‘Copycat’ perfumes infringe trade marks

The UK Courts last week handed down a ground-breaking decision in a high-profile trade mark infringement case (L’Oreal v Bellure, 04 October 2006), finding that ‘look-alike’ perfume packaging infringed L’Oreal’s trade mark rights.

For years, ‘look-alike’ products including perfumes have become more common and have more closely mimicked the style of leading brands. Whilst commercial considerations have often contributed to manufacturers’ reluctance to sue promoters of look-alike products such as supermarkets, there has also been some doubt as to the ability of English IP law to allow such claims to be successful. This case demonstrates that, in relation to registered trade mark rights with a reputation, the existing law is adequate to protect manufacturer’s rights against look-alike products, and may pave the way for future claims.

The Court held that a registered trade mark holder can prove infringement under section 10 (3) of the Trade Marks Act 1994 where similar packaging takes unfair advantage of the reputation of an existing brand, without the need to establish the likelihood that consumers would confuse the products. The case underlines the importance of registering trade mark rights, as the existing relevant law relating to unregistered trade marks, the law of ‘passing-off’, contains the more onerous requirement to establish that customers are likely to confuse the products. The principles demonstrated by this case will also be applicable in other industries where replica goods take advantage of the reputation of established brands.

L’Oreal accused the seven defendants of trade mark infringement under sections 10(1) and 10(3) of the Trade Marks Act 1994 and of passing-off in relation to replica perfumes that were produced and packaged to be reminiscent of established brands.

Section 10 (1) of the Trade Marks Act 1994 provides that 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) provides that a person infringes a registered trade mark if he uses, in the course of trade, a sign which is identical with or similar to the trade mark, where the trade mark has a reputation in the United Kingdom and the use of the sign, being without due cause, takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark.

In a decision that should provide greater protection to top-of-the-range perfume and beauty product manufacturers, Mr Justice Lewison found that some of the packaging of the ‘look-alike’ perfume infringed section 10 (3) of the Trade Marks Act 1994. He made it clear that the requirements to establish a claim under this head required: (i) similarity between the sign and the mark, (ii) the existence of reputation of the mark, and (iii) 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. A claim under this head, did not require proof of a likelihood of confusion. He ruled that perfume made in Dubai and sold in the UK by Bellure was sufficiently similar in its packaging to established L’Oreal brands to create an association in the mind of the average consumer. Bellure’s signs took unfair advantage of the character or reputation of the registered marks. Bellure had unfairly benefited from L’Oreal’s efforts in promoting, maintaining and enhancing its marks, and this constituted an infringement of L’Oreal’s trade marks.

The court also re-emphasised the established notion that a trade mark’s purpose is more than just to authenticate the origin of a product, it also serves to protect a valuable communication tool. Signs and marks on products can be similar if they invoke an association with another brand, even if the possibility of confusion is low.

In discussing whether signs take unfair advantage of registered marks under section 10(3), Mr Justice Lewison highlighted the following relevant considerations:

(i) the similarity between the look-alike products and the established brands was deliberate - “it “winks at” the packaging of the premium brand”;

(ii) the established brands were well-promoted and good sellers;

(iii) the similarity in packaging enabled the look-alike manufacturers to charge more for their products than they would have been able to otherwise;

(iv) the similar range of products benefited from the advertising and promotion of the established fragrances; and

(v) the similar products sold because of the reputation of the original.

The case also tackled the issue of comparative marketing in the industry, where cheaper fragrances are compared to more expensive brands to give consumers an indication of the sort of fragrance they can buy. Mr Justice Lewison found in favour of L’Oreal, concluding that Bellure had taken a "free ride" on the back of L’Oreal’s fine fragrances, infringing section 10 (1) of the Trade Marks Act 1994, by using the protected word marks on comparison lists or in response to customers' queries.

In a lengthy judgement, Mr Justice Lewison addressed and discussed a series of topical trade mark issues such as the relationship between trade marks and brands, the value of qualitative customer surveys, trade mark limitations and disclaimers, rights protected by a trade mark and the defence of ‘honest commercial practices’.

The perfume industry, like many other areas in the consumer products sector, has its share of imitation products and cheaper alternatives. This case should prompt manufacturers to take more care to ensure their perfumes and their packaging are not too similar and not too closely conceptually linked to established best-sellers and promote a change in the way in which perfumes are marketed by comparison to established brands. The case emphasises the importance of registering trade marks, as this will enable a trade mark holder to prove infringement without establishing a likelihood of confusion as required to establish passing off. On this latter point, in the context of the Gowers Review of Intellectual Property, the British Brands Group and Anti-Counterfeiting Group argue that ‘the law of passing off is simply not up to the task of preventing such [copycat] deception’ and needs to be modernised. Businesses would benefit if the law of passing off were brought in line with that of other European jurisdictions, so that unfair competitive practices are prohibited.