Honda Motor Company Ltd v Neesam
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE LEWISON,Sir Andrew Park |
| Judgment Date | 28 February 2008 |
| Neutral Citation | [2007] EWHC 581 (Ch),[2006] EWHC 1051 (Ch),[2008] EWHC 338 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: HC05C02657,Case No: HC05-2657 |
| Date | 28 February 2008 |
[2006] EWHC 1051 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
The Honourable Mr Justice Lewison
Case No: HC05-2657
MR J MELLOR appeared on behalf of the Petitioner
MR I PURVIS appeared on behalf of the Respondent
Approved Judgment
Tape Transcript of Smith Bernal Wordwave Limited Greencoat House, 183 Clarence Street, Kingston-upon-Thames, Surrey, KT1 1QT Tel No: 020 8974 7305 Fax No: 020 8974 7301 EmailAddress: Tape@wordwave.co.uk (Official Shorthand Writers to the Court)
This is an application under Part 24 of the Civil Procedure Rules for summary judgment in a parallel imports case. The products in question are Honda motorbikes.
The claim is brought against two traders; D K Motorcycles in Newcastle-under-Lyme, and K J M Superbikes in Wigan. The trademark proprietor is the Honda Motor Company Limited, the Japanese parent company of Honda. Honda has subsidiaries all over the world.
Parallel import is a shorthand for describing the import and sale within the EEA of trademarked goods without the consent of the trademark proprietor. In this case —as in many —the essential question is whether the trademark proprietor's rights have been exhausted. According to Article 7 of the Trademarks Directive, a trademark does not entitle the trademark proprietor to prohibit use in relation to goods that have been put on the market in the EEA by the trademark proprietor or with his consent.
Kerly, on Trade Marks says, in my judgment correctly, that the issue raised by parallel imports into the EEA has nothing to do with the essential function of a trademark, or whether a trademark should confer the ability to interfere with this type of activity. It is purely a matter of economic policy of the EU and the EEA. A trademark proprietor is entitled to stop parallel imports even though the trademark is applied to the genuine goods, and the function of the trademark as a guarantee of origin and quality is not impaired. Put bluntly, as the law has developed, the trademark proprietor is entitled to keep up prices in the EEA by use of his rights in the trademark.
In the joint cases of Zeno Davidoff SA v. A & G Imports Limited, and Levi Strauss & Co v. Tesco Stores Limited [2002] Ch 109, the European Court of Justice said that the concept of consent for this purpose was to be uniformly interpreted across the whole of the EU. The ECJ made a number of important points. First; consent amounts to renunciation of the right to the trademark proprietor, and must, therefore, be unequivocally demonstrated. Second; an intention to renounce will normally be gathered from an express statement. Third; there may be circumstances from which consent may be inferred, but it is an actual consent, and not a deemed consent that must be established. Fourth; it is, in almost all cases, for the trader to prove consent, not for the trademark proprietor to prove the absence of consent. Fifth; consent cannot be inferred from the trademark proprietor's silence nor from the fact that the goods carry no warning, nor from the fact that the trademark proprietor originally placed goods on the market without any further restriction on the onward sale of those goods.
Part 24 of the Civil Procedure Rules entitles the claimant to judgment if the court considers that the defendant has no real prospect of successfully defending a claim or issue at trial, and there is no other compelling reason why that claim or issue should be disposed of at trial. In considering whether the defendant has a real prospect of successfully defending, the court must consider not only the evidence before it on the application, but also the evidence which can reasonably be expected to be available at trial after the usual process of disclosure, and if necessary, the examination of witnesses in foreign jurisdictions.
The correct approach which the court should take was considered by the House of Lords in Three Rivers District Council & Others v. The Bank of England (No. 3) [2001] 2 All ER p.513. In paragraph 95 of his speech Lord Hope of Craighead said this:
"The method by which issues of fact are tried in our courts is well settled. After the normal processes of discovery and interrogatories have been completed, the parties are allowed to lead their evidence so that the trial judge can determine where the truth lies in the light of that evidence. To that rule there are some well recognised exceptions. For example, it may be clear as a matter of law at the outset, that even if a party were to succeed in proving all the facts that he offers to prove, he will not be entitled to the remedy that he seeks. In that event, a trial of the facts would be a waste of time and money, and it is proper that the action should be taken out of court as soon as possible. In other cases it may be possible to say with confidence before trial that the factual basis for the claim is fanciful because it is entirely without substance. It may be clear beyond question that the statement of facts is contradicted by all the documents or other material on which it is based. The simpler the case, the easier it is likely to be to take that view and resort to what is properly called, summary judgment. But more complex cases are unlikely to be capable of being resolved in that way without conducting a mini-trial on the documents without discovery and without oral evidence. As Lord Woolf, the Master of the Rolls said the in the Swains case; 'That is not the object of the rule. It is designed to deal with cases that are not fit for trial at all.'"
Dealing with the particular case he was considering, Lord Hope continued in paragraph 98 of his speech as follows:
"The present case is, as everyone concerned with it has recognised, one of a quite exceptional character. The issues of fact which the claimants seek to raise are highly complex. They relate to matters in which they were not directly involved as they were third parties to the system of regulation which was set up to protect them. They involved meetings and discussions between many parties at which they were not represented, and they extend, through no fault of theirs, over a very long period."
In paragraph 100, Lord Hope said this:
"I would also examine the question of whether the claim has no real prospect of succeeding at the outset from a totally neutral standpoint. By that I mean I would not make any assumptions either one way or the other about the competence or integrity of the bank or its officials, as a prelude to examining the available evidence. I accept that conduct amounting to misfeasance in public office is not to be inferred lightly, that is true as a general proposition, whatever may be the task or status of the impugned public officer. But I think it would be to risk prejudging the case to attempt to evaluate the action's prospects of success by considering at this stage, before hearing evidence, whether the claimant's case against the bank as regulator is inherently implausible or scarcely credible."
In the result, he, together with a majority of the House of Lords allowed the case to continue to triil. At trial, of course, as everybody knows, it occupied one and a half years of the court time before the claim was ultimately withdrawn.
In the case of D K, four bikes are specifically pleaded. D K acquired all four of them from Sun Motorcycles of Denver, Colorado. In the case of K J M two bikes are specifically pleaded. K J M acquired one of them from Andrews Cycles of Salem, Ohio, the other from Moto Pasion of Vigo in Spain. There was also a more general allegation made against K J M, as it has imported bikes from Australia without Honda's consent. The four bikes that D K acquired from Sun were sold to Sun by American Honda Motor Co Inc —probably at a Honda dealer auction. Sun claims to be the largest Honda dealer in the United States of America. It deals in other manufacturer's bikes as well, and D K has been buying from Sun for over two years. Each bike comes with a manufacturer's certificate of origin. It is the genuine article. Bikes are shipped in containers each holding 30 bikes in a crate. The terms on which American Honda sells bikes to retailers is that they must be un-crated, assembled and tested before delivery. Each authorised Honda dealer —of which Sun is one —is bound by contract not to sell Honda bikes outside its territory. When it sells a Honda bike, the dealer is required to enter details of the sale onto a computerised database. Sun entered details of the four bikes on the database. D K was shown as the buyer of one of them, but it was said to have an address in Colorado, which is plainly false. As far as the other three bikes are concerned, the buyers were shown as private individuals with addresses in Colorado. That too was plainly false.
The evidence of American Honda is that it has not consented to the export by Sun of any bikes to D K. The bike that K J M acquired from Andrews was shipped from American Honda's warehouse in Chicago, Illinois, to a company called Customs Assembly in Havilland, Ohio. Customs Assembly is what is described as a set up company that un-crates and assembles Honda bikes for Andrews. The bike in question was shipped by Customs Assembly to K J M in the UK. It was shipped in its crate. Andrews is another large Honda dealer in the USA. Like Sun, it is contractually bound not to re-sell Hondas unless they have been un-crated and assembled. And it has contractual obligations to Honda not to sell outside its territory. Andrews has not registered this bike as sold on the Honda database.
Again, the evidence from Honda is that American Honda has not given consent to the export of Honda bikes by Andrews. The bike that K J M...
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