This book provides a wide-ranging review of the European rules relating to distribution: exclusive purchase and exclusive supply, exclusive and selective distribution, motor vehicle distribution, franchises, commercial agents.

French Distribution Law

The ownership right for the trademark granted to its holder by Article L. 713-1 of the Intellectual Property Code is restricted by the provisions of Article L. 713-4 on exhaustion of rights. According to that theory, initially established by the Court of Justice to guarantee the free movement of goods within the Union, the right granted by the trademark does not enable its owner to prohibit the us …

Exhaustion of trademark rights.

The ownership right for the trademark granted to its holder by Article L. 713-1 of the Intellectual Property Code is restricted by the provisions of Article L. 713-4 on exhaustion of rights. According to that theory, initially established by the Court of Justice to guarantee the free movement of goods within the Union, the right granted by the trademark does not enable its owner to prohibit the use thereof for goods that have been sold under that brand in the European Economic Area with the consent of the owner, directly or via an agent.

According to the Criminal Chamber , by reason of the exhaustion of the rights of the trademark owner, the sale by a non-authorized reseller of products, even purchased unlawfully, is not per se likely to constitute unlawful use of the trademark.  A network developer who has circulated products bearing the trademark within the EEA must, to set the exhaustion of rights aside, provide legitimate reasons . Such is the case where the trademark is used in an abnormal manner  or where the products at issue are counterfeit or not genuine , where the products are sold to consumers by a third party who is not a member of the network under conditions adversely affecting the value of the trademark and tarnishing the status and prestigious image of the luxury goods in question  or where they are placed into circulation in violation of Article L. 442-2, which penalizes any person directly or indirectly participating in a violation of the ban on reselling outside the network by which a distributor is bound under a selective or exclusive distribution agreement exempted by the applicable competition law rules . Likewise, for perfumes and cosmetic products, any partial use of a product necessarily leads to its alteration, which is seriously detrimental to the image of the brand and to the environment of luxury and purity it purports to convey and consequently the right holder is legitimately entitled to oppose its sale within the second-hand goods . The exhaustion of rights is not limited to sales transactions but concerns all circulation on the market. A trademark owner cannot prevent the use of the mark by the legitimate holder of lawfully purchased authentic goods bearing that trademark and that are already sold on the territory of the European Union, in order to announce to the public and to guarantee the circulation of these goods as part of a lottery . However, it is for the non-authorized third party who sells goods subject to selective distribution to bring evidence that they have been put into circulation in the European Economic Area with the consent of the trademark owner . The production of invoices containing no information on the origin of the products sold, such that it is not possible to verify that they have been placed on the market in the European Economic Area under this trademark by the holder or with his consent does not provide this evidence , which cannot result from the sole affixing of the CE marking on the product, its packaging or the accompanying document, since such a formality only guarantees its conformity with European directives . The commercialization in France of motorcycles not intended for the European market cannot be justified by the fact that they were purchased in Europe insofar as that fact is not sufficient to establish the manufacturer's consent . However, the burden of proof cannot rest with the third party if, as in the case of exclusive distribution, the evidence provided is likely to enable the trademark holder to identify leaks in its network and to partition markets . This is the case particularly where the third-party reseller establishes the existence of a prohibition of passive selling within the network .

On the other hand, where the manufacturer is able to show that there is no risk of market partitioning, notably by bringing evidence of the existence of passive sales, the burden of proof is on the reseller . However, invoices covering ad hoc sales and negligible amounts over a period of five years on the products of the brand which are not those at issue, or on sales to different marketing channels do not show an absence of risk of market partitioning . In contrast, e-mails from more than five years previously or facts dating back to the beginning of the 1990s can be relied on to establish a risk of market partitioning where the head of an exclusive distribution network is unable to show that the practices have since ceased .

Lastly, where a product which is the object of a selective distribution network has been lawfully sold by its manufacturer in a foreign country before being re-imported without authorization into a Member State of the Union, the manufacturer has a right to follow-up and monitor it until it reaches the end purchaser .

Cass. crim., 16 June 1993, LawLex200200006011JBJ.

See, establishing the exhaustion of rights regarding selective distribution: Cass. crim., 16 June 1993, LawLex200200006011JBJ, and Contra: CA Paris, 1 October 1997, LawLex200200001219JBJ: the mere existence of a selective distribution network is a legitimate ground that makes it possible to set the effects of exhaustion of rights aside.

TJ Paris, 20 May 2021, LawLex202100003340JBJ.

CA Paris, 19 April 2013, LawLex201300000701JBJ.

ECJ, Case C-244/00 Van Doren [2003] ECR p. I-3051, LawLex200500004595JBJ; cf. TJ Paris, 20 May 2021, LawLex202100003340JBJ, specifying that the fact that the products are not marketed in the European Union by means of an exclusive distribution system, as the distributors retain the possibility of offering them for sale outside the limits of their territory, is not sufficient to rule out the existence of a real risk of market partitioning.

TGI Paris, 14 janvier 2016, LawLex201600000172JBJ.

CA Paris, 7 November 2014, LawLex201400001241JBJ.

CA Paris, 5 May 2017, LawLex201700000805JBJ and 26 May 2017, LawLex201700000931JBJ.

Cass. com., 2 December 1997, LawLex200200004500JBJ.

Article L. 713-4 of the Intellectual Property Code gives back to the owner the right to object to any sale action if it justifies of legitimate grounds relating, inter alia, to the modification or alteration of the state of its goods subsequent to their release on the market: Cass. com., 15 June 1999: “the plea for exhaustion of trademark right is not admissible; in effect, Article L. 713-4 of the Intellectual Property Code reserves the owner's right to object to any new sale action if it justifies of legitimate grounds relating, inter alia, to the modification or alteration of the state of the goods; furthermore the principle of exhaustion does not suggest that the trademark may be deleted from the sold good”. See also TGI Paris, 12 February 2015, LawLex201500000554JBJ: changing the bar codes and the presentation boxes of products.

CA Paris, 7 November 2014, LawLex201400001241JBJ. Cass. com., 8 November 2016, LawLex201600001852JBJ.

See Cass. com., 23 March 2010, LawLex201000000379JBJ, LawLex201000000380JBJ and LawLex201000000376JBJ.

CA Paris, 28 September 2011, LawLex201100001592JBJ.

CA Rennes, 25 February 2020, LawLex202000000294JBJ.

CA Versailles, 19 November 1998, LawLex200200001052JBJ: which only penalizes the parasitic use that the reseller who is not a member of the network has made of the well-known trademark.

CA Versailles, 10 June 2004, LawLex200500003777JBJ; CA Paris, 8 November 2006, LawLex200800000036JBJ.

TJ Paris, 30 May 2024, LawLex202400004056JBJ.

French Distribution Law

226. Exhaustion of trademark rights.

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

226. Exhaustion of trademark rights.

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise