Authored By: Resham Jha
Indian Law Institute
Abstract
The author proposes that rather than being preordained, luxury items have been created by laws and statutes throughout history. First, medieval Europe’s sumptuary laws, and now current-day trademark dilution provisions. Each phase of the development of law regulating or rather, ‘constituting’ luxury and determining to whom access to luxury goods is permitted involves a different socioeconomic relationship to wealth/social status.
Legal methodologies will be used to analyze the ‘law of luxury’ throughout French, British, European Union, Indian and US law documents and will evaluate/compare these jurisdictions’ legal frameworks as they evolved through the three distinct phases of luxury laws.
Phase One is often defined as the pre-commercial privileging of royal monopoly/guild systems era. Phase Two is the nineteenth century commercial era characterized by the transition to the use of ‘prestige’ as a fungible marketable asset resulting from the induction of industrialization. Finally, Phase Three encompasses all contemporary forms of intellectual property protection for luxury goods per the summation of the increased use of trademarks, designs, geographical indications, and anti-counterfeiting laws; so that these may be used instead of sumptuary legislation to exclude entities from gaining access to ‘prestigious’ goods.
Additionally, the article asserts that the law’s doctrines regarding both preventing and protecting “famous marks” and dilution of trademarks have developed from a mere consumer protection basis into an active device to protect social status or social prestige as an interest recognized by law. These developments raise serious questions regarding whether luxury law promotes exclusivity and thus reinforces social stratification, and whether luxury companies should therefore be treated as private businesses or as custodians of heritage, deserving of a unique regulation.
Introduction
The luxury goods market has been estimated to be over USD 350 billion globally in 2023 and continues to command significant premiums that cannot simply be explained by the materials that comprise them. The difference between a Hermès Birkin Bag and a functionally equivalent leather handbag cannot simply be measured by the amount of leather, thread, or labour but is instead based upon the difference in the meaning of each product. In fact, the law has underwritten this meaning to an enormous extent. This paper argues that luxury is not simply protected by law, but, to a large degree, created by law.
The impact of this argument extends beyond the historical legal examination of the luxury goods industry. If the law creates luxury as opposed to merely regulating it, it will necessitate an examination of how the intellectual property law systems are constructed, not solely on the basis of their ability to achieve economic efficiency but also on the basis of their social consequences. Each of the key doctrines of trademark dilution, protection of famous marks, and geographically range of protection laws, reproduce the social exclusion that was once achieved through sumptuary laws.
This paper employs a doctrinal and comparative approach to demonstrate continuity by analyzing both primary legal sources (statutes, case law, regulations) and secondary legal writings (historical legal doctrine and luxury-brand theory). Conducting research for France, the UK, the EU and the US and India as a critical jurisdiction case study of luxury consumption and intellectual property litigation will yield valuable results in one of the fastest-growing economies today.
The paper is structured in the following way: Part II details the historic regulation of luxury through the use of sumptuary laws, privileges, and guild institutions; Part III discusses the commercialization of prestige in the industrial and post-industrial eras; Part IV analyses the intellectual property mechanisms of contemporary luxury law; Part V explores whether the law protects only consumers or protects as well prestige itself; Part VI examines luxury brands as cultural institutions; Part VII critically assesses whether current luxury law still maintains historical privilege; Part VIII makes recommendations, while Part IX draws conclusions.
Two limitations will be acknowledged at the beginning of this paper. First, while this paper does discuss the economics of the luxury market, it is not intended to represent an exhaustive analysis of such, rather, it represents an analysis of legal mechanisms involved in constructing prestige as its main focus. Secondly, the jurisdictional scope of the analysis will necessarily result in a less granular analysis of Indian Law than is the case for European jurisdictions due to Indian Luxury IP jurisprudence being comparatively new.
II. The Historical Regulation of Luxury
A. Sumptuary Laws and Social Hierarchy
Sumptuary laws are legal rules which restrict the consumption of certain goods on the basis of social rank of people, representing the earliest and most explicit instance of law constructing luxury. Their etymology derives from the Latin sumptus, meaning expenditure, and their political logic was unambiguous which was to render visible, through dress and consumption by the hierarchies that organized society.
In England, a succession of statutes from 1337 to 1604 prescribed with remarkable precision the grades of fabric, fur, and ornamentation permissible to each estate. The Statute of Apparel 1533, for instance, prohibited the wearing of purple silk, except by the royal family, and gold cloth were saved for those of at least the rank of knight. The logic was not aesthetic but ontological. Law defined what luxury was by defining who could possess it. The wearing of purple did not merely signal nobility, in a legal system that criminalized its unauthorized use, purple constituted nobility. The boundary between description and prescription collapsed.
Continental Europe exhibited analogous patterns. Florentine statutes of the thirteenth and fourteenth centuries regulated the use of furs, jewels, and embroidered garments, with enforcement mechanisms targeting women in particular. In France, the règlements somptuaires of successive Capetian monarchs similarly restricted gold thread and imported textiles. These instruments shared a common structural feature where luxury was defined residually, as that which ordinary persons were prohibited from consuming. Legal exclusion was constitutive of prestige.
B. Royal Monopolies and the Institutionalization of Prestige
The decline of sumptuary legislation in the seventeenth century did not signal a retreat of law from the regulation of luxury, rather, law shifted its site of operation from the consumer to the producer. The establishment of royal manufactories under Louis XIV, orchestrated by Colbert, was the decisive moment in this transformation. The Règlements des manufactures royales of 1666 established quality standards and inspection regimes for French textile production, creating a state-backed apparatus of luxury certification.
The dual-purpose regulations of mercantilism were to manage French economy control over gold by minimizing the amount of woven luxury textiles imported from Italy and Flanders, but also they were based on the royal authority to create the difference between high-quality (French) luxury goods versus lower-quality (fake) ones. Thus, the law established the concept of authenticity (as an element of value) through legal enforcement of products bearing the royal mark of quality. For instance, a piece of Gobelin carpet will have its royal insignia affixed at the time it was made; this is not merely for decoration but rather has been established as the legitimate proof of product quality and origin that laws will uphold.
C. Guild Regulation and the Legal Construction of Craft
Across much of medieval and early modern Europe, guilds contributed to the legal construction of luxury. For instance, the Worshipful Company of Weavers (LCW) received its charter in London in 1155 and had authority to both inspect their members’ cloth and enforce quality standards on materials used in the production of luxury items. They had the legal power to punish those producing substandard clothing as well as for restricting access to the textile market for people not authenticated as members of their organization. Guilds possessed a legal monopoly and thus constituted both an endorsement of quality and exclusive rights to the production of luxury goods. Therefore, only those certified by the guilds could legally produce luxury textiles, as craftsmen displayed guild marks on their creations to indicate quality and legitimacy.
A guild system similar to that employed by the LCW existed in the Netherlands and was similarly structured to control production in the Netherlands, including the creation of Delftware and lace. Accordingly, guild regulation served an early version of intellectual property in creating a specific relationship between a specific manufacturer of goods and an associated standard of quality; these intellectual property rights were enforced through the use of guild-defined origin marks in a legal setting. While the development of modern trademarks is a direct continuation of guilds’ use of origin marks for third-party verification of product quality, there exists academic debate regarding whether guilds provided an early version of intellectual property in a rigorous, analytical sense.
III. The Commercialisation of Prestige
A. Industrialization and the Democratization of Goods
The industrial revolution of the eighteenth and nineteenth centuries confronted the legal architecture of luxury with its most severe challenge. Mass production techniques eroded the material distinction between luxury and ordinary goods: machine-woven silk became indistinguishable from the hand-woven article to the untrained eye. The democratization of material goods threatened to dissolve the very category of luxury by making prestige goods widely accessible.
The legal response to this threat was the formalization of branding as a legal institution. The Trade Marks Registration Act 1875 in the United Kingdom, followed by analogous legislation across Europe and the United States, created a system whereby producers could register distinctive signs and obtain state-backed protection against imitation. The registration system performed the same function as the guild mark, but in an industrial economy it guaranteed to consumers that goods bearing a particular mark derived from a specific producer, and it conferred upon that producer the legal right to exclude competitors from using similar signs.
B. The Rise of the Fashion House and the Emergence of Brand Identity
The late nineteenth century witnessed the emergence of the fashion house as the institutional vehicle for the commercial transformation of prestige. Charles Frederick Worth, often credited as the founder of haute couture, established in Paris in 1858 a model of luxury fashion production that substituted the authority of the couturier for the authority of the guild. The fashion house did not merely produce garments, it produced identity and it sought legal protection for that identity through registration of house names, labels, and eventually signature motifs.
The social dynamics of this transformation are instructive. Where sumptuary laws had restricted luxury consumption to the nobility, the fashion house created a new economy of distinction accessible in principle to any person of sufficient wealth. Luxury was democratized in its social availability but simultaneously reconstructed through law as an exclusive commercial asset. The trademark system became the legal mechanism through which fashion houses maintained the distinction between genuine and imitation goods, and thus the premium associated with the genuine article.
This transformation had a paradoxical quality. The decline of sumptuary legislation in democratic societies removed legal barriers to luxury consumption based on birth. But the rise of trademark law replaced those barriers with legal protections for brand identity that achieved economically similar exclusionary effects, the Chanel suit remained inaccessible to most consumers, not because the law prohibited its ownership to commoners, but, because the law enabled Chanel to charge what the market would bear for the association between the garment and the Chanel signifier.
IV. Intellectual Property and the Legal Construction of Modern Luxury
A. Trademark Law
Trademark Law, as established by the Trade Marks Act 1994 (UK) and the Lanham Act 1946 (US), forms the foundation of luxury’s contemporary legal construction. A trademark is generally defined as a sign that can distinguish the products or services of one company from those of another; this definition, however, is solely oriented toward protecting consumers and preventing confusion and only represents a small part of the many economic and social functions that luxury trademarks serve.
In L’Oréal v Bellure, the Court of Justice of the European Union addressed this gap by stating that trademark functions extend beyond simply indicating the source of a product or service to include a guarantee function, an advertising function and an investment function. By recognizing the brand-investment function, which protects the brand’s reputation and image that have developed through investment in advertising, luxury brand prestige is legally considered an interest with cognizable value. A competitor who uses a sign that is similar to a luxury brand to benefit from the reputation of that brand (even where there is not confusion among consumers) infringes on the trademark simply because of the similarity of signs. This doctrine is structurally similar to the prohibition applicable under sumptuary laws that provide for the exclusivity of signs regardless of their communicative significance.
Christian Louboutin v Van Haren is another great illustration of how trademark law can help to protect prestige itself. The Court of Justice in Europe decided that the red sole of Christian Louboutin shoes can be registered as a trademark as long as the colour red acquired distinctiveness through use. The ruling was very significant because it gave Christian Louboutin legal rights not only in respect of the word “Christian Louboutin” but also to a component of its brand, which is the colour red, that has a strong association with the social prestige of the brand. The law through recognitions of this trademark also ratifies and strengthens the social meaning of luxury goods and what makes those products luxury products.
B. Design Protection
Community design rights in the EU and national design rights in the UK and India, registered and unregistered, create an additional legal exclusivity regime for the visual characteristics of luxury goods. The legal protection for the appearance, shape and ornamentation of luxury goods provides the legal framework for protecting the economic value of luxury goods’ physical attributes that are not protected by trademark law. In the case of Crocs Inc v Bata India Ltd, the Delhi High Court engaged with both registered design and trade dress, demonstrating the complexity of luxury IP in emerging markets.
Design rights are comparable to guild marks as they protect the visual characteristics of a product as an indication of its origin and quality. A design registration creates an exclusive legal right preventing competitors from making products with the same or similar appearance. The continued exclusivity of a luxury brand is established by legal distinctiveness and visual distinction.
C. Geographical Indications
Geographical indications are considered the contemporary equivalent of the royalty monopoly concept in terms of law protection. A geographical indication (GI) under Article 22 of the TRIPS Agreement is used to designate goods as having an association with a given place of production, based on their quality, reputation or other features based on being produced in that area. Since GIs are creating each brand as a legal source of their origin, facilitating premium pricing, and keeping out competitors who do not possess the appropriate place of origin means GIs will be an important feature in the fashion and luxury goods industry; examples include “Champagne,” “Scotch Whisky,” “Murano Glass” and “Bordeaux.”
At the same time, the European Union’s quality scheme for protecting Designation of Origin (PDO) and protected geographical indications (PGIs) has become very broad ranging in this area as well. Indian GI laws, largely through the Geographical Indications of Goods (Registration and Protection) Act 1999, have similarly been implemented with respect to luxury craft goods including Kancheepuram silk sarees, Pashmina shawls, and Kolhapuri chappals – effectively establishing a legal structure that grants prestige associated with regional artistry only to producers within their respective regions.
D. Anti-Counterfeiting Mechanisms
Methods of protecting against counterfeit luxury goods today include customs monitoring/recording, seizures of items at borders, civil injunctions against suspect sellers, criminal sanctions against sellers, etc. All of these methods fulfill the same role as the medieval guild system fulfilled in policing how certain goods were produced. In the case of LVMH v eBay in the Paris commercial courthouse, eBay was found liable for not doing enough to prevent the sale of counterfeit LVMH products through their website. This case secured not only LVMH’s financial interest, but also reinforced the notion that manufacturers have a legal interest in limiting who can sell their products. Therefore, this case has established that there are indeed torts for infringing on the right to control the distribution of luxury goods.
V. Luxury, Exclusivity, and Social Status
A. Does Law Protect Prestige Itself?
The previous analysis raises an important question: Does modern luxury law serve to protect the consumer from confusion, or does it merely serve to protect the prestige and exclusivity of luxury brands themselves as an end in themselves? In terms of intellectual property theory, most regimes are based on the proposition that such laws protect consumers by identifying the commercial origins of goods and thereby reducing the search costs associated with purchases, as well as protecting the producer’s investment in the quality of the goods produced.
However, the doctrine of trademark dilution is a clear deviation from this state of consumer protection theory. For example, under the US Federal Trademark Dilution Act of 1995 and amended by the Trademark Dilution Revision Act of 2006, protection against the blurring of or tarnishing of the goodwill associated with a well-known mark is granted without regard to whether or not consumers are confused or if there is competition amongst the parties using the marks. This is illustrated in the case of Louis Vuitton v Haute Diggity Dog where the US Fourth Circuit determined that Louis Vuitton’s iconic monogram was diluted by being used on dog toys that parodied LV’s iconic trademark. This case illustrates that the critical legal interest in question is not to protect consumer information but to protect the unique and prestigious associations inhering in LV’s trademark, associations which exist and are protected by law.
Under UK law, the concept of “extended passing off” and its related provisions in the Trade Marks Act 1994 Section 10(3) and EU Directive 2015/2436 exist to protect famous marks from being used in ways that would create a situation where the user benefitted disproportionately from the reputation of the mark, and were accused of harming the distinctiveness of the mark. As such, the idea of “unfair advantage” is only valid if the mark in question has a reputation protected under the law. This is the exact finding of the Court of Justice of the EU (CJEU) in their decision in L’Oréal v Bellure a competitor that sells perfume as an imitation of a high-end perfume is also “unfairly benefitting” from the high-end mark’s reputation if there is no confusion in the marketplace because they are taking on the high-end mark’s commercial value without compensating for it.
B. Competition Law and the Limits of Exclusivity
While luxury brand exclusivity can be legally enforced, the EU Competition Law recognizes competition in the marketplace should not be illegally restricted by brands that want to limit distribution. In Coty Germany v. Parfümerie Akzente, the CJEU’s ruling authorized a luxury goods manufacturer to have a selective distribution system and prohibit authorized retailers from selling on third-party online marketplaces without violating Article 101 TFEU as long as the restriction to resale was for the purpose of maintaining the luxury image of the goods.
From this ruling, the Court set a new benchmark for justification of anti-competitive behavior by setting the maintenance of a “luxury image” as a legitimate reason to create anti-competitive distribution agreements. Therefore, the Court determined the value of prestige associated with luxury brands is a legitimate business interest/purpose which can be restricted via limiting market access. These statements provide for an example of how economic concepts associated with prestige and exclusivity (through sumptuary law) can be interpreted into the realm of competition laws. The “luxury image” to be maintained by luxury manufacturers via selective distribution is the same image associated with nobility regarding sumptuary laws as used to prevent non-nobles from wearing purple.
The legal framework has given Bourdieu’s idea about social status through culture another dimension: In the context of the marketplace, law gives authority to luxury brands to charge high prices. Law not only gives these types of brands permission to sell at a premium but provides protection to preserve the integrity of the high price in meeting the social function of establishing status. There is controversy surrounding whether the social function of price is desirable or should be limited by competition law instead of supporting it.
VI. Luxury Brands as Cultural Institutions
Some luxury multinational brands have attempted to argue in legal and regulatory settings that their brands are not simply commercial entities, but that they have a role as stewards of cultural heritage. Under the 2003 UNESCO Convention for the Safeguarding of the Intangible Cultural Heritage, traditional craftsmanship is protected by the convention and thus provides an important conceptual basis for treating luxury craft production as an example of cultural heritage, therefore supporting the argument that this type of craft production requires the protection of law through legal means beyond commercial IP laws.
France is a leader in these efforts. The Comité Colbert, which represents the top French luxury houses, has successfully lobbied for the passage of laws which provide legal protection of luxury craft production under the term “cultural heritage” and has lobbied for fiscal incentives to restore traditional workshops under the Law on Patronage of 2003. The Musée Yves Saint Laurent, the archives of Hermès, and the regular exhibition retrospectives at the Palais Galliera have institutionalised the luxury garment industry as a cultural heritage industry, which not only enhances the prestige of the brand, but also provides more compelling arguments to extend the legal protection of luxury craftsmanship.
In India, the GI scheme for luxury crafts has been partially developed through references to heritage, with the Ministry of Commerce suggesting that GI protection for Kanchivaram silk and Pashmina preserves artisan traditions—though it is usually large weaving cooperatives who benefit commercially from GI protection, not the artisans themselves. The heritage argument therefore serves to create an illusion of the provision of legal protection for a primarily commercial purpose. This rhetorical move draws on deep historical precedents in the royal manufactory system.
It is not obvious how the luxury brand can be classified legally as both a cultural institution and a commercial enterprise. If luxury houses are indeed custodians of cultural heritage, then they are entitled to access to greater levels of intellectual property protection from the state, as well as state support and exemptions from certain elements of competition law, than commercial actors could claim. However, this classification is available only to those entities that have sufficient resources and sophistication to further advance their classification. The law’s openness to the heritage argument can create a two-tiered system in which established luxury conglomerates have cultural legitimacy, while up-and-coming luxury providers from developing economies—such as India, China and West Africa—are treated under the commercial framework of intellectual property law.
VII. Critical Analysis
A. Is Modern Luxury Law a Continuation of Historical Privilege?
The key analytical assertion in this paper is that contemporary IP laws carry out, in structurally similar ways, the exclusionary role once served by sumptuary laws. This argument has been made clear by Barton Beebe, who argues in his seminal paper “Intellectual Property Law and the Sumptuary Code” that trademark law creates the same social and economic divisions as sumptuary laws did through protecting brand identities and exclusivity.
There are a number of functional continuities between these two systems. First, both systems define what constitutes luxury by limiting access to some class of goods: sumptuary laws did so by prohibiting access to certain goods based on the social class of the purchaser, while IP laws do so by providing the right-holder with a monopoly on using the IP that they own, making true luxury items unaffordable or inaccessible to many different people. Second, both systems create a social construction of meaning about material property through the use of law: the medieval statute providing that only nobility may wear purple silk and the Louboutin holding that red soles indicating luxury is determined by law; hence the law creates a social understanding of luxury by providing for legal status. Third, both systems create an advantage for established producers versus new entrants: guilds and royal manufacturers had no interest in creating a system that helped new entrants be competitive, just as large luxury brands today have no business interest in creating a system to help new luxury brands become competitors and dilute the social exclusivity they rely on to justify charging premium prices for their products.
Nonetheless, it is important not to exaggerate the continuities between sagas. Sumptuary law was explicitly based on status; nobles could claim superiority to commoners in terms of sumptuary law as stated in the sumptuary law text itself. Modern intellectual property law is surface neutral in that any producer can apply to register a trademark, and any product can be subject to geographical indication protection. In contrast, the exclusionary effects of luxury laws today are structural instead of stated, with the exclusion occurring through price mechanisms and monopolistic legal rights instead of through definitions or rules of exclusion by class. This structural difference is significant for normative assessment because the reproduction of socially defined hierarchies through price is more difficult to challenge from both a legal and political standpoint than the reproduction of social hierarchies through explicitly defined class distinctions.
B. Consumer Welfare Versus Prestige Protection
The conflict between protecting a luxury brand’s prestige and ensuring consumers get value from their purchases is especially seen in the context of dilution claims. Anti-dilution laws safeguard against dilution of a brand’s reputation by using various means to protect associated values, even if the use doesn’t cause confusion to any consumer. Raustiala and Sprigman argue that in the fashion design sector, a lack of strong intellectual property law allows for the acceleration (through rapid knockoff production) of fashion trends, and there is an increased consumer demand for multiple differentiated goods based on those rapid style changes (fashion piracy paradox).
When this idea is expanded to luxury brands, it becomes clear that the social costs associated with anti-dilution laws protecting luxury brand common owner name/brand are likely greater (due to blocking competitors from competing through use of similar/common names/brands) than the benefits from protecting the luxury manufacturer’s established brand image. The question isn’t whether there are social costs or benefits associated with the legal anti-dilution protection of luxury brands, but rather whose interest does it really serve? Is the legal anti-dilution protection designed to help brand owners; to support affluent customers who place a high premium on the exclusivity conferred on them by way of the legal anti-dilution protection; or to help broader sections of society/customers whose consumer choices will be limited by the existence of legal ant-dilution protection?
C. The Digital Era and New Challenges
Today’s legal systems face new challenges due to the advent of virtual fashion, NFTs and metaverse retail environments that highlight their categories’ vulnerability to change. One example is the New York District Court case of Hermès International v Mason Rothschild (SDNY 2023) involving the ownership and trademark protection of MetaBirkins (digital representations of Hermès’s Birkin bags created using multiple different types of virtual fur). This case posed important questions that traditional IP law does not answer, such as whether luxury prestige can exist in a digital form, whether a brand’s social context can be represented with digital art and whether trademark law can be used to exclude people from using or selling virtual goods.
Under the Digital Services Act 2022, the EU now places obligations on digital platforms to remove illegal content from their service (e.g. counterfeit goods), creating an entirely new responsibility for luxury brands to enforce their rights in the digital market against infringers. However, even greater than the issue of enforcement is the issue of ontology, where in the digital age, physical products and representations of those products are converging, so the legal framework for determining ownership of intellectual property is changing drastically. As a result, luxury brands must be understood in the 21st Century not simply as marks attached to a physical product, but rather as an intricate semiotic system, and the law will need to adapt to preserve that integrity in both the physical and digital environments.
VIII. Recommendations
Based on the above analysis, the following recommendations come forward and are observed with respect to legal reform and policy development.
There should be a principled limitation on the dilution doctrine; allowing the protection of luxury prestige in the absence of consumer confusion will create an indefinite monopoly over social meanings. There should be a clearly articulated framework set up by legislatures and courts when determining whether or not the protection of a “reputation” or “distinctive character” meets the proportionality requirements necessary to warrant its anti-competitive consequence; the Coty decision is an appropriate model to draw upon to develop a proportionality analysis.
The extension and reform of GI (geographical indication) law should provide benefits directly to artisan producers and not be exclusively to the benefit of large cooperatives/conglomerates. In the specific case of GI law in India, the legislation should be furthered and supplemented by provisions that require sharing the premium generated as a result of geographic indications with the crafts persons that gave rise to the value of the geographical indications.
Competition authorities in the EU and the UK should be more actively and “robustly” be engaged in assessing the justification of luxury distribution agreements as they relate to “luxury image” with a view to addressing their legality based on an assessment of whether there are legitimate reasons for these restrictions based on quality. In the Coty decision, the court provided a broad endorsement of luxury image-based restrictions; therefore, the post-Brexit UK competition law is well positioned to develop a more nuanced approach.
Finally, putting forth the heritage argument made by luxury brands in the regulatory arena, there must be a higher degree of critical legal evaluation to ascertain if heritage status will result in any legal benefits. Heritage status should be based on the question of how it would benefit society as a whole, i.e., the welfare of artisans, ensuring the public’s access to heritage collections, and providing genuine cultural education as opposed to simply having been present for a long time or being at the top of a given market.
Second, as luxury brands move into the meta verse, the regulation of luxury NFTs and virtual fashion must be according to new legislation. Neither trademark law (Hermès v Rothschild) nor current design rights can adequately deal with the wide range of complex issues regarding authorship, originality, and identity which arise from luxury brands’ entrance into the meta verse. Ideally, a uniform international system of law would be adopted through WIPO instead of having a disparate collection of national judicial systems.
IX. Conclusion
The conclusion reached in this paper is that luxury is largely a legally defined category through the long history of how law has created the category of luxury as well as how law has protected the prestige of luxury through time, from the medieval English sumptuary laws to the modern trademark dilution doctrines in the EU and US. Legal systems have had two main roles in defining and regulating the prestige of luxury, but they have also served to define and regulate social distinctions ever since, beginning with the guild marks that identified Worshipful Company silk from inferior copies, to royal warrants that increased the status of Gobelins tapestries over the production from unlicensed ateliers, to the trademark registrations that permit Hermès to prevent competitors from using its orange colour. Thus, law has created the category of luxury by defining and enforcing the boundary between the original product and the imitation; between prestigious products and ordinary products.
There are both descriptive and normative implications of this analysis. From a descriptive perspective, there is little doubt that the current framework for intellectual property is far from a neutral mechanism of the marketplace, but rather it is a historical accumulation of potential prestige regulations that has built upon itself from its origins as royal privileges and guild monopolies. Historically, serious consideration must be given to the extent that this may change in way to create disproportionate effect of costs associated with the system of the luxuries: that being market inefficiencies, lack of accessibility to small businesses in luxuries and price perpetuation of social class distinctions in a society. The luxury goods market will grow, and the legal framework that underlies it will continue to be strengthened. Additionally, changes in how luxury goods are purchased (i.e., e-commerce) and increases in luxury goods sales in Asia, and the fact that cultural heritage is becoming more politically significant will create legal issues that are not fully addressed by the current legal framework. Therefore, legal scholars, practitioners and policy makers will need to recognize the fact that luxury goods are not naturally existing goods waiting to be legally protected; rather they are a legally constructed social institution’s need to be governed critically and with a politically active mindset.
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