Background

On 16 April 2025, the District Court of The Hague in the Netherlands handed down a decision relating to the complex issue of trade mark exhaustion in the context of parallel trade disputes.

The claimant, Coty Beauty Germany (Coty), is a global cosmetics company and exclusive licensee of several well-known trade marks, including Hugo Boss. Coty operates a selective distribution network for the products in the European Economic Area (EEA). The defendant, Easycosmetic Benelux (Easycosmetic), is an unauthorised wholesaler of perfumes and cosmetics that operates outside of Coty’s selective distribution network.

The dispute concerned a 200ml bottle of “Bottled Night” Hugo Boss perfume, which was being sold by Easycosmetic in the Netherlands. Coty claimed that this specific bottle had originally been shipped to South Africa and therefore had not been placed on the EEA market by Coty or with its consent.

Legal Framework

The case hinged on Article 15(1) of the EU Trade Mark Regulation (2017/1001), which states that a trade mark owner cannot oppose further commercialisation of goods once they have been lawfully placed on the EEA market by or with the trade mark owner’s consent. This principle is referred to as trade mark exhaustion.

However, the District Court of The Hague clarified the position on the burden of proof in trade mark exhaustion cases, which is nuanced. The trade mark holder, here Coty, must initially substantiate the claim of infringement. However, the burden of proving that the trade mark is exhausted—in this case, that the goods were lawfully placed on the EEA market—lies with the defendant, Easycosmetic.

However, the District Court of The Hague clarified the position on the burden of proof in trade mark exhaustion cases, which is nuanced. The trade mark holder, here Coty, must initially substantiate the claim of infringement. However, the burden of proving that the trade mark is exhausted—in this case, that the goods were lawfully placed on the EEA market—lies with the defendant, Easycosmetic.

In Coty v Easycosmetic, it was not necessary for the court to rule on whether the burden of proof had shifted, because Easycosmetic ceased to dispute that the perfume bottles were marketed for outside the EEA.

Still, this did not mean that Coty’s product traceability evidence went to waste.

The Role of Traceability in Coty’s Victory

A pivotal element in Coty’s success was its ability to trace the product’s origin and distribution path. Coty presented evidence from its internal product tracking system, which showed that the specific bottle in question had been manufactured for and shipped to a non-EEA market, specifically South Africa.

The traceability system allowed Coty to:

Traceability: A Legal Sword and Shield

The Coty v Easycosmetic ruling is a powerful reminder that traceability is not just a logistics tool, it is a legal asset. For companies looking to protect their brands, especially those operating a selective distribution system, investing in an effective product tracking system is essential for protecting brand reputation and trade marks in the EEA.

Ultimately, a traceability system is a powerful legal and commercial resource for brands. Our team would be happy to assist your brand with establishing and maintaining a compliant and effective traceability system.

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