L'Oréal SA and Others v Bellure NV (Case C-487/07)

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLord Justice Jacob,Mr Justice Blackburne,Lord Justice Keene,And,Lord Justice Wall,Lord Justice Rimer
Judgment Date21 May 2010
Neutral Citation[2007] EWCA Civ 968,[2010] EWCA Civ 535
Docket NumberCase No: A3/2006/2258

[2007] EWCA Civ 968

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

CHANCERY DIVISION (INTELLECTUAL PROPERTY)

The Hon Mr Justice Lewison

HC03 C04344

Royal Courts of Justice

Strand, London, WC2A 2LL

Before

The Rt Hon Lord Justice Keene

The Rt Hon Lord Justice Jacob and

The Hon Mr Justice Blackburne

Case No: A3/2006/2258

Between
(1) L'Oreal S.A.
(2) Lancome Parfums ET Beaute & CIE
(3) Laboratoire Garnier & CIE
Claimants/Respondents
and
(1) Bellure N.V
(4) Malaika Investments Limited (trading as Honeypot Cosmetic & Perfumery Sales)
(7) Starion International Limited
Defendants/Appellants

Henry Carr QC and Jacqueline Reid (instructed by Messrs Baker & McKenzie LLP) for the Claimants/respondents

Roger Wyand QC and Thomas Moody-Stuart (instructed by Messrs Addleshaw Goddard) for the 4 th and 7 th Defendants

Hearing dates : 10/11/12 July 2007

Judgement

Lord Justice Jacob

Lord Justice Jacob

1

This is an appeal by the remaining (4 th and 7 th) defendants from a decision of Lewison J, [2006] EWHC 2355 (Ch), [2007] RPC 328. The claimants, L'Oréal, cross-appeal a number of matters. Mr Roger Wyand QC argued the case for the defendants, Mr Henry Carr QC that for L'Oréal.

The Market Background

2

The Judge uncontroversially set this out at [4]:

Fragrances in the UK market are broadly divided into four categories. The precise boundaries between these categories are not sharply defined; and do not matter for present purposes. The four categories are:

Fine fragrance brands. These are premium price brands, with selective distribution, expensive packaging and presentation. They are heavily advertised and strongly promoted and are produced by the leading cosmetic and fragrance houses.

Volume prestige brands. These are brands with many of the characteristics of fine fragrances but with retail prices at the lower end of the fine fragrance range, and with a less restricted distribution.

Mass-market brands. These have relatively low retail prices, and are sold quite widely in various retail outlets. They are usually sold on a self-service basis and with less emphasis on brand imagery.

Replica fragrance brands. These are imitations, but not counterfeits, of fine fragrance brands and trade on their image. However, they are sold at retail prices well below those of the premium priced brands and are very competitive with similarly priced mass-market brands.

3

He went on to describe the costs and expense of developing a new brand of fine fragrance and how (as is the case with the products of many other industries) many fail and are paid for by the successful ones. The global costs of developing a fine fragrance are between €60m and €120m.

4

There is a great gulf between the fine fragrance and the replica markets. Fine fragrances are not only expensive to make, but are packaged most carefully. Every detail of the packaging is considered and worked out in fine detail – the bottles used are designed specifically, as also the packaging. Fine fragrances are available only through carefully controlled exclusive distribution outlets. The advertising spend is high both initially and thereafter. Everything is done to create and maintain a “luxury” image. The prices are correspondingly high.

5

The replica product, by contrast, is cheap to produce and sold in cheap packaging and bottles. There is no independent advertising. The outlets are “downmarket”– market traders, discount stores and some cheap internet sites.

6

It is worth actually giving an idea of the prices. A typical fine fragrance will cost £60 or more retail. A corresponding replica will be between £2–4 on a market stall if in a get-up which owes a little in appearance to the original or £1 or so if in a cheap, “independent” get up.

7

The public are not stupid. It is not suggested that anyone ever thinks a “replica” product of the kind with which we are concerned is the original or comes from or is approved by the same commercial source as the original. Nor is it suggested that anyone thinks a replica is anything other than a cheap imitation of the original or is likely to be of the same quality as the original, even though it may smell somewhat the same. So the parties' products are not in competition with each other. They are in different price and market sectors.

The L'Oréal fragrances and their registered trade marks.

8

There are four L'Oréal brands upon which the claims are based, namely Trésor, Miracle, Anaïs Anaïs, and Noa. They are all very well-known. The Judge sets out the details of these products at [15 – 33]. I do not need to set it all out here. The packaging of the products is also described. We had actual samples. But what actually matters for trade mark infringement are the registered marks. All the marks with which we are concerned are registered in Class 3 for perfumes and other fragrance products. In the case of Trésor and Miracle the registrations include registrations for the packaging. There is no material difference between the actual packaging and the registrations. Actually there are two forms of Trésor packaging, described by the Judge at [27], but nothing turns on the difference.

9

There are three Trésor registrations:

(1) UK Mark No. 1,440,039, registered under the 1938 Act in 1992. It is a word and device mark registered in colour. The device is as follows:

There is a disclaimer:

“Registration of this mark shall give no right to the exclusive use of the words “Tresor” (sic) and “Paris.”

And a limitation:

“The mark is limited to the colours black, gold, pink, yellow, orange and mauve as shown in the representation on the form of application”

Slightly unnecessarily and ineptly it goes on to say “The French word 'Tresor' [again without an accent] appearing in the mark means 'Treasure'.”

(2) UK No. 1426188, registered under the 1938 Act in 1991. It is a word and device mark, showing the Trésor bottle:

The words on the bottle read “ Trésor Lancôme”. And there is a disclaimer:

“Registration of this mark shall give no right to the exclusive use of the device of a container.”

(3) UK No 1382742. This, for some reason (perhaps because it is in capitals, even though the typescript is very ordinary), is described as a “stylised word mark.” The word is “Tresor” (again without an accent) and we are told “The mark consists of a French word meaning 'Treasure'”. For practical purposes everyone treated the registration as simply a registration of the word Trésor.

10

There are three registrations relating to Miracle:

(1) CTM No 1776970. This mark consists of a picture of the front view of the Miracle bottle: The bottle is double-walled and has inscribed on it “Miracle” and “Lancôme”. The picture is as follows:

(2) UK registration M748499 (the 'M' means the application was made via the Madrid convention, a so-called “international registration”). This is a front view of the Miracle box in colour and is as follows:

The registration certificate says under the heading “UK mark claim/limit”

The applicant claims the colour metallic pink Pantone 226C as an element of the mark

This is taken to mean that the registration is in that colour.

(3) CTM 1,286,897 consisting of the word mark Miracle.

11

There are two UK registrations for the Anaïs-Anaïs brand. They are in class 3 for perfumes under Nos. 1,098,105 and 1,257,894. They are both for the words “Anais-Anais”. Why there are two registrations does not matter. The absence of the diaeresis mark was treated as irrelevant to anything we had to decide.

12

The Noa brand has three associated registrations:

(1) UK No. 1,416,777 consisting of the words Noa Noa.

(2) CTM 002652170 and UK M702616 each consisting of the word Noa in a stylised form:

So far as the present appeal is concerned, the infringement claim is rather limited. The marks were treated as just for the word Noa (a doubtful assumption, but one the parties were happy with). On appeal these marks only formed part of the comparison list claim.

The Defendants' Products in general

13

The Judge describes the defendants and their products at [34–42]. Only two defendants remain, the 4 th (“Honeypot”) and 7 th (Starion). The Judge described their respective businesses thus:

Starion.

[39] … It sells three main product ranges: Stitch (retailing at £1 or less), Dorall (retailing at £2 or less) and Creation Lamis (retailing at between £2.99 and £3.99). Its customers fall into two categories. First there are wholesalers who sell to their own retail customers: typically corner shop chemists, bargain shops, High Street gift shops and market traders. Second, there are discount retail chains. The ultimate consumer tends to be in demographic groups D and E. Stitch is the most popular range, with Creation Lamis in second place. The annual turnover of the Creation Lamis range is of the order of £450,000 per annum.

[41] The Creation Lamis range is illustrated in a glossy coloured brochure. The brochure illustrates both the bottle and the packaging of each product. It does not illustrate any comparators. In addition to the brochure, Starion exhibits at a trade fair once a year. Apart from that it does not advertise the Creation Lamis range.

Honeypot

[42] …Its business is split between mail order customers and customers who come to its warehouse to buy. Most of Honeypot's customers have a shop, a unit in a mall or a market stall. It does not sell to supermarkets or pharmacies. Although it sells some designer fragrances, most of its business is the sale of mass market fragrances. It has sold products within the Creation Lamis range, although these are not among its best sellers.

The Stitch range

14

This is a range of smell-alike fragrances...

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