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Dior vs. Copad: When Does The Breach Of The License Agreement Also Constitute A Trademark Infringement?

María González-Gordon

Gómez-Acebo & Pombo Abogados S. L. P, Madrid, Spain

Mónica Esteve Sanz

Gómez-Acebo & Pombo Abogados S. L. P , Madrid, Spain

While in previous years luxury-brand owners were convinced that their products should be accessible for everyone, the new economic situation has changed that tendency. Luxury brands are putting their best efforts into the retail experience, offering superior “packaging” of their services and products.

“The most successful and enduring brands are those built over the long term, where a consistent and cohesive set of values is established in the mind of your consumers. From that moment onwards you should never compromise on these values for short term gain.” These unambiguous words of the CEO of the luxury brand Gucci, Patrizio di Marco, are both the best introduction and conclusion to the subject posed by the Cour de Cassation and resolved by the ECJ, in the preliminary ruling case 59/08 “Dior vs. SIL & COPAD.”

As it is known, selective distribution systems have their origin in the establishment of methods needed to preserve the very special characteristics of the product being distributed. It is characteristic for selective distribution contracts within the luxury sector to include obligations for the distributor and his retailers which aim is to protect the inherent features of the good which make it a luxury item, as well as the reputation and high profile status of the brand that distinguish it. The failure to comply with these obligations can even entail a breach of contract and the early termination of same.

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