31 August 2017
In preliminary injunction proceedings initiated by Stanley Black & Decker, The Hague District Court ruled on 3 August 2017 that the Dutch company, HBL, infringed Stanley’s trade mark rights by replacing a UK power cord plug on DEWALT products with a continental European power cord plug.
This case started to roll after a visit of the VP & General Manager of Stanley Black & Decker in the Benelux to the premises of one of the defendants (HBL) in this matter when he saw unpacked DEWALT products lying around in plastic boxes. Stanley made several test purchases of DEWALT products through the website gereedschapscentrum.nl of HBL. The test purchases showed that the products were intended for use in the UK, imported to the Netherlands and then the UK cord plug was replaced with a continental European power cord plug. Amongst other things, Stanley established that the continental European power cord plug was much shorter than the original one intended for the UK, that the original copper cable plug was replaced by a plastic one, that the wiring was not reinstalled in the original way and that the sheathing of the wiring was damaged.
After Stanley sent a demand letter to HBL it confirmed that it had altered the original DEWALT products and confirmed that it would not sell such products but it denied that it had infringed any of Stanley’s IP rights. However, after another test purchase Stanley established that HBL still sold altered products and also removed the original packaging of these products and replaced them by inferior packaging.
Stanley initiated preliminary injunction proceedings based on its EUTMs for DEWALT and on the general wrongful act doctrine of Article 6:162 of the Dutch Civil Code. Since the infringing acts not only took place in the Netherlands but also in Belgium and possibly other European countries, Stanley claimed a pan-European injunction.
The Court first of all rejected the claims based on the wrongful act doctrine because Stanley did not properly substantiate why the acts of HBL would be a wrongful act in the event the Court found that HBL did not infringe Stanley’s trade mark rights.
Regarding the trade mark claims, the Court first had to decide whether the removal of the original packaging and replacing it by blank carton boxes and the resale of individual DEWALT products (in plastic bags) originally sold in tool sets packed in a luxurious plastic box, was a trade mark infringement. The Court applied the criteria of the L’Oreal/eBay decision of the CJEU in this regard and came to the conclusion that these criteria were not met in this case. In particular the Court was not convinced that the removal of the original packaging and resale as individual products was detrimental to the reputation of the DEWALT products and trade marks.
The most important and interesting reason for the Court’s decision on this point is that HBL had filed several statements and other evidence from official DEWALT distributors showing that they were allowed to remove (or at least not prevented from removing) the original packaging and to resell individual products from tool sets as well. The Court argued that if official distributors are allowed to act in a way that is identical to the acts of HBL, the arguments of Stanley that such use is detrimental to its reputation cannot be upheld. Therefore, Stanley’s claims based on the repacking of the products were denied.
However, Stanley in the end did win an important battle in this matter regarding the fixing to UK intended DEWALT products of continental European fit cord plugs. The Court ruled that this fell under the scope of Article 13 EUMTR: there exist legitimate reasons for Stanley to oppose further commercialization of the DEWALT products, since the condition of the goods has been changed or impaired after they have been put on the market. The original power plug cables were thicker and better isolated and the replaced power plug cables were undisputedly shorter than the originals.
The Court came to the conclusion that HBL had infringed Stanley’s EUTMs and granted an injunction covering the entire European Union. HBL also had to send a rectification message to all of its customers of the altered DEWALT products and to put a rectification message on 4 of its websites.
The outcome regarding the altering of products is not surprising. The most important lesson for trade mark owners in this decision is that the acts of its official distributors can play a decisive role in infringement proceedings. If certain acts in trade by official distributors are allowed or not enforced by the trade mark owner, this could very well mean that such acts of third parties (non-official distributors) can also not be opposed. In addition to the recent Coty decision of the CJEU, this is also a good argument for trade mark owners to carefully review distribution agreements and monitor the sale of branded goods by distributors.