The 8th Section of the Alicante Court of Appeal, acting in Spain as the EU Trademark Court of Appeal, has issued a new ruling confirming that the use of third-party trademarks of reputed perfumes to advertise, offer and market so-called 'smell-alike' perfumes amounts to trademark infringement and unfair competition.

The June 2 2017 decision confirms the judgment of October 13 2016, which was issued in the first instance by the Alicante Community Trademark Court No 2 in proceedings brought by Carolina Herrera Limited, Puig France SAS, Gaulme, SAS and Antonio Puig, SA against Spanish company Yodeyma Par­fums, SL.

The case concerned Yodeyma's freely disclosed commercialisation of smell-alike perfumes by referring to the trademarks of well-known perfumes, allegedly by imitating their smell.

The defendant established this correlation with third-party trademarks through the use of:

  • a list comparing retail establishments where their perfumes are marketed, including beauty salons, hairdressers and pharmacies; and
  • a search engine on Yodeyma's website which allows users to search for the smell-alike per­fumes by inserting the trademark of the well-known perfume whose smell it supposedly imitates.

Unlike other smell-alike perfume litigation in Spain, Yodeyma did not deny the commercialisation of such products or the use of other perfumes' olfactory trademarks. Instead, the defence was based on the need to use the trademarks of other perfumes to inform consumers about the fragrance of Yodeyma's smell-alike perfumes.

The Alicante Court of Appeal understood that references to third-party trademarks are not necessary to identify the fra­grance of perfumes, and held that the common procedure in the perfume industry is to:

  • use a glossary of olfactory characteristics;
  • employ perfume testers; and
  • conduct advertising campaigns for the positioning of the perfumes in the market.

The court concluded that while it may be convenient for the defendant (and even for some consumers) to refer to these well-known trademarks, it is not the only possible means of identifying the perfume's fragrance and it cannot be deemed necessary.

Regarding Yodeyma's allegation that the rights of the trademark owners were being subordinated in favour of consumers' rights to informa­tion and the right of free imitation of products, the court considered that there was no such subordination and that all of these rights contain limita­tions which make them compatible with one other. The court declared that neither the right of information nor the right of free imitation are absolute, and they do not authorise the use of a well-known trademark to imitate a product.

With regard to trademark law, the court stated that the rights of trademark owners are subject to a number of limitations (Article 12 of the EU Trademark Regulation and Article 37 of the Spanish Trademark Act) in order to make these rights compatible with those of consumers and with free competition. This applies to the use of a third-party trademark for describing the characteristics of a product (eg, the smell).

However, in this case the court rejected the operability of these limitations to the ius prohibendi (ie, a right to prohibit others from using intellectual property) of the trademark owner. The court recalled that Yodeyma's use of third-party trademarks was not necessary to refer to their products and declared that such use did not accord with honest practices in industrial or commercial matters; nor was such use intended merely to describe the smell of a perfume. The court held that Yodeyma intended to establish an association with the reputation of well-known trademarks which they did not own, and that they used this association to make their products more attractive and facilitate sales at the expense of the advertising of those well-known brands.

For these reasons, pursuant to Articles 34.2(a) and 34.2(c) of the Spanish Trademark Act and Articles 9.1(a) and 9.1(c) of the EU Trademark Regulation, the court confirmed the existence of trademark infringement. The court's condemnation of Yodeyma involved:

  • prohibiting their use of the plaintiff 's trademarks (including in their commercial speech);
  • removing and destroying any type of material, list or means of identification containing such trademarks;
  • suppressing their search engine criteria for searches based on third-party trademarks;
  • compensating any damages; and
  • publishing the judgment.

Likewise, the court confirmed that Yodeyma's activities constituted:

  • unfair competition due to their taking unfair advantage of another trademark owner's reputa­tion;
  • unlawful comparative advertising by presenting their products as imitations or replicas of the plaintiffs' perfumes; and
  • free-riding on the plaintiff's trademarks.

This is the Alicante Court of Appeal's fourth judgment on this issue. Following an EU-level ruling by the European Court of Justice in its June 18 2009 decision in L'Oréal v Bellure (C-487/07), all four judgments banned references to third-party trademarks for the advertising, offering and marketing of smell-alike perfumes.

For further information on this topic please contact Carlota Viola at Grau & Angulo by telephone (+34 93 202 34 56) or email (c.viola@ga-ip.com). The Grau & Angulo website can be accessed at www.ga-ip.com.

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