To make things even clearer, the Spanish Supreme has recently published a Judgment (cassational appeal 1247/2004) confirming that the theory of the international exhaustion of trade mark rights is not applicable in Spain.

According to the facts at stake, Nike International Limited filed a trade mark infringement action against a Spanish company that imported 5,688 pairs of original Nike branded sneakers bought from an authorised dealer in the US. The claim was dismissed in the first instance as the Court understood that there was not a trade mark infringement as it was undisputed that the products had a legitimate origin. Nike was also condemned to pay damages to compensate respondent’s expenses deriving from the interim seizure of the merchandise.

Nike brought the case to the “Audiencia Provincial de Madrid” (Court of Appeals), which upheld the appeal and awarded Nike’s claim. Such decision was appealed by respondent, who tried to elaborate before the Supreme Court that the Judgment of the Court of Appeals contravened some arcane case law prior 1985 (at that moment, the case judiciary was favourable to the theory of the international exhaustion).

In a quite straight-forward decision, the highest instance in the Spanish Court system takes the occasion to remind that since the enactment of the First Directive 89/104/EEC the Supreme Court has constantly ruled in favour of the European exhaustion of trade mark rights, as opposed to the theory of international exhaustion of rights (that was patently superseded).