ECJ: Concept of 'use in the course of trade' in private temporary storage

A trade mark which is obviously not suitable for private use is considered to be a trademark in the course of trade if it is temporarily stored by a private person: the ECJ decided today on the interpretation of the EU Directive on Trade in Goods.

The European Court of Justice (ECJ) today ruled on a question referred by Finland.

Is it to be assumed that a trade mark is used in the course of trade in the EU if the trade mark is received and kept by a private person, but the trade mark is obviously not intended for private use?

The facts of the case

In the present case, a private individual resident in Finland received from China a batch of 150 ball bearings with a total weight of 710 kg, which are used as spare parts in power transmission devices, generators and motors and in the construction of bridges and trams. The goods were handed over to a third party a few weeks later for export to Russia. The private individual was “rewarded” with a carton of cigarettes and a bottle of cognac.

In addition, a protected trademark was affixed to these ball bearings, which corresponded to the international word mark INA, of which A is the owner, inter alia for the goods “bearings”. Trademark owner A sued for trademark infringement and damages.

The Finnish appellate court, Helsingin hovioikeus, held that the conduct of the private individual corresponded to a storage and forwarding activity and that there was no intention to derive any economic benefit from it. Moreover, the remuneration received by the private individual for that activity was not based on the economic use of goods in the course of a commercial activity, but merely constituted consideration for the temporary storage of goods on behalf of a third party.

But is the amount of the economic advantage enjoyed by a private individual at all relevant to the assessment of the commercial movement of goods? The Finnish Supreme Court Korkein oikeus did not find this clarified in the case-law and asked about the application of Article 5 of Directive 2008/95 if a private person uses the trade mark for the benefit of a third party.

Interpretation of the EU Directive with regard to use in the course of trade

The ECJ therefore had to consider how Article 5(1) of Directive 2008/95 in conjunction with Article 5(3)(b) and (c) should be interpreted in this case, in particular with regard to the free movement of goods in the Member States and the concept of use in the course of trade.

In principle, the relevant directive refers to economic operators; consequently, the rights conferred by Directive 2008/95 trade mark apply only in connection with a commercial activity. If, however, the activities are beyond the scope of a private activity due to their scope, frequency or other characteristics, the seller is also acting in the course of trade, explained the ECJ in today’s judgement.

In the present case, the goods were obviously not intended for private use in view of their nature and scale. The ECJ therefore held that the transactions in question were to be regarded as part of a commercial activity, but that this was to be examined by the referring court.

Release for free circulation is use in the course of trade

The Court added that a person who gives his address as the place to which the goods in question are to be dispatched and who carries out customs clearance for those goods, or arranges for it to be carried out and releases them for free circulation, constitutes an importation within the meaning of Article 5(3)(b) of the Directive. (c) of Directive 2008/95.

The fact that a person has imported such goods and put them into free circulation is sufficient to establish that that person has acted in the course of trade without there being any need to examine how those goods were subsequently handled, the ECJ explained. In this respect, the act of temporary storage or export to a third country is just as irrelevant as the amount of remuneration received by the importer in return for his activity.

A private individual who does not professionally pursue a commercial activity and receives goods, releases them for free circulation and stores them in a Member State, acts in the course of trade in accordance with Article 5(1) of Directive 2008/95 in conjunction with Article 5(3)(b) and (c), the ECJ ruled – if these goods are obviously not intended for private use.

The ownership of the goods to which the trademark is affixed is in turn not relevant for the finding of use in the course of trade, the court ruled. This in turn corresponds to the case law on trademark infringement by storage of a product: what matters for a trademark infringement is not mere possession but the purpose of the trademark possession.