The decision is part of a long running battle between the retailer and the luxury perfume supplier concerning the unauthorised sale of perfumes in stores across the country.
Coty called for a preliminary injunction against CVS to stop it selling fragrance products with their unique product codes (UPC) removed back in 2006.
The UPCs serve as both an anti-counterfeit measure for the company, as each product has a unique code, and as a way of detecting defective items and tracing them back to the manufacturer.
Appeal Court found ‘no error’ in judgement
The injunction was granted in July 2007 by the United States District Court for the Southern District of New York. CVS brought this to appeal, which has now been refused.
Both courts found that selling products with the UPC removed would likely constitute a trademark infringement and said the ban on selling the Davidoff products should stand.
In order to protect the luxury reputation of the brand, Coty does not distribute the Davidoff products to CVS. However, the retailer is able to get hold of the products through other distribution channels.
The court recognised that the sale of genuine goods, even if it isn’t authorised by the trademark owner, is not inherently trademark infringement.
However, in this case it said the removal of the UPCs jeopardised the control Coty has over the quality of its Davidoff trademark and therefore risks injuring the reputation of the mark.
CVS would not comment on the case as it is still ongoing; however, a spokesperson for the company said the removal of the UPCs occurred before CVS received the products.