Comparative advertising causes a stink in the Court of Appeal
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In L'Oréal SA v Bellure NV ( EWCA Civ 535, May 21 2010), the Court of Appeal of England and Wales has held that using a famous brand name to compare a characteristic of an otherwise legitimate copycat product was unlawful. The court found itself bound by the earlier ruling of the European Court of Justice (ECJ) on trademark and comparative advertising in L'Oréal v Bellure (Case C-487/07) (for further details please see "ECJ clarifies the meaning of 'unfair advantage' in smell-alike case").
The court held that the ability of advertisers to make comparisons to products protected by famous brands may be limited by a decision which effectively prevents certain truthful statements incorporating another's trademark being made unless for "purely descriptive purposes", which would not include use in advertising. Therefore, most comparative adverts for 'imitation' or 'replica' products which reproduce characteristics of well-known branded products (such as smell or taste) may now fall foul of trademark law and breach the Comparative Advertising Directive (97/55/EC).
The judgment also appears to suggest that the effect of the ECJ's judgment on the meaning of "taking unfair advantage" of the reputation of a trademark is potentially so broad so as to forbid any form of "free-riding", regardless of whether the brand owner has suffered any harm or whether there is evidence of any particular unfairness.
Further, the judgment highlights the very generous protection now afforded to well-known brand owners to clamp down on rival copycat products, look-alikes or supermarket own brand products.
However, the decision was made begrudgingly by the Court of Appeal, which delivered a scathing condemnation of the ECJ's approach, arguing that it goes against free competition and free speech. Jacob LJ made clear that he would have made the opposite decision if not constrained by EU law, describing the effect of the decision as amounting "to a pointless monopoly. But my duty is to apply it". He thus urged reform of the law.
Therefore, while the decision is a powerful one for brand owners, appearing to give those with well-known brands significantly broader protection against the use of their trademarks in competitor's advertising, advertisers are likely to fight it - and it looks like they will have the support of at least one important member of the UK judiciary. EU trademark law is currently under review by the Max Planck Institute on behalf of the European Commission, which may well take note of Jacob LJ's passionate judgment.
This case was brought by L'Oréal SA, the owner of various fine perfume brand names (eg, Trésor and Miracle), against Bellure NV and other companies which produced smell-alike perfumes marketed in look-alike bottles and packaging. In order to inform retailers as to what their perfumes smelt like, the defendants deployed comparison lists which simply listed the L'Oréal brands besides the names of the corresponding smell-alikes. Asserting that its trademarks had been infringed, L'Oréal challenged the look-alike bottles and packaging, as well as the comparison lists. This appeal concerned only the particular comparison lists, which have now been found unlawful.
The case has been running since 2006, when it was heard in the UK High Court, after which the outcome was appealed to the Court of Appeal, which referred certain questions of law to the ECJ. The ECJ's judgment was handed down in June 2009, and the results of the Court of Appeal's application of that judgment - effectively the final word - is what was handed down on May 21.
Joel Smith, Rachel Montagnon and Darren Meale, Herbert Smith LLP, London
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