UK: A Case Of Look-Alikes And Smell-Alikes

On the 4th October 2006, the English High Court handed down a judgment which appears to make it easier for trade mark owners to prevent so-called look-alike products.

The L'Oreal Group is a manufacturer of high quality perfumes and other beauty products. Among its global brands are L'Oreal, Lancôme and Gariner. Many of L'Oreal's products are aimed at the luxury perfume market. In the case at hand, L'Oreal complained that the defendants, a Belgian company called Bellure NV, Starion International Limited and Malaika Investments Limited imported, marketed and distributed a range of perfumes in the UK, which were both smell-alikes and look-alikes of its Tresor, Miracle, Anais Anais and Noa ranges.

The marketing of so-called smell-alike perfumes has been a feature of the UK perfumes market for many years. When a brand owner wishes to launch a new fragrance it will issue a 'perfume brief' to one or more fragrance houses. It will present the concept and usually indicate the family of fragrances to which the new perfume is to belong. The brand owner will usually identify an existing perfume which will form a benchmark to which the new fragrance will be marketed and generally this benchmark fragrance is one produced by a competitor.

There are other firms who not only use competitor's products as benchmarks, but deliberately mimic the smell of leading perfumes. It was accepted by L'Oreal that UK copyright law does not prevent so-called smell-alike products of the like covered by this case. However, L'Oreal also alleged that the packaging of the defendants products also mimicked the 'look' of its leading brands and also that the defendants made illegitimate use of its registered trade marks in so-called comparison lists.

Although the defendants claimed that it was not company policy to distribute comparison lists externally indicating that its products smelled like certain named L'Oreal brands, it was apparent that this policy was widely ignored. A security consultant acting on behalf of L'Oreal had been told that the defendant's products ‘smell like the originals’. Furthermore, the consultant had been supplied with a list of the defendant's products, alongside which the original L'Oreal's brand names had been written in manuscript.

Section 10(1) of the Trade Marks Act 1994 states as follows:-

However, Section 11(2) (b) of the Act provides as follows:-

The defendants argued that since smells are difficult to describe in words, a comparison which uses the name of the ‘benchmark’ perfume to describe the smell of another e.g. Pink Wonder smells like Miracle is an indication of the characteristics of the goods (Pink Wonder) was legitimate.

However, the court held that although such use of a brand name may describe certain characteristics of the goods concerned, the use of L'Oreal's trade marks was not in accordance with honest practices in commercial and industrial matters. The use of registered trade marks in the comparison lists of the defendants essentially 'free rode' on the back of the reputation of L'Oreal's well known brand names. Accordingly, the defendants defence was rejected, and they were found to infringe L'Oreal's trade mark registrations under Section 10(1) of the Trade Marks Act 1994.

It should be remembered in the case at hand that the defendants did not use any of L'Oreal's brand names on the products themselves, nor marks which that the court held were confusingly similar. L'Oreal, however, alleged that the packaging of the defendants products were sufficiently similar to the corresponding L'Oreal product to cause confusion in the marketplace and essentially ‘piggy backed’ on L'Oreal's reputation. A number of the trade mark registrations upon L'Oreal relied upon in this case consisted not only of simple word marks but registrations for the packaging itself.

Section 10(2) (b) the Trade Marks Act states as follows:-

The court found that no one consumer had been confused into thinking that the defendant's products were indeed those of L'Oreal. There was in essence no confusion as to trade origin or any likelihood of confusion. As a result L'Oreal's claims under Section 10(2) (b) failed.

Furthermore, L'Oreal's common law action under passing off also failed. It will be remembered that for a passing off claim to succeed the so-called 'holy trinity' must be established.

1. that L'Oreal had goodwill in the business associated with it branded perfumes,
2. that the defendants misrepresented their products as those of L'Oreal, and
3. that L'Oreal's business would be damaged or is likely to be damaged by the defendant's actions.

Although the court found that L'Oreal had significant goodwill in the business associated with it perfumes, where L'Oreal's passing off case failed was under the misrepresentation claim. Although the tort of passing off has developed over the years, essentially the tort prevents one trader passing off his goods as those of another and the essential component is still that a consumer would be misrepresented into thinking that a particular product was associated, authorised or was indeed that of the trade mark owner. The court found that no consumer would be confused into thinking that the defendant's products were L'Oreal's, even though some of the defendants packaging was obviously based on the look of L’Oreal’s products.

There one might have assumed that the case would have been concluded. However, L'Oreal also alleged that a number of it’s registered trade marks were reputable trade marks and thus the defendants actions were contrary to the provisions of Section 10(3) of the Trade Marks Act which states as follows:-

There are three requirements under this head:

1. similarly between the sign and the mark;
2. the existence of a reputation of the mark; and
3. 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.

It will noted that Section 10(3) in contrast to Section 10(2) does not mention the word 'confusion'.

In Sabel BV v Puma AG, the ECJ identified three kinds of possible links between a mark and a sign. They were:

The court held the first two categories is a necessary condition for infringement under Section 10(2) of the Act. A link falling within the third category is insufficient for infringement under that section. However, a link falling within the third category is sufficient for infringement under Section 10(3) of the Act. It is important once again to note that the court found that confusion is not necessary to be proved to sustain a claim under Section 10(3).

The court held that L'Oreal's registered trade marks did have a reputation in the marketplace. So were the defendant's signs similar to those of L'Oreal's registered mark and did the defendants actions takes unfair advantage of or were detrimental to the distinctive character of the registered marks?

Crucially in the defendants evidence it was admitted the defendants packaging gave:-

The commercial purpose behind this was:-

It was also noteworthy that each design that the defendant put in evidence was identified by certain characteristics (date, job number etc.,.). The most significant feature, however, was that the name of L'Oreal fine fragrance products appeared in a box named 'K/OFF', which the defendant confirmed stood for 'knock off'. Therefore, there seemed little doubt about the defendant's motives in their actions.

The court applied a five part test to the question of whether infringement had occurred under Section 10(3).

1. Was the similarity between the packaging deliberate? The packaging of the defendants deliberately ‘winked at’ at L'Oreal's brands. Although the court accepted that the defendants had attempted to avoid infringement under the Act, they had ‘sailed too close to the wind’ and at times ‘had capsized’,
2. Were the plaintiff's brands good sellers? L'Oreal's brands were good sellers, otherwise the defendant would not have picked them to mimic,
3. Did the degree of similarity because the defendants packaging and that of the plaintiff enable the former to sell their products at a higher price? The degree of similarity in packaging enabled the defendants to charge a higher price than could normally have been expected for their products,
4. Did the defendant's products directly benefit from the advertising efforts of the plaintiffs? The defendant's products directly benefited from the advertising and promotion of L'Oreal's products,
5. Did the defendant's products sell because of the reputation of the plaintiff's brands? The defendant's products sell because of the reputation of L'Oreal's products.

Accordingly the court found that the defendants had in part received 'the reward for the costs of promoting, maintaining and enhancing a particular trade mark' and that the defendants products as a whole had taken unfair advantage of the reputation of L'Oreal's brands.

However, crucially the court found that the defendants had only infringed the plaintiff's trade mark registrations of their packaging as a whole. L'Oreal failed in its case based solely on word mark registrations, as the word marks that the defendants had used were not sufficiently similar for the purposes of Section 10(3). It was only when the plaintiffs packaging as a whole was taken into account that the defendants were found to 'sailed to close to the wind', given the similarity of their own packaging to that of L'Oreal.

What lessons are to be drawn from this case?

1. It is not necessary to prove confusion to establish infringement under Section 10(3) of the Act,
2. The defendant's motives and overall actions seem to have some bearing of the findings of the court under Section 10(3). The poor use of comparison lists, and the deliberate mimicking of L'Oreal products weakened the defendants position. It might be supposed that if the defendants had not been so obvious in their motives that infringement may not have been found. Therefore for traders wishing to 'compete' with the brand leader it crucial that they make sure that their actions surrounding the marketing of their products, for example in product presentations to buyers, and in ones use of language in presentations do not attempt to benefit from the reputation of the brand owner,
3. For the brand owners, it would appear that there is now a definite benefit from registering the packaging of product as a whole, as well as word marks. It should be remembered that L'Oreal failed to prove infringement under 10(3) on the basis of the word mark registrations alone.

Has this made look-alike products harder to pursue in the UK? Possibly, however there may be still ways for a cunning trader to avoid 'capsizing' in the words of the court and also trade mark owners must also be cunning enough to register distinctive packaging and give themselves a full arsenal of weapons to protect the hard won reputation in their brands.