Selective distribution and third parties IDI Frédéric Fournier Redlink May 2012

Several liability cases: *Third party trying to be selected * Reseller not checking the origin of the products *Resale of products which resale is limited to authorized distributors

Third party trying to be selected No liability of the supplier when refusing to disclose selection criteria to a third party wishing to be selected when (i) selection request is not normally made ot (ii) clearly abusive Cass.Com. Sept. 28, 2010

Obligation to check the origin of the products The non selected reseller has to check whether the supplier is authorized for the resale of the products: sanction due to reseller’s negligence Paris April 18, 2008

Third party violating the selective network: French Article L I 6° Commercial Code Tort liabibilty for whom or which « participating directly or indirectly to the violation of a prohibition to resell out of the selective network. »

Third party violating the selective network: unfair competition - parasitism Tort liabibity for whom or which resell selective products without making the investment and being under the usual constraints of the selected distributors and benefiing from the value of the trademark or the image of the products. Paris Sept. 3, 2010

Third party violating the selective network: trademark infringement In addition to the application of Article L °, the non authorized reseller can be held liable for trademark infringement subject to the existence of separate facts Cass. Com. 23 March Chanel

Third party violating the selective network: trademark infringement Article L sect.2 deems infringing any resale of a product under conditions which alters its image. This is the Dior/Copad principles application : CJUE 23 April 2009

Third party violating the selective network: Illicit advertisement * use of inexact quality of selected distributor (Art. L Consumers’ code) * offer of products which are not sold on the website (Paris April 18, 2008) or hypertext link to the officiel site (Paris 24 October 2008) * unsufficient stock of marked products (Paris March 19, 2008)

Third party violating the selective network: Illicit advertisement * Google and eBAy (CJUE March 23, 2010, Google/LVMH, and July 12, 2011, L’Oréal/Ebay) no infringement if no active role (same with 3 decisions of Cour de Cassation, July 7, 2010) * Infringement when eBay acts as an intermediary benefiting from the image and revenue resulting from the sale of the products (Paris January 23, 2012: ebay/Burberry)

Third party violating the selective network: Summary proceedings * Based on French LCEN (Digital Economy Confidence Act) or preliminary actions againts hosting companies: prohibition to grant access.

Frédéric Fournier Avocat associé Docteur en droit Redlink 78, avenue Raymond Poincaré Paris - France Tel /01 – Fax Mob