“Article 4
(1)
Members States shall provide for authors, in respect of the original of their works or of copies thereof, the exclusive right to authorise or prohibit any form of distribution to the public by sale or otherwise. (2)The distribution right shall not be exhausted within the Community in respect of the original or copies of the work, except where the first sale or other transfer of ownership in the Community of that object is made by the rightholder or with his consent.”83.Art.4(2) suggests that the considerations which arise in the context of the exhaustion of other IP rights, in particular trade marks, are relevant to the interpretation of art.4 and thus s.18 of the 1988 Act. 84.My attention was drawn to the judgment of HHJ Birss QC in Abraham Moon & Sons Ltd v Thornber which then supplied the infringing fabric to a firm called ‘Art of the Loom’, either directly or via another company. The first four defendants were the partners in Art of the Loom, a retailer which sold the fabric to the public. 85.It was argued that Art of the Loom had not issued the infringing fabric to the public within the meaning of s.18; this had happened when the manufacturer, NB Fabrics, sold the fabric to Metropolis Interiors. Counsel drew an analogy with the judgment of the CJEU in Peak Holding AB v Axolin-Elinor AB (Case C-16/03) EU:C: 2004:759; [2005] ETMR 28: “[123] Mr Turner submitted that it was clear that s.18 was not intended to be narrower than the concept of putting on the market in European trade law and he submitted that in Peak Holding v Axolin (C-16/03) had held that goods are placed on the market for the purposes of the EU’s law of exhaustion when they are sold to an independent undertaking. Thus the sale from NB Fabrics to Metropolis was the act of putting on the market. [124]Ms Edwards-Stuart submitted that on the facts of this case, the entity which makes the copy available to the public is Art of the Loom and not either NB Fabrics or Metropolis. If NB Fabrics (or Metropolis) were themselves selling to the public then the matter would be different. Art of the Loom would be nothing more than another normal customer and their resale would not be caught by s.18 . [125]I accept Ms Edwards-Stuart’s submission. It seems to me that the CJEU in Peak Holding were not considering a factual situation like this one. In this case, as a matter of reality, it is Art of the Loom which puts the Spring Meadow fabric on the market. Neither NB Fabrics nor Metropolis sell to anyone other than Art of the Loom (or another Thornber company). I do not know whether this is pursuant to a formal supply agreement or simply based on the tacit understanding of the parties to this arrangement but it is clear in my judgment that NB Fabrics and Metropolis are making and finishing this fabric for supply on to Art of the Loom and no one else. If the supply chain includes other entities related to the Thornber family as well, that makes no difference. The purpose of these arrangements with NB Fabrics and Metropolis is in order for Art of the Loom to sell the finished product on the open market. In my judgment Art of the Loom are putting into circulation on the market copies not previously put into circulation and are infringing under s.18.” 86.In Peak Holding the CJEU held: “[40] A sale which allows the proprietor to realise the economic value of his trade mark exhausts the exclusive rights conferred by the Directive, more particularly the right to prohibit the acquiring third party from reselling the goods. [41]On the other hand, where the proprietor imports his goods with a view to selling them in the EEA or offers them for sale in the EEA, he does not put them on the market within the meaning of article 7(1) of the Directive. [42]Such acts do not transfer to third parties the right to dispose of the goods bearing the trade mark. They do not allow the proprietor to realise the economic value of the trade mark. Even after such acts, the proprietor retains his interest in maintaining complete control over the goods bearing his trade mark, in order in particular to ensure their quality.” 87.It seems to me that the sale of infringing fabric by Visage to EWM qualified as issuing that fabric to the public if, by that sale, Visage transferred to EWM the right to dispose of the fabric. The requirement in Peak Holding that the transaction must realise the economic value of the trade mark implies that in addition the disposal must have been to an independent party. 88.Those requirements were satisfied by Visage’s sale to EWM. Therefore Visage’s infringing fabric was issued to the public by that sale. It follows that there was no primary infringement by EWM consequent upon its sales of the Visage Fabric, made into tops, to the public.