CTM Court rules on use of comparison lists for smell-alike perfumes

The Community Trademark Court Number 1 has upheld claims of trademark infringement and unfair competition in a case involving the use of ‘comparison lists’ to commercialise smell-alike perfumes.

In May 2012 Carolina Herrera Limited, Puig France SAS and Antonio Puig SA, which are all part of the Spanish perfume and fashion group Puig, filed a lawsuit before the Spanish Community Trademark Courts against Equivalenza Retail SL and Cataleg de Serveis Integrals SL for trademark infringement and unfair competition.

The defendants were in charge of the Equivalenza chain of stores, which commercialised perfumes that allegedly smelt like well-known fragrances. In order to offer, promote and advertise its products, Equivalenza made use, directly or through its franchised shops and on the Internet, of the registered trademarks of the well-known perfumes allegedly being imitated, mainly through comparison lists. Comparison lists are brochures that link the numerical references of the smell-alike perfumes with the trademarks of the original perfumes. Among other well-known perfume trademarks, Equivalenza made use of several trademarks belonging to the Puig group, such as CAROLINA HERRERA, 212, PACO RABANNE, BLACK XS, 1 MILLION, LADY MILLION and NINA RICCI.

Carolina Herrera and Puig France, the owners of the above-mentioned trademarks, claimed trademark infringement, while Antonio Puig, the distributor of the perfumes in Spain, claimed unfair competition.

In its judgment of January 28 2014, the Community Trademark Court Number 1 upheld both claims.

As regards trademark infringement, the court held that such use of the plaintiffs’ trademarks, which had been proved to be well-known in various EU countries, constituted infringement of the plaintiffs’ exclusive rights conferred by Article 9(1)(c) of the Community Trademark Regulation (207/2009) and the corresponding provision under national law, Article 34(2)(c) of the Spanish Trademarks Act (17/2001).

The court considered that the public would establish a link between the well-known trademarks and the smell-alike perfumes - according to the court, the defendants wanted consumers to make this link since they presented their perfumes as smell-alike fragrances. This took unfair advantage, or exploited the reputation, of the well-known trademarks.  

In this context, the court declared that the use of the plaintiffs’ trademarks could not rely on any of the limitations on ius prohibendi (Articles 12 of the Community Trademark Regulation and Article 37 of the Trademarks Act), notably on use of the trademarks for purely descriptive purposes. The court thus rejected Equivalenza’s main defence. 

The court based this interpretation on the landmark decision of the Court of Justice of the European Union (ECJ) in L’Oréal v Bellure (Case C-487/07), which also concerned the commercialisation of perfume imitations (some smell-alike products did not imitate the packaging and bottles of the original perfumes, such as in this case) by using comparison lists. The court reasoned that the defendants’ use of the plaintiffs’ trademarks was not necessary to indicate the intended purpose of Equivalenza’s perfumes, nor was it a descriptive indication of the products’ characteristics. It added that, in contravention to the requirements of the limitations on ius prohibendi, such use was not in accordance with honest practices, since it created a link with the well-known trademarks so as to take advantage of their prestige and recognition in the market.

With regard to the unfair competition claim, the court confirmed that Antonio Puig had standing to sue as it offered, distributed and sold perfumes in Spain under the trademarks of Carolina Herrera and Puig France - this had been proved by the commercial invoices filed in the proceedings, and the existence of a written distribution contract was not necessary.

On the merits, the court held that, in line with its reasoning on trademark infringement and the relevant case law (in particular the L’Oréal v Bellure decision, as well as certain Spanish decisions in similar matters where the courts had considered only the unfair competition perspective), Equivalenza’s use of the well-known trademarks was unlawful because it constituted unfair comparative advertisement. The court was of the opinion that Equivalenza was presenting its smell-alike perfumes as imitations or replicas of the perfumes bearing the original trademarks and taking unfair advantage of their reputation, thereby infringing Article 10 of the Spanish Unfair Competition Act (3/1991), in accordance with Directive 2006/114 on Misleading and Comparative Advertising, as well as Articles 12 and 18 of the Unfair Competition Act, which prohibit the exploitation of the reputation of third parties and any advertisement considered illegal under advertising law, respectively.

As a result, the court held that Equivalenza was guilty of both trademark infringement and unfair competition, and ordered that the defendants:

• cease offering, advertising and promoting smell-alike perfumes making use of the plaintiff’s trademarks;
• remove and destroy all promotional and advertising materials where such trademarks were being reproduced; and
• refrain from supplying such materials to their chain of stores.

The court stressed that the defendants were liable for offering and advertising, directly or through the shop owners of the Equivalenza network, perfumes making use of the plaintiff’s trademarks. This was irrespective of the fact that, as alleged by the defendants, this business model had been inherited from a previous partner - as a company acting in the market, Equivalenza was obliged to verify the lawfulness of its activities.  

The court also ordered Equivalenza to pay damages to the plaintiffs and to publish the decision, in view of the well-known character of the trademarks and the fact that the infringement had been prolonged and widespread (ie, through multiple stores and on the Internet).

This decision is important since it is the first time that a Spanish court has ruled on the use of original trademarks to advertise smell-alike perfumes since the ECJ’s decision in L’Oréal v Bellure. The decision is not only in line with L’Oréal v Bellure (ie, it protects the holders of well-known trademarks against a use that, far from being descriptive, takes unfair advantage of the reputation of the marks), it also offers a second level of protection through the unfair competition laws, thereby safeguarding the interests of traders and the legality of advertisements.

Carlota Viola, Grau & Angulo, Barcelona