Lebanon: L'Oreal vs. L'Aureole Medmac vs. Medmak For Construction

The Commercial Court of Jabal Lebanon (The Third Initial Chamber) has issued a judgement under the decision No. 99/968 on the infringement of two trade names:

The court regarded L'AUREOLE as an imitation of L’OREAL and hence unfair competition. However, it regarded the lawsuit as baseless after the decision of the Defendant Company to change its name to AROMAVIE.

The judgement kept the right of the plaintiff to claim damages for the losses sustained. Foremost amongst the reasons for the decision:

The Court does not accept the justification of the defendants that they have changed their name and cancelled the registration of trademark "L'AUREOLE" to avoid any dispute with the plaintiff after using both of them for two years. The defendants would not have done that if they hadn't been convinced that there was a strong resemblance and imitation and that the plaintiffs are rightful in their claims.

The plaintiffs' claims have become baseless since the defendants have corrected the situation on their own. However, the plaintiffs still have the right to enforce their right by preventing the defendants from using the imitation trademark L'AUREOLE by obtaining a Court order to prevent any future dispute. The plaintiffs reserve the right to damages due to loss and damage sustained.

The court ordered cancellation of the trade name "Medmak for Construction" and for the defendants to stop using the name subject to a fine of US $ 100 for each day of delay and to pay L£ 8 million (approximately $5,300-00) as damages against the losses sustained.

Foremost among the reasons for the decision:

The defendants claim that Medmac Holdings Corporation have bought most of the shares of the plaintiffs (477 out of 480), therefore the companies are considered merged and accordingly the plaintiff loses its corporate identity and its right to maintain its trade name. This is because a merger must be under a legal document ratified by the general assembly.

The law does not specify a ceiling for share ownership by any partner. Not supporting the merger proves trade name infringement.

Non-registration of the trade name with the Trademarks Office is not a condition for its protection because the law protects trade names without any formality like filing.

The only condition for protection is registration in the pertinent commercial register. The plaintiffs' name is duly registered in the commercial register in Lebanon.

The trade name consists of two words: "Medmac" and "for Construction". The first is the trade name of the plaintiffs, and "for Construction" is just an addition to specify the line of operation of the defendants.

The use of a trade name, even if words are added to it, is an infringement. The court is competent to assess similarity between the two names in the eye of the consumer based on overall similarity not individual differences.

The addition of the phrase "for Construction" to the trade name does not make much difference between the two names. Therefore, there is misappropriation of trade name and confusion among the public as to the true identity of the company.

The difference in the areas where they operate is not an acceptable claim because it does not affect the trade name misappropriation. In fact, this misleads the consumer into believing that one of them is a branch company of the other.

In view of all the above, the defendants, Medmak for Construction, were regarded as having misappropriated the trade name of the plaintiffs, Medmac, and were ordered to to pay a fine of L£ 8 million (approximately $5,300-00) for losses and damages and unfair competition to the plaintiffs.

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