In a recent case heard before the Athens Courts after the new trademark law was entered into force, it was ruled that the advertising function of trademarks is protected as well as the distinctive character of the trademark in question, in case of goods of high standards (i.e. cars). The prohibition to third entrepreneurs, which are not members of the distribution channel of the trademark owner and producer of the products in question, to exploit the trademark's reputation is a demonstration of such function.

More specifically Mercedes Beinz, seated in Stuttgart Germany, manufacturer and distributor of the well known cars Mercedes and Mercedes Beinz and its affiliate company in Greece, general distributors of the said cars in Greece, brought an action against a private company which was selling Mercedes and Mercedes Beinz cars without being part of the distribution network of the manufacturer and without having any contractual relation with the plaintiffs. According to the claims, the defendant was infringing the trademarks Mercedes and Mercedes Beinz, properly registered in Greece, by appropriating the advertising function thereof. He was, therefore, gaining profits to the detriment of the plaintiffs by creating the false impression to the consumers that he was an authorised company. A "waiver of right" objection brought by the defendant based on the argument that the plaintiffs had known about the situation and had not complained for 13 years, was rejected by the court on the ground that the creation of a danger of confusion concerns the paramount interests of the consumers and not only the interests of the private parties and is thus paramount. More specifically, the defendants had a huge, well visible, sign above the door of their store with the trademark Mercedes and the name of their company written in very small characters. They furthermore used the trademark Mercedes on business cards, just as those used by the authorised dealers. The court ruled for the plaintiffs and obliged the defendants to bring down the sign and destroy all business cards and papers bearing the trademark of the plaintiffs.

The judgment gives rise to two questions : why should a parallel importer who does not participate in a certain distribution network not have the right to use the respective trademark when

(a) he sells genuine goods of the trademark owner, originating from him and

(b) the exhaustion doctrine allows parallel importers to use the trademark

for goods having been set in circulation in the EU by the right holder or with his consent .

The court ruled that the right of use of the trademark in printed matters and advertisements (right of announcement and advertisement) is an absolute right. It belongs to the right owner and is not so much connected with the protection of the public from confusion, but with the right of the trademark owner to define freely the means and the way of the advertising exploitation of his trademark. Therefore a parallel importer is only allowed to use the said trademark in order to simply declare the origin of the goods.

The exhaustion doctrine mainly purports to limit the monopoly power of the trademark owner, since the complete ban of the use of the said trademark by a parallel importer would make the supply of the respective goods impossible. Nevertheless, in this framework third merchants are allowed to announce the trademark and advertise it solely in order to make known to the public that they supply goods bearing the trademark, while not in order to exploit the trademark to their benefit. The right owner has every right to control the image and the good will of the trademark, for which he has invested funds. At all times the public interest and the danger of misleading the consumer should be construed as the boundaries beyond which the exploitation of a trademark may not be accepted and therefore the trademark must be protected.

Note: This article is not intended to be exhaustive and specific legal advice should be sought in relation to any specific circumstances.