Supreme Court of Finland: SodaStream Liable for Mysoda’s Legal Costs in Trial – No Change Regarding Trademark Infringement in Market Court’s Interim Decision

The Supreme Court of Finland confirmed in its precedent decision on 17 November 2023 (KKO:2023:87) that the practice of replacing the label on a refilled carbon dioxide gas cylinder originally put on the market by other operator is permissible when the information given in it corresponds largely Properta’s client, Mysoda Oy’s current practice so that in the new label there is a statement excluding the economic connection between the refiller and the trademark holder. From the consumer’s perspective, the information on the label is then considered clear and unambiguous.

While the decision did not alter the Finnish Market Court’s previous interim decision (MAO:388/19), which was already positive for the defendant, Mysoda regarding the trademark infringement, it is noteworthy that the Supreme Court did modify the cost decision. The plaintiff, SodaStream, was ordered to pay Mysoda’s legal costs, totaling 40,000 euros, not only for the Supreme Court appeal stage but also for the Market Court proceedings. Although the awarded amount does not meet Mysoda’s demands, and is therefore insufficient, the decision to make only a partially successful plaintiff bear some of the defendant’s costs is exceptional but entirely justified, given that SodaStream, with numerous expanded and later rejected claims, has significantly increased the legal costs in the case.

The Supreme Court’s justification for the reduced amount of legal costs imposed on SodaStream was influenced by the interpretation of SodaStream’s argument regarding the application of the so-called BMS criteria, especially the necessity criterion, the application of which to this case the Supreme Court considered ambiguous. The Supreme Court sought a preliminary ruling from the Court of Justice of the European Union (”ECJ”) on this matter. In accordance with ECJ’s precedent – as consistently argued by Mysoda throughout the legal process – the Supreme Court concluded that Mysoda’s actions should not be assessed based on the BMS criteria, and particularly the necessity criterion.

Regarding trademark infringement, the Supreme Court, like the Market Court, held that the pink logo label used by Mysoda for only a brief period in the fall of 2016 violated SodaStream’s trademark rights. This was because the pink label did not include a statement excluding the economic connection, similar to the other assessed i.e. white label of Mysoda corresponding mainly the label currently in use by Mysoda. According to the Supreme Court, the pink label was not sufficiently clear and unambiguous for consumers.

The Supreme Court stated that there was not enough evidence at the time (2016–2017) to support Mysoda’s claim that there was a sufficient quantity of refilled cylinders – with labels / markings comparable to the assessed pink labels – in the market, indicating that consumers were already accustomed to such a market practice. However, Mysoda presented evidence at various stages of the trial that also SodaStream uses logo labels on all cylinders it fills, regardless of whether the cylinders were originally released on the market by SodaStream itself or by a third party.

SodaStream also argued in the Supreme Court that the label change by Mysoda, did not secure SodaStream’s legal interests related to preserving the cylinder’s original quality and the trademark’s reputation. However, the Supreme Court concluded that the refilling of cylinders, as presented in the case, could not be considered a change or deterioration of the cylinder’s quality, nor could it be a valid reason for reputational damage to SodaStream.

The carbon dioxide cylinder refill markets in Finland are now in an interesting situation following the Supreme Court’s decision. As for the consequences of trademark infringement regarding Mysoda’s pink labels, the process continues in the Market Court. However, it remains to be seen how SodaStream’s proven and ongoing practice of labeling refilled gas cylinders in a manner comparable to Mysoda’s brief practice in the fall of 2016 will impact or lead to any changes. Interestingly, SodaStream has now even chosen a color for some of its own labels that is reminiscent of Mysoda’s pink label.

For more information on the Market Court’s interim decision, refer to our article here, and for details on the EU Court of Justice’s preliminary ruling (C-197/21), refer to our article here.