The Case That Time Forgot: Dutch can now blow cobwebs off old Bacardi

Like a good dinner, a good drink with friends and a few other special things in life, a good piece of litigation should be savoured rather than rushed.  Case C 379/14 TOP Logistics BV, Van Caem International BV v Bacardi & Company Ltd, Bacardi International Ltd; Bacardi & Company Ltd, Bacardi International Ltd v TOP Logistics BV, Van Caem International BV might have been one such case in the eyes of its parties and participants, though this Kat isn't so sure.  The decision was almost overlooked by this Kat in his excitement at the emergence yesterday of the Coty Germany and Huawei/ZTE rulings of the Court of Justice of the European Union (CJEU). Apologies, if you were waiting in vain for a Katpost on it yesterday.

This case, involving quantities of Bacardi rum, is of some antiquity, in that the sequence of events leading to the litigation began in 2006 and the Dutch litigation kicked off in 2008. Fortunately, so long as you don't open your bottles of rum, they should last pretty well indefinitely, so they won't have gone off by the time the referring court receives this ruling and acts upon it [it's just as well the drink was rum and not Bailey's Irish Cream, thinks Merpel, since it's two-year taste guarantee is not much different from the time it takes to refer questions to the CJEU for a preliminary ruling and then get the chance to answer them]. Anyway, the story goes like this.

Mevi (subsequently TOP Logistics), a licensed customs and excise warehouse operator, stored goods for importer Van Caem, including several consignments of Bacardi rum which were imported from outside the European Economic Area. They were held under the customs suspension arrangement for external transit or customs warehousing of ‘T1 goods’ which were not intended to be marketed within the EEA.  Some of those goods were later released for free circulation. Once they left the customs suspension arrangement, which was regulated by Articles 91, 92 and 98 of the Customs Code, they were placed in a tax warehouse.

Bacardi got to hear about this and, learning that the product codes had been removed from the bottles, had them seized, alleging infringement of its BACARDI trade marks and seeking various orders from the Rechtbank (District Court) Rotterdam. In November 2008 the Rechtbank held that the introduction of these bottles into the EEA infringed Bacardi’s Benelux trade marks, granted some of the requested relief. TOP Logistics then appealed to the Gerechtshof Den Haag and Van Caem was granted leave to intervene in those appeal proceedings.

By an interlocutory judgment in October 2012, the Gerechtshof ruled that, as long as the Bacardi bottles had the status of T1 goods, there was no infringement of Bacardi’s Benelux trade marks. However, as to whether those marks had been infringed once the goods at issue had been placed under the duty suspension arrangement, the Gerechtshof decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘These questions concern goods originating outside the EEA which, after having been brought into the territory of the EEA (neither by the trade mark proprietor nor with its consent), are placed in a Member State of the European Union under the external transit procedure or under the customs warehousing procedure …

(1) Where such goods are subsequently placed under a duty suspension arrangement, as in the present case, must those goods then be regarded as having been imported within the meaning of [the long repealed and re-enacted] Article 5(3)(c) of Directive 89/104 with the result that there is “use (of the sign) in the course of trade” that can be prohibited by the trade mark proprietor pursuant to Article 5(1) of that directive?

(2) If Question 1 is answered in the affirmative, must it then be accepted that in circumstances such as those in the case at issue, the mere presence in a Member State of such goods (which have been placed under a duty suspension arrangement in that Member State) does not prejudice, or cannot prejudice, the functions of the trade mark, with the result that the trade mark proprietor which invokes national trade mark rights in that Member State cannot oppose that presence?’

The CJEU decided not to ask for an Advocate General’s Opinion, and this is what it said:

* The proprietor of a trade mark registered in one or more EU Member States must be able to control the initial marketing of its goods in the EEA.  That's why Article 5 of the trade mark approximation directive, Directive 89/104 [now Article 5 of Directive 2008/95] gives the trade mark proprietor exclusive rights to prevent any third party importing goods bearing its mark, offering the goods, or putting them on the market or stocking them for those purposes without its consent.

* Here, the Bacardi bottles were produced outside the EEA and brought into its customs territory without Bacardi's consent, where they were placed under a suspensive customs arrangement which ended once they were released for free circulation. This gave rise to a duty to pay import duties, and the bottles were thus to be regarded as having been imported; this being so, case law to the effect that the placing of trade marked goods under a suspensive customs arrangement cannot in itself infringe the exclusive right of the proprietor of the trade mark does not apply.

* The proprietor of the trade mark is not in any way obliged to wait for the release for consumption of the goods covered by its trade mark before it can exercise its exclusive right: it can also oppose certain acts committed without its consent, before that release for consumption, including their. importation and storage for the purpose of putting them on the market.  This being so, the actions of Van Caem, in importing the bottles into the EU without Bacardi's consent, then detaining them in a tax warehouse until the payment of import duties and their release for consumption, were ‘using in the course of trade any sign which is identical with the trade mark in relation to goods … identical with those for which the trade mark is registered’, under Article 5(1) of Directive 89/104.

* The terms ‘using’ and ‘in the course of trade’ used in Article 5(1) cannot be interpreted as meaning that they refer only to immediate relationships between a trader and a consumer. However TOP Logistics, in providing a warehouse service for goods bearing another’s trade mark, did not 'use a sign identical to that trade mark for goods or services identical or similar to those in respect of which the mark is registered'.

* Accordingly, Article 5 must be interpreted as meaning that the proprietor of a trade mark registered in one or more Member States may oppose a third party placing goods bearing that trade mark under the duty suspension arrangement after they have been introduced into the EEA and released for free circulation without the consent of that proprietor.

"Is it, or is it not, marketed by the trade
mark proprietor or with his consent ...?"

The IPKat doesn't think this is controversial, and presumably the CJEU didn't think it was controversial either, or the court might have asked the Advocate General for a little guidance. The Gerechtshof made the reference to clarify the interface between the EU's Customs Code and its principles of trade mark approximation. This Kat is however concerned about the leisurely pace at which this litigation, initiated in 2008, has meandered through the courts.  Merpel wonders whether the slow pace might have had something to either with the parties' lawyers wanting to see first what the CJEU did with other "putting goods on the market" cases before getting on with their own actions -- or maybe there was some speculation concerning the extent to which the market price of rum might appreciate while the case was itself 'in transit'.