Can I use a third-party brand in my e-commerce?
The use of third-party brands in e-commerce is a sensitive issue and can have serious legal consequences if not done correctly.
Exclusive Right of the Owner
When using a third-party brand in our e-commerce, we must consider that when a company registers a brand, it obtains an exclusive right over it.
By virtue of Article 34 of the Trademark Law (LM), the holder of the registered trademark has the exclusive right to use it in economic transactions and the ability to prohibit third parties from using an identical or similar distinctive sign for products or services identical to those for which the trademark was registered.
What does this exclusive right imply?
- Prohibition of Unauthorized Use: No other person can use the trademark to sell identical or similar products or services without the owner’s consent.
- Protection Against Unfair Competition: Unauthorized use of a trademark can constitute an act of unfair competition, as it unduly exploits the reputation and investment effort of the trademark owner.
- Quality Assurance: The trademark owner usually associates their name with certain quality standards, and the use of the trademark can harm this perception.
Intellectual Property of the Brand
Intellectual property is a set of legal rights that protect creations of the mind, such as inventions, literary and artistic works, designs, and symbols.
In the case of trademarks, intellectual property also grants the owner exclusive rights over a distinctive sign that identifies their products or services.
Why is intellectual property of the brand so important?
- Economic Value: Trademarks are valuable intangible assets for companies. A strong brand can increase the value of a company, facilitate financing, and attract more customers.
- Differentiation: Trademarks allow companies to stand out in a crowded market by differentiating their products or services from those of competitors.
- Reputation: Trademarks build a reputation and generate consumer trust. This reputation is a valuable asset that has been built over time and can be affected by unauthorized use of the trademark.
- Legal Protection: Intellectual property provides a legal framework to protect trademarks from copying, counterfeiting, and other unauthorized uses.
Therefore, using a third-party brand that holds this exclusive right has its limits.
The Principle of Trademark Exhaustion
So, can I use a third-party registered trademark in my e-commerce?
The answer is found in Article 36 of the Trademark Law:
“1. The right conferred by the registration of a trademark shall not allow its owner to prohibit third parties from using it for products marketed in the European Economic Area with that trademark by the owner or with their consent.
- Paragraph 1 shall not apply when there are legitimate reasons for the owner to oppose further commercialization of the products, especially when their condition has been altered or modified after they were marketed.”
Therefore, the answer is yes, you can use a third-party brand in your e-commerce as long as you meet the following requirements according to Article 36 LM:
- Objective Requirement: The products under the registered trademark must have been marketed for the first time by their owner or with their consent.
- Territorial Requirement: The commercialization must be in the European Economic Area, disregarding international scope.
The Principle of Trademark Exhaustion limits the owner’s right to prohibit further commercialization of a product that has been legitimately introduced to the market by them or with their consent by an authorized distributor.
However, this principle will not apply, as stated in point 2 of Article 36 LM, when the trademark owner demonstrates that the further commercialization of the product unjustifiably harms the value or reputation of their brand, such as careless or inappropriate presentation of the product, which may cause association with inferior quality items or diminish the brand’s image.
IP/IT Lawyer
