Sniffing an Imposter: Smell-Alikes Weighed in Perfume Case

Ask a brand-owner about look-alikes, and you’ll hear about copycats, rip-offs and even passing off. Ask a shopper, and you may hear the same—but if you show the pack you might instead hear, “it’s the same as brand X” or “just as good but cheaper.”

For brand owners, “me-too” products are an emotive subject since they are in essence an attempt to attract sales by taking advantage of the leading brand owner’s investment and reputation. They also often involve tricky customer-supplier relationships that make enforcement problematic.

More critically, however, consumers know the me-too phenomenon well and are often not confused in the least. On the contrary, they exploit it to their advantage by taking cues from packaging to identify leading-brand “equivalents.” Where consumers know the score, can a brand owner who does sue for trade mark infringement hope to succeed without proof of confusion?

 

L’Oreal Sallies Forth

This question was at the heart of the recent High Court decision in L’Oreal S.A., Lancome Parfums et Beaute & Cie. and Another v. Bellure NV and Others in October 2006 ([2006] EWHC 2355 (Ch).

The claimants were internationally famous perfume houses. The defendants made and sold “smell-alikes” whose scent was virtually identical to some of the claimants’ leading brands. Some were sold in packaging and bottles that imitated some of the features of the claimants’ packaging and bottles. In business papers to customers, some of the “smell-alikes” were expressly referred to as “knock-offs” of named brands.

The actions met with varying degrees of success. Most of the claims failed on the basis that the packaging and bottles were just different enough from the claimants’ earlier registered word and word and shape marks to avoid any likelihood of confusion. Indeed, there was evidence that consumers were not actually confused, although they did associate some of the copies with the originals and recognise that the similarities signalled that the copies were leading-brand equivalents.

Two claims failed on the basis of limitations and disclaimers in the registrations, that prevented the court from taking certain elements of the registered marks into account.

Two claims, however, succeeded. The first was based on registered trade marks for TRÉSOR as a word mark and as a label, and for TRÉSOR LANCÔME appearing on a distinctively shaped bottle that resembled an inverted ziggurat, which disclaimed “the right to the exclusive use of the device of a container.” The second was based on registrations for MIRACLE as a word mark, MIRACLE and LANCÔME on a label, and a 3-dimensional, double-walled bottle bearing the words MIRACLE and LANCÔME.

The TRÉSOR claim was directed against a smell-alike called LA VALEUR, whose bottle and packaging bore notable similarities to the TRÉSOR packaging and bottle. The MIRACLE claim was directed against a smell-alike called PINK WONDER, whose double-walled bottle was similar to the MIRACLE bottle, but whose packaging was quite different.

The judge held that infringement under these two claims succeeded. He found that there was no evidence of a likelihood of confusion. However, he considered that the LA VALEUR packaging and bottle, and the MIRACLE bottle, were sufficiently close to those of the claimants to establish a link between them in the mind of the average consumer. The earlier brands had undoubted international reputations. Drawing on OHIM’s decision in Mango Sport System Srl Socio Unico Mangone Antonio Vincenzo v. Diknah (Case R 308/2003-1, [2005] ETMR 5), the judge found infringement under S. 10 (3) of the Trade Marks Act 1994, on the basis that the defendants responsible for LA VALEUR and PINK WONDER effectively used

“the renowned mark as a vehicle for generating consumer interest.... The advantage…arises in the substantial saving on investment in promotion and publicity…, since it is able to ‘free ride’ on that already undertaken by the earlier reputed mark. It is unfair since the reward for the costs of promoting, maintaining and enhancing a particular trade mark should belong to the owners of the earlier trade mark in question.”

The judge additionally found infringement under S. 10 (1) based on use of the identical word marks TRÉSOR and MIRACLE in the defendants’ business papers distributed to retailers. The defendants could not hide behind the defence that they were merely referring to the claimants’ own products or using the names to describe characteristics of their smell-alikes, because those defences under S. 10 (6) and 11 (2) (b) required conduct in accordance with honest practices. The finding of “free-riding” precluded such honest conduct.

 

S. 10 (3): An End to Lookalikes?

The most important infringement findings in L’Oreal were based on S.10 (3), which reads:

“A person infringes a registered trade mark if he uses in the course of trade in relation to goods or services a sign which is identical with or similar to the trade mark, where the trade mark has a reputation in the United Kingdom and the use of the sign, being without due cause, takes unfair advantage or, or is detrimental to, the distinctive character or the repute of the trade mark.”

Few cases have succeeded to date under this provision, but those that have reached the courts have made it clear that success requires three elements: identity or similarity which is sufficient to give rise to a link in the mind of the average consumer; reputation; and detriment or unfair advantage.

Reputation and a mental link are frequently present in lookalike situations. Lookalikes naturally target the market leader, and their packaging is normally deliberately designed to trigger an association with it, and thus to increase sales. Free-riding on the reputation and investment in promotion of the leading brand is also part of the rationale: the me-too purveyor’s costs are kept down, but his sales are buoyed by someone else’s marketing efforts.

The finding in L’Oreal suggests that S. 10 (3) offers a strong weapon against look-alikes. The judge was strongly influenced by the deliberate similarities in packaging and bottles, the high level of advertising and promotion associated with the originals, the fact that the defendants could charge more for the copycat products because of the similarities, and indeed that they could only sell them because of the reputation of the original. Many of these aspects are apparent in the average lookalike case for products ranging from foods to motor vehicle parts.

 

Comment

The decision in L’Oreal may signal new encouragement to brand owners against look-alikes.

It does not point to success against them all, however, indeed far from it. L’Oreal concerned premier, luxury brands with a high level of advertising. Mere market leaders whose sales are naturally high as a result of longevity or a lack of competitors may not meet with the same result, since the “free-riding” argument will pack less punch, and “me-too” purveyors may successfully argue that packaging similarities merely tell the consumer that the products are similar. Nonetheless, this decision contains much to encourage brand owners to take more aggressive action against look-alikes.

Equally important to note is the need for periodic reviews of trade mark protection. The claimants in L’Oreal would have scored a better result had they made timely re-filings for marks subject to old limitations and disclaimers that might have been avoided under current law and practice.

It remains to be seen whether aggressive action against look-alikes becomes more common in the U.K. Brand owners have typically been reluctant to sue supermarkets, the most common makers of look-alikes, on the grounds that the stores are their biggest customers. As a result, it is likely to be harder for many leading food brand owners to stop look-alikes where features of their packaging are already widely copied. If brand owners show less tolerance and the courts back them up, the “me-too” phenomenon may well begin to fade.