Trademarks

• Author: International Law Group

Stussy, Incorporated of Irvine, California owns the word and device mark "Stussy." Stussy has widely registered the marks on its clothing such as shirts, shorts, swimwear, T-shirts, track suits, waistcoats and trousers and markets these products globally. These items have no distinctive characteristic that would identify them as assigned to a specific sales territory.

Under a May 1995 dealership agreement, Stussy gave Van Doren (claimant), a wholesale and retail clothing company established in Cologne (Germany), exclusive rights to distribute Stussy Inc.'s products in Germany. Stussy Inc. authorized the claimant to bring legal proceedings in its own name to obtain injunctions against, and claim damages from, Lifestyle sports + sportswear Handelsgesellschaft mbH (Lifestyle), a company organized in Berlin, and Michael Orth, its managing director (collectively, defendants) for infringement of the Stussy trade mark.

Claimant then hailed defendants before the German courts. It asked the first instance court to enjoin defendants from marketing Stussy's products, to compel defendants to disclose information about their activities since January 1995 and to award claimant damages from that date. According to claimant, in each country of the EEA, there is only one exclusive distributor and general importer for "Stussy" articles. That company contractually binds itself not to sell the goods to intermediaries for resale outside its contractual territory. Claimant also asserts that defendants are marketing "Stussy" products which it did not obtain from claimant. According to claimant, the clothing sold by defendants had originally entered the market in the United States and the trademark owner had not authorized defendants to market its products in Germany and in other Member States.

Defendants responded by asking the court to dismiss the claims on the grounds that, under EU law, the trade mark owner had "exhausted" its trademark rights as to the items in question. They maintained that they had sourced the goods within the EEA where the trade mark owner had put, or had consented to putting, its products on the market. As shown by an October 1996 test purchase, defendant Lifestyle had obtained some Stussy clothing in the EEA from a middleman who (defendants assumed) had bought it from an authorized distributor. Lifestyle also argued that it should not have to name its suppliers until after the claimant has proven the invulnerability of its distribution...