Silhouette International Schmied GmbH & Co. KG v. Hartlauer Handelsgesellschaft mbH (1998)

"Trademark exhaustion applies only within the European Economic Area, not internationally."

Short Description :

This case clarified the geographical scope of trademark exhaustion under EU law. Silhouette, an Austrian eyewear manufacturer, objected to the resale of its products outside its authorized distribution network. Hartlauer had imported genuine Silhouette glasses from Bulgaria, a non-EEA country, and sold them within the EU without permission.

Facts :

Silhouette distributed its products only through selected retailers. Hartlauer purchased original Silhouette eyewear from outside the European Economic Area (EEA) and resold them in Austria at discounted prices. Silhouette argued that once goods were placed on the market outside the EEA, the company’s trademark rights within the EU were not exhausted.

Findings / Reasoning :

The European Court of Justice held that the principle of exhaustion applies only to goods marketed within the EEA by the trademark owner or with their consent. Goods sold outside the EEA remain under full trademark control when imported into the EU. This prevents parallel importers from exploiting price differences across borders.

Suggestions / Observations :

The Court emphasized that limiting exhaustion to the EEA protects the internal market and preserves trademark owners’ right to control distribution channels. However, the rule may increase price disparities between regions.

Judgment & Date :

On 16 July 1998, the ECJ ruled in favor of Silhouette, confirming that international exhaustion does not apply under EU law — only regional exhaustion within the EEA is recognized.