LIMONCHELO - the AG opines; Mastercigars appeal allowed

After a few quiet days it's all happening in Luxembourg again. In Case C-334/05 P OHIM v Shaker di L. Laudato & C. Sas, Advocate General Juliane Kokott advised the European Court of Justice yesterday to annul the ruling of the Court of First Instance in the controversial LIMONCHELO opposition (on which see IPKat post here). Alas, it's available in only 11 official languages of the European Union, including Latvian, Slovak and Slovene - but not English. The IPKat won't even pretend to provide any reasoning, but begs his friends to come to his aid and tell him what the reasoning is. Merpel says, but I thought the word was vaguely generic anyway - can any alcohol expert advise?


Who said that the trade mark owner's unequivocal consent to the importation of non-EU goods into the European Union only existed in theory but would never be likely to occur in practice? In Mastercigars Direct Ltd v Hunters & Frankau Ltd; Corporacion Habanos SA v Mastercigars Direct Ltd and Kenyon [2007] EWCA Civ 176 the Court of Appeal for England and Wales yesterday reversed the decision of Judge Michael Fysh QC (noted here by the IPKat), sitting as a Chancery Division judge. Lords Justices Chadwick, Jacob and Lloyd heard the appeal.

Left: parallel importation makes luxury goods available to ordinary folks at affordable prices (artwork found on Truthdig)

In this action Mastercigars appealed against a ruling that the parallel importation of Cuban cigars into the UK infringed the UK registration of the cigars' trade marks in respect of which Habanos was the UK exclusive distributor. Mastercigars had imported consignments of Cuban cigars into the UK which it bought from a retail outlet in Cuba. This outlet was allowed by the Cuban trade mark owner to sell up to $25,000 worth of cigars to any individual on any one occasion, each sale being recorded on an invoice or "factura" in triplicate, one part of which had to be presented to Customs on leaving Cuba. One such consignment was seized by UK Customs as counterfeit at the instigation of Habanos.

Mastercigars went to court, claiming a declaration as against Habanos that there was no trade mark infringement and seeking the release of the consignment. Judge Fysh held that the consignment was not counterfeit, but considered that the parallel importation did infringe the trade marks because the trade mark owner had not consented to the goods being put on the market within the European Economic Area. On appeal, Mastercigars argued that Judge Fysh had not fully considered the facts and that it was sufficient to show that consent to importation had been given by a party that was legally or economically linked to the trade mark owner.

Allowing the appeal, their Lordships (for whom Jacob LJ delivered the judgment) said:

* When considering whether consent to importation could be implied, the factors to take into consideration had to demonstrate unequivocally that the trade mark proprietor had renounced any intention to enforce his exclusive rights;

* "unequivocal" referred to the nature of the consent, not to the standard of proof that was needed when establishing it: the level of proof was that of civil proceedings, which meant that consent had to be established on a balance of probabilities rather than beyond all reasonable doubt. An act which was proved to have occurred and was consistent both with such consent and consistent with its absence was insufficient;

* consent had to emanate from a "point of control", focusing on what was really happening, on actual knowledge and actual, practical control or the right of control by the trade mark owner (in this case that meant concentrating on the acts of the Cuban trade mark owner and its legal and de facto powers of control);

* the Cuban trade mark owner had unequivocally consented to the sale of the consignments in Europe, by allowing Cuban retailers to sell small but commercially significant quantities of cigars to foreigners, furnishing them with documentation so that they could go through Customs and take them home to sell. This meant that consent had been given for the use of the trade marks on the purchaser's home market. That conclusion applied to purchases by Europeans for sale within Europe as it did elsewhere.

* on this basis Judge Fysh was wrong in concluding that Mastercigars knew of any objection to local purchase for export to Europe and in failing to consider the impact of the evidence as a whole.

The IPKat acknowledges that this is all a matter of how you look at the facts and what the word "unequivocal" does for you: if a set of facts is 51% likely to support proposition A and 49% likely to mean nothing at all, then he has no difficulty in agreeing with the court - but where a set of facts is 51% likely to support proposition A and 49% likely to support proposition B, he's less comfortable with the notion that "uniquivocal" has been satisfied. Merpel says, when arguing your points before the Court of Appeal and Jacob LJ is there, be sure to keep him happy by ensuring that your submission are "shorn of an encrustation of case references" and that you use plenty of numbering (see para.16 of the judgment).

Cigar Cyclopaedia here
Make your own cigars here
How to smoke a cigar without annoying others here
Cigars and cancer here