A discussion of the judgment of the Court of Appeal of The Hague dated 19 July 2007
In January 2007 the Court of The Hague ruled that wholesaler Makro was allowed to offer jeans of the clothing brand G-Star for sale in Makro’s customary manner using the G-Star device mark.
G-Star did not leave it at that and appealed the judgment, but without success.
G-Star’s Luxury Image
G-Star’s first objection was aimed at the manner in which Makro advertises its products. According to established European case law, the manner in which a reseller advertises products may not constitute an unfair act against the trademark holder and the advertising may not seriously damage the reputation of the trademark.
Next, G-Star argued that in the Makro shop the G-Star jeans are hanging on racks in plastic bags carrying the slogan WINSTPAKKER (“a super discount”) as if they were mass-produced articles, and also that jeans of different brands are lying together in one pile in the shop. Makro succeeded in partly refuting this picture by stating that this chaotic presentation was “of a temporary nature because of a renovation”. Makro also showed recent photographs in which the jeans are hanging neatly in the Makro shop.
G-star stated that it has a lawful interest in a decent presentation of its jeans because the G-Star brand has a luxury image. The court did not pronounce a judgment on G-Star’s image, but the Court of Appeal did have an opinion on this image. According to the Court of Appeal the G-Star jeans do not have a luxury image because of their sturdy appearance, and the price of the G-Star jeans is not so high as to make them only available to the happy few. In the opinion of the Court of Appeal, the fact that the G-Star products are not only offered for sale in exclusive G-Star shops and the fact that the trousers are also offered for sale online also diminishes the luxury image that G-Star professes to have.
The Court of Appeal ruled that the manner in which Makro was advertising and presenting the G-Star jeans did therefore not cause any serious damage to the reputation of the G-Star trademark.
Use of the Device Mark
To conclude, G-Star was of the view that Makro was indeed allowed to use the G-Star word mark in its advertisements, but that Makro has exceeded the bounds of the freedom of advertising by also using the G-Star device mark. According to established European case law a reseller may not claim to have non-existent commercial ties with the trademark holder.
This objection of G-Star did not convince the Court of Appeal either. Makro may advertise in the manner customary in its branch, and it is simply the custom in the wholesale branch – and also in supermarkets, perfumeries etc – to use the device mark in advertisements. This way the consumer can see what he buys at one glance. The Court of Appeal did not consider it relevant that it was not necessary for Makro to include the device mark in its advertisements. There would only be infringement if by this use the impression was created that there are commercial ties between G-Star and Makro, but this was not the case here.
No Success against Price Fighter
As much as G-Star would like to, it cannot oppose the sale of its jeans by price fighter Makro. The judgment of the Court of Appeal might have been more favorable if G-Star had succeeded in proving its luxury image. In the view of the Court of Appeal this was particularly harmed by the fact that G-Star products were not exclusively sold in G-Star shops but even online.