Ruling addresses trade mark rights in aftermarket sales

The decision by the Court of Appeal of England and Wales in the case of AGA Rangemaster v UK Innovations Group highlights how easily the presentation of second-hand or modified items can blur the boundaries between independent refurbishment and perceived brand endorsement and puts trade mark law squarely into the sustainability conversation.

The dispute at hand

The dispute in this case concerned renovated AGA cookers converted from fossil fuel to electric by UK Innovations Group (UKIG) using UKIG’s ‘eControl System’.

AGA claimed that the way in which UKIG marketed the refurbished cookers infringed its UK registered trade marks for ‘AGA’ under section 10 of the Trade Marks Act 1994 (TMA). UKIG argued that if its use of ‘AGA’ in its marketing did amount to infringement then it could rely on the so-called exhaustion defence under s12(1) of the TMA; that is, that AGA’s rights in its trade marks had been exhausted – and so were no longer enforceable – because the cookers had already been placed on the UK market by AGA. 

Exhaustion is a complete defence to infringement unless there are “legitimate reasons” under s12(2) of the TMA for a trade mark owner to oppose further dealings in the goods. There are currently three possible legitimate reasons: where the condition of the goods has been changed or impaired after they have been put on the market; where further dealings might seriously damage the reputation of the trade mark; or where the further dealings give the impression that there is a commercial connection between the reseller and the trade mark proprietor. The question in this case related to the third reason: specifically whether UKIG’s marketing of the refurbished cookers created the false impression of a commercial connection with AGA. 

The earlier decision in the case

In the Intellectual Property Enterprise Court (IPEC), which is part of the High Court in England and Wales, judge Nicholas Caddick KC held that, while UKIG’s refurbishment and conversion work did not itself disapply exhaustion, the way UKIG marketed and sold the converted cookers did give AGA legitimate reasons to object to further dealings in the cookers under s12(2).

Website language such as ‘Buy an eControl AGA’, combined with the prominent display of the AGA badge on the cookers together with styling cues echoing AGA’s own product ranges, were likely to lead reasonably attentive consumers to believe they were purchasing an official AGA product or that AGA had provided the conversion service, the judge considered. He highlighted three points: the term ‘eControl AGA’ would be understood by consumers as usage of AGA as a brand and not merely a description or identifier of the goods; AGA was highly distinctive, heightening the risk of confusion; and references to the eControl System were likely to be read by consumers as references to an AGA-connected technology in the absence of a clear disclaimer. 

The Court of Appeal’s ruling

UKIG appealed, but the Court of Appeal upheld the IPEC’s decision. 

However, on the IPEC’s findings regarding the ‘commercial connection’ it considered UKIG had implied it had with AGA, the Court of Appeal determined that the wrong legal test had been applied by the High Court judge. Nicholas Caddick KC had asked himself whether UKIG’s adverts enabled, or enabled only with difficulty, normally informed and reasonably attentive internet users to ascertain the origin of the refurbished cookers. The ‘with difficulty’ aspect introduced a lower threshold and was an error in law, the Court of Appeal held, because this concept came from, and was only relevant to, online keyword advertising cases.

Crucially though, the judge had not relied on it in coming to his decision; he had instead made a straightforward assessment that UKIG’s branding created a false impression of a commercial connection with AGA. That conclusion had been rationally open to him, the Court of Appeal considered. 

The Court of Appeal also confirmed that the impression of a commercial connection can arise in more than one way:  it may relate not only to whether consumers think two businesses are linked, but also to whether they believe a particular product or feature originates from, or is endorsed by, the trade mark owner.

In this case, the concern was that consumers might assume the conversion system itself, or the upgraded cooker as a whole, was part of AGA’s official offering. This decision confirms that a misunderstanding like that is enough to defeat an exhaustion defence, even if the reseller is otherwise entitled to work on and resell the goods. The court said that UKIG could have remedied this by clear, consistent disclaimers in its marketing material, but had not. 

The Court of Appeal reiterated that refurbishment alone is unproblematic – merely selling refurbished AGA cookers would not typically imply a commercial connection. However, presentation is important. The exhaustion defence was lost in this case because UKIG added a new system and then marketed the resulting product in a way that resembled official AGA sub-branding – the branding was such that consumers would understand the modifications were undertaken by AGA or with their approval.  

Lessons businesses can learn

There are some practical takeaways from the Court of Appeal’s ruling for businesses operating in the second-hand refurbishment sector: 

• Use brand names only to identify original goods. Lawful references such as ‘refurbished AGA cooker’ remain permissible, but compound signs that look like model names, such as ‘eControl AGA’, are risky; 
• Avoid brand range cues. Mimicking a manufacturer’s naming conventions, warranty styling or curated colour ranges may imply endorsement by the trade mark rightsholder; 
• Adopt clear, repeated disclaimers. A reseller or converter should make clear, in a prominent way, in marketing that the upgrade or system is independent of the trade mark proprietor; 
• Ensure consistency across customer touchpoints. Websites, invoices, labels and post-sale documents all contribute to the impression consumers form. A single inconsistent reference can undermine compliance. 

The impact on the sustainability agenda

This ruling sits at an important juncture for businesses committed to the circular economy, especially those repurposing or modernising durable goods. It confirms that trade mark law does not stand in the way of legitimate second-hand markets, refurbishment or even advanced upgrades like electrification – provided the marketing does not imply a false commercial connection. 

For resellers the message is clear: sustainability and brand clarity can coexist. Businesses can help consumers make environmentally-conscious choices, reviving long-lasting products, reducing waste and extending lifespan while still respecting trade mark boundaries. The key lies in transparent, accurate and unambiguous signposting: telling customers what the product is, what has been done to it, who has done it and who is selling the upgraded goods now, without misusing the brand owner’s identity in the process. 

Handled well, this decision supports circular practices by clarifying the rules. It allows the secondary market to flourish while giving rightsholders assurance that their marks will not be coopted into unofficial ‘new ranges’. That clarity benefits everyone: brand owners, aftermarket innovators, and consumers on the lookout for sustainable options.