EU Court judgement restricts ‘luxury brand’ sales
In a judgement that could affect retailers of top-end music brands, the Court of Justice of the European Union (CJEU) has ruled that owners of ‘luxury brands’ can restrict their authorised distributors from selling their products on internet platforms to protect their image, reports World Intellectual Property Review (www.worldipreview.com).
The decision, handed down on 6th December, was summed-up by the court as follows: ‘The prohibition imposed by a supplier of luxury goods on its authorised distributors to use third-party platforms for the internet sale of those goods is appropriate to preserve the luxury image of those goods.’
Though the case in question was the result of a dispute between beauty products brand owner Coty and its German distributor, the ruling might equally apply to luxury products in other sectors, such as musical instruments.
WIPR also quotes the court expanding on its ruling as follows: ‘Authorised distributors are permitted to sell the contract goods online both via their own websites—as long as they have an electronic shop window for the authorised store and the luxury character of the goods is preserved—and via unauthorised third-party platforms when the use of such platforms is not discernible to the consumer.’
The decision seems to have provoked mixed opinions among legal specialists, with one expert suggesting that the restrictions may apply as much to physical retail shops as to online sites. Either way, it is going to be a potential issue of concern for retailers in the coming year.
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