Because You're Worth It: L'Oréal and the Prohibition on Free Riding
| Author | Robert Burrell,Dev Gangjee |
| Published date | 01 March 2010 |
| Date | 01 March 2010 |
| DOI | http://doi.org/10.1111/j.1468-2230.2010.00794.x |
CASES
Because You’reWorth It: L’Or eŁal and the Prohibition on
Free Riding
Dev Gangjee
n
and Robert Burrell
nn
INTRODUCTION
In L’Or eŁal vBellure the European Court of Justice decided that free riding, or
taking advantage of the reputation enjoyed by an earlier mark, is actionable per
se. In reaching this conclusion, the ECJ signi¢cantly expanded the scope of
trade mark protection but provided little justi¢cation for doing so. Referencing
activity and building on the e¡orts of others are fundamental to creative and
competitive processes. This comment argues that L’Or eŁal’s broad prohibition
on free riding is theoretically unsound, runs counter to the thrust of European
trade mark law and could negatively impact on the competitiveness of the
European marketplace.
Article 5(2) of theTrade Marks Directive (TMD)
1
deals with trade mark ‘dilu-
tion’, that is, forms of trade mark infringement that are not dependent on a ¢nd-
ing that consumers are likely to be confused by the defendant’s conduct. This
expanded form of liability has been the subject of much controversy. Divorced
(or at least estranged
2
) from the traditional consumer information rationale for
trade markprotection, this extensionof trade mark lawhas contributed towards
increasingscepticism aboutthe shape and direction ofthe trade mark system.This
scepticism, as with scepticism about other forms of intellectual property protec-
n
Lecturer in Law, London School of Economics.
nn
Reader in Law, TC Beirne School of Law, University of Queensland; Visiting Professor, Benjamin
N.Cardozo School of Law.Our thanks go to Barton Beebe, Lionel Bently,David Campbell, Jennifer
Davis, AndrewJohnston,William van Caenegem and Kimberlee Weatherall.
1 First Council Directive89/104/EEC of 21December 1988 to Approximate the Lawsof the Member
States relating to Trade Marks OJ 1989 L40/1. The substantive provisions under co nsideration
remain unmodi¢ed in its successor, Directive20 08/95/EEC of 22 October 2008 OJ 2008 L299/25.
2 A consumer protection rationale for antidilution protection has been proposed. It is argued that
such protection reduces ‘imagination costs’ for consumers by helping to preserve the clarity of
brand messages and preventingco nsumers from making burdensome associations between uncon-
nected products.See, eg,Ty, I n c vPerryman306 F.3d 509,511(7th Cir. 2002).This imagination costs
justi¢cation forantidilution protection has bee n the subject of ¢erce academic criticism. See, eg, G.
Austin,‘ToleratingConfusion about Confusion:Trademark Policies and Fair Use’in G. Dinwoodie
and M. Janis (eds),Trademark Law andTheory: A Handbookof Contemporary Research (Northampton,
MA: Edward Elgar, 2008);R. Tushnet,‘Gone in 60 Milliseconds: Trademark Lawand Cognitive
Science’ (2008) 86 Tex L Rev 507.
r2010The Authors. Journal Compilation r2010The Modern Law ReviewLimited.
Published by BlackwellPublishing, 9600 Garsington Road,Oxford OX4 2DQ,UK and 350 Main Street, Malden, MA 02148, USA
(2010)73(2) 282^304
tion, is founded on the recognition that intellectual property rights need clear
justi¢cations because they a¡ect ‘what [people] may do, how they may speak,
and how they may earn a living.’
3
The ECJ’s most recent opportunity to consider
the scope of Article 5(2) came in L’Or eŁal vBellure.
4
That case, which came on a
reference from theUK, concerned a dispute over low price look-alike and smell-
alike perfumes.The ECJ held that free riding is prohibited under EU trade mark
law. By concluding that taking advantage of the reputation enjoyed by an earlier
mark is actionable per se, the ECJ signi¢cantly expanded the scope of trade mark
protection.Yet it o¡ered littleby way ofjusti¢cation forreaching this conclusion.
This comment argues that L’OreŁal is theoretically unsound, runs counter to the
thrust of the European trade mark law, is di⁄cult to reconcile with the ECJ’s ear-
lier decisions and may impact negativelyon the competitiveness of the European
marketplace.
BACKGROUND TO THE DISPUTE
The L’Ore
Łal Group manufactures cosmetics and high quality perfumes, including
the well known‘Tre
Łsor’,‘Miracle’,‘Ana|
«s-Ana|
«s’and ‘Noa’ brands that were central
to this dispute. The defendants were producers and distributors of a range of
replicafragrances under the‘Creation Lamis’label. In the mid1990sBellure sensed
an opportunity, since the ‘cost of the major fragrance brands was beyond the
pocket of many consumers [and] the demand was for a¡ordable perfumes in
attractive bottles and packaging, with fragrances similar to those of popular
designer brands.’
5
It set out to copy the aroma of successful perfumes, where the
scent itself was not the subject of intellectual property protection. To take one
example, the fragrance of Bellure’s ‘LaValeur’ was apparently identical to L’Or eŁal’s
‘Tre
Łsor’. Bellure’s perfumes were aimed at the lower end of the market andwere
sold in supermarkets,discount stores and at street markets. Bellure acceptedthat it
had adopted similar bottle designs and packaging for its perfumes. To highlight
olfactory equivalence, the defendantsalso distributed comparison lists to retailers,
indicatingby brand name which L’OreŁal fragrance each smell-alike was meant to
imitate.
L’OreŁal objected to the defendants’ activities on the basis of various registered
word, device and packaging trademarks. In order toprotect its considerable crea-
tive and ¢nancial investment in producing high qualityfragrances L’OreŁal argued
that (1) the defendants’perfumes damaged, or were likely to damage, its business
by creating confusion; and (2) the defendantswere taking a‘free ride’ on the clai-
mant’s investments. Based on these claims, L’OreŁal sought to prohibit the use of
the word marks Tre
Łsor, Ana|«s-Ana|
«s, Miracle and Noa in the comparison lists
issued by the defendants, as well as the use of the allusive packaging and names
of ¢ve speci¢c items sold by the defendants.
3 J.Waldron,‘From Authorsto Copiers: Individual Rights and Social Values in Intellectual Property’
(1993)68 Chicago-KentL Rev 8 41, 887.
4L’Or eŁal SAvBellureNV (C -487/07) 18 June 2009 (ECJ) (Unreported) (L’OreŁal ECJ).
5L’Or eŁal SAvBellureNV & Ors [200 6]EWHC 2355 (Ch) at [34](Lewison J) (L’O reŁal HC).
Dev Gangjee and Robert Burrell
283
r2010The Authors. Journal Compilation r2010The Modern Law ReviewLimited.
(2010)73(2) 282^304
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