Trading Repaired and Refurbished Goods: How Sustainable is EU Exhaustion of Trade Marks?

Abstract

Analysing EU, Benelux and German case law, this article examines whether the exhaustion doctrine in trade mark law contributes to a more sustainable economy. It considers that ecological motives seem not to have played a role either in the policy choice against international exhaustion, or in the Court of Justice of the European Union (CJEU) case law on legitimate reasons and the repackaging of medication. Although exhaustion could, theoretically, incentivise traders to give new life to goods that were legitimately marketed before, the analysis shows that this is a risky business because of the thin and blurry line between lawful renewal activities and creating a false impression of affiliation. As such, it is unclear to what extent de-branding, re-branding, and co-branding can prevent liability for infringement, although co-branding renewed products is probably often the only way to do so. As an alternative to buy–renew–resell, traders could consider providing renewal services. On closer analysis, however, offering services puts them in an even less favourable position, and this seems hard to justify. In addition to trade mark rights, copyright and/or design rights will often cumulatively apply to mark-bearing products. Although the latter rights are also subject to a principle of exhaustion, the effects of exhaustion can de facto be overruled by the exception for legitimate reasons proper to trade mark law. Moreover, it is argued that repair exceptions in copyright and design legislation have limited effect and that announced legislative reforms are unlikely to change that. The unattractiveness of renewal businesses is further aggravated by the recurrent use of open norms and references to common practices. It is concluded that IP laws often leave it to the discretion of rightholders whether to offer sustainable post-sale solutions. Besides having clearer guidance on what is allowed, this paper suggests that exhaustion case law should take sustainability arguments into account, for instance by considering what would happen to goods if they were not renewed by the trader. To a large extent, the judiciary already has tools at its disposal to incorporate these kinds of elements.