Protecting brand prestige: IP rights and distribution governance

Why does brand prestige matter?

For luxury and premium brands, prestige is a core commercial asset. It sustains pricing power, consumer loyalty, and long-term brand equity. Consumers choose prestige brands not only for product utility but for the totality of what the brand represents: heritage, craftsmanship, exclusivity, and aspiration.

Threats to brand prestige extend well beyond counterfeiting. Prestige can be diluted by poor retail presentation, unauthorized discounting, inconsistent online merchandising, grey-market sales, and association with unsuitable marketplaces. Once prestige is degraded, restoring it requires significant investment and in many cases, full restoration proves impossible.

Prestige should therefore be treated as a strategic legal and commercial asset, protected through coordinated intellectual property and distribution governance. This article examines the principal tools available to brands pursuing that objective.

How can I protect brand prestige?

1. Understand your IP toolkit

Intellectual property rights form the primary legal architecture for brand protection. The relevant rights operate as follows:

• Trade marks protect source-identifying signs: names, logos, shapes, slogans, and nontraditional indicators such as colours and sounds. They are central to preventing counterfeits, misleading use, free-riding, and dilution or tarnishment of brand meaning. For prestige brands, trade marks also serve to maintain the association between the mark and a defined level of quality and exclusivity.

• Trade dress and get-up protect the overall visual presentation of products, packaging, and retail environments where protectable under applicable law. For luxury brands, the distinctive “look and feel” of a store, website, or product line is often as recognisable and commercially valuable as any word mark.

• Copyright protects original creative works used in campaigns, imagery, packaging, website content, lookbooks, and artistic product elements. It provides another layer of exclusivity over creative outputs.

• Design rights protect the appearance of products and packaging including shape, lines, contours, ornamentation, and surface decoration.

These rights serve both offensive and defensive functions. Offensive use includes infringement actions, customs and border seizures, platform takedowns. Defensive use includes comprehensive registration, clearance, documentation of distinctiveness and reputation, licensing controls with quality-control provisions, and meticulous chain-of-title management. A robust IP portfolio deters infringers and multiplies enforcement options and together these offensive and defensive uses create a layered shield around brand prestige.

2. Use selective distribution to govern the retail environment

While IP rights define and protect the brand’s legal identity, selective distribution models (SDMs) govern how the branded product reaches the consumer. SDMs allow brands to appoint authorised distributors and retailers who meet defined qualitative criteria. These are not IP rights; they are contract-based and competition-law-sensitive distribution governance tools.

Through SDMs, brands can control:

• point-of-sale environment and visual merchandising

• staff training, product knowledge, and customer service

• after-sales support and packaging standards

• sustainability practices and online presentation

• marketplace participation restrictions, in certain circumstances where justified

Each of these touchpoints contributes to the consumer’s overall brand experience. A prestige brand sold through an unsuitable channel (e.g. without knowledgeable staff, appropriate presentation, or adequate customer service) risks reputational harm regardless of whether the product itself is genuine.

Under both UK and EU competition law, selective distribution systems are generally permissible where retailers are selected on the basis of objective, qualitative criteria that are applied uniformly and without discrimination, and where those criteria are necessary and proportionate to preserve product quality or protect legitimate brand requirements. Where these conditions are satisfied, the selective distribution system itself may fall outside the scope of the competition rules because it is not regarded as restricting competition.

However, this does not mean that every restriction contained within the distribution arrangements will automatically be lawful. Individual provisions still require separate assessment under competition law. In many cases, restrictions may benefit from a “safe harbour” under the UK and EU vertical agreements block exemption regimes where, among other things, both the supplier and buyer have market shares of 30% or less in their respective markets. Restrictions relating to pricing, online sales, or the operation of the distribution network may nevertheless attract greater scrutiny and should be carefully assessed.

Suppliers may, for example, impose quality-based criteria for online sales and, in appropriate circumstances, restrict sales through third-party online marketplaces where this is justified by legitimate brand protection objectives. By contrast, restrictions that effectively prevent the use of the internet as a sales channel, maintain minimum or fixed resale prices, or restrict sales between authorised distributors within the network carry materially higher legal risk.

The recent Deckers UK Limited v Up & Running (UK) Limited litigation before the UK Court of Appeal, concerning Deckers’ arrangements for distribution of its HOKA-branded products is instructive in this context (see our analysis here). In this case, the Court of Appeal recognised that protecting brand positioning and having a level of control over distribution channels can be legitimate objectives to protect brand positioning and customer experience. However, the Court emphasised that, when setting up a selective distribution structure, any restrictions will need to be designed carefully and should be analysed in their full economic and legal context to determine their potential effect on competition.

This judgment serves as a reminder that premium and lifestyle brands cannot simply label a distribution network as “selective”. The criteria must be objectively justified, proportionate and applied consistently in practice. Prestige branding alone will not shield distribution restrictions from competition-law scrutiny.

How do IP rights and SDMs intersect?

IP rights and SDMs are not parallel silos; they intersect substantively. Understanding both the reinforcements and the tensions between them is essential to a coherent prestige-protection strategy.

1. Reinforcement

IP rights define and protect the brand and SDMs preserve the brand at point of sale. The two mechanisms create a mutually reinforcing cycle. SDM agreements can mandate compliance with trade mark usage guidelines and imagery standards. Trade mark enforcement can then target unauthorised sellers causing consumer confusion or reputational harm.

2. Tensions and gaps

Several legal and practical limits restrict how far these strategies can go. Trade mark exhaustion means a brand usually cannot block resale of genuine goods once they have been placed on the relevant market with consent. Parallel imports can also undermine territorial distribution controls. Online marketplaces and social commerce platforms make it increasingly easy for goods to move outside authorised channels. Critically, resale of genuine goods is not automatically infringing. Brands seeking to intervene typically need evidence of harm such as misleading affiliation, material differences, or reputational damage. Competition law also limits how far distribution restrictions can be used to suppress discounting or exclude otherwise legitimate channels. Brands therefore need to use these tools carefully to avoid overreach.

What is best practice for luxury and premium brands?

Follow these steps for a holistic prestige-protection strategy that integrates IP portfolio management and distribution governance:

• Build a layered IP portfolio: Register core marks, sub-brands, logos, product shapes (where registrable), packaging, key designs, campaign content, and secure relevant domain names and social media handles. A comprehensive portfolio maximizes enforcement options. Document the creation of materials and ownership of IP rights subsisting in them, distinctiveness and reputation.

• Align IP and distribution strategy: Identify which brand elements require protection and translate them into objective retail and online standards that SDM distributors must meet.

Draft SDM agreements with precision: Include clear admission criteria, ongoing compliance obligations, online sales standards, marketplace rules, audit rights, training requirements, quality-control provisions, rules on use of brand assets and consequences of breach. Ensure consistent application across the network, with all criteria remaining objective, proportionate, non-discriminatory and limited to what is necessary to preserve product quality or the brand’s image. Care should be taken to avoid provisions that restrict the effective use of the internet as a sales channel or amount to resale price maintenance.

• Monitor unauthorised channels: Track online marketplaces, social commerce platforms, domain registrations, paid search use, grey-market imports, discount platforms, and unauthorised physical outlets. Document evidence of consumer confusion, reputational harm, and quality issues. Any enforcement action should remain consistent with competition law. In particular, this includes avoiding restrictions on passive sales (i.e. responding to unsolicited customer requests, including via online channels) or measures that partition markets. Such action should be based on the objectively justified and proportionate application of the brand’s selective distribution criteria.

• Enforce proportionately and holistically: Prioritise high-harm conduct and coordinate litigation, platform takedowns, customs actions, and commercial account management. Avoid enforcement positions that overstate IP rights or create competition-law risk.

• Ensure cross-functional governance: Legal, brand, sales, and e-commerce teams must coordinate to ensure prestige protection is not treated as a siloed IP issue. Distribution decisions have IP implications and vice versa; only an integrated governance model captures the full picture.

Conclusion

Brand prestige is a strategic asset that demands coordinated legal and commercial stewardship. Neither IP rights alone nor distribution controls alone are sufficient. Each addresses different dimensions of the same underlying challenge. By treating prestige as an asset deserving integrated governance, luxury and premium brands can build resilient protection frameworks that preserve the exclusivity, quality, and reputation on which their commercial success depends.

In practice, this often involves careful structuring of selective distribution models and ensuring that contractual arrangements and compliance processes are aligned with competition-law requirements from the outset.