A landmark decision of the European Court of Justice (ECJ) issued on 6 December 2017 confirmed that a supplier of luxury goods may prohibit authorised retailers part of a selective distribution system from selling its products on third party e-commerce platforms.[1]

In the case at issue the request for a preliminary ruling was submitted by the Oberlandesgericht Frankfurt am Main (Higher Regional Court, Frankfurt am Main) in 2016 in the context of a dispute between Coty Germany GmbH, a supplier of luxury cosmetics established in Germany, and Parfümerie Akzente GmbH, an authorised distributor of those goods, concerning the prohibition, under a selective distribution contract between Coty Germany and its authorised distributors, of the use by the latter, in a discernible manner, of third-party undertakings for internet sales of the contract goods.

Specifically, Coty Germany brought an action before the national court seeking an order prohibiting Parfümerie Akzente from distributing products via the platform ‘amazon.de’.

The Oberlandesgericht Frankfurt am Main, also in view of the divergent interpretations of the earlier ECJ’s Pierre Fabre decision issued in 2011[2], by the courts and competition authorities of the Member States   decided to stay the proceedings and to refer to the European Court of Justice questions concerning whether a selective distribution system that has as its aim the distribution of luxury goods constitutes an aspect of competition that is compatible with Article 101(1) TFEU and, specifically, whether the general prohibition imposed on members of a selective distribution system to use, in a discernible manner, for internet sales, e-commerce platforms of third-party companies, is compatible with that rule.

In its ruling the ECJ’s, referring to its settled case-law, stated first of all that a selective distribution system for luxury goods designed primarily to preserve the luxury image of those goods does not breach the prohibition of agreements, decisions and concerted practices laid down in EU law, provided that the resellers are chosen on the basis of objective criteria of a qualitative nature, which are laid down uniformly and are not applied in a discriminatory fashion, nor go beyond what is necessary.

The Court then found that EU law does not preclude a contractual clause which prohibits authorised distributors of a selective distribution network of luxury goods from using, in a discernible manner, third-party platforms for internet sales of the goods in question, provided that the clause is appropriate to preserving the luxury image of the goods, it is laid down uniformly, not applied in discriminatory manner and is proportionate in the light of the objective pursued.

The ECJ further noted that, in circumstances such as those of the main proceedings, these conditions are met and therefore prohibition of the use, in a discernible manner, of third-party undertakings for internet sales does not constitute a restriction of customers nor a restriction of passive sales to end users. Such latter restrictions are automatically excluded from the benefit of a block exemption because they are liable to have severely anticompetitive effects.

1. Selective distribution system: general remarks

The adoption of a selective distribution system for companies operating in the field of luxury and fashion is one of the key factors in the process of evaluation, which allows the trademark owner to protect the prestige and renown of its brand and to guarantee the quality of the products to be distinguished, from the time of the product ideation to its delivery to the final user.

Article 1, let. e) of  Regulation (EU) No 330/2010 broadly defines it as a distribution system where the supplier undertakes to sell the contract goods or services, either directly or indirectly, only to distributors selected on the basis of specified criteria and where these distributors undertake not to sell such goods or services to unauthorised distributors within the territory reserved by the supplier to operate that system.

Therefore, the ban on the resale of products to subjects other than end consumers, unrelated to the network established by the manufacturer, is therefore the “heart” of selective distribution, because through it the goods bearing the trademark are marketed exclusively through retailers who meet certain standards of professional competence, which allows the manufacturer to guarantee uniformity of service at points of sale, coordinated management of logistics, training of personnel specialized in the sale of prestigious products and the control of the disposal of unsold products.

The products subject to selective distribution are usually high-class goods with a high symbolic value, bearing trademarks which convey a message of exclusivity, which can be jeopardized even in the absence of likelihood of confusion.

Selective distribution systems are therefore justified not only in the interests of the trademark owner to consolidate its brand awareness and to preserve around its own products an aura of luxury which enables consumers to distinguish them from similar goods, but also in the interest of the consumers to be guaranteed a high level of quality of service, in line with the standard set by the manufacturer.[3]

These principles have been applied and confirmed by the European Court of Justice in the Coty case, where the Court noted that the quality of luxury goods is not simply the result of their material characteristics, but also of the allure and prestigious image which bestows on them an aura of luxury.

These aspects, the ECJ further noted, are essential for luxury goods since they enable consumers to distinguish them from other similar goods. Therefore any impairment to that aura of luxury is likely to affect their actual quality.

2. Selective distribution and trademark exhaustion

The success of this kind of distribution system cannot, in any case, be independent of effective control by the trademark owner.

The development of the free riding phenomenon in the context of a selective distribution system lies in the fact that third party resellers, not belonging to the system, appear on the market as apparent authorized retailers generating in consumers the belief that the reseller belongs to the selective distribution network arranged by the trademark owner.

In recent years this phenomenon has been the subject of a wide debate amongst scholars and case-law, often with opposing positions on the interpretation of trademark exhaustion doctrine and unfair competition by the unauthorized reseller.

Article 5 of the Italian IP Code (likewise Article 15 of the EU Directive No. 2015/2436) provides that the exclusive rights of the trademark’s owner “are exhausted once the products protected by an industrial property right have been put on the market by the owner or with his consent in the territory of the Country or in the territory of a Member State of the European Union or the European Economic Area”. Paragraph 2 further specifies that “This limitation on the powers of the owner does not however apply when there are legitimate reasons for the owner himself to oppose further marketing of the goods, in particular when the condition of the same has been modified or altered after being put on the market”.

In this regard, the ECJ settled case law clearly states that the existence of a selective distribution agreement is one of the “legitimate reasons” which excludes the application of the exhaustion doctrine of the trademark after the goods have been put on the market, pursuant to Art. 7 No. 2 of Directive 2008/95/C.E. (now, Article 15 EU Directive No. 2015/2436).

Applying these principles, the ECJ clarifies that what is important for the exclusion of the exhaustion doctrine is the confusing effect of the existence of a commercial link between the unauthorized reseller and the trademark’s owner which jeopardizes, or potentially jeopardizes, the aura of luxury and prestige that the trademark’s owner tries to preserve through the adoption of a selective distribution system.

Leading scholarly literature and settled case law have often acknowledged that also the use of false capacity, i.e. pretending to be an authorized reseller which is part of the selective distribution system implemented by the trademark owner, might amount to trademark infringement.[4]

In this regard, the Court of Catania, in a recent ruling issued on 29 November 2016 in proceedings brought by the fashion company Bulgari against an unauthorized reseller, acknowledged that the use of the brand “BVLGARI” on the unauthorized reseller’s web site in order to advertise the sale of Bulgari’s products generated the belief in the public that reseller was part of Bulgari’s distribution network.[5]

The Court further stated that the burden of proof of the existence of “legitimate reasons” pursuant to Art. 15 EU Directive No. 2015/2436 had been fulfilled by the trademark owner since Bulgari was able to prove:

1 – The implementation of a selective distribution system, based on contractual clauses to impose precise quality standards on distributors;

2 – That the goods at issue were luxury or prestige items;

3 – That the sale of Bulgari’s product by an unauthorized reseller, for its specific methods which were not in accordance with the well-known trademark’s owner standards, resulted in an actual prejudice to the prestigious and exclusive image of Bulgari, not respecting any of the quality standards imposed on authorized resellers.[6]

 3. Violation of a selective distribution system and unfair competition

Italian case law also analysed a further aspect concerning the role of the third party unauthorized reseller in the context of a selective distribution system, i.e. whether inducing an authorized dealer to violate its contractual obligations may amount to a violation of the selective distribution system and therefore a breach of contractual obligations.

Selective distribution agreement is legally binding only between the parties. Therefore, the ban on the resale of products to subjects unrelated to the network established by the manufacturer, other than end consumers, is not binding to third parties, such as the unauthorized reseller.

In the past decade, Italian case law often held the view that the unauthorized reseller is always free to buy the goods intended for selective distribution, pursuant to the constitutional freedom of the enterprise. The violation of a selective distribution system by those who are not contractually bound by such a system does not amount to unfair competition, since the obligations between the manufacturer and its authorized dealer are not binding for the third party.[7]

In this regard, a landmark case of the Court of Palermo, following a more recent trend[8], acknowledged that the interference of a third party with a selective distribution system may amount to an act of unfair competition such as “involving in another’s breach of obligations”, which has to be considered an independent act of unfair competition prohibited pursuant to Art. 2598, No. 3 Italian Civil Code.[9]

If the selective distribution network is legitimately created by the trademark’s owner, in compliance with the antitrust regulations, the acts of third parties not belonging to the network consisting in selling (despite having been made aware of the existence of the selective distribution system) products bearing that mark may be considered acts of unfair competition.

Specifically, the Court noted that there may be unfair competition exclusively in the case whether the unauthorized reseller is aware, or has been made aware, of the existence of a selective distribution agreement. Therefore, “once he receives such communication it is no longer a question of irrelevance due to the relativity of obligations principle exclusively between the manufacturer and the distributer” and then “continuing to sell trademarked products even after the manufacturer has notified that a selective distribution system was implemented amounts to unfair competition”.

4. Practical implications

The above mentioned cases deal with different aspects related to the same issue: enforcing trademark rights in the context of a selective distribution strategy in the luxury field in order to protect brand owners against different forms of free riding.

These rulings provide helpful guidance for companies in the luxury field as to what is permissible and can be done to enforce selective distribution against distributors in breach of their contractual obligations and unauthorized resellers.

In conclusion some basic guidelines in this area of luxury goods are:

1. the selective distribution system implemented by the trademark owner to distribute luxury goods must be based on contractual clauses which impose precise quality standards on distributors, i.e. it must be compliant with the antitrust regulations,

2. it is essential to prove that  the products in questions are luxury items and that the selective distribution system is necessary to protect their luxury image,

3. the restrictions imposed on distributors must be consistent with the aim of protecting that luxury image, they must be applied in a non-discriminatory manner and should not go beyond what is necessary.

4. the requirements of the selective distribution system need to be regularly assessed by the brand owner to guarantee they remain fit for purpose,

5. restrictions on sales on third-party platforms, such as Amazon or Ebay, to protect a luxury image are allowed only provided that this does not give rise to a total prohibition on online sales,

6. beside trademark infringement, in order to prove unfair competition by the unauthorized reseller for interfering in the selective distribution agreement, i.e. involvement in another’s breach of obligation, it is necessary to prove awareness on the part of the unauthorized distributor of the existence of a selective distribution agreement between the trademark’s owner and its reseller.

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[1] ECJ, 6 December 2017, C‑230/16, “Coty”.

[2] ECJ, 13 October 2011, C-439/09, “Pierre Fabre”, which, purely for the goods at issue in that case, stated that the need to preserve the prestigious image of cosmetic and body hygiene goods was not a legitimate requirement for the purpose of justifying a comprehensive prohibition of the internet sale of those goods.

[3] See ECJ, 23 April 2009, C-59/08, “Copad”, which stated that “the quality of luxury goods…is not just the result of their material characteristics, but also of the allure and prestigious image which bestows on them an aura of luxury. Since luxury goods are high-class goods, the aura of luxury emanating from them is essential in that it enables consumers to distinguish them from similar goods. Therefore, an impairment to that aura of luxury is likely to affect the actual quality of those goods. Given that context, it must next be examined whether, in the case in the main proceedings, the sale by the licensee of luxury goods to discount stores which are not part of the selective distribution network set up under the licence agreement, may constitute such impairment…Setting up a selective distribution system such as that at issue in the main proceedings which, according to the terms of the licence agreement between Dior and SIL, seeks to ensure that the goods are displayed in sales outlets in a manner that enhances their value, ‘especially as regards the positioning, advertising, packaging as well as business policy’, contributes… to the reputation of the goods at issue and therefore to sustaining the aura of luxury surrounding them”.

[4]  Please see, amongst others, Court of Rome, 28 April 2004, which granted to Jaguar urgency measures against an unauthorized reseller using its distinctive trademark, stating that “the use of a service mark, if carried out in such a way as to appear to consumers as an indicative sign of the third party’s affiliation to the service network of the trade mark owner, constitutes trademark infringement, since the public falls into error about the inclusion of the retailer in the sales network of the trademark owner”.

[5]  Court of Catania, 29 November 2016.  See also Galli, Bulgari successfully enforces selective distribution network against former distributor, WTR, 27 March 2017.

[6] Specifically, the Court found that there was no assortment of products, nor adequate display stands and the unauthorised reseller was applying excessively high discounts, which were not in keeping with Bulgari’s standards.

[7] Court of Venice, 10 March 2004; Court of Milan, 8 March 2004; Court of Bari, 11 July 2008.

[8] See also Court of Milan, 13 March 2009, which stated that “The entrepreneur who, having been aware of the existence of a selective distribution network for products of a certain brand, since he was specifically excluded, and he led the consumers to believe is an authorized distributor of those products violates unfair competition law”.

[9] Court of Palermo, 28 February 2013, which stated that the unauthorized seller of Thun’s products, the well-known manufacturer of artistic ceramics, was aware of the implementation of a selective distribution network since he has been notified by the trademark owner through a letter prior to the preliminary injunction proceedings.

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Every transmission or retransmission of a work which uses a specific technical means must, as a rule, be individually authorised by the author of the work in question”.

This is one the main principles ensuing from the Court of Justice of the European Union (CJEU) in the its recent decision of 29 November 2017 (Case C-265/16).

Continue Reading CJEU on VCAST Recording Service: is a Different Means of Transmission an Essential Condition for the Existence of a New Communication to the Public?

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Un ricorso alla WIPO per la riassegnazione di un nome a dominio per passive holding può essere rigettato in caso sussista un plausibile utilizzo futuro in buona fede del nome a domino e se il registrante si sia comportato secondo buona fede in diverse circostanze relative alla registrazione del nome a domino e alla procedura di riassegnazione instaurata.

Questo è il principio che deriva dalla decisione WIPO D2015-0050.

Continue Reading “www.fimo.club”, un ricorso prematuro alla WIPO

youtube.jpgCon decisione del 5 maggio 2014, il Tribunale di Torino ha rigettato la domanda cautelare di Delta TV Programmes nei confronti Google e Youtube, finalizzata ad ottenere un’inibitoria urgente in relazione alla pubblicazione abusiva, su Youtube, di episodi di varie telenovelas di proprietà della ricorrente. Il Tribunale ha rigettato la domanda ribadendo il contenuto delle norme del d.lgs. 7/2003 secondo cui, in sostanza, il “fornitore di servizi della società dell’informazione” che svolga semplice attività di hosting, come nel caso del fornitore di servizi internet di videosharing, quale è Youtube, gode di una deroga di responsabilità in relazione alla eventuale violazione di diritti esclusivi commessa attraverso lo sharing non autorizzato di contenuti protetti, nel caso in cui, in seguito alla diffida ricevuta dal titolare dei diritti, i contenuti siano prontamente rimossi.  

Continue Reading Nessun obbligo di sorveglianza o ricerca per Youtube, secondo il Tribunale di Torino.

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Oggi, 31 marzo 2014, entra in vigore il nuovo regolamento dell’AGCOM (adottato lo scorso 12 dicembre con delibera n. 680/13/CONS) volto ad offrire ai titolari di un diritto d’autore sulle opere digitali, diffuse tramite le reti di comunicazione elettronica, e dei diritti ad esso connessi, una tutela quanto più immediata ed efficace possibile, in risposta alla estrema velocità con cui le informazioni si diffondono tramite simili mezzi di comunicazione. 

Continue Reading Una tutela rafforzata per il copyright sul web e sui media

Continuerà a Singapore a fine mese (23 – 27 marzo) la battaglia che vede contrapposti gliimage blog.jpg interessi dei produttori vitivinicoli, prevalentemente europei, e l’ICANN, sulla concessione dei domini “.wine” e “.vin”, che potrebbe avere un enorme impatto in materia di tutela delle indicazioni geografiche nel settore del vino dal rischio di frodi e contraffazione in internet. 
Su questo blog abbiamo già parlato dell’ICANN (Internet Corporation for Assigned Names and Numbers – organizzazione con sede a Los Angeles che si occupa della gestione e assegnazione, a livello mondiale, dei nomi a dominio in internet) e della politica di liberalizzazione dei nomi a dominio da questa inaugurata nel 2011 al fine di  accrescere la concorrenza e la competitività anche sul web.
In pratica tale liberalizzazione ha consentito la registrazione di nuovi domini di primo livello generici (generic Top-Level Domain o gTLD) personalizzati, che si aggiungono ai domini già esistenti, ovvero ai “classici” .com, .org, .gov., .net ecc.. Ad esempio, alcune aziende hanno registrato gTDL in funzione della propria attività (.hotel, .fashion, .food ecc.), mentre altre hanno richiesto la registrazione come gTDL del proprio marchio (.apple, .facebook, .nike ecc.).
Il problema è sorto quando quattro società (Usa, Irlanda e Gibilterra), completamente estranee al settore vitivinicolo hanno richiesto all’ICANN l’assegnazione dei domini “.wine” e “.vin”, con l’intento di commercializzarli ed avere un ritorno sui propri investimenti. 
Ma ciò che ha più allarmato i produttori di vino e le associazioni che li rappresentano è che i dossiers presentati dalle società richiedenti prevedono anche la possibilità di concedere a terzi dei nomi a dominio “premium”, il cui contenuto non è specificato, e che potranno essere venduti all’asta al migliore offerente. 
In buona sostanza esiste il rischio che nomi a dominio contenenti celebri indicazioni geografiche (ad esempio chianti.wine, bordeaux.wine o brunello.vin) siano utilizzati da imprese che nulla hanno a che vedere con i vini di qualità delle denominazioni indicate e che il consumatore possa essere fuorviato dai domini utilizzati.
Inizialmente l’ICANN sembrava favorevole alla libera concessione dei suddetti domini “.wine” e “.vin” ma dopo le numerose proteste ricevute ha deciso momentaneamente di sospenderne l’assegnazione. 
Questa decisione ha provocato una vera e propria battaglia tra chi, come gli Stati Uniti, ne vorrebbe la libera assegnazione, e chi invece sottolinea la pericolosità di una simile liberalizzazione, tra cui sono schierate in prima linea la Commissione Europea, la Federazione Europea dei Vini di Origine (EFOW) e il GAC (ovvero il comitato consultivo formato dai Governi di diversi Paesi all’interno dell’ICANN stesso).
Ci si chiede, allora, perché Unione Europea e Stati Uniti si trovano su posizioni così diametralmente opposte?
Entrambi, sappiamo, sono firmatari dell’Accordo TRIPs (Trade Related Aspects of Intellectual Property Rights) del 1994, che all’art. 22 tutela le indicazioni geografiche consacrandole come veri e propri diritti di proprietà intellettuale, e all’art. 23 disciplina in particolare le indicazioni geografiche di vini e liquori. Le norme TRIPs, però, non contemplano una normativa uniforme per tutti i Paesi firmatari ma prevedono che ciascun Paese provveda a predisporre gli strumenti giuridici atti a proteggere i consumatori dall’uso fuorviante di indicazioni geografiche; sicché, se da un lato l’Europa riconosce alle IG quella funzione di differenziazione del prodotto sul mercato, tipico dei diritti di IP, anche con una normativa ad hoc (Reg. 510/2006), all’opposto gli Stati Uniti tendono a non considerare le IG quali veri e propri diritti di proprietà intellettuale, ritenendo sufficiente la protezione accordata mediante la registrazione dei marchi. 
Pertanto, sull’argomento la tensione tra UE e Stati Uniti  rimane altissima, e con l’auspicio con questa vicenda si concluda presto e nel miglior modo possibile per gli operatori del settore vitivinicolo – una delle eccellenze del nostro Paese – aspettiamo l’esito del prossimo meeting ICANN di Singapore previsto per fine mese.
Ovviamente questo problema, che oggi interessa il settore del vino, può estendersi ad altri settori alimentari, qualora altri nuovi domini di primo livello come “.food” o “.pizza”, solo per fare alcuni esempi, vengano utilizzati in modo illecito in Paesi ove le indicazioni geografiche non ricevono adeguata tutela.  
La politica di liberalizzazione adottata dall’ICANN potrebbe quindi comportare dei rischi per le nostre produzioni agroalimentari e si ravvisa quanto mai la necessità di un intervento normativo che stabilisca a tutela delle indicazioni geografiche una disciplina uniforme e valida per tutti.

 

 

Thumbnail image for The 1908 London Olympic Games (4).jpgCome promesso in un nostro post precedente, torniamo ancora sul tema dei gTLD perfornire alcune – a nostro avviso – utili informazioni ai titolari dei marchi registrati che si sentono minacciati dai nuovi domini generici. Al fine di prevenire (o quanto meno limitare) possibili situazioni di cybersquatting o altre violazioni dei diritti di privativa la ICANN ha infatti introdotto alcune “misure di sicurezza”.

Per accedere ai vari servizi gli interessati dovranno per prima cosa registrare i propri marchi presso la Trademark Clearing House (TMCH), un database centralizzato che memorizza i dati dei marchi ritenuti idonei e a sua volta li fornisce ai vari sistemi di protezione. Il procedimento di registrazione è molto semplice, avviene interamente online su questo link e ha un costo di $150 per marchio all’anno (con uno sconto applicabile nei periodi successivi). 

Continue Reading Attenzione: il Sunrise Period e’ aperto!

Cowboy-throwing-lasso-010.jpgSe Coca-Cola prima e Nutella dopo ci hanno fatto assistere a scene da far west tra gli scaffali dei supermercati, dove consumatori incalliti tentavano di aggiudicarsi l’ultimo prodotto riportante il loro nome sulla confezione, prepariamoci a scontri ben più animati dal momento che la posta in gioco riguarda un settore differente e molto ambito. La ICANN sta infatti realizzando una epocale rivoluzione digitale attraverso la liberalizzazione dei nomi a dominio di primo livello e i competitori più agguerriti stanno già lottando per accaparrarsi un “pezzo” di web.

Dal momento che è la prima volta che trattiamo questo tema sul blog sembra opportuno chiarire qualche passaggio fondamentale.

Per i meno esperti del settore, i nomi a dominio di primo livello altro non sono che la parte finale di un indirizzo internet, presente subito dopo il punto come ad esempio .com, .org o .net. Al fine di aumentare la competizione anche sul web, la ICANN (Internet Corporation for Assigned Names and Numbers) sta rinnovando completamente il sistema, consentendo la registrazione di un dominio personalizzato, meglio noto come gTLD (dall’inglese generic Top Level Domain).

Continue Reading gTLD: la personalizzazione diventa possibile anche sul web

dataco sportradar.jpgCon la decisione del 18 ottobre 2012 in C- 173/11 (Football Dataco v. Sportradar GmbH), la Corte di Giustizia ha affrontato il caso del “reimpiego” non autorizzato da parte della tedesca Sportradar GmbH, fornitrice di servizi per società di scommesse online, dei dati relativi alle partite dei campionati inglese e scozzese (punteggio, marcatori, sostituzioni, ammonizioni, etc.) faticosamente raccolti in un database dall’inglese Football Dataco tramite collaboratori, spesso ex calciatori, profumatamente pagati per recarsi negli stadi ad assistere di persona alle competizioni.

E’ noto che a prescindere dall’esistenza di un carattere creativo e, quindi, dalla possibilità di ottenere protezione per diritto d’autore, il costitutore di una banca dati accede comunque ad un livello di tutela ai sensi dell’art. 7 Direttiva 96/9/CE (cfr. art. 102 bis della legge 633/1941 sul diritto d’autore), che consiste nel diritto di vietare ai terzi, per la durata di quindici anni dalla costituzione della banca dati, l’estrazione e/o il “reimpiego”, cioè la messa a disposizione del pubblico della totalità o di una parte sostanziale del contenuto dei dati ivi contenuti, quando il conseguimento, la verifica e la presentazione di essi siano stati effettuati con investimenti rilevanti sotto il profilo quantitativo e qualitativo. In buona sostanza, l’unico requisito richiesto è che la raccolta e l’organizzazione di grossi volumi di dati abbia implicato uno sforzo organizzativo ed economico necessario, che è il vero oggetto della tutela “sui generis”.

Ma nel caso in cui la messa a disposizione avvenga attraverso un sito web, sussiste “reimpiego” in un determinato luogo per il semplice fatto che i dati sono accessibili via Internet in quel luogo? 

Continue Reading Banche dati: la Corte di Giustizia chiarisce che cos’è ” reimpiego “