Exhaustion when the packaging shows more brands? easyCosmetic/Coty

easyCosmetic sells original A-brand cosmetic products whose trademark rights have been exhausted: they were put on the market in the European Economic Area (EEA) by or with the consent of the trademark holder. easyCosmetic supplies products in a box on which 80 A-brands are listed, all in one colour:

For this packaging, easyCosmetics has also aligned the font of each brand with its own 'house style', but in a way that the look & feel of each brand is very similar to the A-brand: 

Perfume manufacturer Coty opposes the use of JILSANDER and DAVIDOFF on the packaging. Despite the exhaustion of the trademark rights, the trademark owner can still prohibit the sale under these marks if it has justified reasons to do so. easyCosmetic is allowed to advertise the exhausted trademark products, as long as this advertising (i) fits the ways customary in the reseller's sector of trade, (ii) does not create the impression of an economic link with the trademark holder and (iii) does not seriously damage the reputation of the goods concerned. We have known this rule since Dior/Evora in 1997.

This dispute centres on the room for manoeuvre of the reseller: is easyCosmetics going too far here? The District Court of The Hague prohibited the packaging, the Court of Appeal allows it after all. By mentioning the trade name and the slogan Beauty for less on a plain white or dark background and separated from the "mass of trade marks", they stand out, while the attention of the public is drawn to that trade name and slogan. Only after that do the depicted 'brands' stand out. With such a large number of trademarks this looks like a kind of wrapping paper, where no single trademark gets special attention. According to the Court of Appeal, this creates the impression that this is a shop that sells cosmetics of many brands. easyCosmetic has also not adhered to the 'house style' of one or more of the pictorial brands, but has adapted it slightly to its own style. The slogan Beauty for less creates the impression that brand products are offered for a lower price than the 'official price' (which is indeed the case), so that this is (therefore) a - not economically linked to the brand owners - discounter.

The Court of Appeal does not consider this to be different from what is usual in the branch of easyCosmetics. It does not matter that a JILSANDER product is delivered in a box on which 79 other brands are mentioned. easyCosmetics is allowed to advertise all those brands this way, as long as it actually sells them.

A win for free competition: can one now play with A-brands as long as there are a lot of them? I wonder if we will see more 'multi branded' packaging now. 

Maarten Haak