Selective Distribution System And Trademark Exhaustion

Selective Distribution System

A "Selective Distribution System" functions through a trademark holder-authorized channel for sale of its products. The purpose behind this arrangement is to have a control on the product distribution method so that only recognized platforms could undertake sale of such products on behalf of the producers/trademark holders. Generally, the intention is to preserve the brand prestige of a product. These channels are largely preferred by the trademark holders or producers of luxurious goods. An example for this could be derived from the recent ruling of European Court of Justice on the case concerning Coty Germany GmbH v Parfümerie Akzente GmbH (Case C-230/16). In the above said ruling the ECJ confirmed that a supplier of luxury goods may prohibit authorised retailers from selling its products on third party platforms, such as Amazon and eBay. According to trademark experts, this ruling brings much needed certainty for manufacturers seeking