The genie is out of the bottle: the ECJ's decision in L'Oreal v Bellure

Abstract

The meaning of the unfair advantage clause in Article 5(2) of the Trade Mark Directive has been unclear. Does it means that a court can ban the use of sign, which does not makes any harm to a trade mark with a reputation? In other words, can the European courts stop what has been called ‘free riding’ and not just ‘blurring’ and ‘tarnishment’? In the USA they have struggled in many years with this question and have found, using an economic method, that there is no weighty arguments for to include a free-riding ban in the US trade mark law. The meaning of the EU-directive of comparative advertisement has also been unclear: What is ‘imitations or replicas of goods or services bearing a protected trade mark or trade name.’? How far can a company go to inform the consumers of its products and services? Furthermore, has the recital 14 in the EU-directive 2005/29, saying that ‘the consumer’s choice should not be reduced where the promotion of products which look similar to other products confuses consumers as to their commercial origin', any meaning in the commercial landscape? Has law and economics any future in the IP-field, as it has in European competition law? There is any proof that the originally meaning of the unfair advantage clause in Article 5(2) of the Trade Mark Directive was anything then a law against blurring and tarnishment, that is a protection against detriments on trade marks with a reputation. No one had in mind to ‘let the genie out of the bottle’ through a free-riding rule. So the European and US trade mark law was pretty much equally good. But when it comes to comparative advertisement it seems that our American friends have more trust in the consumers, then the European have had, and realize that this kind of advertisement is a benefit for the society. But, the latest development in Europe, through the EU-directive 2005/29, saying that the consumer's choice should not be reduced unless the promotion of products which look similar to other products confuses consumers as to their commercial origin, shows that the legislator now has a more consumer-friendly approach. Hence, it is quit conspicuous that the ECJ not follow through. The ECJ's decision in L'Oréal v Bellure has a great practical significance because the woolly lines in this ruling are obvious. It raises difficulties for advisers to SMEs to give clearance for investments in products or services. So, instead of trying to figure out what ‘a link’, ‘to ride on the coat-tails of the mark with a reputation’ or ‘replicas’ means, the advisers are recommend – not to endanger any professional liability – in many cases to dissuade the client to risk his money. The result will be that many consumers around Europe, unlike its equals in the US, will not have the change to buy products and services they needed or wanted and can afford.