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The Schweppes case: expiration of trademark rights and devilish evidence

| News | Litigation

José Martínez analyses the application of trademark law in the Schweppes case in an article published by Cinco Días

Today, expiration is peaceful when the mark has a single global owner, but what about fragmented marks - such as Schweppes® - that originally belonged to a single owner, but are now attributed territorially to different owners? Can a trademark owner in one country prohibit the import of goods manufactured by the owner's network into another country?

The answer is that it can prohibit it," the EU Court of Justice says, "unless after the fragmentation (i) the owners have agreed to create confusion in the public as to the business origin of the goods designated with the brand, or (ii) if there are economic links between the owners, with a common commercial policy, or by exercising joint control over the use of the mark, with the possibility of controlling its quality.

"Schweppes" was owned by Cadbury until 1999 when it sold it to Coca-Cola in the United Kingdom and other countries, retaining for itself to the rest of the countries, including Spain. Cadbury was bought by the Japanese group Suntory in 2009.

In 2014, Schweppes S.A. (of the Suntory group) sued two importers of British drinks Schweppes in Spain, before the Mercantile Court 8 of Barcelona alleging its right to prohibit its sale. The defendants alleged the expiry of the right.

In their defence, the defendants argued that there was a link between the two proprietors of the brand on the basis of a: (i) access to the advertising of British Schweppes products from the Spanish proprietor's website, (ii) that the proprietor of the Spanish trade mark assumed the territory of the United Kingdom as its own on social networks, (iii) the use of English products in the institutional advertising of the proprietor of the Spanish trade mark, (iv) minimal differences in the presentation of the products, (v) preservation of references to British origin and the link with the United Kingdom, (vi) parallel trade mark policy, (vii) business collaboration in the Netherlands: Coca-Cola manufactures the Schweppes for Suntory, (viii) marketing in Member States where the brand is owned by Suntory of English tonic through Amazon.

Analysing each of these eight circumstances in detail, the Mercantile Court of Barcelona considered, in a 2018 ruling, that they all indicated that both owners were coordinated and had economic links, declaring that Schweppes S.A. could not prohibit the commercialization in Spain of the products manufactured by the owner in the United Kingdom.

Suntory appealed, and the result has been diametrically different.

In its ruling last July, after considering that the interpretation given by the Commercial Court to these eight facts could not be qualified as arbitrary or illogical, the Provincial Court considered - with equally logical reasoning - just the opposite: that none of them accredited such links or coordination.

The Audience - intending to follow in the footsteps of the ECJ - seems to demand a degree of agreement between the two owners beyond specific and disjointed actions, such as those alleged, but forgets that, before the fragmentation of the trademark, the products were being marketed in both territories under the same commercial and trademark policy that sought global homogeneity, so that the confusion and sense of uniqueness in consumers already existed, so that a certain passivity will be enough for it to continue to be so, or that they are watched out of the corner of their eye, carrying out these simple, punctual and unconnected actions. 

That is to say, importers are being required, in order to claim expiry of the trademark right, to carry out a devilish test: to accredit a concertation at a level that will never be produced because it is unnecessary, since the effect that this would purport, the confusion of the consumer, was already taking place.

You can see the article in Cinco Días

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