Oracle America Inc (formerly Sun Microsystems Inc) v M-Tech Data Ltd, Supreme Court
M-Tech bought 64 disk drives from a broker in the United States and, as a parallel importer, sold them within the UK to another business without Sun Microsystems’ (SM) consent. The disk drives carried SM’s trade marks, and SM accused M-Tech of infringing certain of its trade marks as, under European Union law, a company is permitted to control the first sale within the European Economic Area (EEA) of products bearing its trade marks, even if those products have already been sold outside the EEA with the company’s consent; however, that right of control is lost if the goods are first marketed within the EEA. In selling the disk drives in the UK without consent, SM argued M-Tech had infringed its trade marks.
M-Tech argued that SM’s attempts to control parallel imports of its products breached the Treaty for the Functioning of the European Union in relation to free movement of goods as it had withheld information which parallel importers needed to know what products had already been sold in the EEA. As such, a parallel importer would never know whether SM’s right of control applied to a particular product.
The Court of Appeal ruled against M-Tech, and the Supreme Court has now rejected M-Tech’s appeal against the Court of Appeal’s ruling. The Supreme Court agreed that, if SM was trying to assert rights over goods that were already available within the EEA, that would have breached the Treaty on the Functioning of the European Union, but trying to enforce its right to control the first marketing of the goods within the EEA was not a breach. The Supreme Court said that any rights held by a trade mark owner to control first sale of a product within the EEA take precedence over any other rights relating to free movement of goods. SM’s trade mark rights are absolute. However, that is a different issue to whether M-Tech may have any right to damages against SM for any possible anti-competitive conduct in refusing to provide relevant information.