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Smells fake? Chanel wins smell-a-like comparative advertising battle

10-06-2016

Chanel successively argues trademark case against Bargello, a Dutch perfume producer that had been selling imitation perfumes of well-known cosmetic brands. Its employees had been using (behind-the-counter) lists with the brand name equivalent of its perfumes. Bargello failed in its attempt to argue that this was a legitimate case of comparative advertising.

Chanel’s case hinged on its argument that Bargello was infringing its trademark rights by using its brand names to derive an unfair competitive advantage.

Well-known trademarks enjoy a broader scope of protection then lesser known marks. These trademarks benefit from a protection even beyond the similarity of the goods and services, in the case where the later mark would take unfair advantage of, or be detrimental to, the distinctive character or the reputation of the earlier mark.

Smell-a-like comparison or trademark infringement?
The case is broadly similar to an earlier dispute between L'Oréal and Bellure, which was also about imitation perfumes. In that ruling, the Court of Justice of the European Union (CJEU) stated that: “where a third party attempts, through the use of a sign similar to a mark with a reputation, to ride on the coat-tails of that mark in order to benefit from its power of attraction, its reputation and its prestige, and to exploit, without paying any financial compensation and without being required to make efforts of its own in that regard, the marketing effort expended by the proprietor of that mark in order to create and maintain the image of that mark, the advantage resulting from such use must be considered to be an advantage that has been unfairly taken of the distinctive character or the repute of that mark”.

In L'Oréal v Bellure, the shape and the packaging of the imitation perfumes had a certain resemblance with the shape and packaging of the well-known perfumes. In Chanel v Bargello, however, the only references to well-known brands were on the comparison lists. Bargello argued that these lists were not displayed to customers and for internal use only.

The judge in the Hague disagreed: "Even if the comparison lists were only used by staff, the marks on these lists will still play a key role in the communication process to the customer.”

The judge ruled that in this case that the use of the lists could not be regarded as ‘internal use’, stating that Bargello took unfair advantage of the distinctive character and did affect the reputation of Chanel’s trademark. It was not regarded comparative advertising: Bargello perfumes were riding too much on the coat-tails of the well-known Chanel trademark. That the consumers in the shop were unable to see the comparison lists themselves, didn’t matter.

For more on trademark protection or for advice on tackling infringing marks, contact us.