A ruling by the ECJ this week in the case of L'Oreal v Bellure has come under heavy criticism from the Court of Appeal for being unfair, undermining free speech and damaging competition, but despite disagreeing with the ruling almost in its entirety, the Court of Appeal have applied it anyway.
The ruling related to an action brought by L'Oreal against Bellure, a perfume manufacturer whose range of products smelled like famous, luxury branded perfumes known by registered trade marks.
Bellure used comparison lists for each of their products, which showed which L'Oreal fragrance each of their products smelt like. L'Oreal alleged that the use of these comparison lists by Bellure infringed their registered trade marks for those perfumes on the lists.
The Court of Appeal were of the opinion that whilst Bellure got a major promotional advantage from using the comparative lists, neither the customers or ultimate consumers of Bellure's products were deceived as a result of the lists - consumers were not stupid and would not see the cheap copies as being of the same quality as the originals. Furthermore, the sales of the corresponding luxury fragrances were not affected by the use of the lists.
The Court of Appeal 's opinion was that trade mark law should not prevent traders from making honest statements about their products, and that the truth in a marketplace was important. By removing a trader's ability to say "my goods are as good as Brand X (a famous registered trade mark) but half the price", the Court of Appeal felt that there would be a real danger that important areas of trade would not be open to proper competition.
The ECJ did not agree, and found that Bellure had infringed L'Oreal's trade marks on the comparative lists. The use by Bellure of the comparative lists on their products could not be justified by the comparative advertising rules.
Despite these differing views, Lord Justice Jacob of the Court of Appeal said that it was his duty as a national judge to follow EU law as interpreted by the ECJ.
The moral of the story is that manufacturers should be very careful before claiming that their products are better than / cheaper than / amazing compared to the products of their competitors. The use of a competitor's trade marked name, whether to promote your product or otherwise, could be a trade mark infringement, even if the use of the trade mark is as part of a truthful comparative statement.