Observations on free riding after L'Oreal v Bellure

Abstract

Seán Mc Guinness is a Trainee Solicitor with Matheson Ormsby Prentice in Dublin. This work is a critical analysis of the ECJ ruling in L'Oréal SA v Bellure NV that takes into account recent English developments under both Article 5 and 6 of the Trade Mark Directive. Granting a right against “free riding” on one's investment per se is not defensible in line with the normative justifications for the trade mark (TM) system. Investment has been divorced from risk. The ECJ in L'Oréal SA v Bellure NV have seen fit to give proprietary status to one's investment itself on top of the rights already granted to the subject of that investment, the trade mark. To say that something is “unfair” due to its so-called “free riding effect” is to reject the foundational balancing exercise centred on market efficiency and lawful competition thereby producing a system whose effects do not align with its justifications. The court's reconceptualization of the TM system has unjustifiably, and in the absence of principled reasoning, created a new quasi-intellectual property right, rejected the basic interaction with the fundamental freedoms of the EU and severed justification from outcome.