Recent developments (including the Court of Justice of the European Union’s judgment in C-230/16, Coty) have provided welcome guidance to brand owners on:
- when a selective distribution network can be justified by the need to protect a brand’s image
- what retail channel restraints can legitimately be placed on authorised distributors; and
- which unauthorised aftermarket uses of trade marks have to be tolerated and which don’t.
In this webinar we considered what these developments mean in practice for brands owners.
Independent Call Girls Pune | 8005736733 Independent Escorts & Dating Escorts...
The Allure of Luxury: up to date guidance on protecting brand image, January 2018
1. Have your say @brownejacobson
Protecting the
“Allure of Luxury”
2. Have your say @brownejacobson
Protecting the
“Allure of Luxury”
Connect with Bonita Trimmer
Bonita.Trimmer@brownejacobson.com
+44 (0)121 296 0675
3. Have your say @brownejacobson
Developments in 2017 relating to:
• when a selective distribution network can be justified by the need to
protect a brand’s image
• what online sales restraints can be placed on authorised distributors;
and
• which unauthorised aftermarket uses of trade marks have to be
tolerated and which don’t.
Topics for consideration
4. Have your say @brownejacobson
• cosmetics (Coty)
• corsetry (Dior)
• cars (BMW)
Luxury goods
5. Have your say @brownejacobson
CJEU in C-230/16,
Coty
Coty Germany - sells its upmarket
cosmetics via a selective
distribution network designed to
support the “prestigious image”
V
Parfümerie Akzente (“Akzente”) –
authorised distributor of Coty,
selling through its high street stores,
its own website and amazon.de
6. Have your say @brownejacobson
CJEU in C-230/16,
Coty (1)
• Coty revised its contractual
agreements after Regulation
No 330/2010
• authorised distributors could still
sell through an “Electronic shop
window” (subject to quality
requirements)
7. Have your say @brownejacobson
CJEU in C-230/16,
Coty (2)
• but they were prevented from:
“Collaborating with third parties if
such collaboration is…effected in a
manner that is discernible to the
public”
• Akzente refused & Coty applied
for an order
8. Have your say @brownejacobson
CJEU in C-230/16,
Coty
Four questions referred to the CJEU
which can be split in two:
• can protecting the “prestigious
image” of goods justify the use of a
selective distribution network?
• can brands contractually prevent
their distributors from making online
sales via discernible third party
platforms without breaching
competition law?
9. Have your say @brownejacobson
Pierre Fabre Dermo-
Cosmétique, C-439/09
• absolute ban on internet sales =
hard-core restriction
“The aim of maintaining a prestigious
image is not a legitimate aim for
restricting competition and cannot
therefore justify a finding that a
contractual clause pursuing such an aim
does not fall within Article 101(1) TFEU”
(para 46)
10. Have your say @brownejacobson
CJEU in C-230/16,
Coty
• problem paragraph in Pierre Fabre is
not “a statement of principle”
• a selective distribution agreement
needed to preserve a prestigious
image can comply with TFEU 101(1)
subject to fulfilment of the pre-
established conditions
11. Have your say @brownejacobson
CJEU in C-230/16,
Coty (1)
• resellers must be chosen on the basis
of objective criteria of a qualitative
nature
• criteria must be laid down uniformly
for all potential resellers and not
applied in a discriminatory fashion
12. Have your say @brownejacobson
CJEU in C-230/16,
Coty (2)
• characteristics of the products must
necessitate such a network in order
to preserve their quality and ensure
proper use
• criteria laid down must not go
beyond what is “necessary”
13. Have your say @brownejacobson
CJEU in C-230/16,
Coty
• re the 3rd bullet but a trade mark
infringement case
• Dior branded corsetry sold in breach
of licence term banning sales to
discount outlets
• CJEU explained that an “aura of
luxury” is as much a part of the
quality of the goods as the materials
they are made of
14. Have your say @brownejacobson
CJEU in C-230/16,
Coty
• remember – the characteristics of the
products must necessitate a selective
distribution network in order to preserve
their quality and ensure proper use
• Copad = harm to the contract goods’
“aura of luxury” is harm to their
qualities/characteristics. Therefore it is
possible for selective distribution
networks designed to protect this
aura/image to fulfil the conditions
required
15. Have your say @brownejacobson
Are these luxury goods:
• personal hygiene products / upmarket cosmetics?
Are the criteria truly qualitative in nature?
• importance of the Block Exemption* (market share <30%) and the safe
harbor it provides
*EU Reg 330/2010 of 20 April 2010 on the application of Article 101(3) TFEU to categories
of vertical agreements and concerted practices (VBER)
CJEU in C-230/16, Coty
16. Have your say @brownejacobson
CJEU in C-230/16,
Coty
Hardcore restrictions include those
which have “as their object”:
• the restriction of the territory into
which, or of the customers to whom, a
buyer party to the agreement… may sell
the contract goods or services...
• the restriction of active or passive sales
to end users by members of a selective
distribution system operating at the retail
level of trade…
17. Have your say @brownejacobson
CJEU in C-230/16,
Coty
• De facto internet ban in Pierre Fabre
Dermo-Cosmétique, C-439/09 “has
as its object the restriction of
passive sales to end users wishing to
purchase online…”
• CJEU in Coty indicated a ban on sales
via “discernible” online sales
platforms was not a hardcore
restriction
18. Have your say @brownejacobson
CJEU in C-230/16,
Coty
Why not a hardcore restriction?
• authorised distributors can advertise
via the internet on third-party
platforms and make use of search
engine facilities
• authorised distributors can sell via
their own websites (NB EU
Commission’s 2017 report on the e-
commerce sector)
• customers are usually able to find the
online offer of authorised distributors
19. Have your say @brownejacobson
Something a bit
different…
20. Have your say @brownejacobson
• BMW has a network of authorised
dealerships licensed to use its
prestigious brand for the repair and
maintenance of BMW vehicles
• BMW owns registered EU trade marks
for the word “BMW” and its roundel
logo
• both are registered in respect of
“maintenance and repair of cars,
motors, engines and parts of these
goods…” in class 37
BMW v Technosport
21. Have your say @brownejacobson
• Uses of a TM which can’t be
prevented include:
• as indications “concerning the kind,
quality… or other characteristics of
the goods or service”
• which are “necessary to indicate the
intended purpose of a product or
service, in particular as accessories
or spare parts”
• provided such uses are “in
accordance with honest practices in
industrial or commercial matters”
BMW v Technosport
22. Have your say @brownejacobson
IPEC Judge found Technosport’s use of:
• the roundel - infringed
• “BMW” in its trading style - did not
infringe
• BMW appealed the non-infringement
finding
BMW v Technosport
23. Have your say @brownejacobson
BMW v Technosport
Court of Appeal (Floyd LJ) – June 2017
‘Informative use’
“My business provides a service which repairs BMWs and/or uses genuine
BMW spare parts”
V
‘Misleading use’
“My repairing service is commercially connected with BMW”
24. Have your say @brownejacobson
Cartier, Montblanc, Richemont v BSB & other ISPs
(ISP blocking order re websites selling counterfeit goods)
• 1 Jan 2017 – Supreme Court granted permission to appeal but only on the
issue of the costs burden; i.e. whether the Court of Appeal “was wrong to
hold that the [ISPs] as innocent parties, should be required to bear the costs
of the blocking injunctions …or… should [the ISPS] be indemnified against all
costs, expenses and liabilities”
• 30 Jan 2018 – The Supreme Court hearing begins
Luxury brands in 2018
25. Have your say @brownejacobson
Connect with Bonita Trimmer
Bonita.Trimmer@brownejacobson.com
+44 (0)121 296 0675
Get in touch