Today's European Court of Justice (ECJ) ruling in the L'Oréal smell-alike perfume case puts clear and strict controls on when an advertiser can use another brand owner's trade mark to promote their own products and services, says law firm Osborne Clarke.
Following a reference from the English High Court, the ECJ ruled that the Defendants' use of various of L'Oreal's well known brand names, such as TRÉSOR, took unfair advantage of the reputation L'Oreal has built up in its trade marks and infringed them.
The ECJ went on to rule that the Defendants could not, in their defence, claim their comparison list was permitted under comparative advertising rules as those rules not only prohibit comparative adverts that take unfair advantage of a trade mark's reputation, but also prevent the promotion of imitations or replicas by reference to the trade mark.
Theo Savvides, Head of Intellectual Property at law firm Osborne Clarke said:
"This ruling means any advert that goes beyond a straightforward comparison on objective and factual criteria could now fall foul of the law and leave advertisers open to a claim for trade mark infringement.
"Whilst we'll continue to see the likes of price comparison websites and supermarkets benefiting from the comparative advertising regime, as they appeal to the customer's search for good value and service, new entrants to market must be wary of comparing their products or their products' characteristics to those of established brands."
Advertisers have until now relied on a broad interpretation of the comparative advertising rules to inform how they can use another brand in a comparative advert. These comparative advertising rules were introduced by the EC to promote competition and provide better information to consumers.
However, today's ruling takes a much stricter view of those rules. It makes it clear that advertisers cannot use the comparative advertising rules to avoid a claim of trade mark infringement where they are deemed to have taken "unfair advantage" of the brand's reputation. It will not matter if the brand owner has not suffered a loss in sales – it will be enough if the advertiser has benefitted from the reflected glory that using a well-known name can bring. The ECJ also ruled that products manufactured to imitate or replicate another product cannot be promoted by using the brand being imitated; that prohibition is not merely intended to prevent counterfeits.
Theo Savvides, Head of the Intellectual Property at law firm Osborne Clarke said:
"Advertisers engaged in comparative advertising must now tread very carefully to stay on the right side of the law. The indication is that any move to gain a commercial advantage by the use of a famous trade mark or brand will automatically infringe that trade mark; and the comparative advertising rules will not help you.
"Any suggestion that an advertiser is deliberately attempting to ride on the coat tails of a famous brand will be frowned upon by the courts.
"This ruling will offer some comfort to brand owners that they can prevent the use of their trade marks in these circumstances. They will hope that when the case comes back to the English courts, they will take a firm hand with any comparative advertising that takes unfair advantage."
The Case - background
The case concerned a comparison chart that compared the smell of perfumes manufactured by Bellure with those of well-known L'Oréal brands such as Anaïs Anaïs and Lancome Trésor. L'Oréal sued Bellure and its distributors for trade mark infringement, including allegations that the comparison diluted the reputation of their trade marks. After hearings in the UK courts, the case was eventually referred to the ECJ by the UK Court of Appeal in late 2007.
The ECJ was asked to consider a number of questions. These included whether using registered marks in comparison charts of this kind constituted trade mark infringement, particularly where there was no negative effect on the brand owner's reputation or sales. The ECJ was also asked to consider whether the prohibition in the Comparative Advertising Directive on using trade marks on replica or imitation products applied in this case.
This ECJ ruling follows that in the O2v3 case in June 2008, which confirmed that so long as advertisers comply with the Comparative Advertising Directive, they can use their competitor's marks and not infringe them.
Date: 18 Jun 2009
