L'Oréal strikes blow for big brands

22 June 2009

LUXEMBOURG: L'Oréal, the cosmetics and beauty giant, has won a landmark case in The European Court of Justice against a company that was trying to "ride on the coat-tails" of its brand-building and marketing efforts.

Bellure, a Belgian firm, was manufacturing products that were very similar to some of L'Oréal's best-selling perfume brands, including Anaïs-Anaïs, Miracle, Noa and Trésor, but which were sold at a much lower price.

Alongside using packaging and logos similar to those employed by L'Oréal, the smaller firm was also directly comparing the cost of its own goods with the French company's equivalents on price lists.

While arguing consumers were unlikely to be confused by the similarity between these products, the Court ruled that Bellure was attempting to "ride on the coat-tails of the mark of reputation in order to benefit from the power of attraction, the reputation and the prestige of the mark."

It was also unfairly seeking to "exploit, without paying any financial compensation, the marketing efforts expended by the proprietor of the mark." 

As a result of this legal precedent, other major brand owners should now be able to take successful legal action against "copy-cats" even if they are not doing substantial damage to their business. 

Paul Gershlick, an intellectual property lawyer at Matthew Arnold & Baldwin, said the case was an example of a business "promoting cheaper imitations simply by comparing them to more famous brands and creating an association in the minds of consumers."

However, he continued that the "highest court in Europe has sent a clear message to those businesses that they cannot expect a free ride for their own commercial advantage and benefit from the huge investment made over many years by the famous brands."

Geoff Steward, a partner at Macfarlanes law firm, added that the decision "should sound the death knell on look-alike and own-label products."

Data sourced from Financial Times; additional content by WARC staff