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England and Wales High Court (Chancery Division) Decisions |
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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Honda Motor Co Ltd & Anor v David Silver Spares Ltd [2010] EWHC 1973 (Ch) (28 July 2010) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2010/1973.html Cite as: [2010] EWHC 1973 (Ch), [2010] FSR 40 |
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CHANCERY DIVISION
(INTELLECTUAL PROPERTY)
Strand, London, WC2A 2LL |
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B e f o r e :
Sitting as a Deputy Judge of the Chancery Division
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HONDA MOTOR CO. LIMITED HONDA MOTOR EUROPE LIMITED |
Claimants |
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– and – |
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DAVID SILVER SPARES LIMITED |
Defendant |
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Brian Nicholson (instructed by Kempner Robinson) for the Defendant
Hearing date: 22 July 2010
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Crown Copyright ©
Mr G. Leggatt Q.C.:
Introduction
The Law
"Rights conferred by a trade mark
The registered trade mark shall confer on the proprietor exclusive rights therein. The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade
(a) any sign which is identical with the trade mark in relation to goods and services which are identical with those for which the trade mark is registered.
…"
"Exhaustion of the rights conferred by a trade mark
The trade mark shall not entitle the proprietor to prohibit its use in relation to goods or services which have been put on the market in the Community under that trade mark by the proprietor or with his consent."
As a result of the EEA Agreement, effective from 1 January 1994, the reference to "the Community" is to be read as applying to the whole EEA.
"Rights conferred by registered trade mark
9.(1) The proprietor of a registered trade mark has exclusive rights in the trade mark which are infringed by use of the trade mark in the United Kingdom without his consent.
The acts amounting to infringement, if done without the consent of the proprietor, are specified in section 10.
...
Infringement of registered trade mark
10.(1) A person infringes a registered trade mark if he uses in the course of trade a sign which is identical with the trade mark in relation to goods or services which are identical with those for which it is registered.
…
Exhaustion of rights conferred by registered trade mark
12.(1) A registered trade mark is not infringed by the use of the trade mark 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."
(1) Articles 5-7 of the Directive embody a complete harmonisation of the rules relating to the rights conferred by a trade mark and accordingly define the rights of proprietors of trade marks in the Community/EEA (Silhouette at [25], [29]; Davidoff at [32], [39]).(2) In particular, national rules may not provide for exhaustion of trade mark rights in respect of goods put on the market outside the EEA by the proprietor or with his consent (Silhouette at [26] et seq; Davidoff at [32]-[33]). Thus even where the trade mark proprietor has put the goods on the market himself outside the EEA, he may still assert his trade mark rights to prevent importation of those goods into the EEA without his consent (Sebago at [21], Davidoff at [33]).
(3) As a matter of Community law, for there to be consent within the meaning of Article 7(1), such consent must relate to each individual item of the product in respect of which exhaustion of rights is pleaded (Sebago at [19]-[22]).
(4) For the purpose of Article 7(1), consent must be so expressed that an intention to renounce those rights is unequivocally demonstrated (Davidoff at [45]-[47]).
Burden of Proof
"39. As the referring court observes, there is a real risk of partitioning of markets, for example, in situations where, as in the main proceedings, the trade mark proprietor markets his products in the EEA using an exclusive distribution system.
40. In such situations, if the third party were required to adduce evidence of the place where the goods were first put on the market by the trade mark proprietor or with his consent, the trade mark proprietor could obstruct the marketing of the goods purchased and prevent the third party from obtaining supplies in future from a member of the exclusive distribution network of the proprietor in the EEA, in the event that the third party was able to establish that he had obtained his supplies from that member.
41. Accordingly, where a third party against whom proceedings have been brought succeeds in establishing that there is a real risk of partitioning of national markets if he himself bears the burden of proving that the goods were placed on the market in the EEA by the proprietor of the trade mark or with his consent, it is for the proprietor of the trade mark to establish that the products were initially placed on the market outside the EEA by him or with his consent. If such evidence is adduced, it is for the third party to prove the consent of the trade mark proprietor to subsequent marketing of the products in the EEA (see Zino Davidoff and Levi Strauss, para 54)."
"At this meeting a representative of Honda UK questioned our client as to the source of the Honda catalogues being distributed from our client's stand. Honda UK's representative promised and assured our client that this information was only being requested in order to establish that the catalogues were genuine and not copies. On the basis of these assurances and promises our client provided the information requested, only for Honda UK to then immediately use that information entirely contrary to the promises and assurances."
Particularity
"The conclusion I draw from the whole of this pleading is that it is a sort of fishing statement of claim, and that the plaintiff might really almost as well have made his statement of claim in this shape: 'I am entitled to the possession of these premises, and I call on you, the defendants, to inform me what answer you can make.'"
"What particulars are to be stated must depend on the facts of each case. But in my opinion it is absolutely essential that the pleading, not to be embarrassing to the defendants, should state those facts which will put the defendants on their guard and tell them what they have to meet when the case comes to trial."
Later in his judgment Cotton LJ said (at p.140):
"I do not for one moment say that this action is brought without any reasonable ground for supposing the plaintiff is entitled; but if in the present case the rule, established for the purpose of preventing persons in possession of estates from being wrongfully and improperly attacked, works hardly on the plaintiff, that will be the necessary consequence of the rules laid down for the general purpose of protecting property, and preventing people from being improperly vexed. But surely the rule is no such hardship. If the plaintiff is doing anything more than merely guessing that by possibility he may make out his title to the estate, he must know something about it sufficient to enable him to state the facts on which he thinks the possession of this estate must come to him."
Honda's Positive Case
(1) Until 2007 David Silver posted on its website statements (taken from a magazine article published in 2002) which included the following:"David Silver buys up Honda spares from all over the world (Bolivia, would you believe?) …""David Silver built the business which bears his name with the supply of new 'old stock' genuine Honda parts bought from dealers and distributors all over the world.""Unused parts in their original boxes are still being discovered and just about everyone in the trade, from the jungles of South America to the deserts of Africa, knows that David Silver is a potential buyer.""Obviously, there are a finite number of genuine Honda-made parts for the older classics, but the supply has not been exhausted. Hondas were sold world-wide and used by the military and police forces in numerous countries.""David Silver buys in bulk. Tonnes of spares have been bought from the Middle East, a horde of Sixties parts came from Bolivia and the cheque book came out again when parts stockpiled by Honda's first distributor in Switzerland came up for grabs.""David runs his business from the Masterlord Industrial Estate in Leiston, Suffolk. It's a few miles from the coast, convenient for shipments of new stock from the nearby Felixstowe Docks.""David has travelled the world buying stock but has now delegated much of that work to his senior staff ..."[accompanying a photo of David Silver's warehouse] "warehouse piled high with parts bought in bulk from as far afield as South America".
(2) David Silver's 2008 Price Guide for Honda Parts includes a statement:
"parts that are not held in our stock can often be sourced by us from various contacts throughout the world, including parts for grey and parallel imports …"(3) David Silver's website offers for sale spare parts for Honda motorcycles not sold by Honda in the EEA – in particular motorcycles for the US and Japanese markets.
(4) An advertisement placed by David Silver in the 14 January 2009 edition of MCN magazine offered "PARTS FOR HONDA … over 70,000 parts for UK, Japanese, USA or European grey imports".
(5) David Silver's business is conducted on a very substantial scale, being by far the largest dealer of Honda spare parts in the UK. In Honda's estimation, it would not be possible for David Silver to conduct such a business on such a scale without purchasing substantial quantities of Honda spare parts outside the EU.
(6) At the 2008 Motorcycle Show in Birmingham Mr David Silver allegedly told a Honda employee, who was posing as a customer, "I can get you whatever you want as I buy from all around the world".
(7) Since these proceedings were commenced, Honda has purchased a Honda part from David Silver for a Japanese model of motorcycle which, as appeared from its packaging, was at least 23 years old – indicating that David Silver keeps some stock for lengthy periods of time.
(8) David Silver has not, either in its Defence or in its evidence served in support of its strike out / summary judgment application, denied the allegation that it imports and sells in the UK under the Honda trade marks substantial quantities of motorcycle spare parts sourced from outside the EEA.
(9) In its Defence David Silver has pleaded a defence of acquiescence based on allegations such as that it has conducted its business in an open manner throughout its 24 year history and that Honda has known of David Silver's business activities since at least 1990. These allegations would only be relevant if the business activities referred to involved infringements of Honda's trade marks.
(1) The point that no inference can properly be drawn that because David Silver has advertised Honda parts as being suitable for Japanese or US home market models of motorcycle it follows that the parts must themselves have been initially put on the market outside the EEA. In particular, Mr Silver says in his witness statement that many parts are common to both EU and non-EU models of motorbike or are in any case available from Honda within the EU.(2) The fact that some of the parts sold by David Silver are so-called "pattern parts" (i.e. generic parts, not manufactured by Honda) which are suitable for use in Honda motorcycles, and are marketed by David Silver as such. Pursuant to Article 6(1)(c) of the Directive (and section 11(2)(c) of the Act) this does not constitute an infringement of Honda's rights conferred by its trade marks.
(3) The point that parts sold outside the EEA may nevertheless have been initially put on the market by Honda within the EEA.
(4) The fact that the statements published (until 2007) on David Silver's website on which Honda relies were historic statements taken from a magazine article written in 2002 by a third party.
(5) A denial that an inference can reasonably be drawn as to whether or not David Silver is importing Honda parts which were put on the market outside the EEA from the size of its business.
(6) The fact that David Silver has denied in correspondence that it has infringed Honda's trade marks (albeit that this denial has not been repeated in any statement of case or witness statement which is subject to a statement of truth).
(7) The fact that the plea of acquiescence in the Defence is stated to be without prejudice to the other points made in the Defence and therefore cannot be relied on as an admission.
Conclusion