Evidence Of Parasitic Intent Not Unfounded: L’Oreal

Advocate General Mengozzi delivered his opinion to the European Union’s Court of Justice (ECJ), on February 16 2012, denying the Appeal sought by Helena Rubenstein SNC and L’Oreal SA concerning the Community trademarks BOTOLIST and BOTOCYL.

Botox was registered as a word mark from 1991 to 2003 for goods in Class 5 of the Nice Agreement (namely for pharmaceuticals) by Allergen Inc., “a global, multi-specialty health care company with leading portfolios in eye care, neurosciences, medical dermatology, medical aesthetics, obesity intervention and urologics”. In May 2002, and July 2002 both Helena Rubenstein and L’Oreal filed Community trade mark applications with the Office of Harmonization for the Internal Market (OHIM) for BOTOLIST, and BOTOCYL, respectively for products in Class 3 of the Nice Agreement (lotions and other superficial cosmetic products).

Allergan filed an unsuccessful application for the declaration of invalidity of BOTOCYL and BOTOLIST in March of 2007, followed by a successful appeal in May of 2008 which was upheld by the OHIM based on Article 8(5) of the Regulation No 40/94 which states:

Furthermore, upon opposition by the proprietor of an earlier trade mark within the meaning of paragraph 2, the trade mark applied for shall not be registered where it is identical with or similar to the earlier trade mark and is to be registered for goods or services which are not similar to those for which the earlier trade mark is registered, where in the case of an earlier Community trade mark the trade mark has a reputation in the Community and, in the case of an earlier national trade mark, the trade mark has a reputation in the Member State concerned and where the use without due cause of the trade mark applied for would take unfair advantage of, or be detrimental to, the distinctive character or the repute of the earlier trade mark.

Following Allergen’s successful appeal, Helena Rubenstein and L’Oreal sought the annulment of the decision before the General Court based on two pleas, namely 1) infringement of Article 8(5) of Regulation 40/94 and 2) infringement of Article 73 of the same Regulation. On December 16th, 2010 the General Court dismissed these actions which led to the Appeal at hand.

The first of four grounds raised by the appellants involved the General Court’s December 2010 decision in which it held that the appellants trademarks took advantage of, or was detrimental to the distinctive character of the earlier mark “BOTOX”. All four complaints within the first ground were tersely rejected by the Court, including the claims that i) the BOTOLIST and BOTOCYL marks were registered only several months prior to BOTOX (para 10), ii) that the General Court erred in determining that BOTOX’s reputation as a mark was sufficiently proven (para 15), iii) that there is no link between the BOTO- in BOTOX and the two contested trademarks (para 27), and iv) that there was damage caused to the earlier mark (para 30).

The last claim is of particular interest as the ECJ declared that BOTOX was a mark with a ‘reputation’ and that the appellants had demonstrated evidence of ‘parasitic’ intent in adopting their marks. The ECJ then proceeded to review three seminal cases concerning trademarks with demonstrated ‘reputation’ : Intel Corporation [2008] ECR I 8823; L’Oréal and Others [2009] ECR I 5185; Interflora and Others [2011] ECR I 000.

Based on the holdings in these cases, parasitism or ‘free riding’ occurs when the second-comer takes unfair advantage (using the power of attraction) of the trademarks’ distinctive character or repute. Detriment to the trademark does not need to be shown, rather, detriment can be ascertained from the use or advantage taken of the mark by the second-comer. The stronger the reputation of the mark, the greater success will be had of showing that detriment has been caused to it. (para 32)

Finally, the Court held,

 …[t]he existence of parasitic intent is inferred from a number of findings which concern, on the one hand, the fact that Helena Rubinstein and L’Oréal opted to use in their marks a prefix which reproduces almost all of the earlier mark – a decision which, in the view of the General Court and, before it, the Board of Appeal, cannot be justified by the intention to refer to the botulinum toxin which, moreover, does not form part of the goods covered by the contested marks – and, on the other, the characteristics of the earlier mark, that is to say, its strong distinctive character, owing also to its uniqueness and widespread reputation. (para 36)

In the end all four Grounds were rejected.

Courtney Doagoo is a doctoral student at the University of Ottawa, Faculty of Law.