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Ad comparing perfume to L'Oréal's did not infringe trade marks, says Advocate General

A perfume manufacturer which created a list of famous perfumes its fragrances smelled like did not break EU trade mark law, an Advocate General of the European Court of Justice (ECJ) has said.11 Feb 2009

The opinion will inform the judgment of the Court, but commentators have said that they find it hard to assess its full implications because the opinion itself is hard to understand. One trade mark expert found the English opinion so hard to understand she produced an alternative translation of some of it from the German version.

Perfume maker L'Oréal took a trade mark infringement case against Belgian perfume maker Bellure and UK distributors Starion and Malaika. It objected to those companies' marketing of its products. L'Oréal said that when they created lists claiming that Bellure's perfumes smelled like specific L'Oréal scents, they engaged in infringement of L'Oréal's trade marks.

The lists themselves were distributed to retailers, not customers, but the Court of Appeal found that this constituted advertising.

The comparison lists made it clear that Bellure's products were separate to L'Oréal's, but the Court of Appeal asked the ECJ whether or not the use of trade marks in those comparison lists was an infringement of L'Oréal's trade marks.

ECJ Advocate General Paolo Mengozzi has said that the list did not break EU trade mark law. His opinion does not bind the ECJ, but the Court follows Advocates General's opinions in around 80% of cases.

"[The Trade Marks Directive] does not affect or is not liable to affect the mark’s essential function of providing a guarantee of origin or any of the mark’s other functions," said the opinion. "That is the case even if such use plays a significant role in the promotion of the advertiser’s goods and, in particular, permits that advertiser to take unfair advantage of the mark’s reputation."

The opinion said that it cannot be assumed that a comparison list will break EU comparative advertising laws on taking unfair advantage of a trade mark's reputation just by virtue of existing.

"It is not possible to conclude on the simple basis of the fact that a trader, in a comparison list, compares his product with a product identified by a well known mark that the advertiser takes unfair advantage of that mark’s reputation," it said.

Mengozzi said that neither can it be assumed that the public will be confused and think that the advertised product is associated with those it is compared to.

"It is for the national court to determine whether that advantage is unfair in the light of all the relevant individual circumstances of the case," he said.

Mengozzi said that the Misleading Advertising Directive means that companies are not allowed to advertise their goods as being manufactured in imitation of another company's goods, but that it can say that it shares their characteristics.

"[The Misleading Advertising Directive] does not prohibit an advertisement solely on the ground that it states that the advertiser’s product has an essential characteristic that is identical with that of a product bearing a protected trade mark, including well known marks," he said.

Mengozzi said that EU law backed comparative advertising as a welcome activity.

"The fact should not be overlooked that [the Comparative Advertising Directive] clearly expresses the Community legislature’s intention that comparative advertising should be encouraged, as it is a legitimate means of informing consumers and stimulating competition between suppliers of goods and services to the consumer’s advantage," said the opinion. "Nor should [be overlooked] the settled case law according to which ‘the conditions required of comparative advertising must be interpreted in the sense most favourable to it’."

The opinion did back trade mark holders in one regard, though. It said that the use of a trade mark in comparative advertising can be unfair if the use is "without due cause".

Mengozzi said that 'due cause' had to be something other than simply the advantage to be gained by the association with the trade mark, and that whether the use was unfair would depend on the facts of the case.

He said that where there is unfair use it should be stopped even when there is no damage to the effectiveness of the trade mark or to the trade mark owner's sales.

"This will be good for rights holders in that taking unfair advantage of a mark can be established without a set of pre-qualifying criteria as to damages," said Iain Connor, an intellectual property specialist at Pinsent Masons, the law firm behind OUT-LAW.COM.