Copad SA v Christian Dior couture SA, Vincent Gladel and Société industrielle lingerie (SIL).
Date: 2009-04-23
19. Moreover, it must be recalled that it is precisely use of the adverb ‘especially’ that led the Court to find, by contrast, that the examples given in Article 7(2) of the Directive provided guidance only (see Joined Cases C‑427/93, C-429/93 and C‑436/93 Bristol-Myers Squibb and Others [1996] ECR I-3457, paragraph 39, and Case C‑337/95 Parfums Christian Dior  [1997] ECR I‑6013, paragraph 42).
22. In this respect, as regards provisions in a licence agreement concerning ‘the quality of the goods manufactured … by the licensee’, which that article mentions, it must be recalled that, according to consistent case-law, the essential function of the mark is to guarantee the identity of origin of marked goods or services to the consumer or end user by enabling him, without any possibility of confusion, to distinguish the goods or services from others which have another origin. For the trade mark to be able to fulfil its essential role in the system of undistorted competition which the Treaty seeks to establish and maintain, it must offer a guarantee that all the goods or services bearing it have been manufactured or supplied under the control of a single undertaking which is responsible for their quality (see, inter alia, Case 102/77 Hoffmann-La Roche [1978] ECR 1139, paragraph 7; Case C‑299/99 Philips  [2002] ECR I‑5475, paragraph 30; and Case C‑228/03 Gillette Company and Gillette Group Finland  [2005] ECR I‑2337, paragraph 26).
24. As the Advocate General stated in point 31 of her Opinion, the quality of luxury goods such as the ones at issue in the main proceedings 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 (see also, to that effect, Parfums Christian Dior , paragraph 45).
25. 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.
26. Therefore, an impairment to that aura of luxury is likely to affect the actual quality of those goods.
28. In that respect, the Court has already held, contrary to what Copad and the Commission contend, that the characteristics and conditions of a selective distribution system can, in themselves, preserve the quality and ensure the proper use of such goods (see, to that effect, Case 31/80 L’Oréal [1980] ECR 3775, paragraph 16).
29. 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, as Copad acknowledges, to the reputation of the goods at issue and therefore to sustaining the aura of luxury surrounding them.
35. Secondly, as regards the other possibility put forward by Dior, it must be held that it is apparent from the case-law of the Court that even though no overriding reason based on the Directive or on general principles of Community law precludes services provided in the context of the retail trade of goods from being covered by the concept of ‘services’ within the meaning of the Directive, the trade mark must have been registered for those services (see, to that effect, Case C‑418/02 Praktiker Bau- und Heimwerkermärkte  [2005] ECR I‑5873, paragraph 35).
40. For the purpose of responding to the present question, it must be recalled that, according to well-established case-law, Articles 5 to 7 of the Directive embody a complete harmonisation of the rules relating to the rights conferred by a trade mark and accordingly define the rights of proprietors of trade marks in the Community (Case C‑355/96 Silhouette International Schmied  [1998] ECR I‑4799, paragraphs 25 and 29, and Joined Cases C‑414/99 to C‑416/99 Zino Davidoff and Levi Strauss  [2001] ECR I‑8691, paragraph 39).
41. In particular, Article 5 of the Directive confers on the trade mark proprietor exclusive rights which entitle him inter alia to prevent any third party from importing goods bearing the mark, offering the goods, or putting them on the market or stocking them for these purposes. Article 7(1) of the Directive contains an exception to that rule, in that it provides that the trade mark proprietor’s rights are exhausted where the goods have been put on the market in the EEA by him or with his consent ( Zino Davidoff and Levi Strauss , paragraph 40; Case C-244/00 Van Doren + Q  [2003] ECR I-3051, paragraph 33; and Case C-16/03 Peak Holding  [2004] ECR I‑11313, paragraph 34).
42. It therefore appears that consent, which is tantamount to the proprietor’s renunciation of his exclusive right within the meaning of Article 5, constitutes the decisive factor in the extinction of that right and must, therefore, be so expressed that an intention to renounce that right is unequivocally demonstrated. Such intention will normally be gathered from an express statement of consent (see, to that effect, Zino Davidoff and Levi Strauss , paragraphs 41, 45 and 46).
43. However, it is also apparent from the case-law of the Court that, in certain circumstances, exhaustion of that exclusive right occurs when the goods are put on the market by a person with economic links to the proprietor. This is particularly the case where that person is a licensee (see, to that effect, Case C‑9/93 IHT Internationale Heiztechnik and Danzinger  [1994] ECR I‑2789, paragraph 34).
45. According to the Court’s case-law, the possibility of control suffices for the trade mark to be able to fulfil its essential function, which, as was recalled in paragraph 22 of this judgment, is to offer a guarantee that all the goods bearing it have been manufactured under the control of a single undertaking which is responsible for their quality (see, to that effect, IHT Internationale Heiztechnik and Danzinger , paragraphs 37 and 38).
46. Consequently, where a licensee puts goods bearing the mark on the market he must, as a rule, be considered to be doing so with the consent of the proprietor of the trade mark, for the purposes of Article 7(1) of the Directive.
47. Even though it follows that, in such circumstances, the proprietor of the trade mark cannot plead that the contract was wrongly implemented in order to invoke, in respect of the licensee, the rights conferred on him by the trade mark, the fact remains that, contrary to Copad’s submission, the licence agreement does not constitute the absolute and unconditional consent of the proprietor of the trade mark to the licensee putting the goods bearing the trade mark on the market.
54. In this respect, it must first be recalled that, according to the settled case-law of the Court referred to in paragraph 19 of the present judgment, use of the adverb ‘especially’ in paragraph 2 of Article 7 of the Directive indicates that alteration or impairment of the condition of marked goods is given only as an example of what may constitute legitimate reasons ( Bristol-Myers Squibb and Others , paragraphs 26 and 39, and Parfums Christian Dior , paragraph 42).
55. Accordingly, the Court has already held that damage done to the reputation of a trade mark may, in principle, be a legitimate reason, within the meaning of Article 7(2) of the Directive, allowing the proprietor of the mark to oppose further commercialisation of luxury goods which have been put on the market in the EEA by him or with his consent (see Parfums Christian Dior , paragraph 43, and Case C‑63/97 BMW  [1999] ECR I‑905, paragraph 49).
56. It follows that where a licensee sells goods to a discount store in contravention of a provision in the licence 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).