NEWSFLASH
L'Oréal v. Bellure
The English Court of Appeal has again referred questions to the European Court of Justice on whether and if so, in what circumstances, comparative advertising constitutes trade mark infringement.
Earlier this year the context was price comparisons in mobile phone advertising (O2 v. Hutchison). The backdrop for the latest round of questions is smell-alike comparison charts (L'Oréal v. Bellure). The Court of Appeal is intent on getting answers and hopes that the ECJ might take the two cases together.
The facts
Essentially, the facts of L'Oréal v. Bellure were that the defendant replica perfume distributors used L'Oréal's perfume marks - TRESOR, MIRACLE, ANAIS-ANAIS and NOA - to indicate their corresponding smell-alikes.
The judgment - comparison charts
Jacob L.J. giving the judgment of the Court of Appeal, acknowledged the gulf that exists between the fine fragrance and replica perfume markets. The global costs of delivering a fine fragrance are 60 - 120 million euros. Luxury images are created and maintained through designer packaging and exclusive distribution concessions. The price of a fine fragrance is at least £60. In contrast replica perfumes are marketed in cheap packaging and through downmarket outlets. Prices vary between £1 - 4.
Using a comparison list undoubtedly allows the smell-alike to "free-ride" on the reputation of the brand leader but is this unfair?
Jacob L.J. says a touch of reality is called for. The public is not stupid and knows that replica perfumes are cheap imitations that do not originate from the perfume houses (the same could, of course, be said for counterfeits). In his Lordship's view, the lists merely serve as comparators (another example Jacob L.J. gives is identifying generics by reference to pharmaceutical brands). L'Oréal's marks are not being used to distinguish the defendants' products and there is no infringement. However, since the law is unclear, the guidance of the ECJ must be sought.
If the ECJ rules that the comparison lists infringe L'Oréal's trade marks, is there a defence?
Jacob L.J. believes that TRESOR etc. are being used to indicate the characteristics of the replicas (i.e., what they smell like), so that the defences are engaged. Moreover in his judgment, the defendants' uses are in accordance with honest practices not least because the fragrance houses themselves employ internal comparison charts, so that the defences apply. Nevertheless, additional guidance is needed from the ECJ on the meaning of taking unfair advantage of and presenting something as an "imitation" in the Misleading Advertising Directive by which it was accepted that honest practices must be judged.
The judgment - smell-alike, look-alike packaging
The second part of the appeal concerned the get-up of the defendants' smell-alikes, which was said to infringe L'Oréal's TRESOR and MIRACLE packaging trade marks (see below). The infringement claim was for the extended protection conferred on trade marks with a reputation (accepted here).
Jacob L.J. again thought there was no infringement. The smell-alike packaging was not confusing and although it "winked" at the branded products no harm was done to sales or the reputation of the latter. Clearly there was advantage - the defendants were able to charge higher prices for the look-alike replicas. But in Jacob L.J.'s opinion a "bright line" ruling was required from the ECJ on what was needed for an advantage to be also unfair. He disagreed with an earlier ruling of the OHIM in Mango v. Diknak that free-riding on its own sufficed.
Implications
Jacob L.J. has consistently pursued a hard line against claimant brand owners in comparative advertising cases where there is no likelihood of confusion or deception. He also refuses to extend the law of passing off into a general remedy of unfair competition. The third member of the Court of Appeal, Blackburne J., expressed a more sympathetic view. In his judgment the comparison charts were not in accordance with honest practices and should not be made lawful.
The ECJ will deliver its ruling in around 18 months or possibly earlier if O2 is decided first. In the meantime unless comparative advertising is misleading, or denigrates or damages a competitor's mark, it is unlikely to be preventable.
| Trésor v. La Valeur |
Miracle v. Pink Wonder |
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