Living in luxury

Owners of luxury brands will welcome a recent European Court of Justice (ECJ) ruling which allows them to enforce selective distribution agreements and prevent their goods being sold in discount stores and other outlets which might damage the reputation and prestige of their trade marks.

The facts

The case (Copad SA v Christian Dior couture SA and others (Case C-59/08)) concerned a trade mark licence agreement between Christian Dior couture SA (Dior) and Société industrielle lingerie (SIL) for the manufacture and distribution of luxury corsetry goods bearing the CHRISTIAN DIOR mark. The agreement contained a selective distribution provision aimed at maintaining the repute and prestige of the CHRISTIAN DIOR mark, which prohibited SIL from selling to wholesalers, buyers’ collectives, discount stores, mail order companies, door-to-door sales companies or companies selling within private houses without prior agreement from Dior. 

SIL subsequently faced economic difficulties and asked Dior if it could market goods outside the selective distribution network. Despite Dior refusing permission,