B&M triumphs in Levi's-Tesco at European Court

In a major victory for Baker & McKenzie clients Levi Strauss, the European Court of Justice this week clarified the law on parallel imports. The ruling was a major blow to retailers Tesco, Costco and A&G Imports, but for once press speculation on their legal fees has been way off the mark.
Last week’s decision related to three different cases – Levi’s against Tesco and Costco and Davidoff against A&G Imports. Despite speculation that the legal bill for Tesco alone came to more than 1m, two sources close to the case have told The Lawyer that the external legal spend for each retailer was around 300,000. Given the importance of the point at issue, this level of fees looks like good value.
A host of UK law firms were involved with the case. Davidoff was represented by Linklaters & Alliance, A&G by Ian Mackie of Macfarlanes, Costco by Guy Heath at Nabarro Nathanson, Levi’s by Harry Small at Baker & McKenzie and Tesco by Catrin Turner at niche intellectual property firm H20.
The three cases were joined at EU level and Geoffrey Hobbs QC of One Essex Court argued for all the retailers before the European Court. Henry Carr QC of 11 South Square and David Anderson QC of Brick Court Chambers acted on behalf of Levi’s. Little time has actually been spent in court, which is reflected by the legal spend.
According to some commentators, the advocate general’s opinion suggested a Tesco victory, but lawyers on both sides have described it as “utterly incomprehensible” and attributed it to the advocate general’s lack of experience. Certainly the court ignored it in the final judgment.
Although the European law dispute is over, the price war is not. Tesco can continue to resell cheap jeans bought on the EU grey market and will continue to do so. According to Turner, “Tesco can and will keep bringing cheaper-branded goods to the British public”.