Case No. EWHC-2564-(IPEC)

1.An EU trade mark shall not entitle the proprietor to prohibit its use in relation to goods which have been put on the market in the European Economic Area under that trade mark by the proprietor or with his consent. 2.Paragraph 1 shall not apply where there exist legitimate reasons for the proprietor to oppose further commercialisation of the goods, especially where the condition of the goods is changed or impaired after they have been put on the market. 95. The Defendants claimed that all of their uses of the Marks were made in relation to the Claimants’ goods, the trade mark rights in which had been exhausted by their sale to iKoustic. The Claimants denied this, again on the basis that the Defendants’ motivation for using the Marks was to attract customers in and sell them their own goods. 96. The Claimants attacked Mr Parsons’ credibility because, they said, the entire case as to the Defendants’ motivation for using the Marks depended upon it, but went on to accept that whether he was subjectively dishonest was not the point, as the honesty of use of the Marks should be objectively assessed. I am not persuaded that the Defendants’ motivation is either relevant or significant, in particular because in my view the possibility of relying upon the defence does not depend upon the question of the Defendants’ motivation for using the Marks, but only upon the objective question of fact: were the Marks being used in relation to goods previously put on the market with the consent of the proprietor? The Claimants cited no authority for the proposition that the Defendants' motivation might preclude their reliance upon the defence and there is nothing in the section/Article to suggest this. That can be contrasted in particular with the defence in section 11(2), which explicitly requires a defendant to use the mark consistently with honest practices. On the other hand, I will consider whether the Defendants’ motivation for using the Marks may be relevant to the consideration of whether the Claimants have legitimate reasons to oppose the resale of the goods bearing the Marks. 97. If I am wrong about the relevance of motivation to the application of the defence, in any event I am not persuaded that the Defendants' motivation in using the Marks was only or principally to attract custom for iKoustic’s own goods. The Claimants’ suspicions about the Defendants’ true motivation in continuing to hold their goods and use the Marks when they had only small stocks of them are understandable. One factor which supports their case is that when in March a number of GenieClips were sold to a customer as an “end of line,” iKoustic kept a small number of certain clips (for instance, it sold 600 of its 648 LB2 clips). However, a number of other facts point against the Claimants’ case. It does not seem to me to be consistent with the sales of the Claimants’ goods by iKoustic throughout 2019, or with the kind of transactions discussed at paragraphs 78, 80 and 82 above, nor with the removal of pages from the website as particular goods became unavailable. The Defendants' open offer on 1 May 2019 to cease all use of the Marks if the Claimant bought back their remaining stock at cost also seems to me to suggest that their motivation was more to avoid making a loss on those goods than to exploit the Marks so as to help them launch their own Mute goods. I therefore reject the claim that the Defendants’ real motive was to use the Marks to sell Mute products. I consider that again there is one exception to that finding, in the single webpage shown at Annex C. It seems to me that the wording of that page, whilst it used the GENIECLIP Mark to identify the Claimants’ products, was designed to persuade the customer to look at the MuteClip alternatives. However, on balance, as this approach appears to be out of line with the rest of the Defendants’ behaviour, it does not affect my overall view about their motivation. 98.In the Amended Particulars of Claim, the Claimants complained of links to competing products on webpages for their goods. The fact that a customer attracted to the iKoustic site on the basis that it stocked the Claimants’ products might be able to navigate from a page for goods bearing a Mark to another page showing the Defendants’ products (for instance by clicking on a link for one of the “Related Products” on a GENIEMAT product page) does not, in my judgment, preclude the application of the defence. The Defendants made the point that if that constituted trade mark infringement, no retailer could advertise goods under one mark but offer products from different undertakings on its website. As the Claimants accepted at trial, the customer would not be confused in these circumstances, but it would be clear that they were being offered alternative products. Mr Downey accepted that where a product had been specified, a contractor would need to check that an alternative was acceptable, and such customers would be unlikely to switch easily from one acoustic product to another. Similarly, if a customer was offered both parties’ products after having asked for goods bearing one of the Marks, which plainly happened on some occasions, in my judgment that does not mean that the use of the marks was not made in relation to the Claimants’ goods, so as to disapply the defence. 99.The Claimants alleged that from some unspecified date the Marks were no longer