ELZABURU has had the pleasure of working together with the publisher Thomson-Reuters Aranzadi on Fashion Law, a pioneering work in Spain on the subject of fashion law, which was presented on 16 April.

In these short weekly summaries, the professionals at ELZABURU who participated in the work offer us a brief outline of their contributions:

  Exhaustion of rights in the fashion sector

The importance of brands in sectors like the fashion industry is incontrovertible; not only do they act as a guarantee for consumers, if properly managed, they can also create great commercial value for their owners.

Nevertheless, prohibiting their use by third parties, the cornerstone of trade mark law, could, if taken to its logical conclusion and applied unrestrictedly, contravene such Community principles as the free circulation of goods and freedom of competition.

Exhaustion of intellectual property rights has thus arisen as a means of mitigating the strict-case scenario and involves limiting the right to prohibit imports and sales of products once they have been placed on the market in a given jurisdiction.

The chapter deals with the most relevant Community case law on this subject, tracing its regulatory history from the early stages of the concept to its boundaries and exceptions in the present day.

Applying the concept of exhaustion gives rise to a series of features that play a key role in the fashion sector, and the chapter thus compiles the findings reached by the courts as a basis for considering the selective distribution systems so commonly used for such products as perfumes and luxury goods, examining the requirements that exceptions to the principle of exhaustion need to fulfil along with how this principle applies in practice.

Another common feature of this sector is the grey market, or parallel trade, which seeks to benefit from price fluctuations for a given product in different countries. The chapter addresses the key factors for this type of trade, such as the operators taking part, the indicators that can be used to ascertain whether or not exhaustion has occurred, and the different approaches used for intra-Community and extra-Community channels.

The advent of the Internet has been a disruptive factor for commercial distribution. Today, not selling a product on-line, where consumers can buy it with just a few clicks, is simply inconceivable.

The rise of the Information Society has elicited no few legal challenges in connection with the doctrine of exhaustion on the web.

On the one hand, these new vistas have facilitated parallel imports by lowering marketing costs and extending the reach of trading activity. On the other, the ubiquitous nature of the Internet poses a challenge when it comes to deciding whether or not rights have been exhausted in a given case.

As a final touch in closing, the chapter addresses control measures and safeguards against parallel trade in goods, reviewing the most helpful measures that can be taken to counter it when it does occur and has been carefully analysed.

Author: Fernando Díaz 

Visit our website: http://www.elzaburu.es/en

Blog entries in the series Fashion Law:

1.Trademark protection in the fashion sector (23.04.2018)

2.Design protection in the fashion sector (30.04.2018)

3.Patent protection in the fashion sector (07.05.2018)

4.Protection of fashion through copyright (21.05.2018)

5. Image rights in the fashion sector (28.05.2018)

6.Fashion Law. Data Fashion (04.06.2018)

7.Counterfeiting in the fashion sector (11.06.2018)

8.Exhaustion of rights in the fashion sector (18.06.2018)

9.Corporate reputation in the fashion sector (25.06.2018)

10. Protection of the commercial imagen of a fashion brand (04.07.2018)

11. Websites, Apps & Social Networks (13.07.2018)

12. Valuation of intangible assets (17.07.2018)

13. Licensing (06.09.2018)