The European Court of Justice (ECJ) has provided guidance to the High Court of England and Wales (the High Court) regarding the interpretation of the Trade Mark Directive and the Directive concerning misleading and comparative advertising.

L’Oréal brought an action before the High Court against Bellure, Malaika and Starion (collectively Bellure) alleging infringement of its trade mark rights. Bellure markets products that imitate L’Oréal’s and provides comparison lists to retailers that indicate the original fragrance brand of which its perfume is an imitation. The High Court has asked the ECJ to clarify the interpretation of the Directives.

The ECJ considered that: i) the advantage arising from the use by a third party of a similar mark is unfair when that party seeks to benefit from the power of attraction, the reputation and the prestige of that mark, without paying any financial compensation for the marketing effort; ii) the proprietor of a mark is entitled to prevent the use by a third party of an identical sign in comparative advertising provided that such use, even if it does not affect the essential function of the mark (i.e., to indicate the origin of the products), affects or could affect other functions of the mark, which include communication, investment or advertising functions; and iii) an advertiser is prohibited from stating in comparative advertising that the product marketed constitutes an imitation of the product covered by the mark. The advantage gained by the advertiser as a result of such unlawful comparative advertising must be considered to be taking unfair advantage of that mark’s reputation.