INDUSTRIAL PROPERTY LAW
Supreme Court of Cassation: even in the presence of a selective distribution network of a luxury brand, the mere sale of the product by an unauthorized retailer is not enough to damage the reputation of the brand.
No prejudice to the famous Maison if the sale of luxury jewelry takes place inside an Outlet.
The Court of Appeal did not consider the existence of a selective distribution system for the marketing of products bearing the luxury trademark to be proven, and in any case argued that the marketing of such products by the defendant, outside the authorized distribution network, had not caused damage to the reputation of the trademark.
The maison appealed to the Supreme Court, complaining, among other grounds of complaint, that EU Reg. No. 330/2010 had been violated because the Court of Appeals had ruled that there was no selective distribution system at the maison. In so assessing, the Court had thwarted the rationale behind the appellant's adoption of such a system, namely its desire to distribute and market the luxury product using retailers with precise characteristics of prestige and elegance, so as to preserve the luxury image associated with its brand as well as its products.
In its arguments, the Supreme Court first recalls that the Regulation invoked by the plaintiff, gives the trademark owner the ability to oppose the further marketing of its products, although they have been placed in the Community territory, in the presence of a network of selective destruction.
That said, it finds that although the maison had indicated the characteristics that the retailers in its network had to possess, there was no evidence that these criteria had actually been applied in identifying the distributors. For example, in examining the various criteria indicated, the court found that as many as twenty-five out of ninety-nine establishments on the list were located neither in provincial capitals nor in areas of tourist interest.
Therefore, the territorial court had correctly concluded by holding that there was a lack of evidence that the authorized distributors had been selected on the basis of meeting certain predetermined requirements.
The Supreme Court goes on to point out that even taking for granted the existence of selective distribution, indicated by the EU rules, the mere fact of selling the jewelry outside the chosen circuit would not suffice to prove the injury, not even potential, to the brand image.
In particular, the placement of the jewelry in a store located within a provincial Outlet does not result in a trademark impairment merely because "Outlets, as well as shopping malls, do not meet the requirements of excellence that the maison adopts."
For these reasons, the Supreme Court rejects the appeal.
The Court of Appeal did not consider the existence of a selective distribution system for the marketing of products bearing the luxury trademark to be proven, and in any case argued that the marketing of such products by the defendant, outside the authorized distribution network, had not caused damage to the reputation of the trademark.
The maison appealed to the Supreme Court, complaining, among other grounds of complaint, that EU Reg. No. 330/2010 had been violated because the Court of Appeals had ruled that there was no selective distribution system at the maison. In so assessing, the Court had thwarted the rationale behind the appellant's adoption of such a system, namely its desire to distribute and market the luxury product using retailers with precise characteristics of prestige and elegance, so as to preserve the luxury image associated with its brand as well as its products.
In its arguments, the Supreme Court first recalls that the Regulation invoked by the plaintiff, gives the trademark owner the ability to oppose the further marketing of its products, although they have been placed in the Community territory, in the presence of a network of selective destruction.
That said, it finds that although the maison had indicated the characteristics that the retailers in its network had to possess, there was no evidence that these criteria had actually been applied in identifying the distributors. For example, in examining the various criteria indicated, the court found that as many as twenty-five out of ninety-nine establishments on the list were located neither in provincial capitals nor in areas of tourist interest.
Therefore, the territorial court had correctly concluded by holding that there was a lack of evidence that the authorized distributors had been selected on the basis of meeting certain predetermined requirements.
The Supreme Court goes on to point out that even taking for granted the existence of selective distribution, indicated by the EU rules, the mere fact of selling the jewelry outside the chosen circuit would not suffice to prove the injury, not even potential, to the brand image.
In particular, the placement of the jewelry in a store located within a provincial Outlet does not result in a trademark impairment merely because "Outlets, as well as shopping malls, do not meet the requirements of excellence that the maison adopts."
For these reasons, the Supreme Court rejects the appeal.
