Carolina Herrera Limited (“Carolina Herrera”) and Puig France S.A.S. (“Puig France”) produce perfumes under the trademarks CAROLINA HERRERA, 212 (in the name of Carolina Herrera), PACO RABANNE, BLACK XS, ULTRAVIOLET, 1 MILLION, LADY MILLION, NINA RICCI, LOVE IN PARIS, PREMIER JOUR, NINA and RICCI RICCI (in the name of Puig France). Antonio Puig S.A. (“Antonio Puig”) markets these perfumes in Spain. The marks are either protected as Spanish, Community or international trademarks.

Cataleg de Serveis Integrals S.L. (“Cataleg”) distributes perfumes which imitate the smell of the fragrances produced by Carolina Herrera and Puig France. Equivalenza Retail S.L. (“Equivalenza”) markets these smell-alike perfumes in corporate outlets and by means of several franchises. The defendants use comparison or equivalence lists which link the numerical references of the smell-alike perfumes with the trademarks of the original products. The smell-alike perfumes are sold in bottles that bear the sign EQUIVALENZA and that are clearly different from those of the imitated fragrances, at a substantially lower price.

In May 2012, Carolina Herrera, Puig France and Antonio Puig brought a lawsuit against Cataleg and Equivalenza for trademark infringement and unfair competition. The Community Trademark Court No. 1 of Alicante, in a decision taken on January 28, 2014, held in favour of the claimants.

In its judgment, after acknowledging the high reputation of the asserted trademarks, the Court stated that there is no likelihood of confusion on the part of the public. Nevertheless, the Court declared that the use of the plaintiffs’ trademarks in the comparison or equivalence lists amounts to trademark infringement, since such use creates a link between the trademarks and the equivalent smell-alike perfumes, and takes unfair advantage of the reputation of the claimants’ trademarks. Consequently, the defendants try to exploit, without paying any financial compensation, the marketing effort expended by the proprietors of the reputed trademarks, with the aim to obtain an unfair advantage of their distinctive character and reputation.

The Court rejected the main argument raised by the defendants, i.e. that the plaintiffs’ trademarks are being used for descriptive purposes in the equivalence lists, and that such use is thus allowed under Article 12 Community Trademark Regulation. In this respect, the Court affirmed that the use of the plaintiffs’ trademarks is not necessary in order to indicate the purpose or the characteristics of the defendants’ products. In particular, the defendants may explain the characteristics of their perfumes by describing them as floral or fruity, for instance, but it is not necessary to compare them expressly with any well-known fragrances by using the trademarks under which the well-known fragrances are sold.

Furthermore, the Court considered that the use of the plaintiffs’ trademarks in the equivalence lists is not in accordance with honest practices in commercial matters. Consequently, such use constitutes unlawful comparative advertising and amounts to unfair competition.

Equivalenza and Cataleg filed an appeal against the judgment of the Community Trademark Court No. 1 of Alicante, which was dismissed by the Community Trademark Court of Appeal of Alicante on June 13, 2014. In this decision, the Court of Appeal confirmed the amount of the compensation for damages awarded to the plaintiffs in first instance, as well as the order to remove and destroy the defendants’ advertising material, in particular the equivalence lists.

Remarks
This is the first case in which the Spanish courts have had the opportunity to follow the landmark judgment issued by the European Court of Justice on June 18, 2009 in Case C-487/07 (L’Oréal v Bellurecf. BARDEHLE PAGENBERG IP REPORT 2009/III). Not surprisingly, this judgment is expressly invoked by the Community Trademark Court in its decision.

As in the L’Oréal/Bellure judgment, the decision of the Community Trademark Court No. 1 of Alicante states that the use of well-known trademarks in comparison or equivalence lists is unlikely to mislead the public, and will probably not damage, dilute or tarnish the reputation or the distinctive character of the relevant trademarks. However, such equivalence lists create a link in the mind of the public between the plaintiffs’ reputed trademarks and the smell-alike perfumes. Furthermore, by using well-known trademarks in their comparison lists, the defendants attempt to ride on the coattails of those trademarks in order to benefit from their power of attraction, their reputation and their prestige.

Finally, and also in line with the L’Oréal/Bellure judgment, the Community Trademark Court No. 1 of Alicante and the Community Trademark Court of Appeal conclude that the marketing of smell-alike perfumes as imitations or replicas of fragrances bearing well-known trademarks constitutes unlawful comparative advertising and is contrary to honest commercial practices.