Case report: Xerox triumphs in EU trademark dispute
On October 20, the Brussels Court of Appeal ruled in favour of Xerox in a pan-European dispute against Belgian company Impro Europe concerning the latter’s marketing of Xerox consumables for printers, copiers, etc, in the EU.
Throughout Europe Xerox sells its consumables inter alia under the ‘Xerox’ trademark, either separately or in the scope of maintenance agreements. In the latter case, authorised Xerox service providers provide maintenance services to end users and the consumables are supplied as part of these services. Unlike Xerox consumables sold separately, consumables sold in the scope of a maintenance agreement are marked with the word “metered” or the ‘PagePack’ or ‘eClick’ trademarks.
The maintenance agreements between authorised Xerox services providers and end users contain a retention of title clause in favour of Xerox for the consumables supplied under contract.
Upon learning that Impro Europe actively solicited Xerox-authorised service providers to sell it their surplus stock bearing the word “metered” and/or the ‘PagePack’ or ‘eClick’trademarks that had been distributed exclusively under these maintenance agreements, Xerox initiated ‘descriptive seizure proceedings’ in Belgium, which led to the appointment of an expert and seizure of the consumables found at Impro Europe’s premises. Based on these findings, Xerox started proceedings on the merits.
The question arose whether Xerox’s exclusive trademark rights had been exhausted regarding the consumables at issue.
The alleged infringer bears the burden of proving that the conditions for exhaustion are met (Court of Justice of the European Union [CJEU], April 8, 2003, C-244/00, Van Doren, paragraph 42). Such proof must be provided for each individual product (CJEU, July 1, 1999, C-173/98, Sebago, paragraph 22). The burden of proof can be shifted to the trademark owner only if the alleged infringer is able to prove a real risk of national EU markets being partitioned if it is required to prove that the goods were placed on the market in the European Economic Area (EEA) by the trademark owner or with its consent (Van Doren, paragraph 37).
In the case at hand, one of Impro Europe’s largest suppliers of Xerox consumables was based in Switzerland, a country outside the EEA, which meant that Xerox’s exclusive rights within the EEA had not been exhausted in relation to consumables originating from this supplier.
Concerning the other litigious consumables, the Brussels court found that Impro Europe had not proved that Xerox had consented to their marketing or that there was a reasonable risk of EU markets being partitioned. On the contrary, the court found that it had been established that the goods at issue are sold exclusively within the scope of maintenance agreements whose retention of title clauses provide that Xerox remains the proprietor of the goods until they are consumed. In the event of a surplus, Xerox takes back the excess goods.
“Impro Europe had acted in bad faith, as it was or should have been aware of the ins and outs of the market for printer accessories.”
The court concluded that the consumables had not been placed on the EEA market by Xerox or with its consent. As Xerox’s trademark rights were not exhausted, Impro Europe infringed them.
In addition to trademark infringement, the court ruled that Impro Europe had committed third-party interference with contractual relations. Indeed, Impro Europe participated in the breach of valid contracts between end users and authorised Xerox service providers by actively encouraging the former to sell it their surplus, even though Impro Europe is an experienced player on the market and thus should have known of the customary retention of title regarding such consumables.
The court issued a pan-European injunction against the marketing by Impro of goods under the ‘Xerox’ trademark in combination with the word “metered” and/or the ‘PagePack’ or ‘eClick’ trademarks.
The court also awarded Xerox damages of €50,000 ($55,000) and ordered Impro Europe to surrender all profits made from the infringing Xerox consumables. The court found that by actively encouraging Xerox customers to sell it their surplus stock, Impro Europe had acted in bad faith, as it was or should have been aware of the ins and outs of the market for printer accessories, including customary retention of title provisions.
The authors represented Xerox in the case.
Tanguy de Haan is a counsel at NautaDutilh. He can be contacted at: tanguy.dehaan@nautadutilh.com
Philippe Péters is a partner at NautaDutilh. He can be contacted at: philippe.peters@nautadutilh.com
