The very different approaches of the English courts and the European Court of Justice to trade mark enforcement were emphasised in the Court of Appeal judgment in L’Oréal SA v Bellure NV (2010), in which Lord Justice Jacob accused the ECJ of muzzling freedom of speech by preventing traders from making honest statements about lawful products. Leaving aside the personal views of Lord Justice Jacob, this is a judgment which will be welcomed by brand owners but will make life difficult for comparative advertisers.
L’Oréal owns certain well-known trade marks registered for perfumes. Bellure produced a range of perfumes which were imitations of L’Oréal perfumes, which were marketed using comparison lists and which stated the trade mark of the imitated L’Oréal perfume.
L’Oreal sued Bellure for trade mark infringement. The matter went before the Court of Appeal, which then referred to the ECJ certain questions relating to the use of the L’Oreal trade marks in the comparison lists. The ECJ answers were then considered by a distinctly unimpressed Lord Justice Jacob.
The ECJ had held that a trade mark is infringed by a comparative advertisement using an identical sign for identical services, where this use does not satisfy all the conditions laid down in the Comparative Advertising Directive. It held that this would be the case even where this use is not capable of jeopardising the essential function of the mark (ie, to indicate the origin of the goods or services), provided that the use affects or is liable to affect one of the other functions of the mark (including those of communication, investment or advertising).
Lord Justice Jacob interpreted this to permit use of another’s trade mark only where this was "for purely descriptive purposes" and that the “other functions” of the trade mark were not liable to be affected. He expressed the view that these “other functions” were vague and ill-defined and that the same result could have been achieved in far more simple manner.
The Comparative Advertising Directive lays down certain conditions for a comparative advertisement to be permissible, including (a) it does not take unfair advantage of the reputation of a trade mark, trade name or other distinguishing marks of a competitor or of the designation of origin of competing products and (b) it does not present goods or services as imitations or replicas of goods or services bearing a protected trade mark or trade name.
The ECJ had held that an advertiser who states explicitly or implicitly in comparative advertising that products are imitations of a product bearing a well-known trade mark presents the products as “imitations or replicas” and that the resulting advantage was an advantage taken unfairly of the reputation of that mark.
Lord Justice Jacob opined that he could see no rational basis for the condition in the Comparative Advertising Directive that the advertisement does not present goods or services as imitations or replicas. He growled, “If a man trades in lawful replicas or in lawful copies, why should he not be able to inform the public what they are? And why should the truth be kept from the public?”
A trade mark is infringed by unauthorised use in the course of trade of an identical or similar sign in relation to dissimilar goods or services, where the trade mark has a reputation and where use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark.
The ECJ had held that the taking of unfair advantage does not require that there be a likelihood of confusion or a likelihood of detriment. There will be an unfair advantage where the person using a mark seeks to ride on its coat-tails in order to benefit from the power of attraction, the reputation and the prestige of that mark and to exploit, without paying any financial compensation, the marketing effort expended by the mark’s owner in order to create and maintain the mark’s image. Lord Justice Jacob did not “agree with or welcome this conclusion – it amounts to a pointless monopoly”.
Reluctantly applying the ECJ judgment (his “duty is to apply it”), Lord Justice Jacob held that the use of the L’Oreal trade marks in the comparison lists infringed.