Tommy Hilfiger has announced that it is to sue Tesco for allegedly selling "fake" products.
Tesco maintains that it bought the products legitimately on the "grey market" (from the US), and that it is entitled to sell them in the UK.
The case brings to the fore the difference between branded goods bought outside the European Economic Area (EEA) for sale in the UK and goods bought within the EEA for sale in the UK.
A judgment, expected imminently from the European Court of Justice (ECJ), is likely to clarify the difference between such purchases.
It is expected that the ECJ will hold that goods bought outside the EEA should be treated differently to goods bought within the EEA - even though the goods may be exactly the same.
The EC Treaty enshrines the concept of the "single market". Accordingly, there should be no trade barriers between member states. If Tesco was to buy Tommy Hilfiger garments in Italy or Spain, then Tommy Hilfiger would not (ordinarily) be able to stop Tesco from reselling those garments in the UK.
But if Tesco was to purchase the garments from the US then, even if the garments were genuine, Tommy Hilfiger would be able to claim that they were trade mark infringements.
In this way, genuine garments can be described as counterfeit, although describing them as "fake" may well be taking the matter too far.
For some time now, Tesco has been waging a campaign against the major brand owners. Tesco claims that the brand owners are engaged in anti-competitive selective distribution by refusing to supply it with their branded goods.
The supermarket chain maintains that this is because brand owners wish to maintain retail prices for their goods and avoid Tesco's discounting practices.
The brand owners assert that they are maintaining their brand image and that Tesco stores are not an appropriate sales vehicle.
The issue of alleged selective distribution may be raised by Tesco as a defence to Tommy Hilfiger's claim. Any judgment will therefore have far reaching implications for both parties.
Finally, there is no need to worry about that Ralph Lauren jacket you bought in Florida last year. There will be no trade mark infringement in connection with purchases for personal use.
