Trade mark protection and imitations: the recent case of L’Oréal
Can the proprietor of a registered trade mark prevent an imitator from using a similar or identical trade mark to promote an imitation product? This was the issue considered by the European Court of Justice (ECJ) in a recent case brought by L’Oréal, the perfume manufacturer, against three companies which manufactured or sold imitations of its fragrances (Case C-487/07 L’Oréal SA and others v Bellure NV and others). The ECJ’s ruling strengthens the position of proprietors of trade marks, and makes it more difficult for others to market imitations using identical or similar trade marks.
L’Oréal’s imitators produced and marketed imitations of L’Oréal’s fragrances. The imitations, although sold under different names and at much cheaper prices, were marketed in bottles and packaging similar to those registered as trade marks by L’Oréal. L’Oréal argued that this amounted to an infringement of its trade mark rights, even though the similarity was not so great as to mislead the general public.
L’Oréal also objected to comparison lists which the imitators had produced in order to market their fragrances to retailers. In these lists, the imitators used fragrance names registered as trade marks by L’Oréal in order to indicate which of L’Oréal’s fragrances their imitations resembled. L’Oréal argued that this, too, amounted to an infringement of its rights in those trade marks.
L’Oréal won its case in the English High Court in relation to some of the imitations—those with bottles and packaging most similar to its own fragrances—and lost in relation to others. Both sides appealed. In considering the appeal, the Court of Appeal referred some questions concerning trade mark law to the European Court of Justice, because the legal provisions relied on by L’Oréal are transpositions into national law of European directives. It is the ECJ’s judgment responding to those questions that has recently been published.
Taking unfair advantage of a trade mark
L’Oréal argued that its imitators’ use for fragrances of packaging and bottles similar to those it had registered as trade marks constituted taking unfair advantage of the distinctive character or repute of those marks, as proscribed by the Trade Marks Directive (89/104 EEC, art 5(2)). The question for the ECJ was what ‘taking unfair advantage’ means: does an imitator take unfair advantage of a trade mark where its use of a similar sign gives the imitator an advantage but there is no likelihood of confusion or detriment to the proprietor?
The ECJ held that this does amount to unfair advantage. Having established a relevant similarity between the sign used by the imitator and the registered trade mark, the proprietor needs only to show that one of the following injuries has occurred: detriment to the trade mark’s distinctive character, detriment to its repute, or taking unfair advantage of its distinctive character or repute. These three points are separate, so that it is not necessary to show detriment to the trade mark’s distinctive character or repute to prove that unfair advantage has been taken.
The ECJ explained that the more immediately and strongly the imitation brings to mind the trade mark, the greater the likelihood that the imitator has taken unfair advantage of the mark. L’Oréal’s imitators’ use of similar packaging and bottles was intended to take advantage of the registered trade marks’ distinctive character and repute. The ECJ described this as ‘riding on the coat-tails’ of a registered trade mark, in order to benefit from its power of attraction, reputation and prestige, and exploiting the marketing effort made by the proprietor to create and maintain the mark’s image. Even when there is no likelihood of confusion or detriment, this would constitute taking unfair advantage of the distinctive character or repute of the trade mark.
Using a trade mark in comparative advertising
The ECJ then considered the imitators’ use of L’Oréal’s trade marks in the comparison lists. The Trade Mark Directive enables a proprietor to prevent a competitor from using any sign identical with the trade mark in relation to identical goods or services (art 5(1)). Where a sign identical to the trade mark has been used (in this case, the names of L’Oréal’s fragrances), there is no need for the proprietor to show any likelihood of confusion: it would be sufficient to show that one of the trade mark’s functions (such as guaranteeing the quality of the goods in question, communication, investment or advertising) would be affected by the imitator’s use. Only uses for purely descriptive purposes, satisfying all the criteria in the Misleading Advertising Directive (84/450/EEC (subsequently amended), art 3a(1)), would be allowed. Hence a proprietor can prevent a competitor’s use of a registered trade mark, even when the competitor’s use does not jeopardize the essential function of the mark (to guarantee the origin of the goods), provided that the competitor’s use affects one of the other functions of the mark, such as advertising.
Comparative advertising, imitations and unfair advantage
Finally, the ECJ considered whether the use of someone else’s trade mark in a comparative list constitutes taking unfair advantage of the mark. Does the Misleading Advertising Directive’s prohibition of comparative advertising of imitations or replicas of goods bearing a protected trade mark (art 3a(1)(h)) apply to any imitation, even if not counterfeit?
The ECJ held that an advertisement presenting a product as an imitation of a product bearing a trade mark is inconsistent with fair competition, and so any advantage gained by the advertiser would be unfair. Furthermore, the prohibition of comparative advertising of imitations applies not only to counterfeits, or to explicit imitations of a product as a whole. It also applies to imitations of an essential characteristic of a product (such as the smell of a perfume). Thus a proprietor is able to prevent an advertisement which implicitly evokes the idea of imitation or reproduction of a registered trade mark.
Significance of the judgment
L’Oréal’s case now returns to the Court of Appeal, which will apply the ECJ’s clarifications of the law to the case. The ECJ’s response is favourable to L’Oréal, though the Court of Appeal will need to apply it to each imitation on its facts. More generally, the ECJ’s judgment strengthens the hand of trade mark proprietors needing to take action against imitators seeking to profit from the goodwill associated with their trade marks.
Article posted: 2009-07-16