DIESEL CAN'T STRIP MONTEX OF ITS TROUSERS

Diesel can't strip Montex of its trousers

This morning the European Court of Justice ruling in Case C-281/05, Montex Holdings Ltd v Diesel SpA, was posted on the Curia website. The dispute was simple: Montex makes jeans by exporting the different pieces from Ireland to Poland, including bits that incorporate trade marks. These exports use the customs seal procedure. Once the pieces are sewn together in Poland, Montex reimports them to Ireland, where fashion jeans company Diesel has no trade mark protection.

Right: following its unsuccessful attempt to exercise trade marks against goods in transit, Diesel turns its zeal for law reform to less controversial issues.

In 2000 (before Poland joined the European Union) the German customs held back a consignment of 5,076 pairs of women’s trousers bearing the name DIESEL, which a Hungarian transporter hoped to take through Germany by road. Removal of those trousers in the course of transit was prevented by a customs seal fixed to the trucks by the Polish authorities. Montex objected, claiming that the mere transit of goods through Germany did not infringe Diesel's trade mark rights. Diesel disagreed and applied for an order prohibiting Montex from carrying its goods across the territory of Germany, or from allowing such transit. It also asked that Montex be ordered to consent to the destruction of the trousers or, if it so chose, to remove all labels and other distinctive signs bearing the name DIESEL and to consent to their destruction, with Montex paying the costs. Montex, having lost at first instance and on appeal, appealed further to the Bundesgerichtshof, which decided to stay the proceedings and refer the following questions to the Court of Justice for a preliminary ruling:

"(1) Does a registered trade mark grant its proprietor the right to prohibit the transit of goods with the sign?

(2) If the answer is in the affirmative: may a particular assessment be based on the fact that the sign enjoys no protection in the country of destination?

(3) If the answer to (1) is in the affirmative and irrespective of the answer to (2), is a distinction to be drawn according to whether the article whose destination is a Member State comes from a Member State, an associated State or a third country? Is it relevant in this regard whether the article has been produced in the country of origin lawfully or in infringement of a right to a sign existing there held by the trade-mark proprietor?".

Left: consumers celebrate the right to keep their trousers

The ruling of the ECJ goes like this:

"1. Article 5(1) and (3) of ... Council Directive 89/104 ... is to be interpreted as meaning that the proprietor of a trade mark can prohibit the transit through a Member State in which that mark is protected (the Federal Republic of Germany in the present case) of goods bearing the trade mark and placed under the external transit procedure, whose destination is another Member State where the mark is not so protected (Ireland in the present case), only if those goods are subject to the act of a third party while they are placed under the external transit procedure which necessarily entails their being put on the market in that Member State of transit.

2. It is in that regard, in principle, irrelevant whether goods whose destination is a Member State come from an associated State or a third country, or whether those goods have been manufactured in the country of origin lawfully or in infringement of the existing trade mark rights of the proprietor in that country".

The IPKat wonders how Diesel must have felt, reading the answer to the first question. Till they got to the last clause (beginning with the word "only") they must have thought they'd won. Merpel adds, this decision - however angry it will make trade mark proprietors who must already feel that the whole world is against them - must have been inevitable after the ECJ's earlier ruling in Case C‑405/03 Class International [2005] ECR I‑8735 (noted here by the IPKat).

A more discreet form of transport here