Prohibiting sales to discount stores that are not part of a selective distribution network possible

TRADEMARK LAW

The very wording of Article 8(2) of the Directive shows that the list set out in it is exhaustive.

That Article 8(2) of the Directive is to be interpreted as meaning that the proprietor of a trade mark can invoke the rights conferred by that trade mark against a licensee who contravenes a provision in a licence agreement prohibiting, on grounds of the trade mark’s prestige, sales to discount stores such as the ones at issue in the main proceedings, provided it has been established that that contravention, by reason of the situation in the main proceedings, damages the allure and prestigious image which bestows on them an aura of luxury.

It follows that it is conceivable that the sale of luxury goods by the licensee to third parties that are not part of the selective distribution network might affect the quality itself of those goods, so that, in such cir-cumstances, a contractual provision prohibiting such sale must be considered to be falling within the scope of Article 8(2) of the Directive.

"31. It is for the national court having jurisdiction in the matter to examine whether, taking into account the par-ticular circumstances of the case before it, contra-vention by the licensee of a provision such as the one at issue in the main proceedings damages the aura of lux-ury of the luxury goods, thus affecting their quality.

32. In this respect, it is important to take into consid-eration, in particular, first, the nature of the luxury goods bear-ing the trade mark, the volumes sold and whether the licensee sells the goods to discount stores that are not part of the selective distribution network regularly or only occasionally and, secondly, the nature of the goods normally marketed by those discount stores, and the marketing methods normally used in that sector of activity.

33. Moreover, it should be added that the interpre-tation of Article 8(2) of the Directive set out in the preceding paragraphs of this judgment cannot be called in question by Dior’s arguments that a provision in a licence agreement prohibiting sale to discount stores for reasons connected with the prestige of the trade mark may fall within the scope of other provisions than that relating to the ‘quality of the goods’, provisions, namely those concerning ‘the territory in which the trade mark may be affixed’ or ‘the quality … of the services provided by the licensee’."

That a licensee who puts goods bearing a trade mark on the market in disregard of a provision in a licence agreement does so without the consent of the proprietor of the trade mark where it is established that the provision in question is included in those listed in Article 8(2) of that Directive.

That, where a licensee puts luxury goods on the market in contravention of a provision in the licence agreement, but must nevertheless be consid-ered to have done so with the consent of the proprietor of the trade mark, the proprietor of the trade mark can rely on such a provision to oppose a resale of those goods on the basis of Article 7(2) of the Directive only if it can be established that, taking into account the particular circumstances of the case, such resale damages the reputation of the trade mark.

"56. It follows that where a licensee sells goods to a dis-count store in contravention of a provision in the li-cence agreement, such as the one at issue in the main proceedings, a balance must be struck between, on the one hand, the legitimate interest of the proprietor of the trade mark covered by the licence agreement in being protected against a discount store which does not form part of the selective distribution network using that trade mark for commercial purposes in a manner which could damage the reputation of that trade mark and, on the other hand, the discount store’s legitimate interest in being able to resell the goods in question by using methods which are customary in its sector of trade (see, by analogy, Parfums Christian Dior, paragraph 44).

57. Therefore, should the national court find that sale by the licensee to a third party is unlikely to undermine the quality of the luxury goods bearing the trade mark, so that it must be considered that they were put on the market with the consent of the proprietor of the trade mark, it will be for that court to assess, taking into ac-count the particular circumstances of each case, whether further commercialisation of the luxury goods bearing the trade mark by the third party, using meth-ods which are customary in its sector of trade, damages the reputation of that trade mark.

58. In this respect, it is necessary to take into consid-eration, in particular, the parties to whom the goods are resold and, as the French Government submits, the spe-cific circumstances in which the luxury goods are put on the market."

IPPT20090423, ECJ, Copad v Dior

C-59-08 - ECLI:EU:C:2009:260