End of the road for cheap replicas?

An advantage gained by a “consequential association” with a well-known mark can be sufficient to amount to trade mark infringement, according to an advocate general’s opinion in a case involving L’Oreal products.

In L’Oreal SA v Bellure NV, L’Oreal claimed a manufacturer of cheap perfumes had infringed its trade mark by selling replica perfumes intended to smell similar to those of the famous brand, in packaging intended to “give a wink of an eye” to the L’Oreal products. The defendant also used the names of L’Oreal perfumes in comparison price lists to indicate which famous perfume its cheaper versions were supposed to replicate.

Geoff Steward, partner at Macfarlanes LLP says: “Advocate General Mengozzi’s opinion on trade mark dilution in free-riding cases, if followed by the European Court of Justice, will sound the death knell on lookalike products. He has drawn a key distinction between the benefit a potential infringer receives from using a similar sign, and the harm a trade mark owner may suffer. Even without any economic harm to the trade mark owner, where the only purpose of the use of the lookalike is to exploit the reputation of the market leader in order to benefit and promote the sale of the lookalike that will confer an unfair advantage and amount to trade mark infringement.”

Where a trade mark has a reputation, its owner may challenge any sign which, without due cause, would take unfair advantage or would be detrimental to the distinctive character or repute of its mark. The key issue is what amounts to “unfair advantage” or “detriment”.

Advocate General Mengozzi suggests that a “consequential association” with a well-known mark can be enough to infringe trade mark laws.

Steward says the advocate general differs from the previous approach of the courts, by taking the view there does not need to be an effect on the economic behaviour of consumers in order to show “unfair advantage”.