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Tesco loses Levi jeans trade mark battle

UK supermarket giant Tesco has lost its four-year legal battle for the right to sell cut price Levi jeans in a case which has implications for trade mark owners and retailers operating in the so-called “grey market”.01 Aug 2002

The High Court yesterday ruled that a decision made by the European Court of Justice (ECJ) in November did not conflict with either domestic law of Community law. The ECJ had ruled that the retailer was not allowed to source Levi jeans outside the European Economic Area and sell them at low prices without the brand owner’s consent.

Tesco bought jeans from wholesalers in the US, Canada and Mexico, countries where they are sold more cheaply. The jeans were then sold in the UK at about half the price recommended by Levi Strauss. The US-based manufacturer took legal action against Tesco, claiming that the cost cuts and the fact that its clothes were sold in supermarkets affected its trade mark-protected brand. The European Court accepted Levi’s argument.

Tesco argued that the ECJ’s ruling meant that the EU’s Trade Mark Directive and its Community Trade Mark Regulation were invalid to the extent to which the court considered that they entitled a registered trade mark owner to prevent importation of its goods from other countries, because they infringed basic principles of EU and English law.

The High Court yesterday dismissed Tesco’s claims after considering the provisions of UK and EU trade mark legislation. Its decision gave Tesco the right to appeal. However, the retailer said it has reached the “end of the legal road”, and that “it is now time for the law itself to change.”