CTM Court of Appeal confirms that use of perfume trademarks to sell smell-alikes is unlawful

By a judgment of January 14 2015, the Community Trademark No 2 Court of Alicante had sentenced several companies belonging to the Saphir Group, together with a supermarket chain (client of the group), for trademark infringement and unfair competition in an action brought by companies of the perfume and fashion group PUIG (Carolina Herrera Limited, Puig France SAS, Gaulme SAS and Antonio Puig SA).

The lawsuit centred on the defendants’ use of trademarks such as CAROLINA HERRERA, NINA RICCI, PACO RABANNE or JEAN PAUL GAULTIER to promote, offer and market their perfumes, which were supposedly ‘smell-alikes’ of the plaintiffs’ perfumes.

In particular, the Saphir Group made use of the plaintiffs’ trademarks in comparison lists linking their smell-alike perfumes to the claimants’ trademarks; the lists were supplied to the retailers that distributed the products at the points of sale. Meanwhile, the retailers sold the perfumes of the Saphir Group on their premises by using labels placed on the displays or shelves which also reproduced the plaintiffs’ trademarks.

The court declared that such use infringed the plaintiffs’ trademark rights, as it took unfair advantage of the distinctive character and the repute of the trademarks. It also declared that the defendants’ actions amounted to acts of unfair competition, as they took unfair advantage of another’s reputation, as well as unlawful comparative advertising.

The defendants appealed virtually all of the pronouncements of this ruling.

In a judgment of September 14 2015, Section 8 of the Alicante Court of Appeal, acting as Community Trademark Court of Appeal, confirmed the first instance decision in its entirety.

While this is not the first lawsuit in Spain regarding the recurring practice of using the perfume trademarks of third parties to market allegedly smell-alike perfumes, it is the first time, following the landmark judgment of the Court of Justice of the European Union of June 18 2009 in  L'Oréal v Bellure (Case C-487/07), that a Spanish Court of Appeal has ruled extensively on this topic, declaring that such acts constitute trademark infringement and unfair competition.

Among other things, the Court of Appeal found that the use of the claimants’ trademarks by the defendants constituted a use which the proprietors of those marks were entitled to prevent, as it impaired the function of communicating the reputation, prestige and goodwill inherent to the plaintiffs’ trademarks, which the Saphir Group sought to appropriate.

The court also stated that such use is not covered by the limitation of the effect of a trademark where use of a third-party trademark is made for descriptive purposes (in this case, the smell). The court argued that the reference to the plaintiffs’ trademarks:

1. was not the only means of providing information to consumers as to the type of fragrance offered (other means included testers, the promotion of products through samples, the description of the fragrance without referring to another party’s brand, as was the case on Saphir’s own website);

2. led to taking unfair advantage of the prestige and reputation of the trademarks; and

3. implied that the smell-alike perfumes were imitations or replicas of the original perfumes bearing the plaintiff’s trademarks.

All in all, the court considered that the plaintiff’s trademarks were being infringed because, even without a likelihood of confusion, there was a link between the plaintiffs’ marks and the signs used by the defendants, which took unfair advantage of the distinctive character and reputation of the trademarks.

Additionally, the court confirmed the existence of acts of unfair competition. According to the court, there was no doubt that the defendants presented their products as imitations or replicas of the plaintiffs’ perfumes, in contravention of the rules on lawful and fair comparative advertising.

It also confirmed that unfair advantage was being taken of the reputation of the claimants’ trademarks. It was the court’s opinion that the whole ‘smell-alikes’ business is based on the idea of offering products as imitations or replicas and using reputed trademarks to attract consumers and boost purchases.

Carlota Viola, Grau & Angulo, Barcelona