Buying branded stocklots legally in the EU: exhaustion, parallel imports and counterfeits

Branded stocklots sell faster and at better prices than unbranded goods, which is exactly why brand law matters. A lot of genuine branded products can still be a problem if the goods were never meant to be sold in Europe. And a lot that looks like a bargain may not be genuine at all. Knowing the basic rules protects your money, your customers and your reputation.

The core rule: exhaustion in the EEA

A trademark gives the owner the right to control the first time goods bearing the mark are put on the market. Once the owner, or someone with their consent, has put specific goods on the market in the European Economic Area (the 27 EU member states plus Iceland, Liechtenstein and Norway), the owner's right over those particular goods is "exhausted". From then on, they can generally be resold freely, including as stocklots, without the brand's permission.

The rule is in Article 15 of the EU Trade Mark Regulation (EU) 2017/1001 for EU trade marks, and Article 15 of Directive (EU) 2015/2436 for national trade marks. Two points matter for traders:

• Exhaustion applies per item, not per product line. The question is whether these specific units were put on the market in the EEA with the owner's consent, not whether the brand sells that product in Europe.
• The brand can still object in some cases, for example when the condition of the goods has been changed or impaired after they were put on the market, or when repackaging or the way the goods are presented harms the brand's reputation.

Goods from outside the EEA: parallel imports

The EU applies regional exhaustion, not international exhaustion. In Silhouette (C-355/96, 1998), the Court of Justice ruled that member states may not apply exhaustion to goods first sold outside the EEA. In Zino Davidoff (C-414/99, 2001), it ruled that the brand owner's consent to sales in the EEA must be unequivocal, and cannot be inferred simply because the owner did not object or did not restrict resale.

In practice: genuine branded goods first sold in, say, the United States, Turkey, the UAE or Asia, and then brought into the EU without the brand owner's consent, can infringe the trademark even though they are not counterfeits. The brand owner can ask customs to detain them and can take action against anyone selling them. These goods are often called grey market or parallel imports.

Burden of proof is normally on the reseller to show exhaustion. The Court of Justice made an exception in Van Doren + Q (C-244/00, 2003): where the brand owner uses an exclusive distribution system and requiring the reseller to reveal its source would let the brand cut off that supply and partition the market, the brand owner has to prove that the goods were first put on the market outside the EEA. Do not rely on that exception without legal advice; it is the reason good sources and paperwork are worth more than a low price.

Red flags for counterfeits

Counterfeits show up in the surplus trade because "overstock" and "liquidation" are convenient stories. Be careful when you see:

• A price that does not make sense. Genuine overstock from top brands is cheap compared with retail, but not a fraction of what other traders ask for the same goods.
• Unlimited supply. Real surplus is a finite lot. A seller who can supply any size, any colour, any quantity, every week, is not selling surplus.
• Only stock photos, or photos that appear elsewhere online, and no willingness to show the actual goods or open a carton on video.
• Inconsistent labels: wrong EANs, missing or misspelled care labels, size labels that do not match the brand's system, poor-quality hangtags or packaging.
• Vague origin: "factory surplus", "from a bankruptcy" or "from the brand's partner" with no names or documents.
• Pressure to pay quickly, by cash, crypto or to a personal or offshore account.
• Mixed lots of many luxury brands at the same low price per piece.

When in doubt, check a sample with the brand's authentication service where one exists, or with an independent authenticator. For goods coming from outside the EU, EU customs can detain suspected counterfeits under Regulation (EU) No 608/2013.

Documents to ask for

No document makes a lot genuine, but serious sellers can usually show where the goods come from. Ask for:

1. The seller's company details and VAT number (check them in VIES and the national business register).
2. A purchase invoice from the seller's own supplier, with prices blacked out if needed, but with the supplier's name, date and goods visible. It shows the chain back to the brand or an authorised distributor.
3. For brand overstock: a letter or contract from the brand or its distributor releasing the goods, including any restrictions on markets or channels.
4. For imported goods: customs import documents showing the goods were cleared into the EU, and information on where they were first sold.
5. A manifest with EANs and article numbers that you can check against the brand's ranges.
6. Photos or video of the actual goods, including labels, and the option to inspect or buy a sample first.

Sellers often protect their sources, which is legitimate. A seller who will not show any documentation at all for a large branded lot is a risk. Keep everything you receive: it is your evidence of good faith if a brand ever questions your stock.

Reselling branded goods

• You may use the brand name to describe and advertise genuine goods you lawfully resell, but do not suggest you are an authorised dealer or have a commercial link to the brand if you don't.
• Do not alter, relabel or repackage branded goods without checking the rules; changes to the goods are one of the cases where a brand can object even after exhaustion.
• Some online marketplaces have their own rules for branded goods and may ask for invoices. Keep them ready.
• For apparel and footwear, brands have new reasons to sell surplus rather than destroy it. See our guide to the EU destruction ban.

On BrandedStocklots

Sellers on BrandedStocklots agree to post accurate, lawful listings and to respect others' intellectual property rights. Listings can be reported to our team with the report button on each lot. Deals are made between buyer and seller, so do your own checks, using the questions above, before you pay. Browse branded lots in categories such as clothing and fashion, shoes, perfumes, watches and jewellery or consumer electronics. Selling genuine branded surplus? List it here.