06 October 2005

Euro Defences: Another one bites the Dust

Yesterday I commented in my post on the Public Patent Foundation on the very small number of cases in art 81 or 82 EEC had been used successfully to prevent or restrict the enforcement of an intellectual property right. Defences that pray in aid EC competition law are sometimes called "Euro-defences" and they are very difficult to run. An instance of that is Mr Justice Warren's decision in Sportswear Company Spa and another v Ghattaura (t/a "Gs3") [2005] EWHC 2087 (Ch) (3 Oct 2005) where he struck out two paragraphs of a defence that attempted to raise a competition argument against a claim of trade mark infringement.

The context in which the defence had been raised was that the defendants had removed or defaced labels and swing tickets from goods that the claimant had manufactured and had found their way into the defendants' possession. Those labels had contained codes which would have identified at least some of the intermediate distributors. The removal of codes was contrary to provisions in the claimant's standard distribution agreement. The claimant objected to the removal of the codes as "mutilation". The defendants countered with the complaint that the provision in the distribution agreement was an infringement of art 81 (2) of the Treaty of Rome.

The learned judge rejected the defendants' argument. There is a large body of case law to the effect that there must be some sort of nexus between the claim and the alleged infringement of EC competition law. The defendants tried to argue that there was such a nexus on the ground that the purpose of the requirement not to remove labels was a backdoor route to partitioning the market and had even prayed in aid the repackaging cases in support of their argument. Those cases were, as the judge observed, applicable to free movement of goods cases but quite irrelevant to competition law.

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