Is the purchaser of a product sold under a trade mark entitled to take it apart and sell its component parts under the trade mark? The High Court considered that issue in resolving a dispute between rival manufacturers of bracelet charms.

An Italian company manufactured high-end bracelets consisting of links which could be detached from one another and relinked in any order to suit the wearer. Although some of the links were made of gold and precious stones, the product required the use of base links that were made of stainless steel and bore the company’s logo, which was protected by trade marks.

The company launched proceedings against a UK-based rival whose charms were compatible with its bracelets. Trading on eBay, the rival had, amongst other things, bought and disassembled the company’s bracelets, removing the base links which were sold on bundled together with its own charms.

In upholding the company’s infringement claim, the Court noted that it was in the nature of its bracelets that purchasers are permitted to disassemble them into their individual links. However, it had established a legitimate reason for its objection to the rival’s onward sale of base links under the trade mark.

The Court noted that base links were sold by the rival, in combination with its own charms, in blister packs and plastic bags which did not convey an impression of quality. That compared with the company’s elegant packaging, which presented an image of luxury. The packaging employed by the rival was in those circumstances likely to damage the company’s reputation.

In also upholding the company’s passing off claim, the Court found that the rival had in some instances used the company’s logo in relation to its own goods. It was not disputed that the company owned the goodwill in the trade marks and at least some of the rival’s customers were likely to have mistakenly assumed that, having been packaged together, the rival’s charms came from the company.