## Facts

- Mitsubishi Shoji Kaisha Ltd owned EU and Benelux trade marks for MITSUBISHI (word and figurative) for forklift trucks; Mitsubishi Caterpillar Forklift Europe BV held an exclusive EEA license.
- Duma Forklifts NV and G.S. International BVBA acquired genuine Mitsubishi-branded forklift trucks outside the European Economic Area (EEA).
- The defendants brought the forklifts into Belgium and placed them under a customs warehousing procedure (not released for free circulation).
- While in customs warehousing, and without the trade mark proprietor’s consent, the defendants:
  - removed all signs identical to the Mitsubishi trade marks from the forklifts,
  - modified the forklifts to meet EU technical standards,
  - replaced identification plates and serial numbers, and
  - affixed their own signs/branding.
- The defendants then imported and marketed the “de-branded” and re-branded forklifts in the EEA (and also sold outside the EEA).
- The forklifts, when first marketed in the EEA, no longer bore Mitsubishi marks, though consumers could still recognize their origin from appearance/model.
- Mitsubishi and its licensee claimed the defendants’ conduct interfered with the proprietor’s control over first EEA marketing and impaired trade mark functions.
- A Belgian appellate court referred questions for a preliminary ruling on the interpretation of EU trade mark law.

## Issues

1. Whether removing trade marks from genuine goods in customs warehousing, and re-branding them for intended first marketing in the EEA, constitutes actionable “use” falling within the proprietor’s exclusive rights.
2. Whether the proprietor may oppose such conduct because it deprives the proprietor of control over the first placing on the EEA market of goods bearing the mark and harms trade mark functions, notwithstanding that the goods bear no mark at the moment of EEA sale.

## Decision

- The court held that EU trade mark law permits the proprietor to oppose, without consent, the removal of all signs identical to the mark and the affixing of other signs on goods placed in customs warehousing.
- This applies where the acts are performed with a view to importing or trading the goods in the EEA and the goods have never previously been marketed in the EEA.
- The proprietor’s rights were not exhausted because the goods had not been put on the EEA market by the proprietor or with its consent.

## Legal Principles

- A trade mark proprietor has an essential right to control the first placing on the EEA market of goods bearing the mark; conduct that prevents exercise of that right undermines the mark’s origin function.
- Acts carried out within an EU Member State on goods in customs warehousing can fall within the proprietor’s enforceable rights when they are part of a commercial operation directed at EEA marketing and impair trade mark functions.
- “Use” is assessed in light of the functional impact on the trade mark (especially origin and related functions), not solely by whether the mark is displayed at the moment the goods are sold in the EEA.
- Exhaustion does not apply to goods that have never been marketed in the EEA by or with the consent of the trade mark proprietor.

## Conclusion

EU trade mark law allows a proprietor to prevent unauthorized de-branding and re-branding of genuine goods performed in customs warehousing when the purpose is first marketing in the EEA, because such conduct defeats the proprietor’s control over initial EEA market entry and impairs trade mark functions.


Mitsubishi Shoji Kaisha Ltd v. Duma Forklifts NV, Case C-129/17 (C.J.E.U. 2018)