Smell of success

The decision in L'Oreal SA v Bellure NV strengthens the hand of brand owners against attempts to market copycat products

The Journal, December 2006, page 43

A landmark decision of Mr Justice Lewison in the High Court on 4 October 2006 ([2006] EWHC 2355 (Ch)) has been welcomed by brand owners as giving them much stronger protection against copycat look-alike and smell-alike products. The case firmly establishes s 10(3) of the Trade Mark Act 1994 as a useful tool for owners of famous brands wishing to establish trade mark infringement.

Brand strength

L’Oréal brought claims for trade mark infringement under s 10(1) and (3) of the Trade Marks Act 1994 and a claim for passing off against Bellure NV, who imported and distributed look-alike and smell-alike versions of Trésor, Anaïs Anaïs, Noa and Miracle perfumes. Bellure’s products were usually sold on market stalls and in discount stores with rival names such as La Valeur and Pink Wonder. Whilst Bellure did not use trade marks owned by L’Oréal on the bottles or packaging – the more usual form of trade mark infringement – the company produced goods in packaging similar to the established L’Oréal brands. L’Oréal argued that the only credible reason for this was to create an association in the minds of consumers deliberately to trade on the reputation and success of L’Oréal’s brands.

Bellure accepted that the bottle and packaging of the L’Oréal luxury brands were chosen as a “reference point” and that their bottle and packaging were intended to give “a wink” to existing brands. In addition, customer lists had been distributed displaying the more expensive L’Oréal products alongside the cheaper copycat products of Bellure.

Section 10(1) of the Trade Marks Act provides: “a person infringes a registered trade mark if he uses in the course of trade a sign which is identical with the trade mark in relation to goods or services which are identical with those for which it is registered”. Section 10(3) states that “use of a sign that is identical or similar to a registered trade mark that has a reputation in the UK amounts to infringement if the use takes unfair advantage of, or is detrimental to, the distinctive character or reputation of the mark”.

Double infringement

It was held that some of the packaging of Bellure’s products amounted to trade mark infringement under s 10(3). To establish infringement under this subsection required: (a) similarity between the sign and the mark, (b) the existence of reputation in the mark, and (c) either the taking of unfair advantage of the distinctive character or repute of the mark or detriment to the distinctive character or repute of the mark. Under s 10(3) there was no need to establish the likelihood of customer confusion of some association between L’Oréal and Bellure. The judge took a practical view, holding that the similarity between the look-alike products and the established brands was deliberate and they sold because of the reputation of the original.

Although the marks were not used on the copycat goods, the judge referred to the use of the brand on the comparison price lists. He held that the use of these marks on the lists (identical marks advertising identical goods) amounted to infringement under

s 10(1) on the grounds that L’Oréal’s marks were used to sell the smell-alike products. Whilst both claims under s 10(1) and 10(3) were allowed, the claim for passing off was rejected on the grounds that “as the law stands, the smell of a fine fragrance is not protected”. So a sweet smell of a trade mark victory, but common law goodwill is fragrance free!

On the scent of copycats

This case is significant because it is the first successful UK case brought u under s 10(3) of the Trade Marks Act and has been heralded as a significant move forward for trade mark owners wanting to protect their brands from copycats. The decision will no doubt be applied well beyond the perfume market and will be heavily relied on by owners of famous brands in the fight against copycat products, given the lack of unfair competition law in the UK. Brand owners spend very large sums of money promoting and protecting their brands and, as Mr Justice Lewison pointed out, it is not acceptable for others to “ride on” brands that have successfully made an impact in the market place.

In addition, the case emphasises the importance of trade mark registration, and demonstrates the advantages of protecting trade mark rights in this way rather than relying on the common law of passing off, where likelihood of confusion needs to be established. The case will also reignite the debate for the need for the common law of passing off to evolve and catch up with unfair competition regimes in the rest of Europe.

    Robert Buchan, Maclay Murray & Spens LLPL