Nomination Di Antonio E Paolo Gensini SNC v Brealey [2019] EWHC 599 (IPEC)

A purchaser that dissembled a product and sold single components under trademark was found liable for trademark infringement. 

The Claimant was a high-end Italian Jewellers – Nomination – who manufactures bracelets. One of its products is a “composable bracelet” which consists of individual links that can be detached and re-linked with other bracelet links allowing the wearer to create their own style of bracelet. The Claimant sold base links bearing its mark alongside a wide variety of decorated links and links with charms attached.

The Defendant was a husband and wife partnership trading under the name JSC Jewellery. The business also sold charm bracelets – not made by Nomination – under their brand name “Daisy Charm” and under a logo. JCT Jewellery’s bracelet links fit Nomination’s links and they could be fitted together to make one bracelet.

In 2015, JSC Jewellery started to buy Nomination base bracelets. These were bracelets composed of plain links bearing the Nomination mark. JSC disassembled these base bracelets and sold individual links alongside its own links in bundles. These consisted of blister packs or separate plastic bags bearing a label – “Manufactured by Nomination Italy Repackaged by JSC Jewellery”.

The key question in the action was:

“Is the purchaser of a product sold under a trade mark entitled to dissemble the product and sell component parts under the trade mark?”

Nomination’s case as the Claimant

The Claimant alleged that the Defendant’s advertisement and sale of bundled base links infringed its trademark under Section 10 of the Trade Marks Act 1994 (“TMA”). The Claimant also alleged passing off of the Defendant’s goods as being made by, or authorised by, or otherwise associated with the Nomination brand.


JSC Jewellery’s case as the Defendant

The Defendant interpreted the Claimant’s consent for it to market its products as consent to market and sell the individual bracelet links.


Trademark 

In this particular trademark case, there were two relevant issues:

  1. The use of the Nomination mark in relation to selling genuine, individual Nomination base links;

  2. The use of the Nomination mark in relation to the Defendant’s own products.

 
Issue 1

In relation to the use of the Nomination mark to market and sell on the individual bracelet links, the Judge agreed with JSC that Nomination could not oppose the onward sale of its product, including the individual links. The Judge considered that, as a matter of principle, there was not a sound basis for Nomination to object to the onward sale:

“There would be nothing misleading, of itself, about a purchaser of a Nomination bracelet stating on eBay that a link taken from such a bracelet is a Nomination link.”

However, the Judge held that Nomination could restrain the commercialisation and the onward sale of the links by JSC if there existed legitimate reasons for doing so pursuant to Section 12 (2) of the TMA.

The Claimant, Nomination levelled various arguments to evidence legitimate reasons under the TMA:

  • Its authorised retailers were not permitted to sell individual base links; 
  • its products were sold in high quality packaging whereas JSC sold the links in low quality blister packs and plastic bags; 
  • purchasers of the Nomination base links from JSC did not have the benefit of a guarantee; 
  • JSC did not specify who repackaged the base links; 
  • the repackaging of the links put the product at risk.

The Judge considered that the fact that products were repackaged by JSC was not a legitimate reason to oppose their sale, since bracelets (unlike pharmaceuticals) were not of a sensitive nature. The absence of a guarantee was also unlikely to make any practical difference to the end-user. There was also no reason to believe that the claimant's links would be exposed to damage when packaged in the defendant's bags or blister packs (a distinction was drawn with pharmaceutical products that are liable to be damaged by poor packaging).

The Judge did consider, however, that the use of low-quality packaging by JSC (as opposed to Nomination’s own “elegant packaging”) could foreseeably damage Nomination’s reputation and that therefore he held that such sales by JSC infringed the Trademarks.

 

Issue 2

Turning to second issue, the Judge held that the mix and match advertising and sale of links bearing the Nomination brand together with JSC’s own links would have led to the typical reader to have “received a blurred message about the manufacturing source of the two bundled links and might have formed the impression that both are made for JSC, one of them being styled ‘Nomination’.”

Considering the evidence, in letters and emails of Nomination’s customers, the judge held that the supply of bundled links had led to confusion in the mind of the public and that the confusion “took the form of a belief that charms not made by Nomination were genuine Nomination charms”.

The judge held that the sign used by JSC in relation to its own goods infringed the trademarks pursuant to Section 10(1) of the TMA. Further, the judge fund that such use constituted a misrepresentation in that members of the public were led to believe that the Daisy Charms were supplied by the Claimant. On the basis of the above findings, the Judge held that passing off was also made out.

 

Summary and Conclusion

Some sympathy may be felt for JSC Jewellery. There was nothing unlawful about re-selling the individual bracelet links. In fact, it was shown that Nomination never expressly forbade its own retailers from selling individual links. However, JSC’s low-quality packaging, in the judge’s view, was likely to damage the public’s perception of the luxury Nomination brand. Nomination had carefully packaged its bracelets to convey an image of a luxury product in the minds of the public, and that was being damaged by the re-sale of the links in blister packs and plastic bags by the Defendant online (a similar case cited was - Case C-337-95 Parfums Christian Dior SA v Evora BV [199] E.C.R. I-6013. It showed that a trademark owner’s right to object to poor packaging was not confined to the repackaging of pharmaceutical products and that damage done to reputation of a trademark may be a legitimate reason to restrain further commercialisation of luxury goods).

Further, the mix and match advertising and sale of Nomination’s links with JSC Jewellery’s own products created business confusion that was proved by the anecdotal evidence from retailers and customers.

At Myerson, our expert Intellectual Property team can advise on claims such as trademark infringement and other types of intellectual property claims such as breach of copyright, design rights and patents. If you would like to speak to one of our specialist IP solicitors, please contact us on 0161 941 4000 or email us at lawyers@myerson.co.uk.