Luxury Brands and Trademark Law

Extract

[...] In order to preserve the image of luxury products, common law and European jurisdictions tolerate sales policies that sometimes conflict with the rules of free competition. Luxury product houses can either choose to keep exclusive distribution for themselves in order to ensure that marketing is done in appropriate conditions and in line with the image they want to reflect, or they choose an exclusive distribution mode with retailers who can offer them this guarantee of quality. This is what is called selective distribution, defined in Article 1 of Regulation No. [...]

[...] Through the study of the principle of exhaustion (2.1) and then the issues related to resale, parallel circuits and image control within the framework of selective distribution it will be shown that the current law, although having provided some flexibility, imposes on luxury brands a constant vigilance in the structuring of their commercial network. 2.1. The principle of exhaustion of the right and its consequences The luxury brand image is considered an essential element of the product. This represents a limit to the exhaustion of the right. [...]

[...] It concerns either opposition to the filing of an application for registration with the national office, or opposition to the application for extension of a mark abroad. Therefore, any sign that may create confusion with a well-known mark or a notorious mark may be the subject of an opposition by its owner. The owner of a well-known or renowned mark may also act in nullity of a sign that may create confusion. This procedure allows for the validity of a mark to be contested once registration has been completed. [...]

[...] Furthermore, the Court states that 'the objective of preserving prestige image cannot be a legitimate objective for restricting competition and cannot therefore justify a contractual clause pursuing such an objective not falling within Article 101, paragraph TFUE.' Certain temperaments to the general prohibition of prohibiting online sales have, however, been admitted, both by European law and by French law. In concrete terms, this means that, in certain specific cases, the supplier can regulate online sales without completely prohibiting them. Firstly, the courts recognize the supplier's right to require its authorized distributors to have a physical point of sale, in other words, a traditional store. [...]

[...] These tasks prove to be complicated for luxury brands, whose sales remain high. This is the case of the lawsuit between Burberry Limited and a leather goods and small luggage company, which it claimed was causing a dilution prejudice due to the use of a similar mark. However, unable to demonstrate a concrete impact on the attractiveness of its brand, and even though the success of its products remained growing, without any decline in performance or prestige, the judges dismissed the dilution claim.14 Furthermore, the plaintiffs in dilution cases often claim that there is a link in the public's mind between their well-known and renowned brand and the disputed mark, without being able to justify a characterizing attack and the damage caused. [...]