English court gets sniffy about being led by the nose

UK Trade Mark 777757

The recent Court of Appeal case of L’Oréal SA & Ors v. Bellure NV & Ors [2010] EWCA Civ 535 is probably the best, recent example of an English court attempting to tweak the nose of the Court of Justice of the European Union (formerly European Court of Justice)(CJEU) that you are likely to find. In its ruling the Court of Appeal acknowledged that it is bound by the European Communities Act 1972 to give effect to judgements of the CJEU and applied the CJEU ruling in Case C-487/07, a referral to the CJEU from the Court of Appeal at an earlier hearing on the case.  However, the leading judgement of Jacobs LJ does an excellent job of showing how unfair and perverse the ruling of the CJEU is when applied to the facts of the case. 

The case involved a small Belgian producer of smell-alike perfumes and its UK distributors, who sold the cheap versions of well-known designer brands to low-end retailers in bottles and packaging that were not identical but were generally similar to the brands’ packaging.  However, the defendants advertised the cheap perfumes in comparative lists which indicated by designer brands which perfume the cheap version smelled like.

 The brands brought various passing off and trademark infringement claims against the defendants.  Certain questions relating to the interpretation of the relevant parts of the Trade Marks Directive were referred to the CJEU for a preliminary ruling, and as a result the CJEU determined that use of a registered trademark in a price and smell comparison list could be a trademark infringement and that stating in comparative advertising that a product of service was an imitation or replica of a trademarked product can be prevented by the trademark owner.

 There are some notable passages in the judgement that show where Jacobs’ sympathies lay:  

Does trade mark law prevent the defendants from telling the truth?  Even though their perfumes are lawful and do smell like the corresponding famous brands, does trade mark law nonetheless muzzle the defendants so that they cannot say so?

I have come the conclusion that the [CJEU]’s ruling is that the defendants are indeed muzzled.

There is no good reason to dilute the [right of traders to make honest statements about their products] in cases where the speaker’s motive for telling the truth is his own commercial gain.

The [CJEU]’s decision in this case means that poor consumers are the losers. Only the poor would dream of buying the defendant’s products.  The real thing is beyond their wildest dreams. Yet they are denied their right to receive information which would give them a little bit of pleasure; the ability to buy a product for a euro or so which they know smells like a famous perfume.

If a trader cannot (when it is truly the case) say: “my goods are the same as Brand X (a famous registered mark) but half the price”, I think there is a real danger that important areas of trade will not be open to proper competition.” 

We have to agree with Jacobs LJ.  We would find it extremely difficult to advise a manufacturer or distributor of an imitation or replica product or service on how to advertise its products or services in comparison with a registered trade mark product or service.  The CJEU does not make it clear what it means by “unfair advantage” in the relevant provisions, nor what is meant by the CJEU’s opinion that “riding on the coat-tails” of a trademark is prohibited.  Is it even possible to cite a registered trademark in a comparative advertisement after the CJEU ruling?

This is not what the Trade Mark Directive or Comparative Advertising Directive should be about.

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