By judgment of 24 January 2019, section 8, the Alicante Provincial Court (acting as the European Union Trademark Court) dismissed the appeal filed by EQUIVALENZA RETAIL, SL ("EQUIVALENZA") against the judgment of 13 February 2017, issued by the European Union Trademark Court No 2 in Alicante, in which it had been sentenced for the infringement of various perfume trademarks of the firms "HUGO BOSS", "GUCCI" and "LACOSTE" in the context of its smell-alike business "EQUIVALENZA".
GUCCIO GUCCI, S.p.A, HUGO BOSS Trademark Management GmbH & Co. KG., LACOSTE, S.A., PROCTER & GAMBLE INTERNATIONAL OPERATIONS S.A. and PROCTER & GAMBLE PRESTIGE PRODUCTS, S.A.U. (now called HFC PRESTIGE PRODUCTS, S.A.U.) filed a lawsuit against EQUIVALENZA for the offering and marketing of smell-alike perfumes by making unauthorized use of the plaintiffs' registered trademarks on the smell-alike perfumes. This illegitimate use of the trademarks was carried out both in the so-called comparison lists and orally in the commercial speech, by linking the numerical references of EQUIVALENZA's smell-alike perfumes with the marks of the original perfumes allegedly imitated.
The first instance judgment declared that such acts (i) infringe the well-known trademarks of the plaintiffs by parasitism, taking unfair advantage of their reputation, attraction and prestige (arts. 34.2 LM and 9.1 RMUE) and, (ii) involve the commission of unfair competition acts, by taking unfair advantage of the reputation of others in the market (art.12 LCD) and by illegal comparative advertising presenting their products as imitations or replicas (in smell) of the perfumes of the plaintiffs (art.18 LCD).
EQUIVALENZA appealed the Court's decision on both procedural and substantive grounds. Among other substantive issues, EQUIVALENZA argued that it would not be liable for acts committed at points of sale since, according to EQUIVALENZA, following the first conviction for similar acts in the PUIG case in 2014, it would have prohibited the use of the trademarks of the original perfumes allegedly imitated in its stores (both in the form of comparison lists and orally) and that, therefore, those uses were not attributable to EQUIVALENZA. In addition, it argued that in any case, it would be an internal and innocuous use of the plaintiff's trademarks, as well as necessary to inform about the type of aroma of the perfumes it offers.
European Union Trademark Court Judgement
The European Union Court Trademark dismisses the appeal brought by EQUIVALENZA and declares as follows:
- First, the Court recalls the case-law of the European Union Trademark Courts on the use of comparison lists for the marketing of perfumes from the perspective of trademark and unfair competition. The Court reviews the numerous judgments (there are already six from 2014 to date) in which the Court has repeatedly confirmed the illegality of the use of comparison lists, pointing out that EQUIVALENZA had already been sentenced in the past for the same behaviour.
- Regarding the trademark
infringement, the Court considers that the defendant's
business is the bulk sale of perfumes through a network of stores
and considers that it has been proven that a significant number of
stores use the plaintiffs' trademarks in comparison lists or
orally. The Court understands that the origin of the equivalences
is fully attributable to EQUIVALENZA, whose model is based
precisely on the use of well-known trademarks to sell the
smell-alike perfumes of those trademarks.
The Court also considers that the use of such comparison lists constitutes the use of third party's trademarks in the course of trade introduced by the defendant in order to use the well-known reputation of said trademarks. The Court points out that the defendant's business model could have been implemented with exclusive reference to olfactory fragrances, smells, without the use of other third party's trademarks; however, according to the Court, it has been proven that the defendant's business is based precisely on that use of third party's trademarks to take advantage of its renown and prestige and the trademark infringement lies precisely in that undue advantage taken by EQUIVALENZA. It is precisely in this that the basis of the infringement lies.
- On unfair competition, the Court considers that the defendant's commercial behaviour is based on the offering and marketing of imitations of goods through the use of the plaintiffs' well-known trademarks. In this context, it also considers that there are acts of unlawful comparison, exploitation of the reputation of the applicant and unlawful comparative advertising.
Consequently, the Court confirms the sentencing /condemnation of EQUIVALENZA to cease and refrain from marketing its perfumes using the plaintiffs' trademarks, to withdraw and destroy the comparison lists or any other means of identification containing the plaintiffs' trademarks, to compensate/ indemnify the plaintiffs and to publish the judgment.
In addition, it is worth noting as a novelty with respect to the previous judgment sentencing EQUIVALENZA, the Court also sentences EQUIVALENZA to change the numerical references of the perfumes it has been using together with the trademarks of the plaintiffs in order to prevent the effects of the infringement from continuing by perpetuating the association in the mind of the consumer between those numerical references of EQUIVALENZA and the renowned trademarks of the plaintiffs.
This ruling has been appealed by EQUIVALENZA before the Supreme Court.
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