The EFTA Court issues landmark ruling concerning exhaustion of trademark rights (L’Oréal / Per Aarskog / Nille / Smart Club)

On 8 July 2008, the EFTA Court issued a judgment concerning the interpretation of First Council Directive 89/104/EEC to approximate the laws of the Member States relating to trademarks (the “Trademark Directive”), in which it adopted the principle of mandatory EEA-wide exhaustion of trademark rights (Joined Cases E-9/07 and E-10/07, L’Oréal Norge AS and L’Oréal SAv. Per Aarskog AS, Nille AS and Smart Club AS). This is a key judgment because previously the EFTA Court had ruled that states subject to its jurisdiction were free to apply a rule of international exhaustion of trademark rights. In the case in question, a group of cosmetic wholesalers and retailers established in Norway were sued by L’Oréal, a manufacturer of cosmetic and beauty products, for selling in Norway products bearing