## Facts

- Coty Prestige Lancaster Group GmbH manufactured and distributed perfumes through a selective distribution network.
- Coty supplied certain authorized dealers with perfume “testers” for in-store customer demonstration.
- The testers were provided without transfer of ownership, subject to a contractual prohibition on sale, and were recallable by Coty.
- The tester bottles were visibly distinguishable from retail goods and bore markings including “Demonstration” and “Not for Sale.”
- Simex Trading AG acquired Coty testers from authorized dealers outside the European Economic Area (EEA) (including Singapore and the Middle East), imported them into Germany, and marketed them there.
- Coty sought to stop Simex’s sales in Germany based on Community and German trade mark rights.
- A German appellate court referred questions to the Court of Justice of the European Union on trade mark exhaustion under Regulation 40/94 and Directive 89/104.

## Issues

1. Whether trade mark rights are exhausted only if the proprietor expressly or impliedly consented to the goods being put on the market in the Community/EEA.
2. Whether a proprietor impliedly consents to marketing when it supplies “testers” without transferring ownership, prohibits resale contractually, reserves recall rights, and labels the goods “Demonstration” and “Not for Sale.”

## Decision

- The court held that exhaustion arises only if it may be concluded—on an assessment for the national court—that the proprietor expressly or impliedly consented to putting the goods on the market in the Community/EEA.
- The court held that, in the described tester circumstances, the “Demonstration” and “Not for Sale” markings preclude (absent contrary evidence) a finding of implied consent to putting the testers on the market.
- The court returned the case to the referring national court to apply these criteria to the dispute.

## Legal Principles

- Trade mark exhaustion is conditioned on the proprietor’s consent to the first putting on the market in the Community/EEA; consent may be express or implied but must be strictly established.
- Implied consent cannot be presumed from silence or lack of opposition; the decisive inquiry is whether the proprietor intended to renounce exclusive rights as shown by relevant circumstances.
- “Putting on the market” requires a commercial act of marketing; supplying goods for advertising or demonstration without transferring ownership and under resale restrictions is not, without more, market placement for exhaustion purposes.
- Clear “Not for Sale” labeling and distinct presentation are strong evidence against implied consent to commercial circulation, particularly for promotional items distributed under restrictive conditions.

## Conclusion

The court ruled that trade mark rights are exhausted only with the proprietor’s express or implied consent to EEA marketing, and that supplying clearly labeled “Demonstration/Not for Sale” testers under non-sale, recallable, and resale-prohibited terms generally does not show implied consent, allowing the proprietor to oppose their resale.


Coty Prestige Lancaster Grp. GmbH v. Simex Trading AG, Case C-127/09 (C.J.E.U. 2010)