Bottle filling can infringe brands – a landmark decision in the French spirits industry
The departing question of this legal issue is as follows: does a distillery company, which only fills labeled bottles provides by a third party, infringe the trademark of others, if it turns out that the label provided by the third party is a trademark infringement?
In its "Red Bull" judgment, the European Court of Justice decided that a service provider who fills packaging supplied by a third party with a sign that is similar to a trademark is not using the sign in a way that is prohibited (ECJ, Red Bull, 15 December 2011, C‑119/10). This decisions establishes a kind of safe harbor for bottle filling companies.
However, this tolerate approach seems to be called into question by a judgment of the Judicial Tribunal of Bordeaux on 23 April 2024 (RG 22/00139).
The plaintiff is a French company which trades in wines, rums, alcohols and spirits, and buys and sells eau de vie and cognac. It is the holder of the French trademark “TRIOMPHE”.
A Chinese liquor company applied for three trademarks in France including the term “CNTRIOMPHES”. Then it mandated a distillery company, specialized in the business of distilling and production of eaux de vie, to fill the bottles provided by it with brandy. The bottles of brandy are intended to be exported exclusively to China under the CNTRIOMPHES trademarks.
The plaintiff filed opposition to the three “CNTRIOMPHES” applications. Furthermore, it considered that the distillery also infringed its trademark right by filling the bottles. It effected a judicial seizure on the premises of the distillery and sued the latter before the Tribunal of Bordeaux.
The distillery maintained that it had not used the trade marks in the course of its business, as the Chinese company that had placed the order had supplied it with all the bottles, sleeves, labels and boxes already bearing the trademarks.
Nevertheless, the tribunal decided in favor of the brand owner. According to the judge, while it's acknowledged that the company being sued did not sell the CNTRIOMPHES brandies or participate in producing their bottles, sleeves, labels, back labels, and pre-printed boxes, it cannot be denied that filling bottles marked with the disputed trademark, affixing sleeves and back labels bearing that trademark alongside its own name, and participating in the promotion of CNTRIOMPHES brandy provided the company with an indirect economic benefit. These actions are now considered as preparatory acts under the amended French trademark law (Article L. 713-3-3 of the French Intellectual Property Code as of 13 November 2019), which aims to punish trademark infringement by means of provision, thus categorizing the activities of the entity responsible for filling branded packaging with a product similar to the earlier trademark as unauthorized use of the trademark.
The reason of this judgment is perhaps that the distillery affixed its own name on the back label and participated in the advertising of CNTRIOMPHES brandy. This necessarily gave it an indirect economic advantage. In fact, it had an interest in the successful marketing of this brandy, since it in difficulty and the Chinese company was its principal client.
The penalty is severe. Even if at the time of seizure, there remained only two bottles of brandy in the warehouse of the distillery, because the orders had stopped, the tribunal ordered a total amount of damages of 400 000 euros.
It would appear that the French judge is now adopting a more protective approach for brand owners in the spirits industry, which may result in a greater burden of attention for interim service providers.
