As reported by IP Kat the European Court of Justice has handed down it’s decision in Copad SA v Christian Dior Couture SA & Ors, Vincent Gladel, as liquidator of Société industrielle lingerie (SIL) and Société industrielle lingerie (SIL), the subject of an appeal from a French Court regarding Dior’s allegation of trademark infringement.
The case involved a trade mark licence agreement that Dior had entered into with SIL to make and sell “luxury corsetry goods” bearing the CHRISTIAN DIOR trademark.
The terms of the license agreement expressly prohibited SIL, as the Licensee, from selling the goods in discount and other outlets.
The French Court considered the effect of the terms of the Licensing Agreement on the exhaustion of the rights conferred upon the proprietor of a trademark.
The European Directive states that a trade mark shall not entitle the proprietor to prohibit its use in relation to goods which have been put on the market in the European economic area under that trade mark by the proprietor with their consent.
However the Directive also provides that the exhaustion of rights doctrine doesn’t apply where there exist legitimate reasons for the proprietor to oppose further commercialisation of the goods, in particular where their condition would be changed or impaired after having been put out on the market.
DIOR relied upon Paragraph 5 of Clause 8.2 of the licensing agreement between the two parties expressly excluded the resale of the goods to a discount store:
‘in order to maintain the repute and prestige of the trade mark the licensee agrees not to sell to wholesalers, buyers’ collectives, discount stores, mail order companies, door-to-door sales companies or companies selling within private houses without prior written agreement from the licensor, and must make all necessary provision to ensure that that rule is complied with by its distributors or retailers’.
SIL had sold the goods in contravention of the License to Copad International, a company operating a discount store business, who in turned sold them to third parties.
Dior had initiated the proceedings alleging trademark infringement proceedings against SIL and other parties, contending that the sale of the goods in contravention of the license had an effect on the quality of the goods manufactured.
In essence, they submitted that Dior were prestigious luxury goods typically not sold through discount stores, and the manner of distribution of the goods had the practical effect of calling into question their nature as luxury goods.
The French Court had held that the trade mark owner has exclusive rights only in relation to goods put on the market without their consent. In this case, entering into the License Agreement meant that the trademark owner had given the necessary consent, and therefore the defendant’s actions did not constitute trademark infringement.
The Court held that the appropriate remedy was breach of contract, not reliance upon trade mark rights.
In the French Court’s opinion, the trade mark rights are granted in order to guarantee the possibility of control over the quality of goods, and didn’t extend to the actual exercise of that control.
Any control they have over the goods must be exercised by contractual means not by virtue of trade mark law and they could not use contractual law to prevent the resale of the goods by third parties.
However the European Court of Justice has ruled in favour of Dior on appeal, holding that Dior could oppose the resale of the products on the basis of trademark law.
Although in this case there was no change in the physical condition, or re-packaging of the goods, the Court found that the manner of distribution caused damage to the reputation of the mark, meaning the Defendants had no valid defence under the exhaustion of rights doctrine.
The ECJ ruled that “the quality of luxury goods is not only the result of their material characteristics but also of the allure and prestigious image which bestows on them an aura of luxury.”
It is not entirely clear what kind of evidence or in what other situations a Court would find that such a scenario would result in similar damage, and how the words “allure”, “prestigious image” and “luxury” will be evaluated in future cases.
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Thx
me
Hydrolyze
Nice post. Keep up the good work
Thank you for the good post once again, looking forward to your next one!
Good points raised here. Thankyou for that, but my thanks don’t end there. I am afflicted with color blindness (protanopia to be precise). I mainly use Safari browser (unsure if that changes anything), and a considerabland a number of sites are difficult to understand on account of a problematic choice of colours employed ithe design. However, here, as the range of colors is good, the site is very clear and comfortable to understand. I am not sure if this was a intentional and conscious act, or simply good luck, but just the same, thanks.
Col,
Thanks for your kind comments. It is an interesting case regarding the exhaustion of rights doctrine in relation to luxury goods and the rights of a proprietor.
Even more interesting and inspiring are your comments on colour perception for which I thank you. Your comments provide a reminder to smart marketers, designers and advertisers that perceptions of images and colours are important, particularly with the advent of the popularity of non-conventional colour and shape trade marks. Perhaps mass-marketers may not think too much about the implications of this, however the internet is supposed to be a medium for catering to niche markets and providing accessible information to all audiences.
However considering 8% of male caucasians are affected by red-green colour perception, there is a window of opportunity for marketers. At the risk of sounding cynical, marketers, advertisers and other profiteers are becoming increasingly resourceful in successfully manipulating our senses. It doesn’t take a lot of imagination to consider how minority groups could be further marginalised through the ballot box simply by the use of devices that exploit differences in visual perceptions.
I have always strived to be conscious of the way information is displayed in visual formats (eg in online auction based ecommerce platforms) to cater to those who see the world differently. However I suspect that I was fortunate enough to have a graphic designer talented and sensitive enough to select appropriate colours using tools such as website colour scheme generators.
You have reminded me that we should all be considering the way images, information, colours and designs are perceived by humanity at large, rather than just how they are filtered through our own lens. We have at our disposal a range of tools now from audio books, and other software applications such as translators to make this an easier task.
Based on my limited understanding there are many causes, both genetic and organic which give rise to different kinds of colour perceptions.
Unfortunately, many still classify differences in perceptions, whether colour or more broadly, as ‘disabilities’. This is often a function of our own tunnel vision, black and white
thinking and stereotypical assumptions about things we either understand imperfectly or don’t care to open our hearts and minds to.
We now know the significant limitations associated with various colour tests. The unfortunate thing is that early misdiagnosis can have enduring psychological impacts on children and
young persons navigating the ordinary challenges of growing up, let alone an educational system that caters for a ‘one size fits all’ approach.
Individuals with protonopia have distinct advantages over ‘normal’ people (whatever ‘normal’ means). CIA analysts have long recognised camouflage can’t defeat certain types of colour ‘blindness’.
I use the word ‘blindness’ and ‘colour deficiency’ with reluctance, as I see it is as a difference of perception. We use labels all too readily. I am sure you would know better than I how many remarkable individuals have made important contributions to society who see who process things differently.
I hope research continues in this field so that devices, technology such as tinted visual aids can assist individuals in realising their full potential, avoiding the unnecessary stigma of being misunderstood.
I heard a parent give a very moving speech about a courageous young boy titled ‘Rose Tinted Glasses’. I fell in love with the speech through my own invisible rose tinted glasses, but stood guilty prior to that speech of believing that only lovers see the world through rose tinted glasses.
Adele
Hi MissKnowlege,
Thanks for your comments and encouragement. The case raises important issues as to when exhaustion of rights can be claimed.
Hi Caterina,
Thanks for your encouragement and interest in the case. It will be interesting to see what implications the decision will have in relation to the imposition of restrictions on rights of re-sale in relation to trade mark and perhaps even in a broader sense such as copyright or the provision of online interactive services.
Hi Tonette,
Thanks for your comments. There has been a lot of interest in the decision. Perhaps you could try some searches on the case itself, and other related keywords phrases such as parallel imports, international exhaustion of trade marks doctrine, third party re-sellers and infringement. Although it is nice to have access to the original decision itself, as you can read it first hand. If you are ever looking for a European Court of Justice intellectual property (or any other case) you can find the cases here: European Court of Justice I am currently updating a series of links on my webpage but in the meantime here is the link. Otherwise, if you prefer reading commentary and legal analysis rather than the authoritative case law, I am sure you will find a few sources online. I will post some references on my links pages to other websites and blogs. I havn’t been posting any references to news items lately. If you have any questions let me know and I’ll try and direct you to the cases and any relevant commentary. (from the perspective of a non-practising Lawyer)
Thx kindly
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Thanks for your kind comments.
Submission to reddit and similar sites is probably a bit ambitious until I improve my writing and research skills.
…one day
thanking you kindly.
Hey…thanks for that. Neat content. I’ll be coming back tomorrow for more updates. Excellent!
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great post as usual!
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Thanks for your kind comments. Just an interesting case on exhaustion of rights re: trademark.
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Thanks for your kind comments. I am not a spectacular writer, but I do try to write my own content, keeping it simple albeit dry.
thanks kindly
Hi Twilight Eclipse,
lol..yes. I often wonder whether a lot of comments are just automated bots. Who knows how closely people read comments. The only way to get a reasonable idea is via web metrics I guess. It would be nice for someone to disagree or have a point of view! Thanks for your generous remarks. I tend not to write seriously on this forum or edit properly, so you are tolerant. I prefer to write fiction for fun.
I really love what you write here, very refreshing and smart. One issue though, I’m running Firefox on Linux and some of your site structure are a little off. I realize it’s not a popular setup, but it is still something to keep an eye on. Just giving you a heads up.
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Thanks for your kind comments. And thank you!. I appreciate you letting me know. I really do appreciate what you are saying about the rendering problems using Firefox and a Linux OS. I realise that professional web designers need to ensure that their pages render correct with most popular web browsers and OS, and as I understand it there are web browser validation and web rendering services that you can use if you don’t have computers with different browsers and operating systems for browser validation. As far as I know they support many combinations of OS and browser combinations, and could be a possible solution. My personal preference is to be using Linux myself and the last thing I want to do is to alienate Linux users by sending the message that they aren’t important! Given that I’m not a professional web developer and this is a very ordinary site, I hadn’t really thought too much about investing in these remote services. However I may re-evaluate this especially after reading your comments . Thanks again
Hi Hipolito,
Thanks for your very generous comments and encouraging. It is an interesting topic. I’m sure there are others who have done more justice to it. I am just an ex postgrad student. You have certainly tempted me with your online book mall. I could spend a long time there. I am more of a reader than a writer. Another temptation!!
hello i submitted a comment some time back pertaining to how to speed up my twilight eclipse site’s loading time due to the fact we made use of the very same theme at the time and someone left a comment responding to it on my blog a week ago – if that was you I just wanted to say cheers, and if it was not you then i am sorry to take the time you, but cheers anyhow!
Hi Kristen,
No that wasn’t me but when I visited your page I noticed the post as delays in streaming can be annoying. Love the site even though I am not a fan of twilight (although you never know; your site may convert me to one) I don’t know whether it is a wordpress theme, but the interface is nice and clean, easy to navigate and uncluttered. Great site! Do you plan on doing more?
Was an interesting article, thank you..
hehe o . k . so here’s just how dumb I am, halfway through reading your post I dropped my mouse and closed the firefox by mistake and I couldn’t locate your site once again until 6 days later to finish reading from the point i stopped at because I didn’t remember how I linked to your blog to begin with lol at any rate it was worth the wait..regards
Hi Jake,
Easy to get sidetracked on the net. I’m flattered by your persistence. Glad you found something worth coming back for. Sorry – I didn’t build the site with a view to monetising it so it isn’t optimised well for the keywords which form the subject of the blog.
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Hi reliance,
That is a very flattering and generous statement. I am not sure that it is deserved given that the case has been discussed by others in a more considered way. Appreciate your comments and hope it gave you value. It is an important case I think in terms of the implications for licensees.
Kind regards
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