Selective distribution network
P&G had argued that it had a selective distribution network and that it policed and took action against any occurrence of traded grey goods that it discovered. On this basis, there was no way that it could have tolerated, let alone consented to, the trade of grey market goods.
To counter this, Star Perfumes produced email evidence that millions of pounds of fragrances (in one case, a £15 million order) had been supplied inside the EEA to distributers that were not part of P&G’s selective distribution network. Star Perfumes also submitted that there was a noticeable increase in grey market P&G fragrances towards the end of each P&G quarter and each P&G financial year because, they asserted, P&G staff were seeking to meet quarterly and annual sales targets and were actively using the grey market to meet those targets.
Policing and enforcement of grey market goods
The Court was not convinced that P&G made a genuine attempt to police and enforce its grey market traded goods. Although P&G had sent a cease and desist letter to Star Perfumes, this had been back in 2008. Further, it hadn’t given sufficient details of the products (in both the initial letter and two further warning letters) for Star Perfumes to identify them.
The last of these initial warning letters was purported to be a “final warning”, but P&G took no further action until 2014 (1 day before the 6 year limitation period expired). P&G then waited for over another year to apply for summary judgment (in September 2015), and the hearing for the summary judgment was not arranged until February 2016. This was 15 months after commencement of the proceedings, and nearly 8 years after the initial cease and desist letter.
Star Perfumes claimed that this type of behaviour was only a token effort by P&G to keep its selective distributors happy, and that it had no real intention to enforce its trade mark rights against Star Perfumes.
The suggestion that P&G’s selective distribution network was leaky, and that P&G’s enforcement of its rights was not as assiduous as it claimed to be, persuaded the Court that the question of whether P&G had given its consent to the import of the fragrances needed further investigation at trial.