“… the issue raised by parallel imports into the EEA has nothing to do with the essential function of a trade mark … . It is purely a matter of economic policy of the EU and the EEA. A trade mark proprietor is entitled to stop parallel imports even though the trade mark is applied to the genuine goods and the function of the trade mark as a guarantee of origin and quality is not impaired. Put bluntly, as the law has developed the trade mark proprietor is entitled to keep up prices in the EEA by use of his rights in the trade mark.”
“45 In view of its serious effect in extinguishing the exclusive rights of the proprietors of the trade marks in issue in the main proceedings (rights which enable them to control the initial marketing in the EEA), consent must be so expressed that an intention to renounce those rights is unequivocally demonstrated. 46 Such intention will normally be gathered from an express statement of consent. Nevertheless, it is conceivable that consent may, in some cases, be inferred from facts and circumstances prior to, simultaneous with or subsequent to the placing of the goods on the market outside the EEA which, in the view of the national court, unequivocally demonstrate that the proprietor has renounced his rights.”
“1 On a proper construction of article 7(1) of [the Trade Marks Directive] the consent of a trade mark proprietor to the marketing within the EEA of products bearing that mark which have previously been placed on the market outside the EEA by that proprietor or with his consent may be implied, where it follows from facts and circumstances prior to, simultaneous with or subsequent to the placing of the goods on the market outside the EEA which, in the view of the national court, unequivocally demonstrate that the proprietor has renounced his right to oppose placing of the goods on the market within the EEA.”
“From time to time, without having any continuous contact, Honda Australia deals with Lime Exports (‘Lime’). Lime fulfils a useful role in servicing the Pacific Islands (e.g. Fiji, New Caledonia and Vanuatu) which Honda Australia does not have the capacity or desire to service. This is the only reason Honda Australia deals with Lime. Honda Australia advises Lime verbally that it is only allowed to sell to the Pacific Islands. By so advising Lime Honda Australia tries to ensure that product supplied to Lime finishes in the Pacific Islands. … Honda Australia does not authorise those to whom it sells to export, except to the Pacific Islands.’ iii). On24 March 2006 Lewison J heard and determined the application for summary judgment. He granted summary judgment to Honda against KJM on several important issues, but did not grant it as respects motorcycles purchased by KJM from Lime Exports. It seems clear that the judge came close to deciding that Honda should have summary judgment on those motorcycles as well, but in the end he decided that there could be sufficient substance in some points raised by KJM by way of defence for it to be appropriate that the Lime Exports issue should be the subject of a full trial. Lewison J gave directions for pleadings to be exchanged in which Honda, the claimants, and KJM, the defendants, should set out their cases on the issue. iv). On3 May 2006 Honda served its statement of case on the Lime Exports issue. There are two points to note about the statement. a) It reflected Mr Hinton’s witness statement. Thus paragraph 4 of the pleading said: “Lime Exports is an Australian company. Honda Australia has sold and sells Honda motorbikes to Lime Exports for export to the Pacific Islands.” b) Read in conjunction with Honda’s original particulars of claim (see subparagraph (i) above) the statement of case claimed relief for infringement of trade marks in respect of all importations of motorcycles by KJM from Lime Exports, without limitation of time (that is to say, it claimed relief going back to the first such importation, which had taken place in 1999). v). On24 May 2006 KJM served its statement of case by way of defence. I need not go into the detailed contents of it here. vi). Disclosure procedures followed. Documents disclosed by Honda, many of which were emails to or from Mr Hinton personally, led to a letter of22 November 2006 from KJM’s solicitor to Mr Hinton. The letter accurately said that it was clear that several things said by Mr Hinton in his witness statement, especially in the passage about the absence of continuous contact and about the Pacific Islands which I quoted in subparagraph (ii) above, were not true. The letter gave examples, saying that the emails showed several things, including the following: “- an almost continuous contact between Lime and Honda Australia, with which it conducted a very substantial level of business – to the extent that Lime enjoyed a credit facility of$100,000.00 with Honda Australia; -·no evidence of bikes being supplied by Lime going to the Pacific Islands – indeed on numerous occasions Lime informs Honda Australia that the bikes are going to various destinations around the world none of which include the Pacific Islands – for example : Japan; South Africa; Laos; Cambodia; Vietnam; China; Eastern Europe; China [sic]; Greece; Turkey; and Indonesia.”
“I included these words (knowing that they were not accurate) because I was trying to protect Honda Australia’s reputation within the Honda group from harm.” viii). (Chronologically this subparagraph comes later than what I describe in subparagraphs (ix) and (x) below, but in terms of its content it belongs with what I have just described, so I depart from strict chronological order in this respect.) On17 March 2007 Honda amended its statement of case. The sentence which I quoted in subparagraph (iv)(a) above – ‘Honda Australia has sold and sells Honda motorbikes to Lime Exports for export to the Pacific Islands’ – was amended so as to read: ‘Honda Australia has sold and sells Honda motorbikes to Lime Exports for export from Australia.’ No material changes were made to the rest of the statement of case. Thus it continued to claim relief for all importations of Honda motorcycles by KJM from Lime Exports, without any time limitation (see subparagraph (iv)(b) above). ix). At the forthcoming trial (fixed to begin on26 March 2007 ) Honda was proposing to call evidence from several witnesses who were resident in Australia. On30 January 2007 Honda applied for an order that their evidence could be taken by videolink. On13 February 2007 Kitchin J made such an order as respects most of the Australia-based witnesses, but declined to do so as respects Mr Hinton. If Honda wanted to adduce evidence from Mr Hinton he would have to come to this country, and be exposed to the greater rigours of being cross-examined in person, rather than by videolink, about the knowingly false statements which he had made in his first witness statement. I mention here that Kitchin J’s order was later extended to apply to two more overseas witnesses, but it was not changed as regards Mr Hinton. x). KJM had its own concerns about two potential witnesses for itself who were resident in Australia. One was Mr Beckert, the shareholder and director of Lime Exports. The other was Mr Juster, who had been a senior employee in the motorcycles division of Honda Australia until May 2003, but who had left Honda then and was now employed by a competitor, Hyundai. Neither Mr Beckert nor Mr Juster was prepared to give evidence for KJM voluntarily, so on23 February 2007 KJM applied for orders under rule 34.13 of the Civil Procedure Rules which would enable their evidence to be taken in Australia under the letters of request procedure. On7 March 2007 the application was rejected in the High Court, but KJM appealed to the Court of Appeal, and on21 March 2007 the court allowed the appeal and granted the letter of request. One consequence was that the trial had to be adjourned. xi). On10 April 2007 KJM served on Honda’s solicitors a notice to admit certain facts concerning the relationship between Honda Japan and Honda Australia. On30 May 2007 Honda responded as follows: “Solely for the purposes of the Lime Proceedings, and in relation to the circumstances of Honda Australia’s supply of the motorcycles to Lime Exports which are the subject of these proceedings, the Claimants admit as follows. Regardless of the nature of the relationship between Honda Australia and [Honda Japan], and regardless of what (if any) knowledge [Honda Japan] had of Honda Australia’s activities, [Honda Japan] does not consider it appropriate to take a point on consent between itself and Honda Australia in the particular circumstances of the sales by Honda Australia to Lime Exports. Accordingly, to the extent that [KJM] can prove that Honda Australia had consented to a motorcycle, which was initially sold by Honda Australia to Lime Exports, being put on the market in the European Economic Area, [Honda Japan] admits that it is bound by such consent in relation to that motorcycle.”
“4A In the course of these proceedings the Claimants have received information which indicates that, in relation to motorbikes shipped prior to about June 2002, there was or may have been insufficient regulation by Honda Australia over where such motorbikes could be put on the market: specifically the Claimants have learnt that sales were made by Honda Australia to (i) Lime Exports in Australia and (ii) Emile Gebben in Holland. That being the case, the Claimants make no claim in relation to motorbikes sold by Honda Australia to Lime Exports and thence to the Fourth Defendant [KJM] prior to1st July 2002 , alternatively, prior to30th November 2002 . Those dates are derived as follows.”
“The burden is on [KJM] to establish that Honda consented to the import into the EEA and the first marketing in the EEA of each of the LE motorbikes. [KJM] asserts that it had or may have had consent and this Honda denies.”
“I trust that this information is in sufficient detail for your needs and will enable you to obtain approval to export them to your customers. As always, if I can do anything else to assist you, at any time, please feel free to contact me.”
“I was trying to protect Honda Australia’s reputation within the Honda group from harm.”
‘In the case of Mr Guntram Beckert’, and ‘In the case of Mr Ian Juster’
“… the following matters in so far as they relate to the question of consent, express or implied, of Honda Australia to the export of motorcycles supplied by Honda Australia by Lime Exports to countries within the European Economic Area in general and/or the United Kingdom in particular …”
“It seems to me that it would be better that the consent should be expressed as being consent to exports to the EEA in general and/or to the United Kingdom in particular rather than to exports generally, since it is a consent to exports to the EEA in general or to the UK in particular that is required to make good the defence to the trade mark infringement claim.”
‘We may have to accept that Lime Exports had consent from Honda Australia to resell bikes generally, but Honda Australia might have excluded from that consent resales to the EEA and/or resales in the EEA by purchasers from Lime Exports. Now you, KJM, must prove that Honda Australia did not do that.’
“If you talk in the motorcycle dealer world in Australia about Lime Exports, people know what I do and where the bikes come from and where they go. They are being exported. And I source them from dealers, from importers, from wholesalers. They don’t go to Australia. But anywhere else.”
‘We appreciate your efforts and look forward to working with you together to further our mutual requirements/goals.’
“We are happy to comply with your export destination requirement [probably a typing error for ‘requirements’]. We intend to ship to the following countries: Japan, Korea, Holland, Germany, Italy, UK. Please advise if there are any destination restrictions for any specific models among these countries.”
“From the outset, when I met with Guntram Beckert, he was told that there would be problems if motorcycles were exported to countries where Honda had an appointed distributor. … The message to Beckert was clear: if we received complaints from Honda distributors that Lime had been selling into their territory, this would cause a problem, and we would have to stop supplying bikes to Lime Exports.”
“After a short while my efforts paid off, and in one of my telephone conversations with Graeme Baynes he agreed to offer us some bikes, on the conditions that we should not advertise them high profile; and that they must not end up back in Australia. Other than this we could sell them however and wherever we wanted to. He said that this was the same arrangement as they had with their existing export agent.”
“The reason why we told Mr Beckert he could not sell into countries where Honda had a distribution network was….”
“I understand that in the course of his cross-examination … Mr Beckert stated that he had no recollection of my telling him that he was not entitled to sell motorbikes into countries where Honda had a distributor. I am absolutely certain that I did inform Beckert of this.”
“Well, he was told not to export into countries where Honda had distributors.”
“Lime Exports clearly knew that they were not to ship into areas where Honda had distributors.”
“My words were, if he exported to countries where Honda had an appointed distributor, there would be problems. …. I told him specifically that if, as I said, … motorcycles turned up in countries where Honda had official distributors, the dealers would complain; … the motorcycles would be checked, where they had come from, and we would be asked to stop the source of supply.”
‘In reply to your recent enquiry regarding destination of product – it is Japan.’
‘It was the second half of 2003. Two hundred per cent. But, you know, I can’t give a date.’
“I do not recall giving Mr Beckert this instruction, although it is possible that I may have done. I think the instruction to Mr Beckert not to export to the United Kingdom would have been likely to have been given at a higher level than me.”
“I believe I now recall (the evidence and documents which have been served since my first witness statement having triggered my memory) asking Chris Valler at Lime Exports for the destinations of motorbikes which Lime Exports were proposing to buy from Honda Australia.”
‘You started asking that, as far as the documents show, around July 2003?’
‘… no exports were permitted to the United Kingdom.’
‘… motorbikes were only sold to Lime Exports on condition that their destination was not the United Kingdom.’
“In any event Honda Australia had, from at least 1999, given a general consent to Lime Exports to export bikes into the EEA. The purported withdrawal of consent to the export of bikes to the UK is an agreement or concerted practice between Honda and Lime Exports having as its object and/or effect the prevention, distortion or restriction of competition within the common market, in particular by reason of the limiting of markets, contrary to the provisions of Article 81.”
“They held that the trade mark proprietor was entitled to prevent import into the EEA even where the trade mark proprietor placed goods on the market without any restrictions on resale.”