L'Oréal v Bellure: Advocate General's Opinion has been issued

Advocate General Mengozzi has issued his Opinion in the case brought by L'Oréal against Bellure. The Opinion is non binding and intended as guidance for the ECJ, whose full decision is expected before the Summer. It is the third in the "trade mark trilogy" of cases on important trade mark questions which were referred to the ECJ by the Court of Appeal.

The Court of Appeal had referred 5 questions to the ECJ: four of which relate to infringement under sections 10 (1) and 10 (2) of the Trade Marks Act 1994 (and the defences provided by the Comparative Advertising Directive), and the fifth of which concerns the provisions of section 10 (3) of the Trade Marks Act, which provides additional protection for well-known marks.

As this is not the final word, it should be taken as only indicative of what the ECJ might decide later in the year. In summary (and acknowledging that the Devil is always in the Detail, of which there is much in this 35 page Opinion), the key findings seem to be:-

Question 1. Does trade mark legislation engage in the case of comparative advertising where there is no confusion or deception, and no damage done to the trade mark's essential function as an indication of origin? The Advocate General effectively follows previous decisions such as O2, and concludes that trade mark legislation does engage. However, his answer is broader than the question which was posed, and he expresses the view that trade mark legislation will engage where the use of a mark could damage any of its functions. In other words, he is indicating that the basis on which the English Courts question was formulated (ie. that the only trade mark function which matters is its essential function, as an indication of origin) is wrong. This is good news for brand owners, although he does not provide any real guidance about what other trade mark functions could be relevant for these purposes.

Question 2. Is the answer any different if the use of the mark plays a significant role in the promotion of the trader's product? He answered this question at the same time as answering the first, and made it clear that the answer is no different whether or not the use of the mark plays a significant role in the advertising. The only question is whether or not it has any impact on any of the functions of the trade mark.

Question 3. What is the meaning of "take unfair advantage of" in the Comparative Advertising Directive, and does the use of a trade mark in a comparison list automatically take unfair advantage? On this, the finding is that a comparison list per se does not amount to "unfair advantage". The Advocate General explains that the whole of the factual matrix needs to be looked at in deciding what amounts to an unfair advantage. The likely effect of the advertising on consumers must be considered, as must the question of whether or not it is likely to create an association with the brand. However, the benefit to consumers, and the underlying reasons why comparative advertising should be permitted, must also be taken into account. He concludes that this is ultimately a factual matter, and therefore to be determined by the national court, in the light of all of the relevant individual circumstances.

Question 4. What is meant by the phrase "presenting goods or services as imitations or replicas", and is this prohibition automatically engaged where an advertiser claims that its product shares a major characteristic with that of a well-known trade marked product, but without causing deception or confusion? The Opinion suggests that this prohibition is limited. It certainly prevents a product being marketed as being an imitation or replica, and therefore is likely to prevent the use of words such as "type" or "style", but simply saying that a product is the same as, or shares a characteristic with, another product, does not of itself mean that it is being held out as an imitation or a replica.

Question 5. The Court of Appeal had asked for guidance on what amounts to "unfair advantage" under section 10 (3) of the Trade Marks Act and the Comparative Advertising Directive. In particular, it sought to establish whether pure "free riding" amounts to an infringement, even where there is no blurring, tarnishment or other negative impact on the registered mark. Here, the Advocate General holds out some hope of good news for the owners of marks. He suggests that the use of another's mark can be unfair even if it has no effect on sales (or otherwise) of the brand, if it is established that there was no "due cause" (ie. good reason) for the advertiser to use that mark. Again, he does not provide any guidance on what would, or would not, be "due cause", but says instead that this is also a matter to be decided by the national court.

In overview terms, there is good news and bad news for brands and other owners of registered trade marks.

Good News

1. The suggestion is that the extent of the exclusivity offered by a registered trade mark goes beyond use which goes to the mark's essential function as an indication of origin. In other words, it suggests that "trade mark usage" can be broader than the English Courts have traditionally tended to find. Whilst the Advocate General does not clarify what other functions a trade mark has, and how far those are protected, he clearly makes the point that the indication of origin function is not the only relevant function for infringement purposes.
2. He says that pure "free riding" can be prevented, even where there is no loss of any sort suffered by the brand, if it can be demonstrated that there is no due cause for the mark to be used. This would seem to prohibit phrases such as "the Rolls-Royce of chocolate", even if that were to cause Rolls-Royce no loss or damage.
3. It clarifies that presenting something as a replica or imitation, or using words such as "style" or "type", will be an infringement. Commentators who had argued that previous cases were opening the way for the marketing of "genuine fake Rolexes" were unnecessarily alarmist.

Bad News

1. The use of comparisons, and comparison lists, do not in and of themselves amount to trade mark infringements, and simply saying that a product shares a characteristic (such as smell or presumably taste) with a product marketed under a registered trade mark does not amount to presenting that product as a replica or imitation.
2. The Advocate General suggests that it is for the national courts to decide whether or not, on the particular facts, there has been an "unfair advantage", and whether or not there has been "due cause" connected with the use of the trade mark. This is likely to lead to inconsistent decisions in Courts across the EU, and could be bad news where the national courts tend to restrict, rather than extend, the breadth of trade mark protection.

L'Oréal -v- Bellure. Opinion of Advocate General Mengozzi delivered on 10 February 2009. Case 487/07