ECJ ruling in 'smell alike' case is victory for brand owners - Court of Appeal reluctantly follows ECJ guidance

The UK Court of Appeal has reluctantly confirmed the decision of the Court of Justice of the European Union (formerly the ECJ) in the case of L’Oreal and Bellure.   The ECJ’s decision was issued in 2009 and answered questions originally referred to it by the UK Court of Appeal.  The case was then returned to the UK Court for an application of the general principles provided by the ECJ to the facts of the case.

As background to the dispute, the case was brought by L’Oreal, Garnier and Lancôme.  L’Oreal Group brought trade mark infringement proceedings after Bellure and associated companies marketed their products in the UK by issuing retailers with comparison lists encouraging them to buy Bellure perfumes by comparing them to L’Oreal’s well known Tresor, Miracle, Noa Noa and Anais Anais perfumes, which possess a similar smell.  Bellure also used similar packaging to that used and registered by L’Oreal, in order to market its perfumes.

The UK Court referred questions to the ECJ to ascertain whether Bellure, through its use of similar packaging, was taking unfair advantage of the packaging and bottle trade mark registrations owned by L’Oreal.  In this regard, the ECJ ruled that the Court must make a global assessment, taking account of all relevant factors of the case.  These factors include the degree of reputation of the earlier mark, the degree of distinctiveness of the earlier mark, the similarity of the marks, the proximity of the goods/services and also the intention of the defendant.  Specifically, where a third party intentionally uses a sign that is similar to a well known trade mark to secure a commercial advantage and benefit from that trade mark’s reputation and power of attraction, this constitutes an “unfair advantage” and consequently amounts to trade mark infringement.  It is necessary to establish that there is a “link” in the mind of the relevant consumer - i.e. that the later sign brings to mind the earlier trade mark - although a link in itself is not enough.  Instead, it must also be shown that the link was created intentionally by the defendant to confer a commercial advantage.  In this case, the ECJ held that it is not, however, necessary for the owner of the infringed trade mark to establish confusion or damage in order to prove unfair advantage. 

The ECJ went on to give further guidance on the concept of “unfair advantage” in the context of the comparison lists.  In particular, it held that it is unlawful to present goods/services as imitations or replicas of goods/services bearing a protected trade mark or trade name.  As such, there is an unfair advantage and consequently an infringement under Article 5(2) where a company uses a well known trade mark to present its goods or services, or a characteristic of those goods or services (in this case the smell), as imitations or replicas.  In issuing retailers with comparison lists, Bellure presented its perfumes as imitations of L’Oreal’s perfumes; this gave rise to an unfair advantage and therefore infringed L’Oreal’s registrations. 

The judgment of the ECJ also clarifies the extent to which use of an identical mark for identical goods/services constitutes trade mark infringement where the mark is not being used as an indication of trade origin.  With regard to Bellure’s use of the comparison lists, the ECJ maintained that there was an infringement even though Bellure was not using the L’Oreal marks as an indication of trade origin.  Following the decision in Arsenal v Reed, the ECJ held that a trade mark owner had the right to prevent the use of an identical trade mark where such use jeopardised any of the functions of the trade mark.  The essential function of a trade mark is to indicate trade origin but there are other functions too.  Namely, the functions of guarantee of quality, communication, investment and advertising. 

In this case, the ECJ suggests that Bellure’s use of the L’Oreal trade marks was for the purposes of advertising and ruled that the referring court must decide whether such use affects any of the functions of the L’Oreal trade marks. 

The case was then returned to the Court of Appeal to apply the decision of the ECJ to the facts of the case.  The judgment was delivered by Lord Justice Jacob, who expressed his own misgivings about the conclusions reached by the ECJ on the grounds that such a verdict would be detrimental to freedom of speech and fair competition.  However, Jacob ultimately held that Bellure’s use of comparison lists did amount to trade mark infringement, on the basis that their use had gone beyond mere descriptive use and was liable to harm the advertising function of the trade mark.

The decision has the practical effect that there can be other aspects to essential function of the trade mark, namely marketing and advertising value, which can be damaged even where a consumer would not be confused as to the origin of the goods offered under the trade mark.

Stephanie Burns & Marisa Foster
Trade Mark Group