Court of Appeal thinks ECJ comparative advertising ruling is not worth it, but follows it reluctantly – L’Oréal v Bellure, Court of Appeal

The Court of Appeal has followed a key 2009 decision of the European Court of Justice on comparative advertising because it said it had to do so, but issued some stinging criticism of the ECJ’s ruling. The ECJ had ruled on the point of trade mark law and the Court of Appeal had to apply that law to the facts.

This case surrounds an action brought by L’Oréal for trade mark infringement against Bellure. Bellure sold look-alike/smell-alike perfumes – perfumes that looked and smelt like some of L’Oréal’s established fine fragrance brands. This case was not about the fact that the perfumes smelt similar but about the get-up of the infringing articles and use of the brand names in comparison lists. The High Court had ruled in favour of L’Oréal. The defendants appealed, and the Court of Appeal referred questions to the European Court of Justice to answer so as to interpret EU trade mark law.

The ECJ came down in L’Oréal’s favour, particularly that the general get-up took unfair advantage of the more famous brands and free-rode on the coat-tails of that brand. The ECJ also said that using comparison lists could amount to trade mark infringement. Comparative advertising may be trade mark use, but could not be stopped by a trade mark owner if it satisfied the list of conditions in Article 3a(1) of the Comparative Advertising Directive. However, that list included not taking unfair advantage of the reputation of a trade mark, and not presenting goods or services as imitations of goods or services bearing a protected trade mark. The ECJ said that the Directive prevented an advertiser from stating or suggesting in comparative advertising that the product or service was an imitation or replica of something with a well-known mark. That would take unfair advantage of the reputation of that mark. The ECJ said use of a competitor’s trade mark in comparative advertising was allowed where the comparison objectively highlighted differences and did not give rise to unfair competition. Unfair competition arose because the imitator was effectively free-riding on the coat-tails of the more famous brand and benefiting from its reputation, despite no one actually being confused.

The Court of Appeal has applied that decision in its own judgment. It had no option but to rule that Bellure had infringed L’Oréal’s trade marks because it had used the brand names in respect of identical types of goods in advertising and, on the ECJ’s analysis, that was trade mark (rather than purely descriptive) use which could not be justified under comparative advertising law, even though there was no question of customers being confused. Lord Justice Jacob criticised this. He said that the comparison lists merely gave consumers buying perfumes at the lower end of the market an opportunity and informed choice as to which perfumes smelt a bit like the much more expensive branded products. Referring to someone else’s trade mark in that way when no one was confused and simply telling the truth that a product was a much cheaper imitation was a positive thing, he thought. He felt that trade mark law now effectively stopped people from telling the truth about comparing someone’s products with those of their competitors in a non-confusing way, and this could have a chilling effect on being able to compete.