 Annette Kur
IV. Sale of goods after repair or refurbishment under the specific criteria developed in the CJEU’s juris-
prudence.39 In a parallel evaluation one could take for
1. Infringement under the double identity clause granted that the origin function is prima facie jeopardised
As suggested above (II.), it does not matter in principle by the repair or refurbishment, thereby satisfying the ‘first
whether the issue considered here is primarily treated un- step’-criterion mentioned above. This would allow
der the aspect of infringement (the double identity clause) embarking on a more detailed evaluation of the case un-
or exhaustion. However, even if the latter route is chosen, der the aspect of exhaustion.
it must be established as a first step that the issue at stake It is true that this kind of ‘shortcut’ foregoes a thor-
falls within the ambit of the rights conferred on the trade ough analysis of the origin function as well as the addi-
mark proprietor. This was confirmed by the CJEU in tional trade mark functions listed in L’Oréal v Bellure.40
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Silhouette.31 In that case the referring court had asked However, examples for that approach are equally found
whether (then) Art. 7(1) TMD alone could serve as a basis in CJEU jurisprudence. For instance, in BMW v Deenik41
for examining alleged trade mark infringement by import and in Gilette v L.A. Laboratories,42 the CJEU briefly,
of goods from a non-Member State. The CJEU denied without any further discussion, stated that (then) Art.
that question and instead referred to the double identity 5(1)(a) TMD was applicable, leaving the national courts
clause as the correct basis for the claim.32 to resolve the case under the provisions on exhaustion or
In the cases considered here, the general requirements the limitations. The curt approach taken in those cases
for applying the double identity clause are regularly ful- differs from L’Oréal v Bellure43 and the Adword cases.44
filled. The goods as well as the signs are almost always There the solution was sought on the basis of an in-depth
identical,33 and as the goods are offered for sale, the trade evaluation of the individual trade mark functions and the
mark affixed on them is used in ‘in the course of trade’ manner in which they might be affected by the allegedly
(with the sole exception of sales by private parties which in infringing conduct. This shows that the CJEU’s attitude
their volume and frequency do not go beyond the realms on this point is rather flexible. The approach chosen
of a private activity).34 In addition to those requirements, appears to depend on whether the actual issue is captured
CJEU jurisprudence regularly requires that the activity at by a specific legal provision (be it exhaustion or the limi-
stake jeopardises or risks jeopardising the functions of the tations). If that is the case, application of the double iden-
trade mark, in particular the essential origin function. In tity clause is confirmed without much ado and without
the cases considered here the products originally put on the entering more deeply into the functions analysis. In con-
market35 have been repaired or refurbished, which means trast, embarking on a full-scale functions analysis is con-
that they underwent certain changes after they left the sidered crucial where the catalogue of limitations is (or
hands of the trade mark proprietor or the person author- was45) silent on relevant point.
ised by him or her. That may allow concluding that, at In line with that scheme, it makes sense to state briefly
least in principle, use of the mark in relation to those prod- that Art. 9(2)(a) EUTMR applies, followed by an in-
ucts affects the origin function to a sufficient degree to trig- depth legal evaluation of exhaustion principles under Art.
ger application of the double identity clause. 15 (2) EUTMR. However, that is no dogma either. An ex-
That view is corroborated by a comparison with CJEU ception applies in any case where the changes effected by
jurisprudence concerning parallel imports.36 In those the process of repair or refurbishment are so substantial
cases the decisive question was whether the import, in- that the product is no longer the same. For instance, that
cluding measures undertaken by parallel importers to would be the case when a product is transformed so thor-
make the products marketable in the import country, in- oughly that it falls within a different product category. As
terfered with the specific subject matter of trade mark an example of this one could think of wooden pallets be-
rights. As the CJEU stated in HAG II37 as well as in Ideal ing transformed and sold as furniture (tables, chairs,
Standard,38 the specific subject matter coincides with the chests), with the original burnt-in sign still visible so as to
mark the ‘funky’ character of such items. Another exam-
essential function of trade marks, namely to guarantee
ple might be containers of canned drinks being moulded
that all goods bearing it have been produced under the
into lampshades, flower-pots or sculptures. Those cases
control of a single undertaking which is accountable for
could hardly be subsumed under the exhaustion provi-
their quality. While that subject matter remained unaf-
sion.46 They would not even fall under the double identity
fected by the unauthorised importation as such, any kind
clause. Instead they must be assessed for likelihood of
of tinkering with the product, including its package, was
considered as potentially harmful and had to be justified
39 See below, 2 (n 48 ff and accompanying text).
40 L’Oréal v Bellure (n 9).
31 Case C-355/96 Silhouette v Hartlauer ECLI:EU:C:1998:374 ¼ [1998] 41 Google and Google France v Louis Vuitton and others (n 17); Case
GRUR Int 695. C-323/09 Interflora v Marks & Spencer ECLI:EU:C:2011:604 ¼ [2011]
32 ibid para 35. GRUR Int 1050.
33 With few exceptions where a product is turned into something else (eg 42 Case C-228/03 Gilette v L.A. Laboratories ECLI:EU:C:2005:177 ¼
a wooden pallet turned into a piece of furniture), with the mark remain- [2005] GRUR Int 479.
ing affixed to it. For those cases see the text in this section, below. 43 L’Oréal v Bellure (n 9) para 58.
34 L’Oréal v eBay (n 17) para 55. 44 In particular Google and Google France v Louis Vuitton and others
35 For the purposes of this article, ‘market’ refers to the EEA. Imports (n 17) and Interflora v Marks & Spencer (n 41).
from third countries are not considered; they would anyhow be 45 The issue was more pressing under the previous law, when the cata-
infringing. logue of limitations was not broad enough to fully encompass referential
36 See below n 48 and accompanying text for a more detailed account of use of marks.
those cases. 46 It is true that the transforming act itself would be covered by exhaus-
37 Case C-10/89 HAG II ECLI:EU:C:1990:359 ¼ [1990] GRUR Int tion, submitting that the original product was released on the market by
960, para 13. the trade mark proprietor or with his consent, and was bought or other-
38 Case C-9/93 Ideal Standard ECLI:EU:C:1994:261 ¼ [1994] GRUR wise came to be owned by the person transforming it. The discussion
Int 614, para 37. above only concerns the sale of such products after their transformation.‘As Good as New’ – Sale of Repaired or Refurbished Goods 5
confusion, or, in particular where the original product • it must be established that opposing the marketing of
and the one into which it was morphed are not similar, (repackaged) products would contribute to the artifi-
for detriment done to, or unfair advantage being taken of, cial partitioning of the markets between Member
the affected trade mark’s reputation or distinctive charac- States;
ter.47 Without going into detail at this point, it is rather • the original condition of the product inside the packag-
unlikely that such confusion, detriment or free riding are ing must not be affected;
found, if and as long as the trans-morph is clearly recog- • it must be clearly stated who repackaged the product;
nised for what it is – namely used products put to a new • the presentation of the product must not be such as to
kind of use which is different and independent from what damage the reputation of the trade mark and of its
the product represented in its ‘first life’. proprietor;
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More frequent than such ‘exotic’ cases are sales of • the importer must give notice to the trade mark propri-
products which have been exposed to massive interven- etor before the product is put on sale, and, on demand,
tions into their substance, but which still remain within supply him with a specimen of the (repackaged)
the same category of goods. This could concern the re- product.
placement of motor, clutches and brakes in a car, or the Where those criteria are not met, any change affecting the
clockwork inside a watch. Regarding such cases it could packaging, labelling or branding of goods imported by
also be argued that they can only be treated as infringe- parallel trade can be opposed for ‘legitimate reasons’ in
ment, as the product sold after the intervention is not the meaning of Art. 15(2) EUTMR.
only a ‘changed’ or ‘impaired’ version of the original but In conflicts concerning resale of used goods the CJEU
has been turned into a completely different product. declared that those principles apply mutatis mutandis in-
However, that approach would make it necessary to sofar as detriment to the trade mark’s reputation must be
draw a bright line between repairs and refurbishment avoided, while advertising of such sales in the manner
resulting in a ‘different’ product and those that only result customary in the sector concerned cannot be prohib-
in change or impairment. As the grades in that scale are ited.51 Furthermore, the relevant public must not be mis-
most likely rather subtle, the division cannot be made led as to the existence of a connection between the
with confidence and certainty. It is therefore suggested proprietor and the reseller.52 The other requirements
that, with the sole exception of transformations into an- listed above do not apply. As the public is familiar with
other product category, sales of products after repair or the conditions of the market, they do not expect that the
refurbishment should primarily be evaluated within the quality of the goods is ‘unaffected’ by the use. Likewise, it
ambit of exhaustion. would be unrealistic and inappropriate to expect that
trade mark holders are previously informed about such
2. Exhaustion sales and can require samples.
Pursuant to Art. 15 EUTMR, the trade mark proprietor The question remains whether the same applies in case
cannot oppose further use of the mark in relation to that the products have been subject to more profound
goods which have been put on the market in the EEA un- changes than what results from mere use. As mentioned
der that trade mark by the proprietor or with his consent, above, there is no answer that covers all situations. For
unless there are legitimate reasons to oppose further com- instance, with used cars it is very common that minor
mercialisation of the goods. Such reasons exist especially repairs are undertaken from time to time. This forms part
where the condition of the goods is changed or impaired of purchasers’ expectations, and is usually mentioned in
after they were put on the market. the information given by the seller. If the purchaser feels
The provision codifies CJEU jurisprudence developed deceived afterwards because the seller’s information
prior to trade mark harmonisation on the basis of Arts. about the nature and frequency of repairs turns out to be
34, 36 TFEU and its predecessors.48 The conflicts trigger- incorrect, that is primarily a matter for contract law and
ing that case law concerned parallel importation, in par- possibly unfair competition; it does not give rise to trade
ticular of medicaments, which had to be repacked and mark infringement claims.
sometimes relabelled in order to comply with prescription Things may be different, however, if the replacement of
rules or habits in the country of import.49 With a view to essential parts has been so massive that only the outer ap-
such cases, the CJEU developed a catalogue of five pearance corresponds to the product originally placed on
requirements, which may be summarized as follows:50 the market, while its inside was more or less completely
rebuilt. For instance the German Federal Supreme Court
decided that a car that was virtually re-manufactured af-
ter having been involved in an accident could no longer
be sold under the original trade mark.53 A similar attitude
47 Provided that the other requirements for extended protection are ful-
filled, in particular that the mark has a reputation. seems to be reflected in the decisions by the Benelux
48 arts 30, 36 TEEC; arts 28, 30 TEC. The wording was the same in all Court briefly referenced in the Dutch Court’s referral to
versions. the CJEU in the pallets case.54 Pursuant to those rulings,
49 The CJEU made clear, however, that the criteria also apply to parallel
import of other products than medicaments (Case C-349/95 the proprietor of a trade mark can oppose the sale of
Loendersloot v Ballantine ECLI:EU:C:1997:530 ¼ [1998] GRUR Int
145, paras 27-29) and to other forms of intervention than repackaging
(relabelling: Loendersloot v Ballantine paras 27-29; rebranding: Case C- 51 Portakabin v Primakabin (n 5); see also BMW v Deenik (n 18) paras
379/97 Pharmacia & Upjohn SA v Paranova ECLI:EU:C:1999:494 ¼ 49, 51.
[2000] GRUR Int 159, paras 28, 30 and 31). 52 BMW v Deenik (n 18) paras 49, 51.
50 Joined Cases C-427/93, C-429/93 and C-436/93 Bristol-Myers 53 Federal Supreme Court, decision of 26 April 1990, I ZR 198/88,
Squibb v Paranova ECLI:EU:C:1996:282 ¼ [1996] GRUR Int 1144, [1990] GRUR 678 – Herstellerkennzeichen auf Unfallwagen.
para 79 and operative part; Case C-276/05 The Wellcome Foundation v 54 Benelux Court of Justice, judgment of 6 November 1992, Cases A 89/
Paranova ECLI:EU:C:2008:756 ¼ [2009] GRUR 154, para 23. 1 and A 91/1 – Valeo.6 Annette Kur
goods that were subject to ‘substantial’ repair. Another However, that option might be foreclosed for legal
example is provided by the Munich District Court’s deci- reasons.
sion regarding the refurbished router.55 While the prod- The issue has been addressed by the CJEU in
ucts conformed to routers usually sold under the trade Portakabin59 and in Mitsubishi.60 In Portakabin the de-
mark, they were no longer comprised of the special fea- fendant sold mobile buildings, originally put on the mar-
tures distinguishing them at the time of market release. In ket by Portakabin, after removing the mark affixed to
search of a formula capturing the commonalities of such them and replacing it with its own trade mark
cases one might say that the product sold under the trade ‘Primakabin’. In Mitsubishi the defendants removed the
mark has changed its identity. What is offered under the trade mark from Mitsubishi’s fork lift trucks, replacing it
trade mark is no longer the same product, but a different with their own mark, in the course of customs warehouse
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specimen of the same goods.56 procedures preceding importation of the products into
Identifying such cases and distinguishing them from the EEA. In Portakabin the CJEU found that using the
‘normal’ repair leaving the identity of the product intact mark ‘Portakabin’ in advertisements for the products
requires a case-by-case assessment. To some extent a par- now sold under the trade mark ‘Primakabin’ amounted to
allel might be drawn to the distinction applying in patent an encroachment of the origin function. The same was
law between permitted repairs and prohibited reconstruc- held in Mitsubishi, even though in that case the allegedly
tion of the patented product.57 However, the decisive ele- infringed trade mark had not been used in relation to the
actual products within in the EEA. In addition the CJEU
ment is not only the scale of intervention; further factors
found in Mitsubishi that the advertising and investment
are the expectations by the public, the customs in the sec-
functions were put in jeopardy.
tor concerned, and the specificities of the actual product.
The cases appear to signal that once a product has
For instance, the identity of fashion products like jeans
been put on the market under a trade mark – within or
changes when they are dyed a different colour, even
outside the EEA – anyone removing that mark and replac-
though the substance of the fabric and the cut of the gar-
ing it with their own sign commits an infringement when
ments remain unaffected.58 Also, in the pallets case the
the product is subsequently commercialised in the EU.
products would no longer be the same if, as a result of the Thus, the right pertaining to the use of trade marks for in-
repair, they no longer fit into the system established under dicating commercial origin is transformed into a right
the collective mark. governing the commercialisation of products once desig-
Situations where the repair as such does not disrupt the nated by the mark. There is no discussion on this point in
identity of the product, but the work carried out does not the CJEU decisions, making it hard to tell whether the
meet ordinary quality standards are to be distinguished Court took notice of, and deliberately embraced, that par-
from such cases. The decisive aspect in such a scenario adigm shift. The silence is remarkable, as the issue can
would be whether the quality level is impaired to an ex- hardly pass as a negligible detail. The CJEU thereby im-
tent that would seriously damage the reputation of the plicitly dismantles one of the basic tenets of trade mark
trade mark or its proprietor. In that case, legitimate rea- law, namely that protection of trade marks does not inter-
sons would exist to oppose further sales. It should be un- fere with the product market as such.
derstood, however, that the benchmark for finding such In both decisions the CJEU motivated its findings by
impairment should not be set too low. It is not for the declaring that the origin function of the mark had been
trade mark proprietor to determine and monitor the qual- jeopardised. That reasoning reveals a literal understand-
ity level to which repaired and refurbished goods should ing (‘consumers must be informed about the ‘true origin’
correspond. This rather depends on the expectations by of products’) which has no basis in commercial reality or
the buying public and the factors impacting them, such as in previous jurisprudence. Thus, no one expects consum-
the price of the product and accompanying information ers to be informed about the ‘true origin’ of goods sold
(see infra, 4.). under supermarkets’ or drugstores’ own labels. Also, no
one hinders proprietors of high-end trade marks from
3. Further circulation of the product selling surplus production under ‘cheap’ labels, although
If legitimate reasons do exist to oppose further commerci- informing consumers about the true origin of such prod-
alisation of the product, the question remains whether ucts would likely be highly relevant for them. The fact
this means that the products must be taken off the market that the origin function has little to do with a literal un-
derstanding of information about actual origin is also
entirely, or whether they may still circulate, if only under
well-establish in case law defining that function: it is not
certain conditions.
about more or less than guaranteeing to the public that
Under economic aspects (as well as for reasons of sus-
the product is marketed under control of the person
tainability and preservation of resources), the latter alter-
whose mark is affixed on it.61 It is irrelevant who actually
native presents the preferable solution. In that light it
made the product; likewise, the fact that the product was
could be asked whether it is advisable for resellers in
originally marketed under a different mark neither
unclear situations to remove the mark from the product.
changes nor affects the message conveyed by the mark ac-
tually displayed.
55 Above n 1.
56 As noted above, this is why at least some of those cases could also be
subsumed under art 9 EUTMR. 59 Portakabin v Primakabin (n 5).
57 For German law see Federal Supreme Court, decision of 4 May 2004, 60 Mitsubishi v Duma (n 6).
X ZR 48/03, II 3 b ß, [2004] GRUR 758, 762 – Flügelradzähler. 61 See for instance Arsenal Football Club v Reed (n 9) para 48; Case C-
58 Federal Supreme Court, decision of 14 December 1995, I ZR 210/93, 259/04 Elizabeth Emanuel ECLI:EU:C:2006:215 ¼ [2006] GRUR Int
[1996] GRUR Int 726 – Gefärbte Jeans. 594, paras 45, 46.‘As Good as New’ – Sale of Repaired or Refurbished Goods 7
While the CJEU’s musings about the origin function legitimate interests of trade mark holders. Also, regarding
appear ill-founded, it is true that removal of marks may the selling of gas that is filled into containers protected as
jeopardise the legitimate interests of trade mark proprie- trade marks62 the CJEU based its decision on an analysis
tors, where that seriously interferes with the possibility to of the market situation, balancing the interests of the
draw benefit from the trade mark’s capacity to attract trade mark holder against the interests of consumers and
customers so as to establish and maintain commercial competitors in unimpeded competition on the secondary
goodwill. As stated above (II.), however, the advertising market. The same approach must govern also here. There
and investment functions encompassing those interests is no pertinent reason why products no longer conform-
are only protected insofar as conduct which does not ing in their substance to the goods placed on the market
comply with principles of sound and efficient competition under a trade mark should not be allowed to circulate fur-
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is concerned. Therefore, the answer cannot be an apodic- ther, if they are still able to fulfil their purpose, and if
tic one but depends on the circumstances of the situation measures are taken to protect the trade mark holder’s
concerned. interests. As stated above (I.), encouraging a more
In the cases considered here this means that account thoughtful handling of resources responds to a strong and
must be taken of the fact that removal of the mark and its growing societal concern, and incentivising repair and re-
replacement by another is not motivated by the wish to use of ‘broken’ products instead of dumping them can
pass off a product originally marketed under a different contribute to that aim. That concerns not only the offer-
mark as one’s own. Rather, it is motivated by a desire to ing of relevant services, but also the opening of markets
keep a product which is still fit for its purpose ‘alive’, for resale of repaired and refurbished goods. It would be
even though it no longer conforms to the original condi- counter-productive to that goal if persons willing to enter
tion under which it was first marketed. It should be clear that market would have to face a high risk of being found
that even beyond the misgivings articulated above, re- liable for infringement if the product is re-sold under the
moval of the mark in this situation cannot result in jeop- original mark, but that a finding of infringement is even
ardising the origin function if, due to changes affecting more certain if the mark is removed, leaving them without
the substance, the product in its actual shape no longer a safe modus operandi.
originates from the trade mark proprietor, but rather For the same reasons, Art. 46 TRIPS cannot apply to
from the person transforming it. Likewise, regarding the the situation addressed here. Products which after repair
additional trade mark functions, the fact that removing or refurbishment no longer conform to the original can-
the mark interferes with the trade mark holder’s commer- not be equated to counterfeit goods. Postulating that such
cial strategies cannot be considered as detrimental if and goods must be destroyed or otherwise kept off the market
because the proprietor would not want to be associated for legal reasons seems absurd. It is true that the interests
with the products in their actual condition. The fact that of trade mark proprietors must be heeded. However, as is
the trade mark proprietor may prefer that the goods dis- explained in the following section (4.), this can be done
appear from the market altogether, or that resale of refur- by other means than declaring the product itself unlawful
bished products be entirely reserved to himself or persons and banning its circulation.
authorised by him cannot be decisive.
It is true, however, that certain elements in the legal 4. ‘Combined use’
framework might indicate that further circulation of While no cogent reason exists to denounce removal of
products that can no longer be sold under their trade marks as illegal per se,63 the solution is no panacea.
mark is completely prohibited. In particular, Art. 15(2) Removing the mark is a drastic measure, and in grey zone
EUTMR refers to the trade mark proprietor’s right to op- cases – when it is unclear whether or not further commer-
pose ‘further commercialisation’ of goods, instead of lim- cialisation can be prohibited under Art. 15 (2) EUTMR –
iting the opposition to ‘further commercialisation under it is preferable to employ less intrusive means. It must
the trade mark’. This could corroborate the position that also be noted that in some cases the trade mark cannot be
the product itself may no longer be put on the market af- removed for physical or technical reasons. That may be
ter it has been changed or impaired. Also to be noted is true in particular for electronic items where display of the
that Art. 46 TRIPS stipulates in its last sentence that in mark is engrained in the operating system, but also in
case of counterfeit products, a simple removal of the case that the mark is embossed into the product body or
mark does not suffice as a sanction, but that the products burnt into its surface, or when the shape of the product is
themselves must be destroyed. its own trade mark.64 Lastly, the reseller as well as cus-
However, those provisions do not impose a solution tomers may have an interest to give and receive informa-
prohibiting further circulation of changed goods under
tion about the identity of the original brand, which
any circumstances. The rule set forth in Art. 15(2)
deserves at least some consideration.
EUTMR must not be understood literally, but should be
There is indeed no need to insist on a strictly binary so-
put in context. This corresponds to the CJEU’s reading of
lution in the sense that either the product is further circu-
the provision in connection with resale of used goods. As
lated under the trade mark, or the trade mark is removed
pointed out above (III. 3), the Court did not even consider
(and replaced by another one). A middle solution is possi-
it necessary to address the fact that products sold on the
ble if, by additional labelling or accompanying product
secondary market are regularly changed and possibly im-
information, it is clarified that, how and by whom the
paired due to the use that was made of them. It is taken
for granted that such markets are a well-known and ac-
cepted part of economy and that, if it is indicated by ac- 62 Above, III. 2.
63 As pointed out above (3.), this does not exclude a finding of infringe-
companying information that the goods are not new, use ment either, depending on the circumstances.
of the sign neither misleads consumers nor jeopardises the 64 This was the case in Viking Gas v Kosan (n 21); above, III.2.8 Annette Kur
original product has been transformed. Use of the original model cars was able to neutralise the impression other-
trade mark in that context would not have to be infring- wise created by the automotive company’s trade mark
ing if – under the functions analysis – neither the origin affixed to the toy models.71 Similarly, the CJEU consid-
function nor the additional functions are seriously af- ered sales of used goods as unproblematic (only) in case
fected, or if – under the scheme preferred here – the use that such sales are announced with ‘additional wording
made falls within the ambit of Art. 9(2)(a) EUTMR, but indicating that the relevant goods are being resold, such
is permitted under specific provisions (exhaustion or the as “used” or “second-hand”’.72 Thus, it is in line with
limitations). CJEU jurisprudence if the focus of the legal assessment is
Of primary interest in this context is Art. 14(1)(b), (2) widened so that it envisages not only the presence or ab-
EUTMR. Pursuant to that provision, use is permitted ‘of sence of the trade mark on the products concerned but
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signs or indications which are not distinctive or which also the accompanying information given on, or in con-
concern the kind, quality, quantity, intended purpose, nection with, those products.73
value, geographical origin, the time of production . . . or Allowing combined use of marks either by additional
other characteristics of the goods’, provided that such use labelling74 or by information announcing and accompa-
complies with honest practices. nying the sales of repaired or refurbished goods would
The German Federal Supreme Court relied on that pro- substantially improve the basis for resolving the complex
vision (or rather its counterpart in the German Trade issues arising in the cases considered here. This would
Mark Act, Sec. 23(b)) inter alia65 in a decision concerning present a welcome relief for those who want to be active
the use of the defendant’s sign on a metal label affixed to on the secondary market but wonder how to navigate the
refurbished automobile component parts which also narrow straits between infringement and exhaustion.
showed the trade mark of the original maker.66 The Telling exactly when repairs are no longer ordinary main-
Federal Supreme Court found no fault in the appeal tenance work but change the identity of the product, or
court’s reasoning that the professional circles to whom when the quality level of the intervention risks jeopardis-
the refurbished parts were delivered understood that the ing the trade mark proprietor’s reputation can be a deli-
additional label only referred to the refurbishment under- cate task, and it could lead to disproportional results if
taken by the defendant, while the plaintiff’s trade mark misjudgements would automatically entail harsh sanc-
indicated the original origin of the goods.67 The same rea- tions. In such situations it is preferable to give the reseller
soning applied in a case concerning Porsche cars that had leeway to leave the mark on the product or otherwise use
been tuned after first sale by an independent company it in connection with the goods, provided that the re-sale
and were subsequently offered for sale under both marks is accompanied by correct and sufficiently detailed infor-
(‘Porsche 911 . . . with TECHART modification’).68 mation about the fact that the products were repaired,
The CJEU has yet to address similar cases of combined refurbished, or otherwise changed, and by whom the
use. However, in parallel import cases the CJEU requires work was carried out.75
that the name and address of the company re-packaging
the goods must be clearly indicated on the product, along- V. Conclusions and suggestions
side with the original trade mark.69 Furthermore, in the Complex issues do not lend themselves to easy solutions.
case of refilled gas containers, the CJEU tacitly approved Balancing the interests of trade mark proprietors, actual
of the fact that the refilling company affixed its own trade or potential competitors on secondary markets, consum-
name on the trade-marked containers.70 In the same vein, ers, and society as a whole requires flexibility and readi-
the CJEU repeatedly emphasised that for deciphering the ness to focus not only on one particular aspect – the
message conveyed by use of a sign, account may have to presence or absence of trade marks affixed or otherwise
be taken of additional information given on, or in close used in relation to relevant goods – but to engage in a
relation to, the relevant goods or services. For instance,
the fact that the actual maker’s trade mark or trade name
71 C-48/05 Adam Opel ECLI:EU:C:2007:55 ¼ [2007] GRUR Int 404,
appeared on the package as well as on accessories of scale paras 23, 24 (in conjunction with the referring court’s observations).
72 Portakabin v Primakabin 2010 (n 5).
73 However, that only applies within certain limits. Thus, no account is
65 In addition to the cases addressed below, see Federal Supreme Court, taken of information solely provided by the situation at the point of sale
decision of 12 February 1998, I ZR 241/95, [1998] GRUR 697 – Venus – for instance a billboard announcing that the marks are used without
Multi, where it was found permissible that the defendant attached to authorisation by the trade mark proprietor; see Arsenal v Reed (n 9) para
gambling machines transformed by him into (no-money) gaming 57. This dictum has been interpreted by some as indicating that EU trade
machines a sign reading ‘remodelling of gambling machine “VENUS mark law encompasses so-called post-sales confusion. However, the basis
MULTI” of [original maker’s trade name] into gaming machine “fruit for that contention is rather thin (see Ansgar Ohly, ‘Post-sale confusion?’
point” by [defendant’s trade name].’ in Wolfgang Büscher and others (eds), Marktkommunikation zwischen
66 Federal Supreme Court, decision of 14 December 2006, I ZR 11/04, Geistigem Eigentum und Verbraucherschutz, Festschrift für Karl-Heinz
[2007] GRUR 705 – Aufarbeitung von Fahrzeugkomponenten. Fezer zum 70. Geburtstag (CH Beck 2016) 615-632.
67 ibid para 23 f. 74 The question could be posed whether such additional labelling clashes
68 Federal Supreme Court, decision of 12 March 2015, I ZR 147/13, with art 20 TRIPS, which stipulates that ‘use of a trademark in the course
[2015] GRUR 1121 – Tuning. Different from other cases discussed in of trade shall not be unjustifiably encumbered by special requirements,
this context, the defendant’s mark was not affixed on the car itself, but such as use with another trademark . . .’. However, that provision is only
was only mentioned in the sales announcement, while the trade mark meant to address the situation that such use jeopardises the distinctive
‘Porsche’ remained on the car. character of a mark by linking it to another sign. Vice versa, the provi-
69 Above, n 50 and accompanying text. sion expressly allows ‘combined use’ for informative purposes, such as
70 Viking Gas v Kosan (n 21). The defendant’s affixing of an adhesive la- informing the public who actually made the product under the trade
bel was mentioned, but not expressly discussed by the CJEU. In the paral- mark holder’s license, provided that such information is only given ‘along
lel case decided in Germany (above, n 21), however, the Federal Supreme with’ the original trade mark, without creating a link between the two
Court placed much emphasis on the fact that by adding the label, the de- signs (art 20 2nd sentence TRIPS). The same precautions would apply
fendant had changed the message conveyed by the original trade mark here.
from an indication of (actual) origin into a mere descriptive indication of 75 Such information was lacking in the Munich router case (above n 1).
original (but no longer actual) origin. Had it been provided, the outcome might have been different.‘As Good as New’ – Sale of Repaired or Refurbished Goods 9
context-sensitive evaluation of infringement, exhaustion However, it triggers the well-known dilemma that while
and limitations. This means that inter alia account must be such thinking enhances flexibility, it reduces the level of le-
taken of accompanying information given by the reseller, as gal security. The effect is particularly precarious in a re-
well as of overarching aspects such as the societal goal of gional legal system such as the EU where trade mark law is
preserving resources and reducing waste. It is true that by uniform in principle, but where national attitudes and tradi-
factoring the reseller’s motivation as well as his readiness to tions may still prevail in adjacent, non-harmonised areas
provide neutral background information into the assessment such as unfair competition in B2B matters.
of trade mark infringement, the evaluation gradually shifts Such lacunae may be filled over time, as the CJEU can
from a pure trade mark law analysis towards an unfair be expected to persistently plough its way further into the
competition-informed approach. However, that phenome- area, whenever an opportunity arises. Formal harmonisa-
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non is neither new nor unusual. Ever since trade mark law – tion is another option, though it appears to be a long shot
with active support from the CJEU – has broadened its given the political climate at the moment. An intermediate
scope to encompass forms of trade mark use that were pre- solution could be found in continuing contacts between
viously considered to fall within the realm of unfair compe- EUTM judges for the exchange of questions and mutual
tition law only, trade mark law itself was imbued with a information. This has worked in the (even more special-
good portion of unfair competition law thinking (‘Trojan ised) patent field and it is commendable in trade mark
horse effect’76). There is no reason to complain about this. law as well.77
76 For that expression and the phenomenon it describes see Annette Kur
and Ansgar Ohly, ‘Lauterkeitsrechtliche Einflüsse auf das Markenrecht’
[2020] GRUR 457.
77 The task is currently undertaken by the Circle of European
Trademark Judges (CET-J; ), initiated by Marianne
Grabrucker and conducted under the patronage of the European Law
Academy (Europäische Rechtsakademie; ERA).You can also read
