24 October 2017Trademarks

General Court backs Commission over Rolex and Louis Vuitton investigation

The EU General Court has backed the European Commission in clearing a string of luxury watch makers of any wrongdoing in relation to their selective repair systems.

A three-judge panel handed down its decision (pdf) yesterday, October 23, agreeing with the Commission in dismissing the complaint from Confédération Européenne des Associations d’horlogers-Réparateurs (CEAHR), which represents independent watch repairers.

CEAHR alleged that an agreement between the watch makers to refuse to continue supplying spare parts to independent repairers constituted an “abuse of a dominant position”.

“The refusal to continue supplying spare parts was not sufficient to establish the existence of abuse. That refusal could also be explained by the preservation of brand image and the quality of products and the prevention of counterfeiting,” the ruling read.

The decision is the latest in a dispute spanning over 13 years, following a complaint from CEAHR in July 2004 against major luxury watch manufacturers including Rolex, The Swatch Group and Louis Vuitton.

The Commission rejected the complaint in 2008, stating there was insufficient EU interest in continuing the investigation, which was annulled in 2010 by the General Court.

But the Commission then re-opened the case the following year, before rejecting CEAHR’s complaint again in July 2014, “on account of the disproportionate nature of the resources which a more detailed investigation would require in view of the low probability of identifying infringements”.

CEAHR then filed an appeal with the General Court, which backed the Commission—supported by Rolex, The Swatch Group and Louis Vuitton—yesterday.

In its decision, the General Court mentioned the prevention of counterfeiting 12 times, and backed the Commission’s ruling which stated that the refusal to supply spare parts was not illegal.

“The applicant’s unsupported allegations do not demonstrate that the Commission overstepped the limits of its discretion by considering that the establishment of selective repair systems and the refusal to supply spare parts could be justified by the objective of combating counterfeiting,” the ruling concluded.

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