In Oracle (formerly Sun Microsystems) v M Tech, the Court of Appeal for England and Wales has held today here that, in a trade mark infringement dispute involving importation of Sun-branded computer hardware from outside the EEA, M Tech was entitled to argue that Arts.28 to 30 and Arts. 81 of the EC Treaty prevented Oracle from obtaining summary judgment for trade mark infringement. This judgment has important ramifications for all trade mark proprietors and parallel traders.

M Tech purchased second-hand Sun hardware from a US dealer, which Oracle (who took Sun over) alleged infringed its registered trade marks.  M Tech maintained that Oracle was not entitled to enforce its trade mark rights because it was impossible for independent traders to differentiate between genuine Sun goods first marketed in the EEA by Oracle and those first marketed outside the EEA. Oracle could differentiate such goods by reference to the serial numbers and their own internal database, but deliberately chose not to make such a database available to traders. M Tech maintained that such facts -- combined with an aggressive litigation strategy against independent traders such as M-Tech -- meant that the independent sector was no longer dealing in any second-hand Sun goods regardless whether they were first marketed in the EEA. M Tech maintained that such conduct by Oracle in enforcing its marks resulted in artificial partitioning of the internal market in Europe, contrary to Arts. 28 to 30 EC (now Arts. 34 to 36 TFEU) and thus in breach of European law. M-Tech added that Oracle's actions were contrary to the emerging European doctrine of abuse of rights and that the distribution agreements between Oracle and its authorized distributors, whereby they were prevented from buying from the independent sector, were anti-competitive and a defence to the trade mark infringement action.

Oracle sought summary judgment on the grounds that the Trade Mark Directive was a complete code and there was no scope for Arts.28 to 30 and that on the facts, there was no nexus between the Art.81 defence and the imports of the goods into the EEA.

The trial judge granted summary judgment, accepting such arguments. However, on appeal, the Court of Appeal accepted that on the basis of the above facts, such could give rise to a defence and ordered that the matter should go to trial. Said the court:

This note was based on a press release from law firm Hill Dickinson LLP, which acted for M-Tech.