In Nomination Di Antonio E Paolo Gensini SNC & Anor v Brealey & Anor (t/a JSC Jewellery) it was queried whether the purchaser of a product sold under a trade mark was entitled to disassemble the product and re-sell the component parts under that mark.

The background

The Claimant companies, Nomination, deal in and market charm bracelets. The first claimant owns one EU and two International trade mark registrations (designating the EU) for the word NOMINATION and a stylised depiction of NOMINATION (“Device Mark”) in class 14 for (inter alia) jewellery. The second Claimant is the exclusive licensee.

The Claimants’ “composable bracelets” are formed of a series of interlinking tiles bearing the Device Mark that can be detached and replaced with individual, embellished tiles which are available to consumers to purchase separately.

In 2004, the Defendants, JSC Jewellery began selling charm bracelets which were similarly comprised of detachable links. In 2011 they amended their eBay listing to state that the bracelets “fit Nomination”, in that the tiles could be interchanged with those in the Claimants’ bracelets. The reference was removed in 2013, following a change to eBay’s trade mark policies. Shortly afterwards, the Defendants began purchasing “base bracelets” from retailers of the Claimants’ products in Germany and Italy (and the UK and Italy from 2015). Those products were purchased for disassembly into individual links and onward retail sale, bundled with the Defendants’ own links in blister packs or polythene bags. Where the Claimants’ links were packaged separately, they bore a label stating, “manufactured by Nomination, repackaged by JSC Jewellery UK”. These bundles were advertised and sold on eBay between April 2013 and July 2018.

The Claimants alleged that the advertisement and sale of the bundled links infringed their trade marks and constituted passing off.

Trade mark infringement

Judge Hacon had no issue determining that use of an identical sign in relation to identical goods – such as the Defendant’s sale of the Claimant’s links - constituted trade mark infringement under s.10(1) Trade Marks Act 1994, unless the Defendants had a statutory defence. S.12 provides that a trade mark owner cannot prevent third parties using its trade marks in relation to goods which have been put on the market in the EEA by the trade mark owner or with its consent. That is unless there are legitimate reasons to oppose further commercialisation of the goods – such as where the condition of the goods has been changed or impaired after being put on the market.

The Claimants argued that they had not given their consent to the sale of the base links individually or alternately, if they had, they had legitimate reasons to oppose further commercialisation.

It was held that Nomination did not have a sound basis for objecting to the onward sale of links taken from their bracelets, unless there were legitimate reasons for doing so. There were such legitimate reasons because the packaging used by JSC to supply its customers, being of poor quality in contrast to the Claimants’ elegant and durable packaging, was liable to damage the reputation of the NOMINATION marks.

It was further held that the Defendants’ advertising of the bundled Claimants’ base links and the Defendants’ links led would convey a blurred message to the reasonable reader about the manufacturing source of the two bundled links, and this might confuse the reasonable reader as to whether the links were made for the Defendants or Claimants.

Passing off

There was no dispute regarding the Claimants’ ownership of goodwill in the NOMINATION marks. Referencing the Defendants’ use of the marks in relation to the advertisement and supply of bundled Nomination base links, the judge accepted evidence of confusion in the minds of the relevant public which, for the most part, took the form of a belief that the Defendants’ charms were made by the Claimants. Such use constituted a misrepresentation which caused annoyance to the Claimants’ customers and the consequent damage to its reputation.

Practical points

When selling items for onwards retail that may be disassembled, manufacturers should take care to convey that resellers are not permitted to sell the component pieces of such items separately (if that is not intended) under the trade marks.

Retailers should likewise ensure that even where component parts of products have been purchased legitimately, they ensure that such items are packaged in a manner befitting of the trade mark. That way, the proprietor is less likely to be able to argue that the presentation of the repackaged product is liable to damage the reputation of the relevant mark and therefore oppose the sale.