Case number: C04528010 (PAC-0154/2014)
Court: The Chamber of Civil Cases of the Supreme Court of the Republic of Latvia
Parties: Dutch company „Inter IKEA Systems B.V.” v. SIA „I-Home”
Date: 6 May 2014
IP RIGHT(S) Trade marks
Arts. 4(6)-4(9), 24(3), 27(1), 28, 281 Latvian Law on Trade Marks and Indications of Geographical Origin (1999), Art. 1635 Latvian Civil Law, Art. 25017 Latvian Civil Procedure Law, Art. 13(2) R 207/2009.
The claimant owns registered and well-known trade marks „IKEA” for furniture and retail trade services. „IKEA” is an owner of an exclusive franchising concept. „IKEA” stores, acting in accordance with the „IKEA” trade concept, forms the largest furniture store chain in the world. The claimant had not authorised any company to use the trade mark „IKEA” in Latvia.
The defendant did not belong to the above-mentioned distribution network, but was reselling original „IKEA” furniture, that he had bought abroad, in his small store on the ground floor of a residential house in Riga under a signboard „IKEA mēbeles” (in translation – „IKEA furniture”) in blue and yellow colours characteristic to the trade mark „IKEA”. After the defendant had received the claimants notification, he promised to change the signboard, but did not do it.
The claimant brought a claim to the court regarding a trade mark infringement, requesting a final injunction (to forbid the use of the claimant’s trade marks and make the defendant to remove the signboards „IKEA mēbeles” from the store) and moral damages at the amount of 2000 EUR. The defendant did not admit the claim and said that it was not forbidden to resell „IKEA” furniture in their original packaging. The defendant’s reselling activities help to advertise the claimant’s goods, to rise popularity of the trade mark „IKEA” and to increase sales.
DAMAGES AWARDED 2000 EUR
The case concerns the issue whether the defendant has infringed the claimant’s trade mark rights by reselling original „IKEA” furniture at the above-mentioned circumstances and whether a trade mark proprietor may prohibit such course of trade.
The Court answered positively, finding an infringement, ordering a final injunction and awarding moral damages.
The Court found „IKEA” to be a well-known trade mark with high reputation and held that the course of use of a trade mark that differs from the course of use intended by the proprietor could be detrimental to the reputation and the distinctive character of the trade mark. As a result of the defendants course of business the trade mark „IKEA” lost its appeal to the public, because the retail trade concept of furniture and interior design goods that had been intended for the goods marked with trade mark „IKEA” by its proprietor and that many customers had seen in the big „IKEA” stores in the nearby countries – Poland, Finland and Sweden, was not carried out in the defendant’s shop.
Regarding the defendant’s argument that his reselling activities help to advertise the claimant’s goods, to rise popularity of the trade mark „IKEA” and to increase sales, the Court held that the trade mark proprietor has the right to decide on the time and the place of advertising of his goods marked with his trade mark.
The judgment establishes a principle that where a third party, who does not belong to the select distribution network, sells goods marked with a well-known trade mark in a way which differs from the trade concept of the trade mark proprietor (for example, the goods are sold in poorer, smaller, less respectable premises), it can be damaging to the reputation and the distinctive character of the well-known trade mark, and it should not be allowed.
These facts must be proven.
Practically this judgment constitutes an exception to exhaustion within the meaning of Article 13(2) of the Regulation 207/2009 on the Community trade mark, even if the condition of the goods themselves is not changed or impaired after they have been put on the market.