Stefan Enchelmaier

Selective Distribution and the Internet: Lessons from Case C-439/09 Pierre Fabre Dermo-Cosmétique (13 October 2011)

In Pierre Fabre, a system of selective distribution for cosmetics was in issue which demanded that sales be made exclusively in a marked, specially allocated outlet and in the presence of a qualified pharmacist. Addressing the question whether the prohibition of internet sales pursued a legitimate aim and did so in a proportionate manner, the Court emphasised that the aim of maintaining a prestigious image was not a legitimate aim for restricting competition. The case Copad v Dior, by contrast, arose from a licensing agreement between a brand owner and a contract manufacturer which specifically prohibited the manufacturer from selling to discount stores. The Court held that the quality of luxury goods was not just the result of their material characteristics, but also of the allure and prestigious image which bestowed on them an aura of luxury. Therefore, impairment of that aura was likely to affect the actual quality of those goods. Crucially, this meant that no exhaustion occurred with regard to these goods under Articles 7(1) and 8(2) of the Trade Marks Directive. Despite their differences, these two cases address similar questions in incompatible ways. Stefan Enchelmaier shows that the Court’s approach in Pierre Fabre is preferable.

Restrictions on the Use of Goods and Services

‘Market access’ is the latest of the Court’s formulae for establishing whether the free movement of goods and the freedom to provide services are restricted. So far, the criterion is ill-defined, especially in its application to restrictions of use. Nevertheless, predictability can be restored to the assessment under both freedoms through a properly understood discrimination test, complemented by a prohibition of universal bans, proceeding in the following steps: