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ECJ ruling: L'Oreal v Bellure: when does an advantage become Unfair?

Written by Paul Bicknell on 21 June 2009

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The much awaited decision of the European Court of Justice (ECJ) has finally been reached. This case has concerned a comparative advert the message in the advert was in essence; our fragrances smell a bit like L'Orea's. The advert listed the particular fragrances next to the defendant's so as to illustrate an olfactory similarity.

There were two points argued by L'Oreal the first, was that L'Oreal does not agree with the use of their word-marks in the comparative list and secondly, L'Oreal disagreed with the packaging and words used by the defendant for their fragrances.

At first instance the court found that the defendants had infringed the claimant's word-marks in the comparative list, and the packaging of the defendant's fragrances infringed two of L'Oreal's packaging-marks, namely the La Valeur and Pink Wonder fragrances.

The Court of Appeal had to address whether L'Oreal could prevent the defendant from using L'Oreal's trade names in the list where no detriment was caused but, where the defendants had gained a commercial advantage and if there was such an advantage, was that advantage "unfair" within the meaning of the Trade Mark Act 1994. The Court of Appeal also had to ascertain whether the defendant's packaging made a link to L'Oreal's, and if so whether that link was enough to establish an unfair advantage.

Jacob LJ answered the two issues in the negative; however, the judge referred the case on the ECJ - the importance of this reference was that it would give the ECJ another chance to clarify matters concerning the meaning and extent of the dilution provisions in directive 89/104 as amended by directive 2008/85 particularly clarification as to the meaning and extent of the words: "unfair advantage" and when an advantage becomes "unfair".

The ECJ stated: "an advantage taken by a third party of the distinctive character or the repute of the mark may be unfair, even if the use of the identical or similar sign is not detrimental either to the distinctive character or to the repute of the mark or, more generally, to its proprietor".

The court went to explain when that advantage becomes "unfair" within the meaning of directive 89/104:

"In order to determine whether the use of a sign takes unfair advantage of the distinctive character or the repute of the mark, it is necessary to undertake a global assessment, taking into account all factors relevant to the circumstances of the case, which include the strength of the mark's reputation and the degree of distinctive character of the mark, the degree of similarity between the marks at issue and the nature and degree of proximity of the goods or services concerned. As regards the strength of the reputation and the degree of distinctive character of the mark, the Court has already held that, the stronger that mark's distinctive character and reputation are, the easier it will be to accept that detriment has been caused to it. It is also clear from the case-law that, the more immediately and strongly the mark is brought to mind by the sign, the greater the likelihood that the current or future use of the sign is taking, or will take, unfair advantage of the distinctive character or the repute of the mark or is, or will be, detrimental to them."

The court went to find that "where a third party attempts, through the use of a sign similar to a mark with a reputation, to ride on the coat-tails of that mark in order to benefit from its power of attraction, its reputation and its prestige, and to exploit, without paying any financial compensation and without being required to make efforts of his own in that regard, the marketing effort expended by the proprietor of that mark in order to create and maintain the image of that mark, the advantage resulting from such use must be considered to be an advantage that has been unfairly taken of the distinctive character or the repute of that mark".

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