Goods to which a trade mark has been applied by a brand owner or with its consent (eg by a licensee) and also put on the market in the EU by the brand owner or with its consent are said to be ‘in free circulation’ which means they can be imported and resold in any EEA country without the consent of the brand owner and without infringing any trade mark rights. These are often referred to as ‘grey market’ goods.
The importing and selling of counterfeit goods will usually be a criminal offence. Counterfeit goods include those which may have ‘come out of the back door’ of a factory or be stock held by a manufacturer from a cancelled order.
However, there was a lack of clarity about whether importing and re-selling genuine goods could be a criminal offence if these goods turned out to be not ‘grey market’ goods.
It can be difficult to be certain that genuine branded goods are ‘in free circulation’ and so proper ‘grey market’ goods. Sometimes inadequate checks are made because time is short or the purchase needs to be closed quickly. Maybe the goods are in transit and the price is so good that a risk is taken to buy and re-sell them. Whatever the reason, the goods maybe unlawful risking a trade mark infringement claim and now a successful prosecution.
The re-selling of the goods would be unlawful because the goods as sold were not put on the market and into ‘free circulation’ by the brand owner or with its consent.
The relevant criminal offence is in section 92(1) of the Trade Marks Act 1994 and involves a person doing certain things with intent to gain or to cause loss, and without the consent of the brand owner. One of those things is advertising and selling goods to which a sign identical to, or likely to be mistaken for, a registered trade mark has been applied.
A person who re-sells goods in the UK which are not proper ‘grey market’ goods ‘in free circulation’ will be regarded as advertising and selling goods to which a sign identical to, or likely to be mistaken for, a registered trade mark has been applied without the consent of the brand owner.
Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.