## Facts

- The “Ideal Standard” trademark for heating and sanitary products was held in different Member States by subsidiaries of the same corporate group.
- A French subsidiary, facing financial difficulty, transferred its heating business and the French “Ideal Standard” mark (for specified territories) by agreement to a third party.
- The French-territory mark for heating installations was later assigned to a French company that had no corporate or economic link with the original group.
- That French company manufactured heating installations under the “Ideal Standard” mark in France and marketed them in Germany through its German subsidiary, IHT Internationale Heiztechnik GmbH.
- Ideal‑Standard GmbH retained the German “Ideal Standard” mark and sued in Germany to prohibit IHT from using “Ideal Standard” for heating installations in Germany, including in advertising and price lists.
- A German trial court granted an injunction; the appellate court referred to the Court of Justice the question whether Treaty rules on free movement of goods limited enforcement of the German mark in these circumstances.

## Issues

1. Whether Treaty rules on free movement of goods (then Arts. 30 and 36 EEC) prevent the proprietor of a national trademark from prohibiting use of the same sign in the importing Member State for identical or similar goods when the mark has been territorially split by voluntary assignment to an economically independent undertaking in another Member State.
2. Whether the trademark exhaustion principle applies where, after voluntary territorial assignment, there is no single point of control over the quality and origin of goods marketed under the same sign in different Member States.

## Decision

- The Court held that Arts. 30 and 36 EEC do not preclude the importing-state trademark proprietor from enforcing its national trademark to stop use of the same sign for identical or similar goods by an independent assignee established in another Member State.
- The Court reasoned that exhaustion requires that goods be put on the market by the trademark owner or with its consent, including situations involving economically linked entities under unitary control; that condition is not met after a voluntary assignment to an independent third party.
- The Court confirmed that the detailed conditions for prohibiting use (including whether goods are identical or similar and whether confusion is likely) are determined by national law, subject to Treaty limits.
- The case was left to the referring German court to apply the interpretation and assess confusion under German law.

## Legal Principles

- National trademarks are territorial and legally independent; partial territorial assignments are permissible under applicable trademark frameworks.
- Exhaustion of trademark rights under EU free-movement rules applies only where marketing in another Member State occurs by the owner or with consent, including through economically linked entities ensuring a single point of quality control.
- A voluntary territorial assignment to an economically independent undertaking breaks unitary control; the original owner cannot be treated as having consented to cross-border marketing under the assignee’s control for exhaustion purposes.
- Protecting the trademark’s essential function—indicating origin by guaranteeing goods are produced under the control of a single accountable undertaking—can justify restricting imports under Art. 36 EEC when owners are not the same and are not economically linked.
- Enforcement must remain within what national trademark law permits for identical or similar goods where confusion is likely, and within Treaty constraints.

## Conclusion

When identical marks in different Member States are separated by voluntary territorial assignment to an independent undertaking, EU free-movement rules do not require the importing-state trademark owner to tolerate imports bearing the same sign, because exhaustion depends on consent and unitary control that no longer exists; national courts still apply domestic confusion standards to determine the scope of any prohibition.


IHT Internationale Heiztechnik GmbH v. Ideal-Standard GmbH, Case C-9/93 (C.J.E.U. 1994)